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National Energy Policy Aims to Save $6.4 Billion Per Year

The Ministry of Science and Technology has sought Cabinet Committee on Energy’s (CCOE) approval for the National Energy Efficiency and Conservation (NEEC) policy which is estimated to result in monetary benefits of $6.4 billion per annum.

The Ministry has moved a summary to the CCOE, a copy of which is available with ProPakistani. It notes that the provision of reliable, affordable, efficient, secure, and clean energy has become the primary driver for the sustainable economic growth of the country.

Like most developing countries, Pakistan’s economy is also suffering due to a surge in energy prices, exchange rate volatility, increasing demand for energy, and depleting domestic energy resources. Pakistan is the net importer of energy resources and it has not been able to define efficiency as a key pillar of its energy sector sustainability.

Energy consumption in Pakistan has increased by 15.4% in FY 2021. This increasing energy consumption pattern is marred by irresponsible energy use, high energy wastage, and reliance on less efficient technologies. Lack of integration of energy efficiency and conservation measures can also be witnessed in the energy planning of the country where demand-side energy management has not been able to get the required attention it deserves.

High energy prices, peak demand, and circular debt are major challenges that demand integration of EE&C measures across the entire energy value chain of the economy.

Energy Efficiency and Conservation (EE&C) is one of the key components of the Sustainable Development Goal (SDG) where the target for 2030 is set at doubling the rate of improvement in energy efficiency. Though multiple policy measures have been put in place to achieve this target. EE&C’s measures have not been able to gain momentum in Pakistan.

It is a well-established fact that saving energy is always cheaper than producing the same amount of energy. As per the estimates, Pakistan has the potential to save up to 10-15% of its primary energy supply through EE&C measures. During the backdrop of the recent economic and energy crisis, a Ministerial Committee on Energy, Water, and Food recommended the implementation of short-term EE&C measures to save a dollar outflow of $1.15 billion.

With the promulgation of the National Energy Efficiency & Conservation (NEEC) Act 2016 (Annex-I), a renewed focus on EE&C was witnessed in the national energy sector landscape. It provides a comprehensive governance framework for the institutionalization and implementation of EE&C measures in the country.

National Energy Efficiency and Conservation Authority (NEECA) in light of Section (7) subclause (c) of the NEEC Act 2016 formulated the NEEC Policy to activate the EE&C regime in Pakistan.

It is submitted that NEEC Policy 2022 has been promulgated with a vision to create a culture of conservation and efficient use of energy resources. It aims to double the rate of energy efficiency by improving energy intensity, ensuring cost-effective measures, and developing market-based mechanisms to achieve the country’s energy efficiency targets of 9 MTOE by 2030.

The said policy will also offer associated Green House Gases (GHG) emission reductions of approximately 35 MTCO2 per annum. The policy has prioritized five strategic sectors of the economy i.e. Industry, Transport, Building, Power & Petroleum, and Agriculture where the proposed EE&C measures will result in average monetary benefits of $6.4 billion per year while the total implementation cost of this policy is 8 billion USD.

Further, an EE&C Action Plan 2023-2030 will be developed, in close consultation with all the public and private stakeholders, both at federal and provincial levels, to ensure systematic implementation of policy measures.

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