By Staff Reporter
KARACHI: Pakistan’s power generation jumped 8% in June 2025 from the previous month, fueled by rising temperatures and government efforts to shift industries from captive power to the national grid, pointing to a possible pickup in economic activity.
Electricity output reached 13,744 gigawatt-hours (GWh) in June, up from 12,755 GWh in May, according to power sector data. Compared to June 2024, when generation stood at 13,461 GWh, output rose by 2%.
For the full fiscal year 2025, ending in June, power generation remained nearly unchanged, inching up 0.1% to 127,159 GWh from 127,059 GWh the previous year.
Analysts at Topline Securities pinned the flat annual performance on industries leaning heavily on their own power plants due to costly grid electricity. “Power generation in Pakistan in FY25 has remained flat on a YoY basis because companies relied largely on their power generation throughout the year amidst expensive grid energy,” the brokerage firm said in a note.
To counter this trend, the government rolled out an off-grid levy in February 2025 to deter companies from using captive power and nudge them toward the national grid. In addition, the government slashed the unit cost of electricity by more than Rs5 per kilowatt-hour across April, May, and June 2025, following negotiations with independent power producers (IPPs) and a reallocation of the Petroleum Development Levy (PDL).
The impact was clear in the fiscal year’s final stretch, with electricity production climbing 7% in the fourth quarter, Topline Securities noted.
Looking forward, the brokerage anticipates a 5-8% rise in power consumption in FY26, driven by the ongoing shift from captive power to the grid, the PDL’s application to Furnace Oil, and an economic rebound supported by falling interest rates. “We expect 5-8% growth in electricity consumption in FY26 due to gradual and continuous transition of captives to the national grid and imposition of PDL on Furnace Oil (FO). Furthermore, gradual economic recovery amidst easing interest rates will also help power generation to post growth,” Topline said.
The average cost of generating electricity edged up 1% to Rs7.9 per kilowatt-hour in June 2025 from Rs7.8 in May. On a yearly basis, however, it dropped 9% from Rs8.6 in June 2024.
Hydel power led the generation mix in June, making up 39% of the total, bolstered by a 12% month-on-month increase tied to seasonal water flows. Re-Liquefied Natural Gas (RLNG) followed at 16%, with local coal contributing 11%. Among renewables, wind accounted for 4% and solar 1%.
Copyright © 2021 Independent Pakistan | All rights reserved
