A Stochastic Approach to Energy Policy and Management: A Case Study of the Pakistan Energy Crisis

The energy policy of a country dictates its ability to better manage and deal with an energy crisis. A sustainable energy policy deals with not only energy production but also with energy consumption. In the past, the government of Pakistan has lacked such an approach. This study aims to develop a policy-making framework to improve the energy management of Pakistan through a probabilistic approach. Stochastic analysis is performed in this study and the uncertainty in energy data is used to propose a holistic energy policy. Energy-utilization data from 17 different sources are used to compare the accuracy of energy-consumption data from 1989 to 2013. The analysis reveals that there exists an uncertainty in energy-consumption data and the major cause of this uncertainty is energy theft. The analysis shows that the industry has the highest uncertainty in its energy-data utilization, followed by the transport and the domestic sectors of Pakistan. Based on stochastic analysis, seven recommended energy-policy guidelines are presented to manage the energy crisis in the country. The analysis proposes that Pakistan needs to take measures to control energy theft