Pakistan’s power crisis decades in the making, not just war fallout: study

A study released on Tuesday says Pakistan’s energy crisis is not a temporary disruption caused by the US–Iran war, but the result of decades of structural choices. The crisis stems from decades of over-reliance on imported fossil fuel, rigid long-term gas contracts that cannot adapt to either surplus or scarcity, and an absence of the energy storage infrastructure that would allow the country’s solar expansion to work around the clock, as per the study. “The war in the Persian Gulf has not created these vulnerabilities but has exposed them”, says Beyond the Shock: Pakistan’s Energy Options Amidst Persian Gulf Crisis, a study examining the energy security emergency triggered by the US-Israel military campaign against Iran that began on February 28, 2026. The study is undertaken by the Policy Research Institute for Equitable Development (PRIED), a think tank working on Pakistan’s transition to renewable sources of energy. The launch coincided with a webinar titled ‘Pakistan’s Energy Options amidst Persian Gulf Crisis’, bringing together government officials, industry leaders, economists, and civil society representatives to discuss evidence-based pathways out of the crisis. Since the closure of the Strait of Hormuz, through which approximately 20% of the world’s oil and liquefied natural gas normally flows, crude oil prices have surged to $126 per barrel at their peak. Pakistan’s weekly oil import bill more than doubled from $300 million to $800 million, Prime Minister Shehbaz Sharif said last week, while fuel prices rose by up to 55% within two months. The International Energy Agency has described the disruption as the largest to global oil supply in the history of the world market. For Pakistan, operating simultaneously under two IMF assistance programmes that constrain its ability to subsidise fuel or increase public spending, the shock could not have arrived at a worse moment. “The war in the Persian Gulf has laid bare Pakistan’s energy vulnerabilities in the starkest way possible. The country cannot afford to have a simplistic response to this crisis — it must be a layered one”, said Ammara Aslam, a researcher at PRIED, and co-author of Beyond the Shock. “In the short run, that means protecting essential imports without allowing prices to spiral out of control. In the medium and long run, it means resisting the panic-driven temptation to lock the country into coal or expensive imported fuels, and instead accelerating the investments in solar power, battery storage, and grid infrastructure that will determine whether Pakistan remains permanently exposed to the next global energy shock, or finally builds its way out of it. ” The study identifies Pakistan’s rapid solar expansion, with 34 gigawatts of installed capacity by 2025, of which approximately 7 gigawatts is net metered that feeds directly into the national grid while the rest is installed behind the meter and completely off-grid. These systems becomes genuine strategic asset that cushioned the country from the worst of the shock, it maintained. The study also identifies a critical gap: without utility-scale battery energy storage, solar power cannot resolve the evening peak demand crisis that RLNG shortfalls have now made acute. “Filling this gap, and doing so urgently, is the single most important investment Pakistan can make to break its cycle of energy vulnerability. ” Also read: Up to 25 kW: NEPRA removes licence requirement for small solar users Switching from imported LNG to imported coal does not solve the underlying problem; it only trades one import dependency for another, while locking Pakistan into new long-lived infrastructure at a moment when the cost of coal is itself rising globally in response to the LNG supply shock, as per the study. Solar power: ‘Pakistan’s strategic asset’ The study maintained that Pakistan’s solar expansion has provided a genuine cushion against the worst of the shock. “But solar has its limits”. It identifies the duck curve as Pakistan’s most urgent grid challenge: solar collapses at sunset just as demand, particularly the summer cooling demand, peaks sharply. “Only fast-ramping RLNG plants can currently manage this transition, which is why the same solar boom that reduced LNG demand has also made some LNG supply paradoxically indispensable”. The economic case for continued solar investment remains compelling: 1, 000 megawatts of solar costs $100 million and generates electricity for 25–30 years. The same money buys one LNG cargo, burned once, as per the study. Former finance minister and a keynote speaker at the launch of the report, Miftah Ismail said, “Pakistan sells the most expensive electricity and gas in the region and among peer countries. This is not a technical failure. This is a policy failure. The rational path requires privatisation, creation of wholesale markets for both power and gas, and a pro-consumer regulatory approach at the retail level”. “What we’ve learned from the Strait closure, gas cuts, and energy price spikes is this: the sun shining on our land is ours, ” said Waqas Haroon Moosa, Chairman Pakistan Solar Association, a panelist at the launch event. “It doesn’t pass through Hormuz or any route we can’t control. We should expand solar, hydro, and wind for energy sovereignty — even if they were expensive. But they’re cheap, which is a boon. The miracle of solar in Pakistan is that the people introduced it — farmers, the common man. The government is doing its part and ahead of the budget, we’re pushing to cut GST on solar panels, batteries, and inverters to zero. Oil imports get used and run out. Solar gives us a sustainable resource, and eventually, energy independence. ”

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