Pakistan’s electricity generation remained stagnant in the fiscal year 2024-25, with total output at 127,160 gigawatt-hours (GWh)—virtually unchanged from the previous year’s 127,165 GWh. Analysts say the flat growth reflects two key trends: rapid solar adoption and declining industrial dependence on the national grid. While June saw a modest 2% year-on-year increase, the broader annual trend highlights structural shifts in energy consumption.
Solar Surge & Industrial Self-Generation Reduce Grid Reliance
Farhan Mahmood, Head of Research at Sherman Securities, noted that solar power expansion and cheaper fossil fuels have driven industries toward self-generation. “Lower coal and oil prices made off-grid solutions more attractive, reducing pressure on the national system,” he said. However, consumers continue to bear the cost of underutilized capacity, paying Rs12-15 per unit in fixed charges despite stagnant demand.
Hydropower Dominates as Furnace Oil Crashes
Hydropower remained Pakistan’s largest energy source (31.4%), followed by nuclear (17.7%) and RLNG (17.5%). Solar generation grew by 15%, while furnace oil-based power plummeted by 79%. Imported coal use spiked 80%, but nuclear and gas-fired output declined. On costs, nuclear power became 35% more expensive, whereas furnace oil and imported coal saw price drops of 12% and 5%, respectively.
Capacity Payments Burden Consumers Amid Low Demand
Despite a 2% yearly decline in average generation costs, experts warn that capacity payments to idle power plants strain consumers. With industrial demand weakening and renewables gaining ground, policymakers face pressure to reform tariff structures and optimize the energy mix to prevent further inefficiencies in the power sector.