Power

Power sector in 2030

To meet growing demand as energy access progresses, Pakistan is undertaking a major expansion of electricity generation capacity. In recent years, Pakistan has achieved its short-term energy goals of eliminating power and gas shortages. However, this has been largely achieved by commissioning new coal fired power plants and LNG-importing infrastructure.¹

The Alternative and Renewable Energy Policy 2019 aims for a 20% share of renewables in power generation by 2025, and 30% by 2030, along with 30% share of large-scale hydro.²^,³^,⁴^,⁵This is a relatively slow increase for the latter technology which has contributed, on average, to a 26% share of Pakistan’s power generation in each of the last five years. However, this does represent a significant ramp up of other renewables, which in 202-21 made up just over 3%.⁶^,⁷ On the other hand, 1.5°C compatible pathways show the need for an even greater uptake in renewables by 2030, reaching shares of 76-81% by that time.

The government’s recently released generation capacity expansion plans indicate that hydro and nuclear power generation will significantly increase, along with a more modest increase in that from wind. This would result in a steady decrease in power emissions intensity, declining to 0.202 kgCO₂/kWh by 2030.⁸ In comparison, for the 1.5°C compatible pathways, this indicator would need to decline to 0.082-0.084 kgCO₂/kWh by 2030.

Although coal has played a minor role historically in Pakistan’s power mix, the government plans to meet anticipated future growth in energy demand, in part, through new coal capacity, including plans for coal gasification and liquefaction of indigenous coal.⁹ At the same time the government has neglected opportunities to develop wind and solar resources which are price advantageous and domestically available.¹⁰^,¹¹

Further increasing coal capacity would exacerbate the existing problems with overcapacity and consequent high electricity prices for consumers, which further suppress demand. The result has been an ongoing problem with circular debt in the country’s power sector.¹² Moreover, increasing coal capacity would make Pakistan more reliant on energy imports thus reducing the country’s energy security.

Pakistan's power mix

terawatt-hour per year

Scaling

Relative
Absolute

Dimension

Capacity
Generation

In the 100%RE scenario, non-energy fossil fuel demand is not included.

Graph description

Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC SR1.5 global least costs pathways and a 100% renewable energy pathway. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2021.

Methodology
- Downscaling power energy mix
Data References
- Historical energy consumption : IEA WEB 2021

Towards a fully decarbonised power sector

A 1.5°C compatible pathway would require that Pakistan reach full decarbonisation of its power sector by 2038. This would be mostly driven by a strong uptake of renewable energy reaching 93-95% by 2040 and 95-100% by 2050, and a corresponding phase-out of gas between 2038 and 2045. Other studies have shown that at regional level, coal will need to be phased out by 2040 in South and East Asia to be compatible with the Paris Agreement.

Pakistan is one of the most at risk countries from adverse effects of climate change.¹³ This has implications for the power sector. Increasing extreme heat, high temperatures, and low river water flows during the summer period will likely affect supply and thermal power plant efficiency, damage oil and gas infrastructure, while also increasing electricity demand for cooling and irrigation.¹⁴

While hydropower has been an important source of low emissions electricity generation in Pakistan historically, the effects of climate change will likely also hinder its use and/or reliability in the country in the future as warming leads to a recession of Himalayan glaciers and greater variability in water flows.¹⁵^,¹⁶

Thus, increasing the role of variable renewables such as wind and solar, will not only help Pakistan to avoid stranded assets and carbon lock-in risks, it is also key in both mitigation and adaptation efforts.

Graph description

Emissions and carbon intensity of the power sector in selected 1.5°C compatible pathways.

Methodology
- Downscaling power carbon intensity
Data References
- Historical energy consumption : IEA WEB 2021
- Historical energy emissions : IEA GHG emissions from Energy database 2021

Investments

Yearly investment requirements in renewable energy

Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Pakistan to be on the order of USD 4.7 to 15.3 billion by 2030 and 5.3 to 25.8 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors, growing energy demand, and an expansion of electricity access. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.

Demand shifting towards the power sector

The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time.

Graph description

Annual investments required for variable and conventional renewables installed capacities excluding BECCS across time under 1.5°C compatible pathway.

Methodology
- Power Investments

Co-benefits

Employment impacts of replacing coal with wind and solar

Decarbonisation of the power sector is linked to many other national development goals beyond climate change mitigation. Replacing coal power generation with renewable energy can, among other things, generate employment opportunities.

In Pakistan, job growth from renewables would outweigh job losses from closed coal power plants at least 2.8 to 1 in a scenario where coal is phased out in line with 1.5°C pathways and replaced with solar and wind.

We estimate that around 30,000 new jobs in renewable energy could be created from an accelerated coal phase-out. Conversely, up to 9650 jobs in coal plant operation and maintenance would be lost in this scenario compared to current coal plans.

Our analysis focuses on direct jobs in manufacturing of technology parts (to the degree this happens within the country), construction and installation as well as operation and maintenance of power coal, wind and solar capacities. Other existing electricity generation technologies have not been taken into account, nor has growth in electricity demand due to increased electrification, which would increase job estimates. Additional jobs related to storage can also be expected when transitioning towards solar and wind.

Jobs in coal mining (for export or local use) are also not included in this analysis. Estimates suggest that Pakistan’s coal mining sector employs over 100,000 workers.¹⁷ However, these jobs are considered very dangerous with low safety and health standards, and many injuries and even deaths per year.¹⁸ These deaths contribute to coal power-related mortalities, but are not included in our analysis below.

Another advantage of decentralised renewable solutions, such as solar PV (especially roof top), is that they can provide reliable electricity to households during times of high demand from the grid or when there are disruptions, such as during heatwaves.

You can find more information on the methodology and assumptions also linking to more detailed results here.

Air quality and health benefits from phasing out coal

Pakistan has some of the highest air pollution levels in the world.¹⁹ Pakistan’s coal power plants contribute substantially to air pollution in Pakistan.²⁰

Pakistan could substantially reduce the estimated number of premature deaths with an accelerated coal phase-out. Over 3000 premature deaths per year could be avoided by the mid-2030s compared to a business-as-usual (BAU) scenario illustrating current coal development plans.

Between 2022 and 2040, we estimate that Pakistan could avoid a total of about 4,000 premature deaths if coal is phased out in line with a 1.5°C pathway. Pakistan’s projected population growth and its age structure means the number of people exposed to air pollution from coal power plants is expected to increase over time, leading to increasing air pollution-related deaths even if no new coal capacity was installed.

Our estimates do not include deaths related to cross-border pollution, i.e. health implications from Pakistan’s coal power plants for neighbouring countries, nor health impacts on Pakistan’s residents caused by coal plants in neighbouring countries.

You can find more information on the methodology and assumptions also linking to more detailed results here.

Indicator	2019	2030	2040	2050	Decarbonised power sector by
Carbon intensity of power gCO₂/kWh	350	82 to 84	-45 to 0	-33 to -18	2038
Relative to reference year in %		-77 to -76%	-113 to -100%	-109 to -105%

Indicator	2019	2030	2040	2050	Year of phase-out
Share of unabated coal per cent	12	0 to 1	0 to 0	0 to 0
Share of unabated gas per cent	46	12 to 13	0 to 3	0 to 0	2038 to 2045
Share of renewable energy per cent	24	76 to 81	93 to 95	95 to 100
Share of unabated fossil fuel per cent	68	15 to 17	0 to 3	0 to 0

BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded

Malik, S., Qasim, M. & Saeed, H. Green Finance in Pakistan: Barriers and Solutions. (2018). ↩
The Government of Pakistan. Alternative and Renewable Energy Policy 2019. (2019). ↩
Khan, M. B. Alternative energy policy 2019 at a glance. The Nation (2020). ↩
Qasim, M. Pakistan leapfrogging to a green energy future. East Asia Forum (2020). ↩
Renewables covered by the policy include solar, wind, geothermal, and biomass, as well as alternative technologies like biogas, syngas, waste to energy, energy storage systems, ocean/tidal waves, and hybrids thereof. ↩
NERPA. State of Industry 2021. (2021). ↩
However, analysts have pointed out that Pakistan’s latest Indicative Generation Capacity Expansion Plan has hydro generating 47% of the country’s power in 2030 while wind and solar produce a combined 14%. This mix is seeming in violation of the Alternative and Renewable Energy Policy targets.[^21] ↩
NTDC. Indicative Generation Capacity Expansion Plan (IGCEP) 2021-30. (2021). ↩
The Government of Pakistan. Pakistan: Updated Nationally Determined Contributions 2021. (2021). ↩
Ebrahim, Z. China’s coal exit will not end Pakistan’s reliance on dirty fuel. The Third Pole (2021). ↩
Nicholas, S. There’s No Second Life for Coal in Pakistan. (2021). ↩
PACRA. Power Generation - An Overview. (2021). ↩
Eckstein, D., Künzel, V. & Schäfer, L. Global climate risk index 2021. Who suffers most from extreme weather events? (2021). ↩
Chaudhry, Q. U. Z. Climate Change Profile of Pakistan. (2017). ↩
Chaudhry, Q. U. Z. Climate Change Profile of Pakistan. (2017). ↩
Several studies have investigated climate change effects on water flow variability in the Indus basin. A recent article suggests that this area has the highest potential for low-cost seasonal pumped hydro storage in the world.[^22] ↩
See website of the IndustriALL global union https://www.industriall-union.org/pakistans-deadly-coal-mines ↩
See website of the IndustriALL global union https://www.industriall-union.org/pakistans-deadly-coal-mines ↩
See e.g. the Air Quality Life Index putting Pakistan on rank 4 out of 240 countries for their pollution ranking as of August 2022 https://aqli.epic.uchicago.edu/country-spotlight/pakistan/ ↩
Abbas, S., Ali, G., Qamer, F.M. et al. Associations of air pollution concentrations and energy production dynamics in Pakistan during lockdown. Environ Sci Pollut Res 29, 35036–35047 (2022). https://doi.org/10.1007/s11356-021-18071-4 ↩

What is Pakistan's pathway to limit global warming to 1.5°C?

Power sector in 2030

Pakistan's power mix

terawatt-hour per year

Towards a fully decarbonised power sector

Pakistan's power sector emissions and carbon intensity

MtCO₂/yr

Investments

Yearly investment requirements in renewable energy

Demand shifting towards the power sector

Pakistan's renewable electricity investments

Billion USD / yr

Co-benefits

Employment impacts of replacing coal with wind and solar

Air quality and health benefits from phasing out coal

1.5°C compatible power sector benchmarks

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