Grid must transform immediately

Business Recorder

05-05-2025

EDITORIAL: One reform the Prime Minister is particularly optimistic about is the reduction in power prices. Yes, there has been some decline — though not as much as the government claims — in April's electricity bills. But the issue isn't just energy pricing, which has temporarily gone down; the real challenge lies in sustaining consumption on the national grid.
The question is whether industrial consumers will return to the grid, and whether domestic solar adoption will slow down. On the ground, the sentiment is clear: if cheaper alternatives to grid electricity are available, consumers will switch — and many already have done so. The government has made gas prohibitively expensive for captive users, compelling a shift away from gas. However, not many are eager to rely solely on the grid.
Some consumers already have furnace oil (FO)-based generation facilities and are using them because current FO prices make them competitive. Meanwhile, solarization is accelerating. Those who can rely almost entirely on solar power during daylight hours are doing so, and many may adopt storage solutions once battery technology becomes more affordable.
The government has yet to finalise its revised net metering policy, even as net-metered solarization spreads rapidly. Additionally, non-net metered solar systems on single-phase meters — especially in rural areas — are growing in number and remain unaccounted for.
To attract consumers back to the grid, the government must make it more reliable and cost-effective. However, lower hydel generation this year could dilute the benefits of reduced tariffs. Global energy prices — including those of oil, coal, and LNG — are declining, which is helping keep local prices in check for now.
Still, industrial consumers are actively investing in alternative solutions and backup systems. Those who have temporarily returned to the grid from captive power may shift again if global energy prices reverse.
Crucially, there is no permanence in the recent tariff reduction — it is not backed by a sustainable drop in base prices. Circular debt continues to grow. There is no significant reduction in line losses, no improvement in bill recoveries, and transmission bottlenecks remain unresolved. In essence, no meaningful reform has taken place in the energy sector.
The grid is simply not ready. The bureaucracy that manages it seems unaware of the coming wave of battery-based solutions. History offers warnings: the world's biggest camera film company failed to adapt to digital and became obsolete. Shalimar Recording kept making cassettes and lives only in the memories of 1990s Pakistan. PTCL lost its monopoly because it couldn't modernise in time.
NTDC's grid could face a similar fate if it fails to evolve. The global energy transformation will not pause to protect inefficient legacy contracts or outdated infrastructure. The grid must transform – urgently — if it wants to stay relevant.
Copyright Business Recorder, 2025