The country has increased in the installation capacity of electricity production during the year 2024-25 in progress, imposing an additional burden on consumers.
Capacity payments are the result of an increase in the installed capacity of electricity production, which has affected 46,000 MW. Consumers paid Rs 2.5 to Rs 2.8 Billions each year, which they pay in inactive plants which did not produce a single unit.
According to the economic study 2024-25 published here Monday, in July to March 2012, the total capacity of the installed electricity production of Pakistan was 46,605 MW, reflecting an increase of 1.6% against 45,888 MW recorded during the corresponding period of the 201024 financial year.
The government said that this increase is mainly attributed to the addition of 2,813 MW through net measurement.
However, the Government of Pakistan put an end to the electricity purchase agreements (APP) with several independent electricity producers (PPI) – including Hub Power, Lalpir Power, Pakgen Power, Rousch Power, Saba Power and Atlas Power – Effective on October 1, 2024.
The percentage of production capacity shares per source was: Hydel (24.4%), nuclear (7.8%), renewable (12.2%) and thermal (55.7%).
Although thermal power remains the dominant source, its share has decreased in recent years, indicating an increasing dependence on indigenous energy sources.
On the total electricity production of 90,145 GWh, the combined share of Hydel, nuclear and renewable sources amounted to 53.7%, highlighting a significant change towards more sustainable and environmentally friendly alternatives.
The energy sector remains an essential engine of economic and industrial development in Pakistan, influencing productivity, commercial competitiveness and quality of life.
During the first nine months of the 201025 financial year (July-Mars), Pakistan continued to deal with challenges in energy affordability, sustainability and safety.
Nevertheless, key reforms, capacity improvements and a changing energy mixture reported progressive progress to a more resilient and diversified energy landscape.
In March 2025, the total production of electricity production installed was 46,605 MW, reflecting a continuous change towards cleaner energy sources. The Hydel, Nuclear and Renewable sources have collectively represented 44.3% of the installed capacity – an improvement compared to previous years – while the Power Power’s share fell to 55.7%. In terms of electricity production, Pakistan produced 90,145 GWh in July to March2025, with 53.7% generated by Hydel, nuclear and renewable sources.
This transition reflects a positive development towards indigenous and environmentally friendly energy sources.
Sectoral consumption models show that the household sector has remained the largest consumer, representing almost half of the country’s electricity consumption. PPIB continued to play an essential role by allowing the participation of the private sector in electricity production and transmission.
During the examination period, key milestones were reached, in particular the operationalization of the hydroelectric project of 884 MW Suki Kinari, as well as continuous progress on new solar, wind and bagasse projects.
In March 2025, Ppib facilitated 88 operational PPIs with a cumulative capacity of 20,726 MW. The emphasis on the government on renewable and indigenous energy is obvious from the project pipeline, 84% of which include clean energy initiatives.
In the oil sector, domestic production has remained limited, maintaining high import dependence.
However, stable oil prices have helped moderate the energy import bill compared to the previous year.
The use of interior refining capacity has remained sub-optimal, although efforts to attract investments in upgrades to refineries and the new capacity continued.
On the natural gas front, the exhaustion of indigenous reserves remains a major concern. Without major discoveries, Pakistan has more and more supported on LNG imports to meet domestic demand, especially in the power and industrial sectors. In response, initiatives are underway to improve energy efficiency and extend the infrastructures of the LNG supply chain.
Coal continues to play an important role, especially thanks to coal -based electricity projects. The indigenization of coal energy is actively continued, several plants based on Thar contributing to the national network.
However, environmental concerns and the need to adopt their own technologies remain the main political considerations.
