47. Pakistan Economic Survey 2011-12 - Consultancy Services in ...

Chapter 14EnergyEnergy is considered to be the lifeline of economicdevelopment. For a developing economy with ahigh population growth rate, it is important to keepa balance between energy supply and emergingneeds. If corrective measures are not effectivelyanticipated significant constraints start emergingfor development activities.The rise in global energy demand has raisedquestions regarding energy security and increasedthe focus on diversification, generation andefficient allocation. The answer lies in theattainment of optimal energy mix through fuelsubstitution by promoting energy efficiency andrenewable energy and interregional co-operation.However, oil and natural gas will continue to bethe world’s top two energy sources through 2040;accounting for about 60 percent of global demand.Gas being the fastest growing major fuel sourceover this period is expected to grow at 1.6 percentper year from 2010 to 2040 as estimated by “TheOutlook for Energy: A View to 2040” is given inFigure-14.1.Figure 14.1: Global energy demand by fuel type (Quadrillion BTUs)Quadrillions British Thermal Units250200150100502040201020102040From its peak in 2025, coalwill decline by more than 10percent of total Hydro/Geo201020402040 2010 20402010Latin America andChina are the biggestusers of hydropower, which makes upover 80 percent of totalHydro/Geo supplies20402010 2040 20100OilGasCoalSource: The Outlook for Energy: Aview to 2040NuclearBiomass/WasteHydroOtherRenewablePakistan’s economy has been growing at anaverage growth rate of almost 3 percent for the lastfour years and demand of energy both atproduction and consumer end is increasing rapidly.Knowing that there is a strong relationshipbetween economic growth and energy demand, thegovernment is making all possible efforts toaddress the challenges of rising energy demand(Box-1).193