Pakistan Institute of Development Economics

P & R Vol.2 Issue 5
Energy investment and planning
Publication Year : 2021

Pakistan has lurched from an excess demand to excess supply of energy and has whimsically played around with the energy mix. While the world is moving to renewables we are investing heavily in coal. We allow energy to be produced on sovereign guarantees. The experts at the table were of the opinion that_ absence of competitive bidding and non-transparent power procurement process has brought structural rigidity and hindrances to the creation of a competitive market. Generation sector did attract private investment but get stuck in the cost-plus model. Guaranteed capacity payments have increased the cost of generation. Decision-makers have always chosen short term fixes to avert crisis instead of a long- -term well thought out strategy. Political expediency and short term goals resulted in long-term contracts; the end result is high prices for the consumers.