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Investigating power outages in Pakistan

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  • 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
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    References listed on IDEAS

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    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

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