Pakistan is transforming its energy sector by emphasizing renewable energy to promote sustainability, enhance energy security, and provide economic relief. The government is renegotiating outdated energy agreements to establish a fair pricing model supported by a team of technical experts and policymakers. These efforts aim to reduce dependency on costly fossil fuel imports and create a sustainable energy landscape that fosters long-term environmental resilience and economic growth, ensuring a prosperous future for its citizens.
By the end of FY 2024, Pakistan’s total installed renewable energy capacity had reached 13,640 MW at the utility level, contributing 31% to the national energy mix. With net metering additions, this figure rises to 16,091 MW, 35% of total capacity and 36% of total energy generation. These advancements result from strategic government policies, regulatory frameworks, and private sector participation, demonstrating the country’s commitment to a cleaner, more affordable energy future. According to the latest Indicative Generation Capacity Expansion Plan (IGCEP 2024-34), Pakistan has set ambitious targets for the next decade, projecting that 89% (17,456 MW) of total capacity additions will come from renewable energy sources by 2034. By that time, renewables will constitute 55% of Pakistan’s installed capacity, with clean energy sources (including hydropower) making up 73% of total generation.
Pakistan’s renewable energy reform focuses on addressing inconsistent tariffs. Older projects, especially wind power plants, were developed under policies with higher tariffs that now exceed market rates. This leads to higher costs for consumers and the national power sector, while newer projects benefit from lower tariffs due to technological advancements. A government task force is working to renegotiate these outdated agreements to align tariffs with current market conditions and maintain investor confidence in the energy transition.
It is important to address misinformation suggesting that the Pakistan Army is involved in these negotiations. These discussions are conducted exclusively by government authorities and regulatory bodies such as the National Electric Power Regulatory Authority (NEPRA) and the National Transmission and Dispatch Company (NTDC). A dedicated task force comprising energy sector professionals and financial analysts oversees the renegotiation process to ensure the agreements are revised transparently and fairly. The government has emphasized that military institutions are not part of these negotiations, as this is purely a policy-driven and regulatory matter under civilian governance.
One of the most significant advancements in Pakistan’s renewable energy shift has been the rapid adoption of net metering and distributed solar energy. By FY 2024, the country had integrated 2,451 MW through net metering, marking a 148% growth rate in just one year. This momentum continues into FY 2025, with an average addition of 283 MW per month in the first quarter alone. Initial estimates from IGCEP 2024-34 projected an additional 2,107 MW in net metering by 2034. Still, recent trends suggest this figure could exceed 8,000 MW, driven by increasing public demand, government incentives, and falling solar panel costs. Additionally, off-grid and behind-the-meter solar installations have expanded significantly, with estimates suggesting that 12,027 MW of solar energy capacity operates independently of the national grid. This transition empowers businesses, households, and industries to generate power, reducing dependency on expensive grid electricity and lowering consumer costs.
Pakistan’s renewable energy expansion offers significant economic benefits. By reducing fossil fuel imports, the country can save foreign exchange and ensure greater stability. The long-term affordability of renewable sources will lead to lower electricity costs for households and businesses. Additionally, the sector will create jobs in solar panel manufacturing and maintenance, supporting local industries. Increasing clean energy will also help reduce air pollution in major cities like Lahore and Karachi, addressing environmental and health issues.
Despite these positive developments, challenges remain in achieving a seamless transition to renewable energy. Grid integration remains a key issue, as managing variability in solar and wind generation requires advanced forecasting, battery storage solutions, and modernized grid infrastructure. While renewable energy technology costs are declining, initial investment barriers still pose challenges for widespread adoption. Expanding green financing options and streamlining the regulatory framework will be critical in overcoming these hurdles. Bureaucratic inefficiencies have historically slowed the progress of energy reforms, and ensuring stable, transparent policies will be essential to attracting continued investment in the sector.
The government remains committed to ensuring the transition to renewable energy is fair and sustainable. This means ensuring that past agreements are reviewed in a structured manner while maintaining investor confidence. The renegotiation process is not about undermining energy companies or discouraging investment but rather about making energy pricing fairer for consumers. Investors who entered the market under previous policies will be given reasonable adjustments rather than being subjected to forced revisions that could harm business confidence. At the same time, the government recognizes that Pakistani citizens should not have to bear the burden of unnecessarily high electricity costs due to outdated agreements.
Pakistan’s renewable energy transformation is driven by strong governance, technical expertise, and policy reforms, rather than military involvement. With a focus on fair energy deals and sustainability, Pakistan aims to build a resilient energy sector. If effectively managed, this transition to renewables will enhance energy security, stimulate economic growth, and promote environmental sustainability for future generations.
