Pakistan’s power regulator approves the Integrated System Plan 2025–35, while rejecting a proposed $900 million battery-storage investment and raising concerns over excess generation capacity.
ISLAMABAD, PAKISTAN — WEB DESK: The National Electric Power Regulatory Authority (NEPRA) has approved Pakistan’s $47 billion electricity expansion plan through 2035, setting out a roadmap for additional generation and transmission capacity to meet projected future demand.
The regulator approved the Integrated System Plan (ISP) 2025–35, submitted by the Independent System and Market Operator (ISMO), but rejected a proposed $900 million battery energy storage investment, saying its cost had not been properly assessed through the system’s optimisation model.
Pakistan’s power demand projected to rise
Under the approved plan, peak electricity demand is projected to increase from 26,950 megawatts in 2025 to 35,521MW by 2035.
The plan calls for 26,045MW of new generation capacity, comprising 17,485MW of committed capacity and 8,560MW of newly optimised capacity. It also envisages the retirement of 2,577MW of existing capacity.
The projected cost of the generation expansion is $47.13 billion, while transmission upgrades are expected to require an additional $10.65 billion.
NEPRA rejects $900m battery storage proposal
NEPRA declined to approve a proposed Battery Energy Storage System (BESS) investment worth around $900 million.
The regulator said the cost of the project had not actually been run through ISMO’s optimisation model. It called for a comprehensive technical study before the proposal could be reconsidered.
The decision highlights the regulator’s concerns over whether major new investments are justified by Pakistan’s actual electricity requirements and system economics.
K-Electric transmission project also rejected
NEPRA also declined to endorse a proposed NGC-K-Electric interconnection scheduled for 2028.
According to the regulator, the proposed timeline was unrealistic because the transmission project would require around five years to complete.
The ISP covers both the development of new power-generation projects and transmission infrastructure needed to move electricity across the country.
Questions raised over renewable power
The regulatory decision also highlighted concerns over the exclusion of some of Pakistan’s cheapest renewable power from national planning.
NEPRA member Amina Ahmed said K-Electric had secured renewable auction tariffs as low as 3.09 US cents per kilowatt-hour in late 2024, described as the lowest recorded in Pakistan.
She said around 640MW of those projects had remained outside ISMO’s planning for more than a year despite repeated regulatory queries.
According to her dissenting note, ISMO had initially used incorrect data in its modelling. After the data was corrected in July 2026, the cheaper renewable power was found to reduce system costs rather than increase them.
Ahmed said the episode had undermined NEPRA’s confidence in ISMO’s optimisation process.
Concerns over excess power capacity
The approval comes despite concerns from stakeholders that Pakistan already has substantial excess generation capacity.
Project developers, trade bodies and provincial governments reportedly warned that the country has a 15–20GW capacity surplus, while existing power plants operate at around 45% utilisation.
They cautioned that additional investment could increase circular debt and capacity-payment costs, ultimately placing a greater burden on electricity consumers.
Solar adoption reducing grid demand
NEPRA Chairman Waseem Mukhtar also raised concerns over Pakistan paying for more generation capacity than it currently needs.
He noted that daytime electricity demand from the national grid has fallen to around 12,000MW, partly as consumers increasingly adopt rooftop solar and other alternatives to grid electricity.
The development presents a challenge for long-term power planning, as Pakistan must balance projected economic and electricity demand growth against rising distributed solar generation and existing excess capacity.
