The National Electric Power Regulatory Authority (Nepra) has criticised the government’s Indicative Generation Capacity Expansion Plan (IGCEP), citing overinvestment in peak demand capacity, delays in Thar coal expansion, and a lack of support for rooftop solar systems as primary contributors to rising electricity costs and financial burdens on consumers.
According to a news report, Nepra, in its special report on generation sector challenges, noted that Pakistan’s generation planning focuses excessively on meeting peak demand, which occurs only for a few hours annually.
The installed generation capacity in the national grid system reached 42,512 MW by the end of fiscal year 2024, far exceeding the system’s maximum load-serving capability of 25,516 MW. This imbalance, combined with inadequate transmission and distribution (T&D) systems, has increased electricity costs while leaving demand unmet.
Nepra observed that the system’s average annual load served was just 18,463 MW, with peak demand of 30,150 MW and a minimum of 7,015 MW. “Planning to meet peak demand that lasts only a few hours annually adversely affects the power sector’s economics, leading to higher costs for consumers and underutilized generation capacity during low-demand periods,” the report stated.
The regulator expressed concern over persistent load-shedding despite an installed capacity of 45,888 MW as of June 30, 2024. It attributed this paradox to high Aggregate Technical and Commercial (AT&C) losses driven by electricity theft, poor infrastructure maintenance, and inadequate revenue collection systems. Nepra emphasized the need for governance reforms within the distribution network to address these inefficiencies.
The report highlighted delays in expanding coal-based power plants at Thar, which are intended to reduce reliance on imported fuels and utilize indigenous resources. While Thar coal-based plants have added significant generation capacity at cost-effective energy purchase prices, their average utilization over the past five years has been low, undermining their potential to achieve energy independence.
Nepra also advocated for greater adoption of rooftop solar systems, noting that over 156,372 solar installations with a capacity exceeding 2,200 MW had been connected to the grid through net-metering by June 30, 2024. The regulator called for removing hurdles in net metering by distribution companies (Discos) to achieve the government’s renewable energy target of an additional 3,420 MW by 2031.
The report underscored the financial and operational benefits of rooftop solar systems, including reduced T&D losses, improved voltage stability, and zero capacity payments. It urged the government and power companies to embrace rooftop solar solutions as part of a broader strategy to enhance efficiency, reduce costs, and meet energy demands sustainably.
