Chaos in power: Pakistan's electricity crisis

Pakistan is facing a severe electricity crisis due to a persistent and widening gap between demand and available system generating capacity. The worsening of power shortages has become a major political issue, reflecting the hardships for individuals and businesses. It threatens to undermine the credibility and legitimacy of government and to further stress the social fabric of the country. The power crisis did not emerge suddenly. It is the direct result of imprudent and reckless energy policies over the last three decades. These policies have impeded the development of cheap and abundant domestic energy sources. They have also resulted in very inefficient fuel-mix choices, compromising energy and economic security. Pakistan's energy bankruptcy is ultimately due to massive institutional and governance failure. This paper analyzes the problems confronting Pakistan's electricity sector and identifies the key elements of a potential policy response to address the country's severe power crisis. ► We analyze the structure, conduct, and performance of Pakistan's electricity sector. ► The causes and economic impacts of Pakistan's electricity shortages are analyzed. ► We identify the potential policy response to the power crisis.