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Chapter 15
ENERGY
Energy is essential for the maintenance and
development of the quality of human life as well as
for economic activities. To maintain accelerated
growth momentum, the economy needs reliable,
uninterrupted and affordable supply of energy. The
per-capita consumption of energy is viewed as an
important indicator of economic development of
any country. Countries with higher Human
Development Index (HDI) have higher per capita
energy consumption.
The world is facing a daunting task to meet the
growing energy demand that is likely to double in
the next twenty years. Pakistan is among those
developing countries where the need to tackle the
challenge is greatest. Its energy demand is
projected to reach 129 million tones of oil
equivalent (MTOE) in the next 15 years. Ensuring
availability of usable and affordable energy is
therefore, the bedrock of Pakistan’s current and
future developments. In recent years, the energy
demand has increased sharply in Pakistan owing
mainly to strong economic growth and the
attendant rise in per capita income. The supply of
energy, on the other hand, has remained far too
short to match growing demand because the
existing energy resources could not be sufficiently
explored and exploited. Consequently, the energy
supplies remained deficient to offset the growing
demand of domestic, industrial, commercial and
power generation needs. Despite being a high
priority item on the economic agenda of the
government, the growth of the energy sector
remained slow due to a host of factors such as
inadequate
institutional
framework,
financial
constraints, sky-rocketing oil prices, high risks,
low interest of private sector, heavy costs and
complex character of hydrocarbon development.
To address the issue of demand-supply gap, the
government is working on many fronts, including
the import of electricity and gas from Iran,
utilization of 185 billion reserves of coal,
development of small hydro projects, promotion of
efficient use of ener