LAHORE: Pakistan’s installed electricity generation capacity has risen to 46,605 megawatts in FY2024-25, yet costly capacity payments to idle power plants remain a major burden on consumers, ranging between Rs12 to Rs15 per unit.
The Economic Survey 2024-25 reveals that while the government has halted new power projects and is terminating power purchase agreements (PPAs) with several independent power producers (IPPs), the capacity payment issue persists — especially during winters when electricity demand plummets to 12,000-13,000MW.
The current energy mix includes thermal (55.7%), hydel (24.4%), nuclear (7.8%), and renewables (12.5%). From July to March FY25, total electricity generation reached 90,145 GWh, with consumption at 80,111 GWh. Households consumed 49.6% of the total electricity, followed by industry at 26.3%.
Experts note that almost half of the installed capacity originates from IPPs, though many plants remain idle due to maintenance or inefficiency. Solar net metering contributed over 2,800MW, but solar energy is not considered firm capacity due to its intermittency.
Efforts to cut reliance on expensive thermal energy and optimize the power mix are underway, but real relief hinges on deeper structural reforms to reduce capacity payments and rationalize tariffs.
Story by Khalid Hasnain
