PBC proposes framework to address electricity challenges

ISLAMABAD: The Pakistan Business Council (PBC) has proposed a strategic framework to stimulate electricity demand, optimise existing generation capacity, reduce power sector costs and promote electricity consumption as a means to accelerate economic activity. A PBC delegation led by Chief Executive Officer Javed Kureishi held a meeting with Federal Minister for Energy Sardar Awais Ahmad Khan Leghari, during which Dr Naveed Arshad presented the council’s framework for addressing the interconnected challenges of electricity demand and cost. The presentation identified potential growth areas and proposed measures for optimal utilisation of existing generation capacity. It also evaluated projections indicating potential annual electricity demand growth of around 44 to 45 terawatt-hours (TWh) over the next five to seven years. READ ALSO: Pakistan no longer faces power generation shortage, says power minister The PBC highlighted opportunities to generate additional electricity consumption in several key sectors, including electric buses and vehicles, gas-to-grid transition, agriculture, data centres, railways and industrial operations. According to the council, generating incremental demand would enable fixed capacity costs to be distributed over a larger volume of electricity consumed, thereby helping stabilise per-unit tariffs for end-consumers. The Energy Minister said boosting electricity demand, ensuring efficient utilisation of available generation capacity and reducing power sector costs remained central to the government’s reform agenda. He said the government was implementing multiple measures aimed at reducing system expenses and eliminating unnecessary financial burdens on electricity consumers. The minister further stated that approximately 21 million consumers are currently benefiting from power subsidies ranging between 40 and 50 percent, while the government is undertaking structural reforms to rationalise the cross-subsidy burden. He emphasised that reducing system costs and establishing a more sustainable and targeted subsidy mechanism were essential to protecting consumers from undue financial pressure. Sardar Leghari also made it clear that the government would not encourage or support projects that violate the principle of least-cost generation. He said that where any project deviated from the least-cost framework, the resulting additional financial burden would not be passed on to electricity consumers and the respective project would have to absorb the additional costs itself. Highlighting gains from ongoing reforms, the minister said efforts to reduce losses in distribution companies (DISCOs) over the past two years had generated savings of Rs265 billion. He said operational and administrative measures were continuously being undertaken to further improve the performance of DISCOs, adding that the overarching objective of power sector reforms was to establish a highly efficient, cost-effective and consumer-centric electricity system. To encourage higher industrial electricity consumption, the minister explained that under the Time-of-Use (TOU) tariff mechanism, industrial units would receive discounted per-unit electricity rates for consumption beyond their normal usage levels. He said the measure was aimed at encouraging industrial production while maximising utilisation of existing generation capacity. The meeting also discussed a shift towards greater use of domestic energy resources. The minister informed the delegation that feasibility studies for converting imported coal-based power plants to local coal had been completed. He said conversion to local coal would significantly reduce dependence on imported coal, conserve foreign exchange and help lower overall power generation costs. The minister further underscored the government’s objective of expanding electricity access throughout the country, saying measures were being taken to achieve 100 percent electrification in the near future. He maintained that sustainable growth in electricity demand could only be achieved when all regions and socio-economic segments had effective access to electricity and when consumption was directly linked with productive economic activities. Welcoming the proposals put forward by the PBC, Sardar Leghari said consultations with the business community would strengthen the ongoing power sector reform process. He assured the delegation that the government would continue implementing practical measures aimed at balancing electricity demand, cost, efficiency and consumer interests. The meeting comes against the backdrop of persistent challenges facing the power sector, including low electricity demand, high capacity payments, distribution losses and pressure on electricity tariffs. The PBC’s proposed framework seeks to address these challenges by increasing productive electricity consumption rather than relying solely on tariff adjustments or subsidies. Copyright Business Recorder, 2026

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