Comment by Riaz Haq on July 7, 2025 at 6:39pm

Shift to solar comes at a price for Pakistan’s national grid

https://www.ft.com/content/91116c44-bacf-43f4-9b6f-63a6c738ef4e

Demand for lithium-ion batteries is also surging, traders and importers say, in part because households are preparing to lose the payments from selling to the grid that they use to offset high charges during peak usage times in the evening, while industries also want to scale up renewables. Pakistan introduced net metering 10 years ago to help households defray the costs of installing solar — then 10 times higher — by letting them sell spare power to the grid. The move worked, but policymakers say a surge in installations — net metering capacity was 2,813MW as of March — from 300,000 consumers, mostly households, added a burden of Rs150bn ($529mn) on the other 40mn consumers last year from fixed and buyback costs. The impact could reach Rs4,400bn for the period 2025 to 2034 if current policy persists, officials say. At the same time, demand for grid power has fallen.

Since 2015, Pakistan has drawn in billions of dollars of sovereign-backed loans to build power plants, and signed long-term liquefied natural gas deals. This resolved blackouts but was costly, as economic growth has not kept up with demand projections. The result is a country owing $18bn in mounting power and gas sector debts to finance excess energy supply. According to Arzachel, a consultancy, two-thirds of a household electric bill comes from fixed costs, such as capacity charges even for idling plants. In March, the government proposed cutting the electricity buyback rate, reducing the licensing period for net metering contracts, and limiting consumers to installing only as much solar as is authorised by their electricity provider. The plan stalled after it was denounced as “cruel” by politicians, who said consumers and industries would be saddled with power costs of between Rs30 and Rs60 per unit, among the highest in south Asia.

Power minister Awais Leghari says a change is a “necessity” as the “wealthiest households in Karachi, Lahore and Islamabad . . . avoid fixed costs while their share is covered by the most vulnerable”.

Power minister Awais Leghari says poorer customers are subsidising those who can afford solar “Why should we buy power at a price that is Rs17 more expensive than the national energy pool price I buy from other generators?” Leghari says. He adds that reforms would raise payback periods to four or five years, from two to three currently, which “remains a fair incentive”.

Haneea Isaad of Islamabad-based Institute for Energy Economics and Financial Analysis says there was nearly a nationwide blackout during Eid in March, as solar power surged and the grid could not absorb frequency changes as some backup generators and plants were switched off due to low demand in the holiday. “Technical problems are . . . a ticking time bomb,” she says, and the switch to solar means companies are losing revenues to invest. The government says imported panels harm prospects of a local industry and it hopes to recoup some of the import bill. Analysts say the proposed levy is aimed at slowing solar adoption. To boost grid use, enabling investment to improve the service, Pakistan is banking on cryptocurrency mining, AI data centres, power cost reductions, levies on industries using captive natural gas plants, and electric vehicles.

Saadia Qayyum, an energy consultant at Canada-based Hatch, says “the government appears to be relying on short-term policy adjustments that risk slowing down solar adoption” among the poorest. “Many consumers are turning to solar because grid electricity is expensive and unreliable — in some areas, supply is limited to just 8 hours a day,” she says. “Policy shifts that make it harder to access or afford solar risk removing that essential lifeline.”

Comment by Riaz Haq on July 8, 2025 at 7:24am

Pakistan has quickly become one of the world's biggest markets for solar energy. This solar boom has been driven in large part by consumers who are fed up with sky-high electricity costs.

https://www.npr.org/2025/07/08/nx-s1-5448805/pakistan-becoming-one-...

Comment by Riaz Haq 5 hours ago

Pakistan plans large battery storage to ‘stabilise grid’ - Business -


https://www.dawn.com/news/1959871

Move aims to manage renewable intermittency, reduce frequency fluctuations, minister says
• Clean energy share rises to 46pc, surpassing 2025 capacity target

ISLAMABAD: The government is wor­king on large, utility-scale Battery Ene­rgy Storage Systems (BESS) to ensure stability of the national grid, which is currently facing challenges such as frequency fluctuations caused by the induction of intermittent renewable energy sources faster than planned targets.

“The government … is pursuing the development of large-scale battery energy storage systems through private-sector investments to address the intermittency of variable renewable energy, optimise grid demand management, and enhance overall system stability,” Power Minister Sardar Awais Leghari told the National Assembly in a written statement on Friday.

In response to a series of questions from various MNAs, the minister also confir­med that the government was gradually moving away from Liquefied Natural Gas (LNG) as part of its policy to reduce reliance on imported fuels amid higher capacity contracts, increasing induction of indi­genous renewables, and stagnant demand.



Clean energy share

The minister said the clean energy share in the country had reached 46 per cent by September 2025 against the government’s 40pc capacity target for 2025.

He added that the government had set ambitious targets under its various power policies to increase the share of on-grid renewable energy capacity to 40pc by 2025 and 60pc by 2030.

Currently, 60 private-sector renewable energy projects with a cumulative capacity of 4,753MW are operational, including 680MW of solar, 1,937MW of run-of-river hydropower, 1,845MW of wind, and 291MW of bagasse cogeneration.

Alongside 9,619MW of public-sector hydropower and 100MW of solar in K-Electric’s system, renewables account for more than 37pc of the generation mix.

“Net-metering-based solar photovoltaic [PV] has further added 6,390MW as of September 2025, raising the clean energy share to approximately 46pc, thereby surpassing the government’s 40pc renewable energy capacity target for 2025,” the minister said.

In parallel, the minister said the government had finalised an initial quantum of 800MW for the Competitive Trading Bilateral Contract Market framework to provide market access to renewable ene­rgy producers and enable large consumers to enter into direct supply contracts with producers of their choice, subject to a wheeling charge of about Rs13 per unit.

Mr Leghari emphasised that the availability of reliable, efficient, eco-friendly, and affordable electricity was crucial for sustainable economic growth. “There­fore, the government is prioritising the effective use of renewable and indigenous energy sources through its national policies aimed at diversifying the energy mix by promoting clean and renewable sources such as wind, solar, hydropower, and bagasse,” he added.

LNG reliance

Discussing LNG diversion, the minister reported that dependence on imported fuel plants had comparatively reduced in recent years, and priority was being given to the utilisation of local energy resources, including Thar coal, solar, wind, bagasse, and hydropower, to minimise reliance on imported fuels.

He conceded that dependence on imported LNG had comparatively dec­reased in recent years. “This policy shift is primarily aimed at promoting ind­igenous and renewable energy resources and ensuring least-cost dispatch in the overall generation mix,” he added.

He continued that the government was actively promoting the adoption of solar energy technology at the consumer level across residential, commercial, and industrial sectors.
.

Comment

• ‹ Previous
• 1
• 2
• 3
• 4
• Next ›
• Page