Physicist define energy as capability to do work, they apply the fact to study nature. But, this fact in contemporary world also applies to economies in determining their potential and real output. These days energy has also become instrumental in establishing balance of power and is catalyst in shifting this power from a state to another.
The sources widely used for generating energy are oil, natural gas, water-hydel, nuclear power and coal. Renewable energy sources such as wind mill, solar, sea-waves, geothermal, and waste are gaining popularity since conventional sources have fallen inadequate to meet raising demand for energy. Besides it, energy sources like oil and gas are depleting at rapid pace and nuclear energy is costlier. It has necessiated to explore new avenews of energy like renewable which is present in abundance for an infinite time.

Pakistan has enormous potential of generating power, it has however, plunged into the energy crisis in recent years. Pakistan relies largely relies on thermal energy production, hydel stands second. Pakistan's installed power capacity is 65% of total production by thermal; 34% by natural gas, 28% by furnace oil and 0.1% by coal (China produces 75% of power by coal). Around 32% of power is generated by hydel-plants and rest by nuclear plants. But generation of power remains below its installed capacity.


Pakistan's potential of power generation is beyond its installed capacity. Hydel potential is about 40,000MW, wind mill 50,000MW, Biomass 8,000MW and multi thousand MW of solar energy. Coal deposits in the country are 185 billion tons of which 175 billion tons are in Thar. Sea-waves and geothermal are other renewable sources available to the country. Pakistan's geo-strategic location opens doors for her to energy rich corridors like Iran, Afghanistan, Central Asian countries and giant power producers like China and India.
Pakistan still faces worst energy crisis in region since 2005. Present crisis has rose and deepened mainly due to Public Policy and recent Oil supply shocks. Later troubled the country on more than one front i.e. energy crisis and BoP problem when Oil import bill soared to about $11 billion in FY 2008 June. It was beyond our control because oil prices in international market rose to $140/barrel from $40 in short period of 12months. In case of Public Policy, causes for present crisis is home made.
In Power Policy 1987 and 1994 role of WAPDA was reduced in setting up new projects, but federal units disagreed. Private Sector was encouraged to set up power plants by one window facility provided by Pakistan Power and Infra-structure Board. Second half of decade of 1990s saw $6.5 billion investment in power sector for generation of 5728MW on power by Independent Power Producers. It resolved energy shortages problem for the time and left surplus of energy. Poor management of surplus energy subsequently no sells to neighboring countries where demand was high, up set foreign investors.
Following years upto 2006 witnessed little increase in power generation capacity of hydel plants and minimal increase in thermal-IPPs and Nuclear plants. Whereas, KESC's capacity of generating electricity diminished by 3% to 9% in 2006 as compared to 12% in 1999. Total installed capacity increased roughly by 2500MW by 2006 as compared to 1999.
In the same period of 2001-2006 economy grew at an average of 7%. Economic activity demanded more power. Power demand during these years averaged to double of GDP growth; 65% of which was consumed by shops and 12% by industry. Investment in power sector did not match the demand hence it resulted in shortages of supply. Energy deficit between demand and supply ranged from 2500MW to 5000MW in peak times.

Summarizing:
Causes
1. Public Policy: already discussed above, it can be discussed further
2. Wearing away of equipment used in generation
3. Water shortages
4. Dams Building: Differences of Provinces
5. Circular Debt which deterred IPPs from operating at their full capacity
6. Line Losses in transmission
7. Theft
8. Reliance on Oil and Gas-Ignorance of Thar Coal
9. Ignorance of Renewable Sources

Remedies

1. Attract more investment in Renewable and Hydel Projects
2. Internationalizing Power-Transmission of regional level: Links with India, China, Afghanistan and Iran so as to import electricity from them for border areas.
3. Building Dams
4. Thar Coal power plant
5. Others

Government has taken steps

> Awarded contract to Turkish firm Zorlu Enerji to erect 6 wind mill plants. 1st project of wind mill in Thinpir-Sind has capacity of 1.2MW.

> 93 firms are interested in wind farms, government has issued LOI to them. Government has allocated land to 22 of firms on lease for a period of 33 years.

> Government is also floating Corporate Investment Paper to raise funds upto Rs.75billion to retire a portion of circular debt so as to enable IPPs to function smoothly.

Conclusion

If adequate attention is given to the sector especially renewable energy, country can turn into supplier of energy to two big economies like India and China-where demand for energy is increasing day by day.

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