Powering Pakistan: bridging gaps in sustainability | Political Economy

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Pakistan’s energy sector is at a critical juncture of availability, affordability and sustainability. Addressing these critical dimensions is imperative to promote economic growth and social equity. The absence of a coordinated approach at these nodes has systematically created failures, undermining national development. To navigate this maze, Pakistan must adopt structural and systemic reforms tailored to its unique challenges.

A strong energy framework is based on policy coherence and technological alignment. Pakistan is behind in this matter. A persistent gap between policy and technology hinders the deployment of adaptive and agile solutions.

Regulations often fail to keep pace with evolving technological interventions, leaving the country unable to take advantage of global developments. This disconnected approach creates a ripple effect, which hinders progress in renewable integration and energy market liberalization.

The introduction of solar energy, considered a cornerstone of sustainability, has inadvertently widened socio-economic disparities. While some high-income households have reaped the benefits of solarization, low-income groups have been an exception.

Recent declines in solar equipment prices have marginally improved penetration. However, the divide remains. Pakistan can counter this imbalance through alternative financing mechanisms targeting pro-poor models, enabling equitable access to solar energy.

A holistic approach should prioritize local production and assembly of solar components. Excessive dependence on imports has exposed the market to exchange rate fluctuations and international price shocks.

By promoting domestic manufacturing and establishing warehousing facilities for key components, Pakistan can stabilize prices and ensure continuous supply. Such a change will not only increase affordability but also create employment opportunities, stimulating economic growth.

Grid infrastructure represents another Achilles heel in Pakistan’s energy sector. Chronic underinvestment has hampered capacity expansion, leaving a significant portion of the population unprotected.

Strengthening grid networks and investing in microgrid solutions can dramatically increase access, especially in remote and underserved areas. These decentralized systems, combined with renewable energy sources, offer a practical way to close the energy access gap.

A significant challenge of intermittent renewable energy – grid instability. Addressing this requires innovative energy storage solutions such as battery swapping stations or hydrogen-based systems. A multi-complementary strategy, blending hydro, solar and wind energy, can also reduce intermittency problems. By leveraging these synergies, Pakistan can create a more flexible and stable energy supply chain.

Wind energy, while potentially promising, requires careful contextualization in Pakistan’s energy landscape. Horizontal-axis turbines, which are prevalent in global markets, demand substantial investment and land use, often making them less viable for off-grid or captive power arrangements.

A broader challenge lies in the structural reforms of Pakistan’s electric power market. A deregulated, multi-buyer multi-seller model can improve energy trading, promote competition and improve service quality.

Policymakers must weigh these limitations against the unique needs of local industries and communities to optimize the deployment of wind energy where it fits national priorities.

Structural reforms of Pakistan’s electric power market pose a broad challenge. A deregulated, multi-buyer multi-seller model can improve energy trading, promote competition and improve service quality. The government’s move to develop a competitive commercial bilateral contract market is a step in the right direction. Its implementation should be accelerated to ensure tangible benefits. Regulatory oversight should balance market liberalization with safeguards against monopolistic practices, drawing lessons from international case studies such as California and Brazil.

Investment in infrastructure is a non-negotiable element of this transformation. Countries such as Germany and China have demonstrated how targeted investment can drive renewable integration and increase grid capacity. Pakistan should emulate these examples, ensuring that infrastructure development is both forward-looking and inclusive.

Equally important is the involvement of stakeholders, the government, the private sector and the spread of civil society. Collaborative frameworks can align diverse interests, foster consensus, and accelerate implementation.

At the heart of these reforms is the need to make energy affordable for all segments of society. Although market mechanisms can increase efficiency, they must be complemented by policies that protect vulnerable populations from price fluctuations. Subsidies, when effectively targeted, can play an important role in achieving this balance.

is at stake. Energy availability underpins industrial growth, export competitiveness and job creation. Affordability ensures social equality. Sustainability protects the environment for future generations. Pakistan cannot afford to solve these dimensions in isolation. An integrated, multi-pronged strategy is the only viable way forward.

To achieve this vision, policymakers must go beyond short-term fixes to long-term solutions. Investments in renewable energy, grid modernization and domestic manufacturing must be coupled with innovative financing models and regulatory agility. Fostering a culture of accountability and transparency, ensuring that reforms translate into real-world impact.

Energy sector transformation is not just a technical challenge. It is also a test of national resolve. With concerted efforts and a clear vision, Pakistan can turn its energy crisis into an opportunity, and power a future that is inclusive, resilient and sustainable.

The author, an associate research fellow at the Sustainable Development Policy Institute, heads the SDPI Center for Private Sector Engagement. He can be contacted at ahad@sdpi.org. The article does not necessarily represent the views of the organization.