Energy transition pathway options for Pakistan reaching high levels of sustainability

Abstract

Pakistan, a developing country in South Asia, is heavily dependent on imported fossil fuels to meet its energy requirements. Such extensive reliance on imported and expensive fossil fuels has led to chronic power shortages, high electricity consumer bills, and overexposure to global energy shocks, revealing the vulnerability of the country’s energy security. Thus, this thesis examines the techno-economic feasibility of five distinct energy-industry transition scenarios led by highly renewable energy towards 2050.

The LUT Energy System Transition Model was utilised to determine the most cost-optimised energy-industry system transition pathway by 2050 in terms of the levelised cost of final energy and non-energy use. Out of the five transition scenarios, three of them are the best policy scenarios with very high shares of renewable energy that completely defossilise the energy-industry system with net-zero emissions by 2050, in accordance with the climate action goals of the Paris Agreement. The reference best policy scenario is fully optimised on a techno-economic basis by the LUT Energy System Transition Model without any constraints on renewable energy resources utilisation. A fast transition best policy scenario was devised in light of massive Chinese imported solar photovoltaics installation in this country to investigate how an accelerated transition with faster adoption of renewable energy can be manifested. Finally, a solar photovoltaics constrained best policy scenario depicts how renewable resources complementarity can provide flexibility to the energy-industry system by reducing the need for electricity storage. A delayed policy scenario hampers the transition to carbon-neutrality, while a current policy scenario is in line with the announced governmental polices for all the energy sectors without any specific emission reduction targets till 2050.

The analysis highlights that the most favourable policy options are the highly renewable energy net-zero scenarios. The reference best policy scenario provides an energy-industry system with the levelised cost of final energy and non-energy use of 29.2 €/MWh, reducing annualised energy system costs by 65% compared with a status-quo energy-industry system dominated by fossil fuels by 2050. Concurrently, a fast transition and a solar photovoltaics constrained best policy scenarios, result in a slightly higher levelised cost of final energy and non-energy use of 30.8 €/MWh, and 37.9 €/MWh, respectively, yet still achieve 63% and 54% reduction in the annualised energy system costs, respectively, by 2050, compared to the current policy scenario. In all the defossilised scenarios, solar photovoltaics and lithium-ion batteries will be the most dominant electricity generation and storage technologies, respectively, for Pakistan. The highly renewable energy pathways can prevent 42 b€ in fossil fuel costs annually compared to a fossil-intensive current policy pathway by 2050, demonstrating monetary and strategic benefits of defossilisation. The transition is driven by direct electrification of power, heat, and desalination sectors, while the hard-to-abate sectors, such as transport and industry, are indirectly electrified through the production of e-fuels and e-chemicals. Overall, the results of this study show that an energy-industry transition for Pakistan is in fact an emergence of a “Solar-to-X Economy”, which is sustainable, cost-efficient, energy-secure, and carbon-neutral.