According to evidence shown during the Pakistan Economic Forum 2015, the current plan to increase supply will not provide relief to consumers any time soon. The growth in demand will continue to outpace growth in supply, especially as aging power capacity goes offline.

As part of my work for the Integrated Energy Plan (an effort of the Energy Experts Group), I compiled Pakistan's first comprehensive energy flow diagram (as seen below). If you want to understand what is an energy flow diagram read our explanation here.

The findings of my energy flow diagram for Pakistan surprised everyone, although the data had been staring us in the face for a long time.

Including losses at the consumer level, Pakistan is losing 82% of its energy to inefficiencies. As can be seen in the energy flow diagram, the biggest losses are on the consumer usage side (29.24MMTOE), in power generation (15.06MMTOE), natural gas Transmission and Distribution (T&D) (3.79MMTOE) and electricity T&D (1.69 MMTOE). That means if Pakistan would only concentrate on reducing the inefficiencies in its energy flow, much of the energy crisis would be resolved.



 Key Highlights

1. 1. Pakistan imported 20.88 MTOE of energy to fulfill the demand of its population, the majority of it crude oil and oil products. 44.76 MTOE of energy came from indigenous resources.


2. 2. Natural Gas forms the backbone of Pakistan’s energy needs, providing 31.15 MTOE out of the entire 64.59 MTOE of Pakistan’s energy needs (as well as non-energy industrial needs like fertilizer, plastics, etc).


3. 3. 3.8 MTOE (12.2%) of the total natural gas supplies is lost in transmission and distribution.


4. 4. The power generation sector receives 22.84 MTOE of energy from natural gas, hydel, nuclear, oil and coal. It outputs only 7.78 MTOE as electricity. 15.06 MTOE (65.9%) are lost in generation due to inefficient transformation processes and plant use.


5. 5. A further 1.69 MTOE (21.7%) of electricity is lost in Transmission and Distribution (as well as plant use), so that in the end consumers receive 6.09 MTOE of electricity.


6. 6. On the final energy level, industry is the biggest consumer, using 14.49 MTOE of energy from oil (petroleum products), gas, coal and electricity. Transport is the next biggest consumer, using 12.71 MTOE of energy from oil and gas followed by the domestic sector using 9.97 MTOE of energy from gas, petroleum products and electricity.


7. 7. Out of the 40.2 MTOE of final energy that trickles down the consumers,72.7% of it is lost by the usage of inefficient appliances, motor vehicles and industrial processes. Only 10.96 MTOE of useful energy is received.


8. 8. Overall, from 60.6 MTOE of energy that came in through primary energy and imports and was used for energy needs only, 49.37 MTOE (81.9%) was lost due to inefficient electricity conversion, line losses, and inefficient usage at final demand level.
   

Does that mean we can get 100% efficiency out of our system? No, 100% is a theoretical efficiency. The European Union was 38% efficient in 2006, and has since then managed to reduce final energy demand by 12.8%, raising its total efficiency to 45-50% in just 9 years. Keeping these regions as our benchmarks, our 18% efficiency is dismal. The efficiencies of the developed countries allow them to sustain growth while our inefficiencies are handicapping our economy.

By following existing best practices around the world, Pakistan can significantly reduce the energy losses down to 50-55%, and hence put an end to the energy crisis and reduce the import of energy.

Now what can be done to reduce the losses? Read more here.

Note: The Energy Flow Diagram is based on data from the Pakistan Energy Yearbook and NEPRA's State of the Industry Report. Efficiencies on the consumer side are based on global averages given by the Global Energy Assessment.