A recent study conducted by the Policy Research Institute for Equitable Development (PRIED) and Renewables First has brought to light the pressing issue of Pakistan’s soaring electricity demand. According to the study, Pakistan’s electricity demand is projected to increase by a staggering 48 per cent over the next decade, from 154 terawatt-hours in fiscal year 2022 to 228 terawatt-hours in fiscal year 2031. To address this escalating demand for electricity, the study emphasizes the necessity of constructing and connecting additional power plants to the national grid. It also highlights the financial burden posed by the existing power plants, citing their high operational costs. The study advocates for replacing these costly power sources with cheaper and more sustainable alternatives.
The Indicative Generation Capacity Expansion Plan (IGCEP), a comprehensive planning document approved by the National Electric Power Regularity Authority (NEPRA) and prepared annually by the National Transmission Despatch Company (NTDC), outlines the need for approximately 30GW of new power plants to be built and integrated into the national grid within the next decade. However, meeting this ambitious initiative comes with a price tag of around USD 40 billion.
While the investment is substantial, it is crucial to ensure a stable and reliable energy supply for the nation. The study also raises concerns about the current power planning process, citing unpredictable and unexplained constraints on candidate Renewable Energy (RE) projects. These constraints have led to a lower share of wind and solar technologies in the national grid. Moreover, the report warns of the risks associated with constructing expensive and inefficient power plants without proper planning. Such careless decisions burden the people of Pakistan with soaring costs, leading to increasing circular debt and financial strain.
Notably, Pakistanis paid ₹41 billion for partial load adjustment charges in 2022 due to underutilization of thermal power plants, which operated at only 46 percent capacity. Additionally, capacity payments amounted to ₹721 billion, further highlighting the financial challenges faced by the nation. As the demand for electricity continues to rise, the urgency to implement the IGCEP and adopt cheaper and more sustainable power sources becomes ever more critical. Transparent and efficient power planning will be instrumental in paving the way for a brighter energy future for Pakistan, alleviating the burden on its citizens and fostering economic growth.