Lights out, bills up as summer approaches

The government is finalising a plan to curb summer electricity consumption through scheduled outages, compulsory conservation measures, and higher tariffs as cooling demand rises in the coming weeks. The move reflects a deepening fuel shortage caused by a complete disruption of LNG supplies, constrained Thar coal output, and costly alternatives like furnace oil and imported coal. With peak demand expected at 27–28 GW, officials say daily power cuts and steeper bills are unavoidable

Pakistan’s ongoing energy stress, triggered by the US-Israel war on Iran, stems primarily from two shocks: the total disruption of Qatari LNG imports — already reflected in reduced utilisation of gas-fired plants — and the escalating cost of other imported fossil fuels such as oil and coal, the full impact of which has yet to be felt by consumers and the economy.

Dr Khalid Waleed of the Sustainable Development Policy Institute (SDPI) estimates that a full summer blockade of the Strait of Hormuz could cut 8,800 GWh of RLNG-based generation. “With replacement fuel premiums costing an additional Rs100-110 billion and idle capacity charges of RLNG plants amounting to Rs35bn, tariffs will go up by Rs6–8/kWh through emergency FCA adjustments. Average residential bills may exceed Rs55–60/kWh,” he warned. He added that the foreign exchange impact would ripple across sectors, as emergency procurement of Residual Fuel Oil (RFO) and coal at war-driven premiums, along with fertiliser imports of 1.5–2 million tonnes to replace lost RLNG-based urea production, likely costing $2.5-3.5bn in a single quarter.

Peak electricity demand expected to hit 27-28GW

The key questions confronting Pakistani policymakers, therefore, are how to fill the power generation gap caused by the LNG supply disruption and how to keep electricity prices stable despite rising global fuel costs. The government’s response revolves around three measures: increasing the use of domestic gas and indigenous coal in the power generation, expanding reliance on imported coal, and, in emergencies, increase the use of oil.

“While the first step being considered by the government makes sense in the short run, the second and third steps are not viable even briefly given the rising costs of coal and oil in the international market and Pakistan’s fragile financial position to finance their import,” argued Manzoor Ahmed, a researcher at the Policy Research Institute for Equitable Development (PRIED).

“It is also clear that Pakistan cannot go back to LNG-based power generation even in the medium term because its main supplier, Qatar, will require a couple of years to resume its supplies disrupted by the war.”

Mr Ahmed noted that domestic gas could offer short-term relief but cannot fully bridge the power gap over time. Currently, it meets less than 70pc of demand, and even optimistic new discoveries are unlikely to close the deficit in the coming years.

He added that much of this gas is tied to fertiliser production, vital for agriculture. Diverting it to power generation would disrupt fertiliser supply, raise prices, and harm farm output, undermining a sector that has sustained growth as Pakistan’s manufacturing base has struggled in recent years.

Energy experts say that domestic coal also faces supply constraints due to weak investor interest, delays in construction of a railway line to transport coal and other factors from Thar to other parts of the country. The sponsors of coal mines are also finding it difficult to finalise coal purchase agreements with prospective buyers.

‘Global coal markets highly volatile’

The option of increasing coal imports from Indonesia and South Africa, relatively insulated from the Middle East conflict, to boost power generation remains less feasible. While prices remain below the 2022-23 peaks, Mr Ahmed warned that global coal markets are highly volatile. He noted prices have already risen about 30pc in the first month of the Iran conflict. With major consumers like India, Korea and Indonesia delaying coal plant retirements, demand and prices are expected to rise further.

This leaves one viable medium- to long-term solution: accelerating the ongoing shift towards solar energy and supporting it with battery storage systems.

Over the past eight years, Pakistan has seen a dramatic surge in solar adoption. A joint PRIED-TransitionZero report estimates that 51,000MW of solar capacity was imported between 2017 and 2025 at a cost of $7bn, with about 33,000MW already installed. Another study by Renewables First and the Centre for Research on Energy and Clean Air finds this boom has reshaped the energy mix, helping shield consumers from immediate LNG supply shocks and price spikes amid the war in Gulf.

Experts highlight that China has played a central Pakistan’s solar transformation, reshaping the economics of its energy transition. Its vast manufacturing scale, integrated supply chains and state-backed policies have sharply reduced global photovoltaic prices, making solar one of the cheapest power sources worldwide. This decline, reinforced by an influx of low-cost Chinese panels, enabled Pakistan – with zero-rated import taxes – to rapidly scale adoption.

The economic benefits have been compelling for households, farmers and businesses facing high tariffs and unreliable grid supply, as solar offers predictable long-term savings. Easy access to Chinese technology has removed supply bottlenecks, driving a consumer-led shift to distributed solar at an unprecedented speed. Beyond affordability, this expansion has strengthened energy security by reducing reliance on imported fuels such as LNG, partially insulating the country from external supply shocks, experts said.

However, this rapid growth has also revealed a critical structural imbalance. Solar generation, by its nature, primarily meets daytime demand. The real challenge emerges during summer nights, when air-conditioning demand peaks but solar output drops to zero due to near-zero battery adoption. As a result, even solar-equipped households remain dependent on the grid after sunset.

Dr Waleed noted that 10-18GW of distributed rooftop solar installed in recent years displaces 3,500–4,000 GWh of grid demand during daylight hours in a summer quarter, absorbing up to one-third of the shortfall. “However, output drops to zero after sunset, shifting the entire evening peak back to thermal generation. In a Hormuz blockade scenario, this would lead to severe night-time load-shedding. With no battery storage capacity, excess daytime solar cannot be utilised during peak evening hours, he explained.

Mr Ahmed emphasised that Pakistan’s subsidy-free solar boom shows strong consumer willingness to invest, provided the government avoids deterrents like taxes on panels or restrictive net-metering policies. He criticised the lack of support for low-income groups, noting that over 25pc of Pakistanis still lack electricity despite the potential of decentralised solar systems.

He argued that expanding solar access would not require major grid investments and could unlock economic opportunities. The government should remove taxes on solar equipment, offer subsidised schemes for low-income households, and support mini- and micro-grids for localised energy distribution.

Mr Ahmed also warned that rising global demand for Chinese solar panels could increase prices, making timely policy support essential. Sustaining solar growth is vital, he added, as it has already saved $5bn–$12bn in fuel imports since 2018 and can further protect foreign exchange reserves.

“Second phase”

More importantly, he stressed that the government should remove all taxes on the import of battery energy storage systems (BESS) and related equipment, he argued. This would trigger a “second phase” of Pakistan’s solar transition by improving energy independence and security. He noted that global demand for batteries is rising as countries turn to China for supply, pushing prices higher, making timely policy support essential.

Published in Dawn, April 1st, 2026

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