By Staff Reporter
ISLAMABAD: Pakistan’s power regulator approved a $58 billion plan to expand electricity generation and transmission over the next decade, even as its own three-member board attached dozens of pages picking apart the document they had just signed off on.
The National Electric Power Regulatory Authority’s decision, issued late on Friday, greenlights the Integrated System Plan for 2025 through 2035, a blueprint meant to guide how Pakistan builds power plants and grid infrastructure through the middle of the next decade. The approval clears a document that has stirred controversy since it was first submitted for review, and the 45-page order accompanying it reads as much like a rebuke as a rubber stamp.
Chairman Waseem Mukhtar and members Amina Ahmed and Maqsood Anwar Khan each filed separate notes running to more than 12 pages combined, according to the decision, questioning why certain major projects were dropped from the plan while others were added, and challenging the process that produced it. Their central complaint: that a matter this consequential for the national grid should have gone through the Council of Common Interests, the constitutional body that Pakistan’s federal and provincial governments use to settle disputes over shared resources, including energy policy.
Nepra’s order does not mince words on that point. Changes to the National Electricity Policy or the National Electricity Plan, it says, cannot be dictated by a technical committee or by the Power Division — the federal bureaucracy that oversees the sector — without routing back through the Council. That warning follows a series of moves this year in which the Power Division and the Prime Minister’s office pushed through amendments to national electricity planning documents on their own authority, including changes Prime Minister Shehbaz Sharif signed off on in August alongside a separate blueprint for the country’s energy needs through 2060.
The approval is conditional and comes with strings attached. Nepra excluded two elements outright — a $900 million allocation for battery storage systems and a transmission line linked to K-Electric Ltd., the private utility that serves Karachi, both originally penciled in for 2028. The regulator also flagged what it called contradictory statements from two entities under the Power Division: the Independent System and Market Operator, which built the plan, and the Power Planning and Monitoring Company, which is meant to track its execution. Nepra put both organizations’ conflicting positions on the record rather than resolve them, leaving the discrepancies for a later reckoning.
Scale of the Buildout
The plan Nepra approved envisions capacity additions of 26,045 megawatts over the 11-year horizon — 17,485 megawatts already committed to construction and another 8,560 megawatts still to be finalised — while retiring 2,577 megawatts of aging plants. That would push Pakistan’s installed generation capacity to 62,657 megawatts by 2035, including 8,120 megawatts expected to come from rooftop solar and other small-scale, customer-owned systems connected through net metering.
The generation buildout alone is projected to cost $47.08 billion. Transmission upgrades add another $10.65 billion: $4.6 billion for projects already underway or committed, and roughly $6.05 billion for new transmission expansion, covering substations, transformer upgrades, voltage-control equipment and the lines needed to move new power from where it’s generated to where it’s consumed.
Nepra built the plan around three demand scenarios, distinguished by assumed economic growth: a high-growth case pegged to average annual GDP expansion of 6.37%, a medium case at 4.95%, and a low-growth or “business as usual” scenario at 3.52%. It is the most conservative of the three — built on what planners call the Rationalized Capacity Addition assumption — that Nepra adopted as the reference case, a choice that itself signals caution about how much new demand the grid needs to serve.
Pakistan’s power sector has spent the past several years absorbing an unplanned shock: a boom in rooftop and distributed solar that has grown from a few hundred megawatts to tens of gigawatts of installed capacity in under a decade, driven by soaring grid tariffs, a weaker rupee and cheaper imported panels. The shift has cut into demand for grid-supplied electricity even as the utilities remain contractually bound to pay fixed capacity charges on plants built for a bigger, more predictable load — one reason the country replaced its net-metering framework with a less generous net-billing system earlier this year, and one reason Nepra is now asking harder questions about how much more generation the grid actually needs to add.
Storage Plan Rejected, For Now
The board’s refusal to fund battery storage outright reflects that same skepticism. Rather than approve the $900 million BESS allocation, Nepra directed that a comprehensive technical and economic study be completed first, one that establishes the actual requirement for storage, its optimal capacity, how it would be operated and whether it is cost-effective — a bar the underlying submission apparently failed to clear to the regulator’s satisfaction.
The tariff question drew similarly pointed treatment. Nepra noted that ISMO and the Power Planning and Monitoring Company had given conflicting accounts of how the plan would affect what consumers ultimately pay, and it ordered that the impact be properly quantified and folded into the main report rather than left as a footnote. The monitoring company’s own projection, cited in the decision, has the base consumer tariff climbing to 37.28 rupees per unit by 2035 from 34 rupees in the 2024-25 fiscal year — a roughly 10% increase over the life of the plan, though Nepra’s insistence on a fuller accounting suggests the board isn’t yet convinced that figure captures the whole picture.
The industry has spent years grappling with circular debt — the buildup of unpaid bills and subsidy shortfalls that cascades through generators, distributors and the government’s own finances — a problem that international lenders have tied directly to the adequacy and timeliness of tariff adjustments. Any plan that adds tens of billions of dollars in new investment inevitably raises the question of who pays for it, and how quickly.
Project Disputes and a Karachi Carve-Out
The decision also surfaces a dispute specific to K-Electric, the utility that runs generation, transmission and distribution for Karachi and its surrounding areas as a vertically integrated operator distinct from the rest of the national grid. Nepra noted that several of K-Electric’s renewable energy projects, awarded through competitive bidding, had initially been excluded from the plan by ISMO. One of them, a 269-megawatt wind-solar hybrid project at Dhabeji procured through the Japan-backed Joint Crediting Mechanism, was later added back in for the current fiscal year, though Nepra’s language suggests the reversal came only after scrutiny, not as part of the original submission.
Underlying the entire document is a rebuke of ISMO’s own posture toward the numbers it supplied. Nepra recorded its displeasure that the system operator had disclaimed responsibility for the integrity, accuracy and completeness of the data and projections underpinning the plan, along with any consequences that might follow from relying on them — an unusual position for the body that produced the analysis Nepra is now being asked to bless.
One provision in the plan responds to Pakistan’s immediate geopolitical surroundings rather than long-term demand growth. With the conflict between Iran and the United States disrupting Pakistan’s electricity imports from Iran, the plan carves out a 40-megawatt onsite power facility for the Gwadar and Makran region in Balochistan, an area where extending the national grid remains neither technically nor economically viable. The provision underscores how a document built around decade-long capacity forecasts can still be shaped by short-term diplomatic and security disruptions far from Islamabad.
What Comes Next
Nepra’s conditional language — approval “subject to redressal of the observations of the Authority” — leaves the door open for further revisions before the plan takes final effect. The unresolved questions include the constitutional one at the heart of the members’ dissents: whether a planning document of this scale and consequence can properly bypass the Council of Common Interests, or whether the government will need to take the underlying policy changes back to that forum before the $58 billion program can proceed without a legal cloud hanging over it.
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