Energy / Asia
Track Asia energy trends, demand growth, industrial power needs and strategic supply signals through curated summaries.
Transitioning Pakistan’s energy demand
Summary
Pakistan's energy system is at a critical juncture, facing challenges from declining gas reserves and rising electricity demand. The transition towards electrification is seen as a viable solution to enhance energy security and reduce carbon emissions. Two studies focus on residential and industrial electrification pathways, highlighting the economic and environmental benefits of shifting from gas to electric alternatives.
The residential sector study indicates that transitioning to electric appliances could save approximately $23.8 billion in fuel imports and reduce carbon emissions by nearly 108 million tons by 2050. The industrial electrification study suggests that electrifying industrial processes could cut emissions by up to 50% and deliver significant energy savings. Both studies emphasize the need for a clear, evidence-based strategy to manage this transition effectively.
Challenges in the gas sector, including declining domestic reserves and increasing import dependence, necessitate a shift towards electrification. The electricity system has surplus capacity that remains underutilized, presenting an opportunity to meet heating demands through electric solutions. However, the transition requires careful planning and policy adjustments to ensure affordability and reliability.
Tariff reforms are essential to make electricity prices competitive with gas, particularly for low-income households. The current high electricity tariffs hinder the adoption of electric appliances, necessitating a restructuring of pricing mechanisms. Additionally, the transition must consider the socio-economic diversity across regions to ensure equitable access to electrification.
Perspectives
short
Pro-Electrification
- Advocates for transitioning from gas to electric alternatives to enhance energy security
- Highlights potential economic savings of $23.8 billion in fuel imports through electrification
- Emphasizes the environmental benefits of reducing carbon emissions by 108 million tons
- Points out the underutilized electricity generation capacity as an opportunity for electrification
- Calls for tariff reforms to make electricity more affordable for low-income households
Skeptical of Transition
- Questions the feasibility of electrification given the current high electricity tariffs
- Raises concerns about the reliability of the electricity grid and its capacity to handle increased demand
- Points out the need for significant infrastructure investments to support electrification
Neutral / Shared
- Acknowledges the need for institutional coordination to facilitate the transition
- Recognizes the importance of considering socio-economic diversity in electrification strategies
- Notes the potential for decentralized solar solutions to complement electrification efforts
Metrics
savings
US$23.8 billion USD
cumulative fuel import savings from transitioning household gas appliances to electric alternatives by 2050
This significant savings could alleviate financial pressure on the economy.
it could generate around US$23.8 billion in cumulative fuel import savings
emissions_reduction
nearly 108 million tons
carbon emissions reduction from transitioning household gas appliances to electric alternatives by 2050
Reducing emissions is critical for meeting climate goals.
reduced nearly 108 million tons of carbon emissions
emissions_reduction
up to 50%
potential reduction in industrial emissions through electrification by mid-century
A 50% reduction could significantly improve air quality and public health.
could reduce Pakistan's industrial emissions by up to 50%
energy_savings
more than 36%
potential energy savings from electrifying industrial processes compared to current trajectories
Energy savings can lead to lower operational costs for industries.
deliver energy savings of more than 36%
decline_rate
8.6%
annual decline of domestic gas reserves
This rapid decline indicates a looming energy crisis.
domestic reserves are declining at 8.6 percent annually
remaining_years
10 to 15 years
years of gas supply remaining at current extraction rates
Limited time frame for transitioning to alternative energy sources.
we have only 10 to 12 years stretched to 15 years at most
LNG_import_percentage
25%
percentage of gas demand met through LNG imports
Increased reliance on LNG exposes the economy to volatile markets.
25 percent was met by the LNG imports
LNG_cost
10 to 12 dollars per MMBTO USD
long-term cost of LNG compared to indigenous gas
Higher costs for LNG increase the financial burden on consumers.
long term cost of this LNG has 10 to 12 dollars per MMBTO
Key entities
Timeline highlights
00:00–05:00
Electrification and sector coupling are identified as crucial for achieving credible zero pathways in Pakistan's energy landscape. Studies indicate that transitioning to electric alternatives could lead to significant fuel import savings and substantial reductions in carbon emissions.
- Amara, an energy and climate researcher at PRIED, highlights electrification and sector coupling as essential for achieving credible zero pathways in Pakistans energy landscape. The country faces significant stress in its gas sector, with rising electricity challenges and rapid solar uptake reshaping consumption patterns
- The residential electrification study by Agora and LUMS Energy Institute evaluates the feasibility of transitioning household gas appliances to electric alternatives by 2050. This shift could yield US$23.8 billion in cumulative fuel import savings and cut nearly 108 million tons of carbon emissions
- Agoras industrial electrification study, in collaboration with PRIED, suggests that electrifying industrial processes could reduce emissions by up to 50% by mid-century. It also indicates potential energy savings exceeding 36% compared to current trajectories
- The event agenda features a presentation from LUMS Energy Institute on reconfiguring traditional gas appliances in the residential sector. This will be followed by findings from PRIEDs industrial electrification study and a panel discussion with various stakeholders
05:00–10:00
Pakistan's domestic gas reserves are declining at an annual rate of 8.6%, leading to increased import dependence and rising consumer costs. The electricity system has surplus generation capacity that remains underutilized, highlighting the potential for residential electrification as a sustainable alternative to gas.
- Pakistans domestic gas reserves are declining at an annual rate of 8.6%, with only 10 to 15 years of supply remaining at current extraction rates. This decline is leading to increased import dependence and rising costs for consumers
- The residential sectors reliance on natural gas for heating and cooking is becoming unsustainable due to severe shortages during winter months. The electricity system has surplus generation capacity that remains underutilized, creating a mismatch between gas shortages and available power supply
- The studies aim to assess the feasibility of residential electrification as a sustainable alternative to gas, focusing on cost reduction, energy security, and environmental benefits. A significant portion of gas demand is now met through LNG imports, exposing the country to volatile spot markets
10:00–15:00
Pakistan's gas sector is facing fiscal challenges due to structural inefficiencies, resulting in a circular debt exceeding 3 trillion rupees. The power sector has significant underutilized capacity, indicating a potential shift from gas to electricity for residential heating.
- Pakistans gas sector faces fiscal unsustainability due to structural inefficiencies, including high technical losses and weak billing systems, leading to low recovery rates and tariffs that fail to cover operational costs. The circular debt has exceeded 3 trillion rupees, driven by network losses and non-reflective tariffs, complicating the financial viability of gas distribution companies
- Residential gas consumption accounts for approximately 30-36% of total gas usage, highlighting the need for a transition to electrification. The power sector has substantial underutilized capacity, with generation capacity increasing from 30% to 50% surplus over the past three years, indicating an opportunity to shift heating loads from gas to electricity
- During winter, gas demand triples due to heating needs, while electricity demand drops significantly, creating a seasonal mismatch. This presents an opportunity to electrify residential heating without requiring new generation capacity, addressing both energy security and sustainability
15:00–20:00
The study analyzes the transition from residential gas to electric and renewable alternatives in Pakistan, focusing on cost-benefit and macroeconomic impacts. It employs data-driven scenario modeling to assess system readiness and develop actionable pathways for electrification.
- The study evaluates the cost-benefit and macroeconomic impact of transitioning from residential gas to electric and renewable alternatives, employing data-driven scenario modeling that combines household consumption data with market-level appliance comparisons
- Three main objectives guide the study: evaluating the cost-benefit of transitioning to electric alternatives, assessing system readiness for electrification, and developing a feasible pathway for the near, medium, and long term
- The analysis includes a detailed market assessment of electric and gas appliances, identifying suitable electric options and compiling data on retail prices, operational costs, and efficiency parameters
20:00–25:00
The study evaluates the transition from gas to electric and renewable technologies for residential heating, highlighting a phased pathway that considers affordability and system readiness. It finds that while gas appliances have lower upfront costs, electric options offer significantly lower operational costs, leading to potential savings of 50 to 70 percent.
- The residential sector study evaluates the feasibility of transitioning from gas to electric and renewable technologies for space heating, water heating, and cooking, outlining a phased pathway that considers affordability and power system readiness
- A comprehensive market analysis indicates that while gas stoves are cheaper upfront, they operate at low efficiency, making electric heating appliances more efficient despite higher initial costs
- Operational costs for electric appliances are significantly lower, resulting in savings of 50 to 70 percent compared to gas systems, which enhances the economic viability of electrification
25:00–30:00
The grid requires tariff reforms to support electrification and enhance demand and revenue, with scenario modeling revealing business as usual, partial electrification, and full electrification pathways. Significant reductions in gas demand and CO2 emissions are projected with a phased implementation roadmap for transitioning to electric heating solutions.
- The grid requires tariff reforms to support electrification and enhance demand and revenue, with scenario modeling revealing business as usual, partial electrification, and full electrification pathways
- Gas demand is projected to drop from 300 billion cubic feet per year in the business as usual scenario to 190 billion cubic feet in partial electrification, with full electrification eliminating gas consumption entirely
- Electricity demand is expected to increase by 12 terawatt-hours in partial electrification and by 37 terawatt-hours in full electrification, potentially saving 1.67 billion USD and 3.6 billion USD annually in import bills, respectively
- Emission reductions are significant, with 6 million tons of CO2 reduced per year in partial electrification and 16 million tons in full electrification, while utility cash flow could improve dramatically with full electrification
- An implementation roadmap is necessary, divided into three phases: a five-year plan, a scaling phase from 2030 to 2040, and a full transition phase from 2040 to 2050, to prepare both gas and power sectors for the transition
- Prioritizing the electrification of space and water heating is essential as these are the main drivers of winter gas demand spikes, with initial phases focusing on heating transitions and cooking electrification scaled later