Pakistan’s national electricity grid generated more power in February of 2018 than in February of 2025. Let that sink in. It is the third February in a row of year-on-year power generation going down. A 3 percent year-on-year dip may not sound alarming from the sound of it, but mind you, it is coming off a low base, and also coincided with the culmination of the Winter Bijli Sahulat Package – which seems to have fallen flat.
On a cumulative basis, 8MFY25 generation at 72 billion units is the lowest since FY20 and 10 percent shy of the peak in FY22. The 12-month rolling average is stuck at 10 billion units – down 4 percent from last year’s same period. It was back in September 2019 when the power generation rolling average first crossed 10 billion units – just 78 months ago. Factor in the fact that February 2025 saw temperatures significantly warmer, being in the top decile for 65 years –and the numbers start to look more worrisome.
Pakistan grid consumption per connection for the residential category by the end of FY24 was at the lowest point in at least two decades, at a paltry 123 units per month. Industrial users tell the same tale – sitting at the lowest point at under 5.000 monthly units.
A cursory look at the LSM numbers is enough to make sense of electricity demand sluggishness from industries – where one-third of sub-sectors are operating even below the levels seen at the start of rebasing back in FY16. As the tariffs started to rise and transmission vulnerabilities were left unaddressed after the last wave of massive capacity injection under CPEC Phase-I, many industrial players opted for alternative backup plans. Some have gone off the grid, and some have started to rely heavily on solar power, reducing grid reliance.
The case of residential consumers is not that difficult to make sense of either. The last few years have not really seen the Pakistani middle or lower-middle class undergoing an upgrade in living standards. If anything, many have barely kept up. Real incomes have stagnated for many others – and the bulk of the residential consumption gets driven from the segment falling between 100-300 units of monthly consumption – which has arguably faced the most of the music in the recent past. Instead of finding new cases, a large segment looked for ways to curtail use cases – faced with what at one point became the highest tariffs in the region.
And those at the higher end of the consumption (and spending) pie took refuge in rooftop solar – that offered great returns and fast payback – on-grid or off-grid. Mind you, the solar transition is not going to stop anytime soon, as advanced and cheaper storage options will eventually make the economics work for a larger segment of society. So, there goes the grid demand growth for a toss. All this while, the capacity additions meant tariffs had to be jacked up, and the perennial inability to handle circular debt meant more and more surcharges had to be added to service interest costs on loans.
To top it all off, AT&C losses-based commercial load-shedding continued unabated – further restricting system generation and mounting more cents in the consumer end tariff – just because half the distribution companies can’t find a way out of the mess of high losses and low recovery. While there has been some respite in consumer end tariff of late in lieu of periodic adjustments, and some improvement in 1HFY25 T&D losses, there is a long way to go for the tariffs to be anywhere close to reasonable. With alternative technologies intruding at a brisk pace, for the grid to not lose relevance and still sustain – much more needs to happen on the governance front. The blueprint of how and what is already there. It takes a doer to do things.
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