Indigenous energy sources overtake thermal power

• Renewables, hydel and nuclear together now account for more than half of installed generation capacity
• PPIB has facilitated 102 IPPs, attracting over $35bn in foreign investment

LAHORE: Pakistan’s energy sector recorded steady improvement during the first nine months of the current fiscal year, with hydel, renewable and nuclear sources overtaking thermal power in installed generation capacity for the first time, says the Pakistan Economic Survey.

Citing relevant figures, it highlights a gradual shift toward cleaner, indigenous energy sources as the government pursued policies to improve energy security, affordability, and sustainability while reducing dependence on imported fuels.

Total installed electricity generation capacity increased to 49,651 megawatts (MW), up from 45,782MW a year earlier. Hydel, renewable and nuclear sources collectively accounted for 50.8 per cent of installed capacity, surpassing thermal power, whose share declined to 49.2pc from 56.7pc a year ago.

During July-March, Pakistan generated 92,835 gigawatt hours (GWh) of electricity, with hydel, nuclear and renewable sources contributing 53.1pc of total generation, underscoring continuing drift towards cleaner energy.

Electricity consumption rose by 3.8pc to 83,143GWh during the period under review. Households remained the largest consumers, accounting for 47.5pc of total power usage, while industrial demand strengthened, with its share rising to 31.5pc.

In contrast, electricity consumption in the agriculture sector fell sharply by 42.3pc, a decline the survey attributed to the growing adoption of solar-powered alternatives and changing irrigation practices.

The Private Power and Infrastructure Board (PPIB) continued to attract investment in the sector, facilitating the development of more than 102 independent power producers (IPPs) with a combined capacity exceeding 25,800MW. These projects have brought over $35 billion in foreign investment into the country.

Among the notable developments during the outgoing fiscal year was a 32MW bagasse-based power plant that commenced commercial operations in October 2025. Work also continued on a 100MW solar project in Gilgit-Baltistan, a 40MW power project in Gwadar, solarisation of water infrastructure in the port city and the installation of solar systems at 397 health facilities across the country.

The survey noted that Thar coal remained an important component of Pakistan’s energy security strategy. Five Thar coal-fired power projects with a combined capacity of 3,300MW are currently operational, while efforts are underway to replace imported coal with indigenous Thar coal at major power plants established under the China-Pakistan Economic Corridor (CPEC).

Nuclear power: Pakistan’s six operational nuclear power plants, with a combined capacity of 3,530MW, generated more than 17,133GWh of electricity during the first nine months of FY2026. According to the survey, nuclear power helps avoid an estimated 16-18 million tonnes of greenhouse gas emissions annually.

Construction of the 1,200MW Chashma-5 nuclear power plant is also progressing and is expected to be completed by 2030-31.

Gas sector: Indigenous natural gas continued to play a significant role in Pakistan’s energy basket during FY26, contributing 29.3pc to the country’s primary energy mix, though the nation remained heavily dependent on imported liquefied natural gas (LNG) amid declining domestic reserves.

Average gas consumption during July-March FY26 stood at 2,929 million cubic feet per day (mmcfd), including 613mmcfd of imported re-gasified liquefied natural gas (RLNG), according to the survey.

Despite dwindling indigenous supplies, gas utilities expanded their networks and provided more than 149,000 new connections during the first nine months of the fiscal year.

The survey noted that Pakistan’s reliance on imported LNG persisted, with domestic gas fields continuing to see declining production, adding to concerns over long-term energy security and import dependence.

LPG sector: The liquefied petroleum gas (LPG) sector also recorded growth, with total supplies re­­aching around 1.97 million tonnes during the period under review.

Pakistan currently has 11 LPG producers, 382 marketing companies and approximately 6,200 authorised distributors. Investment worth nearly Rs10.36bn was made in LPG infrastructure during the period, reflecting efforts to strengthen supply chains and improve access to cleaner fuels.

Coal consumption: Coal consumption increased to 21.4m tonnes, driven primarily by the power sector.

Power generation accounted for 59.6pc of total coal usage, underscoring the fuel’s continued importance in the country’s electricity mix. Brick kilns consumed 20.8pc of total coal supplies, while cement manufacturers and other industries accounted for the remaining 19.6pc.

Published in Dawn, June 12th, 2026