Energy Sector Overview

Structure of Energy Sector in Pakistan

Several public and private sector entities operate in Pakistan’s power sector. Electricity generation is undertaken by WAPDA (hydel power), four public sector Generation Companies (GENCO’s), and several Independent Power Producers (IPPs). Power generated by these entities is purchased by the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G).

The transmission system in Pakistan is operated by the National Transmission and Despatch Company Limited (NTDC), a public sector entity, which transmits electricity to regional public sector Distribution Companies (DISCOs). These DISCOs are responsible for the distribution of electricity and its delivery to end-consumers.

The overall regulation of the power sector is carried out by the National Electric Power Regulatory Authority (NEPRA), which is mandated to ensure transparency, efficiency, and fairness among all sector participants.

STRUCTURE OF ENERGY SECTOR

Generation mix

Generation Mix

Pakistan’s power sector comprises a mix of thermal, hydropower, nuclear, and renewable energy–based generation facilities. Historically, the installed generation capacity was predominantly hydropower-based, with an approximate hydropower-to-thermal ratio of 67% to 33% in 1985.

However, over time, this composition shifted significantly toward thermal generation. As of 30 June 2025, the total installed capacity of the country stood at 41,121 MW, of which thermal power plants accounted for 20,544 MW (49.96 %), followed by hydropower plants at 11,500 MW (27.97 %), nuclear power plants at 3,620 MW (8.80 %), renewable energy (wind, solar & Bagasse) power plants at 2,767 MW (6.73 %) and K-Electric at 2,690 MW (6.54 %).

Renewable energy

Mainstreaming renewable energy and increasing the utilization of indigenous resources can play a pivotal role in diversifying Pakistan’s energy mix and reducing the country’s reliance on any single source, particularly imported fossil fuels. This diversification would help mitigate the risks associated with supply disruptions and price volatility. When the environmental and social externalities of different energy options are properly accounted for, renewable energy technologies can become economically competitive with conventional sources on a least-cost basis.

Pakistan is particularly well endowed with hydropower resources, with potential sites totaling approximately 100,000 MW identified in the northern regions. At present, renewable energy sources—including hydropower, wind, and solar—constitute around 35% of the country’s installed generation capacity. Given the substantial untapped potential, Pakistan is well positioned to further diversify its energy mix through the systematic development of these renewable resources, thereby enhancing energy security and supporting long-term sustainable growth.

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