- Cutting circular debt, reforming grid and boosting rooftop solar drive the nation’s energy transition
Energy sector of Pakistan suffers from multiple issues here is a pragmatic, least-cost, “keep-the-lights-on” energy game plan for Pakistan that balances affordability, security, and decarbonization. The plan could be split it into near-term triage, medium-term build-out, and long-term structural moves, all grounded in what’s happening on the ground right now.
The prime goal should be cutting average power cost, stabilize the grid, slash import exposure, and retire circular debt — without stalling the rooftop/ utility-solar boom.
Installed capacity in Pakistan is still thermal and system performance held back by high T&D losses and poor recoveries.
Rooftop/ distributed solar is exploding, but policy is in flux as the government rethinks buyback rates.
Circular debt hovers around PKR2.5 trillion, it is system-threatening.
Wind corridor potential in Sindh/ Balochistan is enormous.
Hydro mega-projects (Dasu, Diamer-Bhasha) are moving but staged over years.
Thar coal is online (1,320 MW Block I) and reduces dollar imports, but raises emissions that demands its use selectively and cleanly.
Rapid rooftop solar adoption is stressing a financially weak grid and tariff design — policy must evolve, not reverse it.
Tariff reform (protect poor, fix signals): Targeted subsidies, expand time-of-use and demand charges for high-use tiers; stop cross-subsidy blowouts that fuel circular debt.
Fuel merit order discipline
Maximize domestic Thar utilization when it displaces dollar LNG and reduces unit cost, but cap its share; enforce emissions controls and heat-rate guarantees.
Transmission unlocks everything
Twin 500 kV corridors from wind/ solar zones to load centers; dynamic line rating + reactive compensation; prioritize interconnection queues by least-cost grid impact.
Agriculture solarization — feeder-level, not scattered pumps: Solarize entire feeders with utility-scale plants + day-time irrigation schedules to absorb mid-day PV; pair with pre-paid metering to wipe arrears.
Industrial green tariffs: 5–10-year renewable-plus-storage contracts at stable prices for export-oriented zones to de-risk energy cost and drive FX earnings.
2029–2035: Cement low-cost base load and flood control
Hydro backbone: Stage Dasu and Diamer-Bhasha to deliver multi-GW, firm low-cost power plus water storage and flood control; add pumped-hydro where feasible for seasonal balancing.
Selective nuclear and life-extension: Maintain safe base load share (K-units/ Chashma) to anchor nights and monsoon lulls; avoid overbuild that creates new capacity-payment burdens.
Gas only as firming fuel: No long-tenor LNG take-or-pay; favor short/spot, biogas in agri belts, and demand-response to cut peak gas burn.
Policy switches that make or break the plan
Move from net-metering to net-billing with hourly pricing, small fixed network fee, and storage incentives — keeps rooftop solar growing but fair.
Performance-based regulation for DISCOs (loss/collection, SAIFI/SAIDI, safety) with automatic penalties and privatization/PPP options where targets are missed.
Competitive auctions for utility solar/wind with storage and clear interconnection timelines (grid-ready sites, one-window land).
Capacity-payment relief: renegotiate/convert older PPAs to energy-plus-flex products; retire the worst heat-rate plants first.
Green industrial contracts and agri-feeder solarization to absorb mid-day PV and improve DISCO cash flows.
Why this is optimal (in Pakistan’s context)
Cheapest new kWh today is utility solar/ wind (backed by modest storage) in Sindh/Punjab; Pakistan has the resource and land to scale quickly.
Hydro + limited nuclear provide firm, low-cost night/base energy and water security.
Tariff + metering fixes attack the heart of circular debt (losses, non-payment, bad price signals).
Domestic Thar reduces FX outflow but is kept capped and cleaner, avoiding lock-in that would later raise costs or climate risk.
Strategic Direction
“Go solar + wind fast, fix the grid, and use hydro/nuclear as the long-term backbone.”
Key Steps
Immediate (0–2 years)
- Cut the line losses & theft through smart meters and DISCO accountability.
- Shift rooftop solar from net-metering to net-billing (hourly wholesale rate + small fixed network charge).
- Pilot battery storage (200–300 MW) at weak nodes to absorb mid-day solar.
- Maximize Thar coal only where it displaces imported LNG, but keep capped.
Medium Term (2–6 years)
- Add 8–10 GW of solar and 3–4 GW of wind, mainly in Sindh & South Punjab.
- Build transmission corridors from wind/ solar zones to Lahore/ Karachi load centers.
- Solarize agriculture feeders (entire feeders, not scattered pumps) with prepaid metering.
- Offer green tariffs (cheap renewables + storage) to export industries for FX earnings.
Long Term (6–12 years)
- Complete hydro mega-projects (Dasu, Diamer-Bhasha) for firm power + water storage.
- Maintain nuclear share as reliable base load (Chashma, K-units).
- Develop pumped hydro for seasonal balancing.
- Use gas only as flexible peaker fuel — no new long-tenor LNG contracts.
Optimal Mix by 2035)
35–40% renewables (solar + wind)
35–40% hydro + nuclear
20–25% efficient flexible thermal (gas + limited coal)
- Cheapest kWh comes from solar and wind in Pakistan’s Sindh/ Punjab belt.
- Hydro/nuclear give firm night power and water security.
- Tariff & loss reforms directly attack circular debt.
- Domestic coal/gas only used selectively — lowering FX exposure.
- Storage + smart tariffs prevent grid collapse from rooftop solar.