ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a $47.13 billion electricity expansion plan for Pakistan through 2035, while rejecting a proposed $900 million battery energy storage investment and raising concerns over several aspects of the country’s future power planning.
The regulator approved the Integrated System Plan (ISP) 2025-35 submitted by the Independent System and Market Operator (ISMO), according to a report published by The News on Saturday.
The plan aims to address Pakistan’s future electricity generation and transmission requirements as peak demand is projected to increase from 26,950 megawatts in 2025 to 35,521MW by 2035.
$47bn expansion plan
Under the approved roadmap, Pakistan would add 26,045MW of generation capacity, including 17,485MW of committed capacity and 8,560MW identified through further optimisation.
At the same time, around 2,577MW of existing capacity is expected to be retired.
The estimated cost of the generation expansion stands at $47.13 billion, while transmission system upgrades would require an additional $10.65 billion.
The ISP covers both the development of new power generation projects and the transmission infrastructure required to transport electricity across the country.
However, Nepra directed ISMO to address several shortcomings, including providing clearer explanations for its calculations and reconciling differences in projected electricity tariffs before preparing the next version of the plan.
Nepra rejects $900m battery storage proposal
Nepra declined to approve a proposed Battery Energy Storage System (BESS) investment worth around $900 million.
The regulator noted that the cost of the proposed storage system had not actually been tested through ISMO’s optimisation model. It directed that a comprehensive technical study be conducted before the proposal is reconsidered.
Nepra also declined to endorse a proposed K-Electric transmission line, known as the NGC-KEL interconnection, which had been scheduled for completion in 2028.
The regulator found the proposed timeline unrealistic, noting that construction of the transmission line would require around five years.
Disagreement within Nepra
The decision was notable because Nepra’s members did not fully agree on all aspects of the power plan, with individual members recording separate notes outlining their concerns.
Nepra member Maqsood Anwar Khan objected to the removal of several hydropower projects, including Gabral Kalam, Madyan, Kalam Asrit and Asrit Kedam.
He argued that the projects had previously been treated as approved and reliable and were removed without a clear or lawful justification. He warned that such decisions could undermine investor confidence, particularly among developers who had already committed funds based on earlier approvals.
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Meanwhile, stakeholders including project developers, trade bodies and provincial governments raised concerns about adding new capacity when Pakistan already has a reported surplus of 15,000MW to 20,000MW.
They also pointed to low utilisation of existing power plants, which they said operate at around 45% of capacity, warning that unnecessary investment could increase circular debt and capacity-payment pressures on consumers.
Nepra member questions exclusion of cheap renewable power
The strongest criticism came from Nepra member Amina Ahmed, who recorded a dissenting note on the decision.
Ahmed pointed out that K-Electric had secured renewable energy auction tariffs as low as 3.09 US cents per kilowatt-hour in late 2024, described as the lowest renewable tariff recorded in Pakistan.
She said around 640MW of those projects had remained outside ISMO’s planning model for more than a year despite repeated queries from Nepra, including one raised in March 2026.
According to Ahmed, 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 overall system costs rather than increase them.
She said the episode had “materially undermined Nepra’s confidence in ISMO’s optimisation process”.
Falling daytime electricity demand raises concerns
Nepra Chairman Waseem Mukhtar supported the final decision but highlighted a broader concern over Pakistan’s electricity planning.
He noted that the country was paying for more generation capacity than it currently needed, contributing to higher electricity bills.
According to Mukhtar, daytime electricity demand from the national grid has already fallen to around 12,000MW as more consumers turn to solar panels and other alternative energy sources.
The regulator’s decision therefore highlights a growing challenge for Pakistan’s power sector: balancing future electricity requirements with existing surplus capacity, falling grid demand and the financial burden of maintaining generation assets.
