ISLAMABAD: The country’s overall electricity consumption has posted a growth of 3.8 per cent during the first nine months (July-March) of 2025-26 whereas domestic and agriculture consumption showed a declining trend due to relative structural shift to alternative energy sources due to tariff hikes, which have reduced affordability and incentivized conservation.
According to Economic Survey 2025-26, as of July-March FY 2026, Pakistan’s total installed electricity generation capacity stood at 49,651 MW, reflecting an 8.5 percent increase compared to 45,782 MW recorded in the corresponding period of FY 2025.
The increase can be attributed to the installed capacity of 7,319 MW from net metering. However, out of 102 commissioned IPPs, 13 IPPs of 5,105 MW combined capacity have been closed for various reasons. These include 9 RFO based IPPs of 2,877 MW), 3 gas/RLNG-based IPPs of 601 MW, and 1 multi-fuel-based IPP of 1,638 MW.
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The percentage shares of hydel, nuclear, renewable, and thermal are 23.4 percent, 7.1 percent, 20.3 percent, and 49.2 percent, respectively. The share of thermal power as the dominant source of electricity supply has declined over the past few years, highlighting an increased reliance on indigenous sources.
Out of the total electricity generation of 92,835 GWh, the share of hydel, nuclear, and renewable stands at 53.1 percent. This shift marks a positive development of the economy, as the energy mix transitions away from thermal generation towards more sustainable and environmentally friendly alternatives. During July-March FY 2026, total electricity consumption in Pakistan stood at 83,143 GWh, compared to 80,811 GWh in the corresponding period of FY 2025, reflecting a 3.8 percent increase in electricity usage.
The household sector continued to dominate electricity consumption, with its share declining to 47.5 percent (39,472 GWh) during July-March FY 2026, down from 49.6 percent (39,730 GWh) in the same period of FY 2025. This decrease indicates a relative structural shift to alternative energy sources due to tariff hikes, which have reduced affordability and incentivized conservation.
In contrast, industrial consumption increased to 26,205 GWh, up from 21,083 GWh, increasing its share from 26.3 percent to 31.5 percent.
Electricity usage in the agriculture sector dropped significantly by 42.3 percent, falling from 4,566 GWh to 2,636 GWh, which reduced its share from 5.7 percent to 3.2 percent. This sharp decline is likely due to changes in irrigation practices, rainfall patterns, and possibly a switch to diesel-powered or solar alternatives in response to rising electricity costs.
The commercial sector recorded a modest increase in consumption, from 6,898 GWh to 7,044 GWh. This rise indicates a marginal pickup in business and retail activity, particularly in urban centers. The “others” category, comprising public lighting, bulk supply, and government buildings, consumed 7,785 GWh, slightly decreasing its share from 9.8 percent to 9.4 percent.
During the review period, key milestones were achieved, as 32 MW bagasse-based Shahtaj Sugar Mills power plant achieved Commercial Operations Date (COD) on 10 October 2025 and started supplying the national grid 126 million units of clean energy annually over its 30-year lifespan.
The Prime Minister of Pakistan has granted in-principle approval for processing of a 40 MW power project in the Gwadar region.
To establish a more balanced, transparent, and sustainable framework for Distributed Energy Resources (DERs), the government is considering a transition from net-metering to net-billing. Thar coal supply commenced in September 2025 and is being gradually ramped up, with full-scale supply planned by March 2026.
The commercial operation date (COD) for Phase-3, along with full lignite coal utilization, is expected by the third quarter of 2026, ensuring the plant operates entirely on local coal.
During the period from 1 July 2025 to 31 December 2025, significant progress was made on the conversion of the 660 MW Jamshoro Power Project to Thar coal. Pakistan has 175 billion-ton Thar Coal Reserve, which is sufficient to provide a cost-effective and indigenous fuel option for base load power generation for decades to come. So far, five Thar Coal-based IPPs of 3,300 MW have been commissioned through PPIB, which provide inexpensive electricity to the national grid. These projects include: (i) 1320 MW Thar Coal Block-1 Company (Shanghai) at Thar Block-1 ;(ii) 660 MW Engro Power Project at Thar Block-II; (iii) 660 MW Lucky Electric Project at Port Qasim; (iv) 330 MW Thar Energy Limited Project at Thar Block-II; (v) 30 MW Thal Nova Project at Thar Block-II.
Nevertheless, there is still a need to harness Thar’s coal potential as much as possible for meeting the country’s electricity and energy needs.
In this regard, GoP has already imposed a moratorium on the processing of new imported fuel-based power projects since 2016. Due to the increased prices of imported coal in the international market, the GoP took the initiative to substitute imported coal-based IPPs with Thar coal. Subsequently, efforts are under way to start blending Thar coal by three imported coal-based IPPs with a cumulative capacity of 3,960 MW which were implemented under the CPEC regime.
Six nuclear power plants (NPPs) are operating at two different sites with a total installed capacity of 3,530 MW. Chashma Nuclear Power Generating Station (CNPGS) near Mianwali comprises four units (C-l, C-2. C-3 & C-4) with a total capacity of 1330 MW.
Karachi Nuclear Power Station (KNPGS) has a total capacity of 2,200 MW and is located on Karachi coast.
The performance of Pakistan’s Nuclear Power Plants is up to the mark compared to international standards. These NPPs are placed at the top notch among thermal power generation options in the national merit order.
Over the past six months of the current fiscal year, the overall capacity factor of nuclear capacity is about 80 percent despite the challenges of low demand in the country.
The electricity, gas, and water supply industry contracted due to a decline in subsidies, slow growth in the output of WAPDA and companies, and an increase in the deflator.
Copyright Business Recorder, 2026
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