The National Electric Power Regulatory Authority (Nepra) has delivered a stark assessment of Pakistan’s power sector woes: poor planning and overinvestment in generation capacity have rendered electricity unaffordable for households and industries alike. The regulator’s recent report identifies a critical flaw in the nation’s power strategy—excessive investment to meet peak demand, which only occurs for a few hours annually. This approach has contributed to spiraling consumer tariffs and placed an undue burden on government finances.
At the close of the 2024 fiscal year, Pakistan’s installed generation capacity stood at an overwhelming 42,512MW. Yet, the transmission and distribution (T&D) network could handle only 25,516MW, highlighting a significant mismatch between generation and delivery. Moreover, maximum demand peaked at 30,150MW for a limited duration, while the average annual load served was just 18,463MW. The disparity is glaring: the country is generating far more electricity than it needs or can distribute effectively. Despite this, policymakers continue to prioritize meeting peak demand, perpetuating inefficiency and financial strain.
One glaring issue is the lack of foresight and capability within the National Transmission and Despatch Company (NTDC). Tasked with planning for the sector’s future needs, the NTDC has consistently failed to provide a clear, cost-effective vision. Its most recent Indicative Generation Capacity Expansion Plan (IGCEP) draft underscores this failure, offering little in the way of innovative or economical solutions. This document has since been retracted, with a revised version underway, but the challenge remains: how to align generation capacity with actual demand while ensuring affordability and reliability.
Nepra’s report also highlights critical missed opportunities. Delays in expanding Thar coal power and the lack of support for rooftop solar adoption are key factors driving up costs. Solar power, in particular, represents an untapped potential that could revolutionize Pakistan’s energy landscape. Advances in renewable energy technologies and battery storage are rapidly reducing costs and enhancing efficiency, making solar a viable and attractive alternative to the current reliance on fossil fuels.
The way forward lies in a fundamental shift in energy planning. The new IGCEP draft must prioritize renewable energy, particularly solar, over expensive hydropower and environmentally damaging coal projects. Policymakers need to view renewable energy not as a challenge but as an opportunity to reduce costs, decrease dependence on fossil fuels, and foster economic growth. A strategic push toward solar adoption—through incentives for rooftop installations and large-scale solar projects—could disrupt the current grid system in a way that benefits consumers and the economy alike.
Inaction is no longer an option. The reliance on outdated energy strategies will only deepen the crisis, making electricity even more unaffordable and stifling economic progress. The government and power regulators must act decisively to embrace renewable energy, streamline generation capacity, and ensure an efficient and sustainable power system for the future.
