Govt Plans To Embark Transition Strategy To Shift From Gas To Electricity

In Pakistan, the high energy intensity and high and rising cost of energy have serious effects on disposable incomes and economic competitiveness.

Govt Plans To Embark Transition Strategy To Shift From Gas To Electricity

The government intends to launch a 10-year transition strategy to switch from gas to electricity in the commercial, industrial and residential sectors, as well as promote energy-efficient buildings under a Rs45 billion energy efficiency and conservation project that aims to save more than Rs500 billion annually on energy costs.

Recently, the Central Development Working Party gave the project official approval to enter into negotiations with the World Bank for a $150 million loan, including a $15 million technical grant for the National Energy Efficiency and Conservation Authority’s capacity-building. A 10-year transition period was found to be excessively long and should be cut down.

The Planning Commission was informed by the project’s sponsors, the Ministry of Science and Technology and the Energy Efficiency Authority, that Pakistan currently had the potential to save 10 to 12 million tonnes of oil equivalent, which is the amount of energy produced by burning one ton of crude oil.

With a projected annual growth rate of 5.8 percent, the country’s primary energy supply, which is currently estimated to be 95 million tonnes of oil equivalent, will surpass 115 million tonnes by 2025 as per capita energy consumption rises from 405 kilograms of oil equivalent to 469 kilograms.

Plans a 10-year transition strategy for a project that calls for over Rs 500 billion in annual savings. In Pakistan, the high energy intensity and high and rising cost of energy have serious effects on disposable incomes and economic competitiveness.

With ongoing tariff reform measures necessary to address the circular debt issue, which is why energy costs already account for more than one-fourth of typical household spending, this percentage would increase. In terms of industry, Pakistan is at a significant competitive disadvantage due to the expensive and inefficient energy use, particularly in sectors of the economy that are exposed to foreign trade.

Plans a 10-year transition strategy for a project that calls for over Rs 500 billion in annual savings. In Pakistan, the high energy intensity and high and rising cost of energy have serious effects on disposable incomes and economic competitiveness.

With ongoing tariff reform measures necessary to address the circular debt issue, which is why energy costs already account for more than one-fourth of typical household spending, this percentage would increase.

In terms of industry, Pakistan is at a significant competitive disadvantage due to the expensive and inefficient energy use, particularly in sectors of the economy that are exposed to foreign trade.

A 25 percent decrease in building energy use across all sectors, according to a World Bank study for the project, could result in energy savings of 16 gigawatt-hours and cost savings of about Rs291 billion annually. Another aspect of the multi-purpose project, switching from gas to electricity could result in efficiency gains that are significantly greater than Rs250 billion annually.

The majority of Pakistani buildings were not built to strict energy-efficiency standards, which led to excessive energy use and costs for consumers. Additionally, some regions of the nation require inefficient water heating during the winter, which adds to the strain on already-depleted domestic gas supplies.

The national grid is strained in the summer due to inefficient buildings’ increased cooling demand, especially during peak hours, necessitating the use of costly and polluting peaking plants.

All significant federally owned buildings will undergo energy audits and benchmarking as part of the project. Several “showcase” buildings will also undergo deep energy efficiency retrofits as part of the project, and standardised materials and specifications will be developed to support the retrofitting of buildings in the commercial, public, and residential sectors.

The project would contribute to the creation of building design templates that housing authorities, relevant government agencies, and businesses could freely use to specify and build new energy-efficient buildings in accordance with new “green building codes.”

Due to a lack of regulations and standards for appliances, the building sector uses 26% of the nation’s total gas consumption, primarily for highly inefficient space and water heating at the highest subsidised rates.

Strangely, while more than 73 percent of people have access to electricity, only 24 percent do so to the piped gas network. Furthermore, an energy efficiency initiative is more important given the nation’s growing reliance on imported liquefied natural gas, rising gas prices, and seasonal gas shortages.

According to the National Energy Efficiency and Conservation Authority, using inverter air conditioners can reduce utility costs by 10–12 percent in the winter and 20–25 percent in the summer. By switching from gas heaters to inverter ACs in the winter, approximately 46 million standard cubic feet of gas per day would be saved.

For the purpose of meeting the heating needs in the targeted sectors, this component will therefore support a gradual switch from gas to electricity. To improve the energy efficiency of buildings and deliver a coordinated approach that takes into account both the thermal insulation of buildings and the efficiency of heat and cooling services provided within them, this would be done concurrently with changes to building designs and codes.

The project will involve launching a trade-in programme for households and businesses to voluntarily replace their inefficient gas geysers, boilers, and space heaters with electrically powered alternatives based on current analysis and ongoing studies.

This is going to be based on heat pump technology, the replacement of inefficient heating technologies, and the upgrading of processes, especially those that encourage a switch from gas to electricity in industrial sectors based on a revolving loan fund to also provide credit lines to homes and businesses.