Pakistan is presently confronted with a severe energy crisis, rising fuel prices, and electricity shortages, which are affecting the entire country. The rising cost of imported oil and gas needed to power generators has crippled the country's power stations. While demand for power is growing at some 7 percent to 8 percent per year, the country's own production of oil and gas is declining. With domestic production of oil and gas in decline, the Government determined that the country should not rely upon imported fuel, but seek other alternative energy sources and improve its own generation.

Despite the various issues outlined above, a number of initiatives were taken by the Democratic Government and the Ministry of Water and Power, as a result of which 3400 MW has been added in the system.

Alternative Energy - Keeping in view future needs, the Government has set a target of 3000 MW to be generated through renewable energy by the year 2015. The Alternate Energy Development Board's (AEDB) role as a facilitator has been strengthened and it has been provided legal cover through enactment since May 2010. The announcement of feed in tariff has fast-tracked the wind energy project where three projects (150 MW) are already under construction. Another initiative by the AEDB, the Remote Village Electrification Program, is currently providing electricity to 7,874 remote villages off grid villages in Sindh and Balochistan using solar home systems. The Government has also announced that 30 million energy saver bulbs be distributed free of cost throughout the country with the financial assistance of the Asian Development Bank.

Natural Resources - On several occasions, President Zardari has urged international companies to invest in Pakistan's energy sector. The Government has also assured foreign investors of effective security conditions. The Geological Survey of Pakistan launched a project to explore coal and copper deposits in Balochistan. The total coal reserves in Thar are estimated to be around 185 billion tonnes which have the potential to generate around 50,000 MW. Both Federal and Provincial Governments are taking concrete steps to harness these huge coal reserves by utilizing it as a cheap source of energy for power generation through international investment.

Thermal Projects - The Government started addressing the power crisis by firming up the Public Sector Power Generation Enhancement Plan (2010-2015) to add 10,000MW generation capacity in the system. Moreover, the Government expedited work on 525MW Chichoki Malian Power Project and 425MW Nandipur Power Project. Similarly, negotiations and signing of contract for 747MW Guddu Combined Cycle Power Plant have also been completed. The Government also started implementation of long-stalled IPPs projects.

Hydel Projects - Pakistan has so far tapped only 6,700MW out of its total hydel potential of around 60,000MW. The Government has initiated work on Neelum-Jhelum and Jinnah Hydro Power Project and Basha Diamer Dam, which would generate 4500MW power and store 6.4 acre feet of water. The Government has also planned to construct 32 small and medium dams (eight in each province) at a cost of about Rs.250 billion (USD$2.9 billion). The water storage capacity of these dams would be around 6-7 million feet of water. Additionally, major work on Mangla Dam Raising Project has also been completed which will increase water storage capacity up to 2.88 MAF and additional power capacity of 644GWh. The Private Power Infrastructure Board (PPIB) is responsible for initiating private sector investment in the upcoming hydropower projects.
An MOU has been signed among the member countries of the Central Asia South Asia Electricity Trade and Transmission Project (CASA-1000) which is designed to transmit 1300 MW of surplus electricity from Tajikistan and Kyrgyzstan through Afghanistan to Pakistan.

Energy Efficiency Programs - Energy Efficiency and Energy Conservation are amongst the most important and critical areas. A number of projects and interventions have been initiated in this regard during the last 3-4 years. Some of the initiatives include launching national awareness campaign using energy audits, targeted technical services and pilot demonstrations, launching projects and establishment of Clean Development Mechanism Cell, removal of barriers to cost-effective development of Energy Efficiency Standards and labels, energy conservation through training and mass awareness, and Tubewell Efficiency Improvement Programme.