Dr. John P. Holdren, Adviser on Science and Technology to US President Barack Obama for both his terms in office and a distinguished faculty at Harvard and Berkeley for over two decades, believes that a society can get into trouble with “energy” either by not having adequate resources or by their costs moving beyond its reach. What Dr Holdren perhaps didn’t expect was that a society can have sufficient endowment of energy resources and still can push the energy out of the reach of its people and economy. Our present energy imbroglio is a classic case in point.
As energy is lifeblood to modern society, access to a minimum quantum of affordable, secure, and sustainable energy supplies is inevitable to fuel the economy and keep the lights on. Electricity is also a superior energy carrier for its versatility of use, ease of control, and cleanliness. As societies progress and their incomes grow, people switch from traditional fuels to electricity. Though not an absolute measure, electricity consumption per capita is a reasonable indicator of a country’s development.
According to the International Energy Agency’s “Key world Energy Statistics 2020”, Pakistan’s per capita annual energy consumption of half a ton of oil equivalent is only 29 percent of the average world consumption, 13 percent of the developed countries, and 23 percent that of China. Its per capita annual electricity consumption of 593 kWh is only 18 percent of the world average, 7 percent of the developed country average, and 12 percent that of China. Fifty to sixty million people in Pakistan still do not have access to electricity. Pakistan’s $1,250 per capita GDP is only 11 percent of the world average, 3 percent that of the developed countries, and 16 percent that of China.
We thus face abject poverty, both in economic development and energy use. Energy poverty may not be the exclusive cause of our economic poverty, but it’s certainly among the key contributing factors because access to affordable and reliable energy supply, and in particular to electricity, enables a decent standard of living for people and drives the engine of economic development.
Energy poverty stifles both human growth and economic development. Energy prices, if they exceed the citizens ability to pay, affect their quality of life, compelling them to cut corners on food, education, and health. Higher energy prices also undermine the competitiveness of agricultural producers, commercial businesses, and industries. It is, therefore, critical that we look deeper into the causes of our energy poverty and take measures to ensure that affordable, reliable, secure, sustainable energy supplies remain available for our people and economy.
Without dwelling on the past and making a passing note of the futility of continuing on the existing approach to managing the energy sector in Pakistan, we move on to offer a broad-brush sketch of an alternative approach that holds a better promise in turning our energy poverty into at least self-sufficiency, if not affluence. The power sector will be our focus for electricity’s being the choice carrier even now, and its increased importance in the future.
The primary cause of our energy (electricity) poverty has been our over-reliance on a centralized power supply system based largely on imported technologies and fuels. This approach has led to prohibitively expensive electricity supplies. While one can seriously debate the viability of this approach, let’s forgive our past leaders as they might have just followed the established practices. There’s, however, no excuse to continue on the same path in the future as this will lead to financial ruin, not just for the power sector, but for the whole economy.
The traditional approach to managing the power sector essentially consisted of aggregating consumers’ forecast demand and meeting it through a least-cost expansion of generation and T&D facilities. As bigger has always been better (more efficient) and cheaper too (economy of scale), it made sense to develop generation projects as large as practicable closer to sources of primary energy supplies or large water bodies for cooling. These approaches have become obsolete in the wake of disruptive market forces that have put small-scale, distributed, and renewable power generation on a head-to-head competition with their large-sized conventional competitors.
Our decision-makers’ recent love affair with utility-scale renewable power generation also may not last long, as when the reality sets in, they will have to grapple with issues of connecting these plants from resource-rich remote locations to serve distant urban centres, adding the requisite flexibility in the grid, and maintaining adequate backup by either conventional plants or storage of some kind. Obviously, not without their costs which if incorporated in the total cost equation may make them as expensive as the conventional plants are, if not more.
Fortunately, we no longer face the limitations of technology, size, and fuel, and the typical ways of the past to deliver electricity to consumers. The energy market has turned favourable lately, opening up a host of opportunities. Small power plants now beat the cost and performance features of large plants. Renewables, even without government support, are proving competitive. Battery storage technologies are enabling consumers to reduce, and even eliminate, their dependence on the grid. Electric vehicles (EVs) are opening up new vistas for their dual role for loads as well as supply. Choices are, therefore, in abundance.
We need to make a fundamental transformation in the way we produce and deliver electricity, essentially turning it on its head, from our current “top-down” to a new “bottom-up” approach. Our planners must strive to serve the future demand as much as possible at its source, from a nearby location, or from the central grid, whichever proves more feasible. In addition to avoiding a substantial portion of capital and O&M costs required for keeping excessive, and now, unnecessary reserve generation and transmission facilities, it will also help avoid excessive losses in the system.
These distributed electricity supply options and their deployment will lead to a range of additional benefits also. Their use will contribute significantly in making the electricity “affordable” for consumers by eliminating a substantial portion of the costs that may otherwise be incurred in the supply systems. Distributed supplies will also enhance the “security” of supply in traditional terms and also by reducing risks of sabotage or terrorism that mega-projects will always carry. Distributed systems will also contribute to “sustainable” energy supplies by virtue of their reliance mostly on natural renewable energy flows and technologies, skills, and support that can easily be developed within the country.
As aptly noted by the French writer Marcel Proust: “The true voyage of discovery lies not in seeking new landscapes, but in having new eyes.” We do not need to go elsewhere for our energy supplies. Resources are already there in our own backyards and in abundance too. The key issue, however, is “can our leaders and decision-makers, who are currently trained to look for mega and grand projects only, re-train their eyes to discover these hidden treasures in the small places scattered all over the country?”
