We often hear about various NGOs, scientists and other such academics and businesses warning us about energy crises. Is solar energy is an alternate solution? Some people take these warnings seriously, while others just don’t pay any attention to it. In truth, energy crises are not merely a conspiracy theory as its reality has slowly but steadily unfolding itself. Right now, we can see the reverberations of the forthcoming crises that is looming like a sword on our heads. In this blog, we are going to discuss everything that you need to know about energy crises in Pakistan and the word as well.
What is Energy Crisis?
Energy crisis can be defined in simple terms as energy shortfall or shortage.
According to the Wikipedia,
“An energy crisis is any great bottleneck (or price rise) in the supply of energy resources to an economy. In popular literature though, it often refers to one of the energy sources used at a certain time and place, particularly those that supply national electricity grids or serve as fuel for vehicles. “
It means that energy crisis is mainly characterized by Record prices, fuel shortages, rising poverty, slowing economies.
Global Energy Crises – An Up-coming Reality in 2023
Numerous causes, particularly the incredibly quick economic recovery following the epidemic, caused the energy markets to tighten up in 2021. However, once Russia invaded Ukraine in February 2022, the situation quickly worsened and turned into a full-fledged global energy crisis. Natural gas prices hit record highs, which had an impact on electricity prices in several markets. The price of oil reached its highest point since 2008.
In addition to making families poorer, forcing some factories to reduce output or even close their doors, and slowing economic growth to the point that some nations are in the midst of a severe recession, higher energy prices have also led to uncomfortably high inflation. This winter, gas restriction may be necessary in Europe because of its historic reliance on Russian gas supplies, while many emerging economies are experiencing dramatically higher energy import costs and fuel shortages.
There are significant contrasts between the current energy crisis and the oil shocks of the 1970s, despite some similarities. The 1970s price shocks were mostly restricted to oil at a period when the global economy was far more dependent on oil and less dependent on gas, whereas the crisis we are currently experiencing affects all fossil fuels. The impact is amplified by the fact that the global economy is considerably more interconnected than it was fifty years ago. This is the first truly global energy crisis, for this reason.
While some gas-intensive manufacturing facilities in China simply had their power supply cut, others in Europe reduced output due to financial constraints. Higher energy costs have exacerbated extreme poverty and slowed progress toward attaining universal and affordable energy access in emerging and developing economies, where the share of household budgets spent on energy and food is already significant. Rising prices have affected impoverished people and led to substantial economic, social, and political difficulties even in developed economies.
There is no proof, despite some claims, that climate measures are responsible for the current spike in energy prices. Actually, more access to sustainable energy technology and sources would have benefited consumers and lessened the upward pressure on fuel prices.
Energy Crises in Pakistan – A Sickening Overview
Pakistan is suffering from a severe energy crisis, which has serious ramifications for both the country’s fragile economy and its unstable security situation. Some calculations indicate that during the previous few years, energy shortages have cost the nation up to 4% of its GDP. Additionally, they have compelled the closure of hundreds of factories, including more than 500 in the industrial hub city of Faisalabad alone, which has furthered unemployment and paralyzed production. They also jeopardize crucial infrastructure and development projects. Energy riots have been tearing through the country in the meanwhile. The country’s political leadership’s de facto strategy of expanding power generation and other supply-side band-aids will not suffice to solve this situation. Deep and complicated, Pakistan’s energy issues are more a result of a lack of political will and good leadership than a lack of actual availability. If the country is to get out of this crisis, it must start with a comprehensive institutional energy sector reform—a politically unpopular but absolutely necessary condition for energy relief. Then, necessary reforms can be made. However, the success of such initiatives will depend on the presence of leaders prepared to put long-term national growth and well-being ahead of short-term political considerations.
Primary Reasons of Energy Crises in Pakistan
Fuel prices have skyrocketed as a result of the crisis between Ukraine and Russia, jeopardising the supply chain and making it difficult for Pakistan to sustain the efficient functioning of its power plant. LNG corporations have violated their agreements with Pakistan in order to exploit the lucrative European markets. Long-term LNG suppliers cancelled a number of cargoes that were due to be delivered during the past few months, further constricting supplies and creating issues for Pakistan. Currently, Pakistan is compelled to purchase expensive LNG.
The political unrest, shifting leadership, and lack of interest in addressing the problem and finding a solution all contributed to the situation’s worsening. Governments, political parties, and other interest groups still meddle in corporate choices like hiring and disconnecting default clients. Utility companies deny any responsibility and charge the management authorities with misconduct in the meantime.
Any form of comprehensive or integrated energy policy that would benefit Pakistan’s faltering economy and energy industry cannot be implemented due to a lack of coordination. Moreover, the circular debt has increased by 10% from the previous fiscal year to a frightening 2.5 trillion Pakistani rupees. Studies predict that it will reach 4 trillion Pakistani rupees by 2025.
The mainstay of Pakistani oil and gas exploration and production, Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipelines Ltd. (SNGPL), reportedly owe the Oil & Gas Development Company Ltd. (OGDCL) and Pakistan Petroleum Ltd. (PPL) Rs. 1.5 trillion. When compared to imported LNG, which Pakistan uses more of, this affordable homegrown energy source is less than half the price.
OGDCL and PPL are unable to enter new markets since their revenue is trapped in a spiral of debt, placing a heavy financial burden on our scant foreign exchange reserves. In light of the nation’s dwindling oil and gas reserves, the absence of fresh investment in exploratory projects is worrying and does not augur well for the country.
In addition to the above-described causes, further important elements are:
Decreased gas availability and reliance on oil
Unrealistic electricity prices (low investments)
Low recovery of payments
Ineffective collection of taxes
Overuse and overpopulation
Solar – The Way Forward in Pakistan’s Energy Crises
Pakistan is a top destination for solar energy since it has several cities with sweltering temperatures that allow the most sunlight to penetrate. In Pakistan, solar energy is regarded as a viable alternative energy source for achieving economic growth. In Pakistan, solar energy is a plentiful resource that can be used to create electricity. It helps generate electricity without endangering the environment. Solar energy does not produce any carbon emissions of greenhouse gas emissions when it is used to generate electricity. Environmental protection is guaranteed while the intensity of climate change is reduced.
Pakistan Needs to Explore Solar Energy Potential to Save Billions
Solar Energy in Pakistan has a positive impact for the residential areas, and the corporations. The residential consumers can use solar panels to generate their own free electricity from the sun. With the electricity tariff prices reaching record high, solar can help reduce electricity bills by a huge margin. In this energy crises, it can not only help maintain the supply of electricity, get rid of high electricity bills, but it can also help save a lot of money that can be used for other things in the rising inflation. It also helps the entire nation by reducing the stress of household electricity on the grid.
The manufacturing and processing of chemicals, minerals, and food are just a few examples of the industrial uses of solar energy that Pakistan’s industrial sector may rely on. Solar Panels can help improve energy availability for enterprises which is in turmoil due to the issue of a lack of electricity. It may result in increased production and job opportunities for people. By increasing per capita income and boosting export potential, it can further develop the economy and improve the trade balance.
Pakistan has a huge potential for the use of solar energy as the average solar radiation intensity ranges from 1500 watts per square meter to 2750 watts per square meter for about 10 hours each day. Throughout the year, this is most prevalent in parts of southern Punjab, Sindh, and Baluchistan. The aforementioned locations have the capacity to produce close to 45 to 83 megawatts of electricity per month. This shows how solar energy can be the way forward in eliminating the energy crises and creating an energy independent future in Pakistan.
Energy crisis is real and we are stuck in it very badly. It is not only related to the supply of energy but the consequences are far worse. It can badly damage the economy and push us decades back in terms of national development. Solar energy is one of the primary solutions that can hep us curb the crises. This is because solar can be installed by the residential and industrial consumers to fulfill their own energy requirements. As for other sources of energy, everything has to be done by the government. This freedom and independence to install their own system can accelerate to the Switch to Solar which can in return help reduce the pressure on national grids. By attaining energy independence, we can truly embark on a journey to become a developed nation.