KARACHI – Pakistan’s electricity demand on the national grid remained stagnant in FY2024-25, largely due to the rapid growth in solar power and reduced industrial reliance on grid energy. Official figures show total power generation reached 127,160 GWh, nearly the same as the previous fiscal year’s output of 127,165 GWh.
Although June showed some improvement with a 2% year-on-year rise and 8% month-on-month growth, overall demand failed to pick up significantly. The average fuel cost for electricity production fell by 2% over the year, offering slight relief. However, in June alone, the cost dropped by 9% compared to last year, though it rose 1% from May.
Experts say the trend toward solar energy is reshaping national energy consumption. Farhan Mahmood, Head of Research at Sherman Securities, noted that many industrial users are now generating their own electricity due to lower prices of coal and oil. As a result, on-grid electricity demand has weakened, and dependence on the national grid has reduced further.
Despite lower demand, consumers continue to pay capacity charges, which remained between Rs12 to Rs15 per unit during FY25. These charges are meant to cover the cost of keeping unused power plants ready for operation, placing a financial burden on users even when consumption drops.
In terms of energy sources, hydropower remained the biggest contributor, making up 31.4% of the total generation. Nuclear power followed at 17.7%, while RLNG contributed 17.5%. Local coal accounted for 12.2%, natural gas 8.8%, and imported coal 7.1% of the total mix.
Meanwhile, some energy sources showed sharp changes in generation and costs. Electricity from imported coal surged by 80%, but nuclear output fell 3%. Solar power grew by 15%, while furnace oil usage plummeted 79%. Nuclear energy became 35% costlier, while furnace oil-based generation became 12% cheaper, adding complexity to future energy planning.