Abstract:
Rising energy demand, global warming and climate change have collectively increased
attention towards more effective utilization of the energy resources at our disposal. The
scenario for Pakistan is no different if not worse. In light of this ongoing dilemma, renewable
energy sources are looked upon as the fundamental pillars of this new energy
paradigm. However, this transition from a heavy reliance on conventional sources of energy
such as fossil fuels is easier said than done. Attracting investments to sustainable
sources of energy is among the biggest challenges as these are often evaluated as more
risky and costly alternatives compared to the commonly labeled ‘black gold’. Bearing
in mind the complexities of modern energy systems, the way investors evaluate their
options calls for a more sophisticated methodology. This research delved into the domain
of investment evaluations from a different perspective and has merged two research
areas, namely energy modeling and decision analysis, to introduce a new methodology
for making investment decisions in the energy sector. The Integrated MARKAL-EFOM
System (TIMES) modeling framework has been utilized, whereby optimization mathematics
leads to the determination of a least cost energy system. The results from TIMES
were further explored using the multiple criteria analysis approach to incorporate the
impact of uncertainties and risks revolving around investment decision making. More
specifically, a PESTLE analysis is implemented upon the energy sector to analyze the
results from TIMES with greater scrutiny. As a result of this amalgamation, the author
strives to present a comprehensive energy planning tool which allows the formulation
of accurate decision making regarding investments in the energy market. Such tools
can empower key stakeholders by enhancing their insights and allowing them to smartly
allocate funds in order to fulfill the energy demands in their respective areas of interest.
