Pakistan’s power generation falls 15% MoM, costs plunge 30% in February

Power generation in Pakistan clocked in at 6,945 GWh in February 2025, a steep decline of 15% MoM compared to the previous month, suggesting a decline in economic activity.

Back in January 2024, power generation stood at 8,153 GWh.

On a yearly basis, power generation declined by 3% as compared to 7,130 GWh in the same month of the previous year.

“This was the lowest monthly power generation in five years,” said JS Global.

Electricity generation in February fell to its lowest level since March 2020, when it stood at 6,911 GWh.

In the first eight months of FY25 (July-February), power generation fell by 3% YoY to 81,739 GWh compared to 84,426 GWh in the SPLY, showed data released by Arif Habib Limited (AHL).

Experts attributed the plunge in generation to several factors including a shift towards renewables.

“Residential consumers are moving towards solar, whereas industrial consumers are installing their own gas and coal captive plants, reducing dependence on the national grid,” Waqas Ghani, Head of Research at JS Global, told Business Recorder.

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There is a growing shift towards alternative energy sources, especially solar, in the South Asian country which has become increasingly popular among residential and commercial sectors.

This rising trend has left decision-makers grappling with its implications for the national grid and energy sector.

Days ago, the government reduced the buyback rate for net metering electricity to Rs10 per unit from previously Rs27 per unit, attributing the decision to “significant increase in the number of solar net-metering consumers, with associated financial implications for grid consumers”.

Moreover, adding to the woes is lacklustre industrial activity. According to the State Bank of Pakistan (SBP), the LSM sector contracted by 1.9% in H1-FY25.

“The drag in LSM growth is mainly coming from a few low-weight sub-sectors, which have more than offset the positive momentum in key sub-sectors like textiles, pharmaceuticals, automobiles and POL,” SBP said in its latest monetary policy statement.

However, experts were optimistic that demand would pick up in the next fiscal year (FY26), driven by government measures to stimulate industrial activity.

“Industrial activity is expected to improve from FY26 onwards, leading to a corresponding increase in power consumption. Additionally, demand will naturally rise in the summer months,” added Ghani.

Meanwhile, the total cost of generating electricity in Pakistan decreased by a significant 30%, clocking in at Rs7.57 KWh in February 2025 compared to Rs10.79 KWh registered in January 2025.

On a yearly, electricity cost lowered by 13%, as compared to Rs8.70 recorded in February 2024.

In February, hydel emerged as the leading source of power generation, accounting for 27.1% of the generation mix, to become the largest source of electricity generation.

This was followed by nuclear, which accounted for 26.6% of the overall generation, ahead of coal (local), which accounted for 15% of the power generation share.

Among renewables, wind, solar and bagasse generation amounted to 2.5%, 1.2% and 1.1%, respectively, of the generation mix.