ISLAMABAD: Industrial electrification in Pakistan may reduce costs of energy consumption by more than 36 percent and cut carbon emissions by more than 50 percent by 2050, as per the findings of a new report that comes just when Pakistan’s gas-intensive industry is reeling from its worst-ever supply disruption.
Jointly carried out by the German think tank Agora Energiewende, which operates from Berlin, and the Pakistan-based Policy Research Institute for Equitable Development, this study provides a detailed road map sector by sector on how to replace fossil-fueled industries with electrical ones. This comes at a time when Pakistan’s gas prices are rising as the Strait of Hormuz dispute heats up.
Pakistan’s Dependence on Gas for Industry: A Structural Problem
Gas Rules an Unstable Mix of Fuels
The study of Pakistan’s industrial gas use highlights the magnitude of the problem in alarming detail. Currently, gas constitutes 30% of the industrial fuel mix of Pakistan the highest proportion compared to other fuels like coal and coal products which contribute 26.7%, and electricity, which contributes only 15%. The reliance on gas for critical industrial functions such as heating, boiling, and steam production makes it structurally vulnerable, and the Gulf crisis has turned this into a practical economic issue.
The decreasing domestic production of gas adds up to the dependence on LNG imports, which is being put at direct risk by the regional conflict. As noted by study author Naila Saleh from Agora Energiewende, Pakistan’s drive towards industrial electrification was already underway even prior to the present-day conflict, owing to the worsening fundamentals and increasing costs associated with the use of gas as an energy source.
Industries Driving the Electrification Trend
The Food Industry Provides the Quickest Payoff
Electrification in the Pakistani industrial sector is likely to have its greatest impact in those industries in which gas currently plays a dominant role and in which electric heating systems can be found on an industrial scale. The food industry stands out as providing the quickest payback – 51% of all fuels used in the industry consist of gas.
This research shows that the use of electrical heating together with the load offsetting from the photovoltaics allows saving up to 90% costs in applications related to the food industry, with a payback period of 2.2 years. Such high returns disqualify any commercial logic that could have justified postponing electrification in favor of the food sector.
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Textiles, Paper, Pulp and Fertilizers Close Behind
The field of textiles also presents attractive economics for the electrification of industries through solar photovoltaics in Pakistan from a process perspective. Savings are estimated to be $100,000 per process annually compared to equivalent processes powered by gas, which holds a lot of weight for the industry given its price wars in global markets.
the sectors that the research highlights as having strong near-future potential for electrification are paper and pulp and fertiliser production, along with the other sectors listed above.
CO2 Emissions Lowered to 36.9 Million from 76.5 Million Tonnes
The electrification of industry in Pakistan produces an environmental change that is just as profound as it is financially advantageous for Pakistan. According to the research paper, the expected carbon dioxide emissions from the country’s industries would drop to about 36.9 million tonnes in 2050, compared to 76.5 million currently, which means more than 50 percent lower emissions.
The researcher who studied this issue, Manzoor Ahmad from Pried, clearly outlines the double benefits, whereby the electrification of industries in Pakistan not only cuts the carbon footprint of industry but also reduces the cost of operations, provided that the government offers competitive prices for electricity and appropriate incentives.
What Pakistan Requires to Make its Industrial Electrification Strategy Succeed
Tariff Barriers Will Persist
The problem Pakistan industrial electrification strategy confronts is a central issue that emerges clearly from the study. It is impossible to reap any benefit in terms of cost efficiency without cheap and uninterrupted electricity, which Pakistan’s power sector does not seem able to provide regularly. Indeed, the high tariff rates due to capacity payments, line losses, and circular debt have created an obstacle that makes the case for industrial electrification presented elsewhere in the study unpersuasive.
The CEO of ALM Textile Mills, Khawja M. Hussain, verifies the industrial point of view himself. Manzoor Ahmad states that industrial electricity is economically feasible in Pakistan, but he emphasizes that the high initial capital investment acts as an impediment, which requires government support to overcome. Hussain urges low-cost industrial electrification financing loans, similar to what was previously provided for solarization.
Solar PV, Storage Policy, and Regulatory Reform
According to Naila Saleh, solar photovoltaics (PV) is the most feasible option in the short term for overcoming the challenge posed by the tariff hurdle since the competitiveness of industry depends on the availability of inexpensive and reliable electricity. According to Shahzad Ali from the Ministry of Industries and Production, there would soon be a policy for the entire nation concerning industry and its electrification, while a policy for battery storage is also in the pipeline.
Manzoor Ahmad contends that Pakistan needs to adopt a phased approach towards electrification in the industrial sector by first adopting electric processes for industries where low- to medium-temperatures prevail using currently available technologies and then later using future advanced technology in high-temperature industries.
