Pakistan’s power generation remained largely flat in the fiscal year 2024-25, with total output reaching 127,160 GWh, nearly unchanged from the 127,165 GWh recorded in the previous fiscal year. This trend is largely attributed to the rising adoption of solar power and a decline in industrial activity, which collectively suppressed on-grid electricity demand, as reported by The News on Sunday.
In June, power generation saw a 2% increase compared to the same month last year and an 8% rise on a month-on-month basis. Despite this, the overall annual trend remained stagnant. The average fuel cost of power generation decreased by 2% over the year, with a notable 9% year-on-year (YoY) decline in June, though it was marginally higher (1%) compared to May.
Farhan Mahmood, Head of Research at Sherman Securities, explained that “Solarisation has reduced the on-grid electricity demand in the country, as it has seen substantial growth.” He further noted that industrial users have increasingly shifted to self-generation due to lower coal and oil prices, diminishing their reliance on the national grid. However, electricity consumers continue to bear the financial burden of this lower demand through capacity payments, which ranged between Rs12 and Rs15 per unit during FY25.
Energy Mix and Cost Dynamics
Throughout the fiscal year, hydropower generation remained steady. Generation from regasified liquefied natural gas (RLNG) fell by 6.0%, while power from local coal increased by 2%. Notably, generation from imported coal rose sharply by 80%, although nuclear power saw a 3% decline. Both gas and wind-based generation dropped by 2% each, while solar power experienced a significant 15% increase. Conversely, electricity generation from furnace oil plunged by 79%.
In terms of cost, nuclear power became 35% more expensive, and the cost of local coal-based generation rose by 10%. However, generation from furnace oil became 12% cheaper, electricity from imported coal declined in cost by 5%, and RLNG power generation cost dropped by 1%.
Hydropower continued to be the largest contributor to Pakistan’s national energy mix, accounting for 31.4% of total power generation. It was followed by nuclear at 17.7% and RLNG at 17.5%. Local coal contributed 12.2%, natural gas 8.8%, and imported coal 7.1% over the course of the year.
