ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has criticized the government’s power generation strategies, particularly the overinvestment in capacity to meet peak demand, delays in expanding Thar coal projects, and insufficient support for rooftop solar systems. These factors, according to Nepra, are driving up electricity tariffs and burdening government finances.
Nepra’s special report on the generation sector challenges highlights the inefficiencies caused by focusing on peak demand, which occurs only for a few hours each year. The regulator argues that the government should instead promote rooftop solar solutions, noting their benefits such as zero transmission losses and no additional capacity payments.
The report points out that despite the national grid’s installed generation capacity of 42,512 MW by the end of fiscal year 2024, peak demand only reached 30,150 MW. The discrepancy between installed capacity and actual demand, combined with underutilization during off-peak hours, has led to higher electricity costs. This imbalance is further exacerbated by the inadequate transmission and distribution infrastructure.
Despite a significant increase in installed capacity, Nepra observes that load-shedding persists in several regions due to inefficiencies, including high Aggregate Technical and Commercial (AT&C) losses, which are largely driven by electricity theft, weak oversight, and poor infrastructure. These challenges have contributed to a decline in sales growth and the shift toward off-grid solutions, further impacting the power sector’s finances.
Additionally, Nepra addressed the progress of coal power plants at Thar, which were expected to help reduce energy dependency through locally sourced fuel. However, the utilization rate of these plants has been lower than expected, despite their cost-effectiveness.
The report also praised the net-metering initiative for rooftop solar installations, which has shown positive outcomes, including improved voltage stability and reduced technical and distribution losses. The growing adoption of solar energy, driven by falling panel prices, has led to the installation of over 156,000 distributed solar generation systems with a total capacity exceeding 2,200 MW by mid-2024. Nepra advocates for the expansion of this renewable energy source, urging that the distribution companies (Discos) should not hinder further growth, which could help meet the government’s target of 3,420 MW of additional solar capacity by 2031.
