IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v189y2024ics030142152400137x.html
   My bibliography  Save this article

Investigating power outages in Pakistan

Author

Listed:
  • Ahmad, Hafsa
  • Jamil, Faisal

Abstract

Pakistan is facing electricity crisis and outages for the last many years, and the government is trying to reduce the power shortfall by attracting more investment into the power sector. Low installed capacity and rising fuel costs are considered the main reasons for the outages. There has been an excessive reliance on fossil fuels for power generation and the public utility was unable to make payments for power purchases resulting in accumulated debt. Besides, the transmission and distribution lines are inadequate. This study examines the relationship between power outages and underlying factors by employing the Pakistan electricity sector data from 1980 to 2020. The empirical model determines the factors affecting outages, including electricity demand, fiscal deficit, thermal power generation, crude oil prices, installed capacity, and power losses. The results show that budget deficit, losses, and electricity consumption raise power outages, whereas crude oil prices, installed capacity, and share of thermal power generation tend to reduce the outages. The study concludes that the utility can eliminate outages with plausible financial management. Moreover, the energy policy should pursue electricity generation from renewable sources to address environmental and financial sustainability concerns regarding inefficient energy mix.

Suggested Citation

  • Ahmad, Hafsa & Jamil, Faisal, 2024. "Investigating power outages in Pakistan," Energy Policy, Elsevier, vol. 189(C).
    • Handle: RePEc:eee:enepol:v:189:y:2024:i:c:s030142152400137x
    DOI: 10.1016/j.enpol.2024.114117
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142152400137X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2024.114117?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Abdisa, Lamessa Tariku, 2018. "Power Outages, Its Economic Cost and Firm Performance: Evidence From Ethiopia," MPRA Paper 88217, University Library of Munich, Germany.
    2. Paul L. Joskow, 2007. "Supply security in competitive electricity and natural gas markets," Chapters, in: Colin Robinson (ed.), Utility Regulation in Competitive Markets, chapter 4, Edward Elgar Publishing.
    3. Rehana Siddiqui & Hafiz Hanzla Jalil & Muhammad Nasir & Wasim Shahid Malik & Mahmood Khalid, 2008. "The Cost of Unserved Energy: Evidence from Selected Industrial Cities of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(3), pages 227-246.
    4. Rauf, Omer & Wang, Shujie & Yuan, Peng & Tan, Junzhe, 2015. "An overview of energy status and development in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 892-931.
    5. Rud, Juan Pablo, 2012. "Electricity provision and industrial development: Evidence from India," Journal of Development Economics, Elsevier, vol. 97(2), pages 352-367.
    6. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    7. Qudrat-Ullah, Hassan, 2015. "Independent power (or pollution) producers? Electricity reforms and IPPs in Pakistan," Energy, Elsevier, vol. 83(C), pages 240-251.
    8. Lin, Boqiang & Jiang, Zhujun, 2011. "Estimates of energy subsidies in China and impact of energy subsidy reform," Energy Economics, Elsevier, vol. 33(2), pages 273-283, March.
    9. Pasha, Hafiz A. & Ghaus, Aisha & Malik, Salman, 1989. "The economic cost of power outages in the industrial sector of Pakistan," Energy Economics, Elsevier, vol. 11(4), pages 301-318, October.
    10. Jamil, Faisal, 2013. "On the electricity shortage, price and electricity theft nexus," Energy Policy, Elsevier, vol. 54(C), pages 267-272.
    11. Shaikh, Faheemullah & Ji, Qiang & Fan, Ying, 2015. "The diagnosis of an electricity crisis and alternative energy development in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1172-1185.
    12. Imran, Muhammad & Amir, Namra, 2015. "A short-run solution to the power crisis of Pakistan," Energy Policy, Elsevier, vol. 87(C), pages 382-391.
    13. Jamil, Faisal & Ahmad, Eatzaz, 2019. "Policy considerations for limiting electricity theft in the developing countries," Energy Policy, Elsevier, vol. 129(C), pages 452-458.
    14. Shakeel, Shah Rukh & Takala, Josu & Shakeel, Waqas, 2016. "Renewable energy sources in power generation in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 421-434.
    15. Mirza, Faisal Mehmood & Mushtaq, Iqra & Ullah, Kafait, 2017. "Assessing the efficiency dynamics of post reforms electric distribution utilities in Pakistan," Utilities Policy, Elsevier, vol. 47(C), pages 18-28.
    16. Malik, Sadia & Qasim, Maha & Saeed, Hasan & Chang, Youngho & Taghizadeh-Hesary, Farhad, 2020. "Energy security in Pakistan: Perspectives and policy implications from a quantitative analysis," Energy Policy, Elsevier, vol. 144(C).
    17. Andersen, Thomas Barnebeck & Dalgaard, Carl-Johan, 2013. "Power outages and economic growth in Africa," Energy Economics, Elsevier, vol. 38(C), pages 19-23.
    18. Mirjat, Nayyar Hussain & Uqaili, Mohammad Aslam & Harijan, Khanji & Valasai, Gordhan Das & Shaikh, Faheemullah & Waris, M., 2017. "A review of energy and power planning and policies of Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 110-127.
    19. Anwar, Javed, 2016. "Analysis of energy security, environmental emission and fuel import costs under energy import reduction targets: A case of Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1065-1078.
    20. Kessides, Ioannis N., 2013. "Chaos in power: Pakistan's electricity crisis," Energy Policy, Elsevier, vol. 55(C), pages 271-285.
    21. Grainger, Corbett A. & Zhang, Fan, 2019. "Electricity shortages and manufacturing productivity in Pakistan," Energy Policy, Elsevier, vol. 132(C), pages 1000-1008.
    22. Leong, Soon Heng, 2021. "Global crude oil and the Chinese oil-intensive sectors: A comprehensive causality study," Energy Economics, Elsevier, vol. 103(C).
    23. Syed Sajid Ali & Sadia Badar, 2010. "Dynamics of Circular Debt in Pakistan and Its Resolution," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(Special E), pages 61-74, September.
    24. Jamil, Faisal, 2012. "Impact of different public E&P policies on natural gas reserves and production in Pakistan," Resources Policy, Elsevier, vol. 37(3), pages 368-374.
    25. Muhammad Nasir & Muhammad Salman Tariq & Ankasha Arif, 2008. "Residential Demand for Electricity in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 457-467.
    26. Faisal Jamil & Eatzaz Ahmad, 2014. "An Empirical Study of Electricity Theft from Electricity Distribution Companies in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(3), pages 239-254.
    27. Valasai, Gordhan Das & Uqaili, Muhammad Aslam & Memon, HafeezUr Rahman & Samoo, Saleem Raza & Mirjat, Nayyar Hussain & Harijan, Khanji, 2017. "Overcoming electricity crisis in Pakistan: A review of sustainable electricity options," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 734-745.
    28. Cole, Matthew A. & Elliott, Robert J.R. & Occhiali, Giovanni & Strobl, Eric, 2018. "Power outages and firm performance in Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 134(C), pages 150-159.
    29. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    30. Milstein, Irena & Tishler, Asher, 2012. "The inevitability of capacity underinvestment in competitive electricity markets," Energy Economics, Elsevier, vol. 34(1), pages 62-77.
    31. Zachariadis, Theodoros & Poullikkas, Andreas, 2012. "The costs of power outages: A case study from Cyprus," Energy Policy, Elsevier, vol. 51(C), pages 630-641.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jamil, Faisal & Islam, Tanweer Ul, 2023. "Outage-induced power backup choice in Pakistan," Utilities Policy, Elsevier, vol. 82(C).
    2. Ashfaq, Asad & Ianakiev, Anton, 2018. "Features of fully integrated renewable energy atlas for Pakistan; wind, solar and cooling," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 14-27.
    3. Abdullah, Fahad Bin & Iqbal, Rizwan & Hyder, Syed Irfan & Jawaid, Mohammad, 2020. "Energy security indicators for Pakistan: An integrated approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    4. Khan, Muhammad Arshad & Abbas, Faisal, 2016. "The dynamics of electricity demand in Pakistan: A panel cointegration analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1159-1178.
    5. Syed Aziz Ur Rehman & Yanpeng Cai & Rizwan Fazal & Gordhan Das Walasai & Nayyar Hussain Mirjat, 2017. "An Integrated Modeling Approach for Forecasting Long-Term Energy Demand in Pakistan," Energies, MDPI, vol. 10(11), pages 1-23, November.
    6. Wajahat Ullah Khan Tareen & Zuha Anjum & Nabila Yasin & Leenah Siddiqui & Ifzana Farhat & Suheel Abdullah Malik & Saad Mekhilef & Mehdi Seyedmahmoudian & Ben Horan & Mohamed Darwish & Muhammad Aamir &, 2018. "The Prospective Non-Conventional Alternate and Renewable Energy Sources in Pakistan—A Focus on Biomass Energy for Power Generation, Transportation, and Industrial Fuel," Energies, MDPI, vol. 11(9), pages 1-49, September.
    7. Ullah, Kafait & Raza, Muhammad Shabbar & Mirza, Faisal Mehmood, 2019. "Barriers to hydro-power resource utilization in Pakistan: A mixed approach," Energy Policy, Elsevier, vol. 132(C), pages 723-735.
    8. Leezna Saleem & Imran Ahmad Siddiqui & Intikhab Ulfat, 2021. "The prioritization of renewable energy technologies in Pakistan: An urgent need," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2021(1), pages 81-103.
    9. Ur Rehman, Syed Aziz & Cai, Yanpeng & Mirjat, Nayyar Hussain & Walasai, Gordhan Das & Nafees, Mohammad, 2019. "Energy-environment-economy nexus in Pakistan: Lessons from a PAK-TIMES model," Energy Policy, Elsevier, vol. 126(C), pages 200-211.
    10. Valasai, Gordhan Das & Uqaili, Muhammad Aslam & Memon, HafeezUr Rahman & Samoo, Saleem Raza & Mirjat, Nayyar Hussain & Harijan, Khanji, 2017. "Overcoming electricity crisis in Pakistan: A review of sustainable electricity options," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 734-745.
    11. Fahad Bin Abdullah & Rizwan Iqbal & Falak Shad Memon & Sadique Ahmad & Mohammed A. El-Affendi, 2023. "Advancing Sustainability in the Power Distribution Industry: An Integrated Framework Analysis," Sustainability, MDPI, vol. 15(10), pages 1-28, May.
    12. Yu, Jian & Liu, Peng & Fu, Dahai & Shi, Xunpeng, 2023. "How do power shortages affect CO2 emission intensity? Firm-level evidence from China," Energy, Elsevier, vol. 282(C).
    13. Jamil, Faisal, 2013. "On the electricity shortage, price and electricity theft nexus," Energy Policy, Elsevier, vol. 54(C), pages 267-272.
    14. Ali, Fahad & Ahmar, Muhammad & Jiang, Yuexiang & AlAhmad, Mohammad, 2021. "A techno-economic assessment of hybrid energy systems in rural Pakistan," Energy, Elsevier, vol. 215(PA).
    15. Syed Aziz Ur Rehman & Yanpeng Cai & Nayyar Hussain Mirjat & Gordhan Das Walasai & Izaz Ali Shah & Sharafat Ali, 2017. "The Future of Sustainable Energy Production in Pakistan: A System Dynamics-Based Approach for Estimating Hubbert Peaks," Energies, MDPI, vol. 10(11), pages 1-24, November.
    16. Thomas, Douglas & Fung, Juan, 2022. "Measuring downstream supply chain losses due to power disturbances," Energy Economics, Elsevier, vol. 114(C).
    17. Akhtar, Muhammad & Haris, Muhammad & Naveed, Hafiz Muhammad & Rasool, Yasir & Al-Faryan, Mamdouh Abdulaziz Saleh, 2024. "Electricity shortfalls and financial leverage of listed firms in Pakistan," Utilities Policy, Elsevier, vol. 87(C).
    18. Mirjat, Nayyar Hussain & Uqaili, Mohammad Aslam & Harijan, Khanji & Valasai, Gordhan Das & Shaikh, Faheemullah & Waris, M., 2017. "A review of energy and power planning and policies of Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 110-127.
    19. Jamil, Muhammad Hamza & Ullah, Kafait & Saleem, Noor & Abbas, Faisal & Khalid, Hassan Abdullah, 2022. "Did the restructuring of the electricity generation sector increase social welfare in Pakistan?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).
    20. Babar, Zainab & Jamil, Faisal & Haq, Wajiha, 2022. "Consumer's perception towards electricity theft: A case study of Islamabad and Rawalpindi using a path analysis," Energy Policy, Elsevier, vol. 169(C).

    More about this item

    Keywords

    Power outages; Circular debt; T&D losses; Pakistan; Fiscal deficit; Energy prices;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:189:y:2024:i:c:s030142152400137x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.