Latest news with #DISCOs
Business Recorder
a day ago
- Business
- Business Recorder
Solar net-metering capacity in Pakistan jumps to 2,813MW
Solar net-metering capacity in Pakistan has jumped to 2,813 megawatts (MW) as of March 31, 2025, according to the Pakistan Economic Survey 2024-25, reflecting a 12% increase over the first nine months of the current fiscal year. This represents a rise of over 300MW from the previous fiscal year, when the capacity stood at around 2,500MW, as per NEPRA's State of the Industry Report 2024. The 300MW jump in net-metering capacity is largely attributed to a sharp fall in solar panel prices and the financial incentives net-metering offers to consumers. China exports more solar panels to Pakistan than to many G20 nations in 5 years: report The system allows consumers to install rooftop solar panels, sell surplus power generated during the day to distribution companies (DISCOs), and purchase electricity at night — offsetting monthly bills and contributing to the national grid. Experts say the expansion has also improved voltage stability and reduced transmission and distribution losses, showcasing tangible benefits to the power system. Despite the growth, net-metering still accounts for a fraction of the total potential. Pakistan is estimated to have imported solar equipment capable of producing 20,000–22,000MW in recent years, most of which is installed off-grid — particularly in agriculture, residential, and industrial settings. The surge in clean energy coincides with broader developments in the country's power sector. As of March 2025, Pakistan's total installed electricity generation capacity reached 46,605MW, up 1.6% from 45,888MW a year earlier. This includes the operationalisation of the 884MW Suki Kinari Hydropower Project, and progress on new solar, wind, and bagasse-based projects, as well as the termination of power purchase agreements (PPAs) with some independent power producers (IPPs). Of the total capacity, 44.3% now comes from hydel, nuclear, and renewable sources, marking a continued shift away from thermal power, which now accounts for 55.7% of the energy mix. Renewable energy data reveals that hydel sources contribute 24.4%, nuclear power 7.8%, and solar and wind (including net-metering) 12.2% to the installed capacity. Meanwhile, Khalid Waleed, an energy expert at the Sustainable Development Policy Institute (SDPI), warned against proposed tariff reductions for net-metering. From crisis to clean energy: Pakistan emerges as top solar market in 2024 The government is considering slashing the current Rs27 per unit buyback rate to Rs10, which Waleed argued would 'disincentivise clean energy' and reverse recent gains. Instead, he recommended a phased reduction to Rs15-18 per unit to maintain investor and consumer interest. The Indicative Generation Capacity Expansion Plan (IGCEP) 2022-31 set a target to add 3,420MW under net-metering by 2031. NEPRA believes this goal can be met — or even exceeded — if distribution companies avoid obstructing the ongoing rooftop solarisation momentum.
Express Tribune
6 days ago
- Business
- Express Tribune
Govt decides to tighten solar net metering rules
Listen to article The government has decided to tighten regulations for solar net metering users in a second attempt, after the first one faced a strong backlash and was blocked by Prime Minister Shehbaz Sharif. Under the new plan, the government will abolish the zero-bill facility for solar net metering by introducing various measures. Additionally, consumers will be allowed a sanctioned load of 1.0x, down from the current load of 1.5x. This means they will be forced to switch to hybrid solar systems by using lithium batteries. Under the current net metering system, the consumers share electricity with power distribution companies (DISCOs) at a buyback rate of Rs27 per unit. However, as part of the new plan, the government is seeking to end this electricity sharing system and DISCOs will pay only Rs10 per unit to the rooftop solar owners who have a net metering system. Experts believe this will lead to an additional expenditure of $1 billion on the import of lithium batteries every year. The plan was discussed during a meeting held between different stakeholders and power ministry officials. Power Division minister chaired the huddle. The Power Division has proposed several measures that will kill the spirit of net metering. According to the proposed plan, the concept of net metering has been abolished and a new concept of net billing with a revised buyback rate is being introduced. This means there will be no exchange of electricity units; rather DISCOs will pay a reduced buyback rate of Rs10 to consumers instead of the existing Rs27 per unit. At present, DISCOs offer a credit billing facility on a quarterly basis, which is being abolished. In its place, a cash facility will be available for the excess electricity exported to the national grid by the solar meter owners and the time period has been reduced to a monthly basis. However, no change has been proposed in the categories of consumers as commercial, domestic and all other consumers will be eligible to take benefit of the new policy. The contract period for a licence has been reduced from seven years to five years. Meanwhile, Federal Minister for Energy Awais Ahmad Khan Leghari, in a statement, said that the government was not abolishing the net metering policy, but was considering changing its current mechanism to a more effective, transparent and sustainable model. He recalled that in 2017-18 he himself played a key role in introducing net metering and at that time the system was in its infancy. "Now, the scope of net metering has expanded and it is having a serious impact on the grid, which must be addressed in a timely manner." He stressed that the government did not intend to harm any consumer or business, but all decisions were being taken while keeping in mind the national interest and long-term sustainability of the energy system. "If we mention the purchase of units, then this is also being considered and there is talk of bringing it to the energy purchase price, so that the system automatically adjusts with fluctuations in rates. All these suggestions are under consideration," the minister said. He pointed out that if the payback period for net metering customers was about three years or less, it would be suitable for any investment. "If a customer is consuming 40% of the electricity himself, the return of money in three years is an acceptable business model. These reforms are not a deterrent, but a step towards a better, balanced and sustainable system," he added. During the meeting, the energy minister presented a comprehensive outline of the ongoing energy reforms. In this regard, the government has eliminated 9,000 megawatts of expensive and unnecessary projects, which were a burden on the system. He said that a levy was imposed on the captive power consumers to bring them back to the grid, which resulted in an increase in electricity demand. Since June 2024, the cross-subsidy given to the industry has reached Rs174 billion, which has reduced industrial tariffs by 31% and caused a significant rise in industrial consumption.
Business Recorder
30-05-2025
- Business
- Business Recorder
2 Sindh-based DISCOs' working irks PD
ISLAMABAD: The Power Division has expressed displeasure at the performance of two Sindh-based power Distribution Companies (DISCOs) — SEPCO (Sukkur Electric Supply Company) and HESCO (Hyderabad Electric Supply Company). Responding to questions during a meeting of National Assembly Standing Committee on Power, presided over by Muhammad Idrees, Federal Minister for Power, Awais Leghari stated that the performance of SEPCO and HESCO is disappointing. Power Division is using all its influence to change the incumbent Boards of both Discos but did not succeed due to political interference by the Peoples Party. Acting CEO HESCO, who is a Charted Accountant continues to occupy the office contrary to the wishes of Power Division. Poor performance of 3 Discos earns PD's ire 'The level of losses is decreasing in other DISCOs, but in these two Companies, the loss rate is increasing,' said the Minister. In the last meeting of Standing Committee, acting CEO HESCO had challenged the claims of both the Minister and Ministry's officials about losses in HESCO. During the committee proceedings, Rana Muhammad Hayat enquired if electricity tariffs will be reduced further in the upcoming fiscal year? Nepra Chairman Waseem Mukhtar replied that as of now, the electricity rates are expected to remain the same. Rana Hayat noted that 30 per cent tariff relief has been given to industry and asked why agriculture has not been given any concessions? Secretary Power Division, Dr. Fakhray Alam Irfan stated that the relief to the industrial sector was made possible by ending cross-subsidy. PAC Chairman Junaid Akbar, who is also member of Power Committee stated that four months ago he had offered to personally remove illegal connections (Kundas), adding that they cooperated and yet the line losses are not decreasing. 'Because line losses aren't reducing, consumers are without electricity for up to eight hours. The work isn't done, yet elected representatives are blamed,' Akbar maintained. Answering Junaid Akbar, Chief Executive PESCO stated that due to cooperation there has been significant improvement, and more is expected in the next month, adding that the power utility company provides relief on annual basis instead of monthly. He, however, was directed by the Minister for Power to extend relief in load shedding to the consumers on monthly basis. The committee was informed that for vulnerable consumers, the price has been reduced by 48 to 50 percent. The number of such consumers is 17 million. Power Division has sought an increase in the subsidy of Rs. 294 billion for protected consumers. The burden of consumers' subsidies for the poor falls on the middle class. The new base electricity tariff will be implemented from July 1, 2025. The impact of the July re-basing will be reflected in the August electricity bills. Copyright Business Recorder, 2025
Business Recorder
27-05-2025
- Business
- Business Recorder
Discos' sell-off/provincialisation: PMO directs Power Div. to expedite consultations
ISLAMABAD: The Prime Minister Office (PMO) has directed the Power Division to expedite the consultative process on Discos privatisation/ provincialisation and develop proposals through Task Force on Power Sector Reforms, well informed sources told Business Recorder. The finalized proposals shall be submitted to the Steering Committee on Privatisation of Discos. The Cabinet approved the outright privatisation of three DISCOs—Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company (GEPCO)—in its meeting held on August 13, 2024, marking the first phase of the privatisation initiative. ECC grills PD: Discos' T&D losses total Rs143bn till March The second phase will include Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Hazara Electric Supply Company (HAZECO). Meanwhile, Hyderabad Electric Supply Company (HESCO), Sukkur Electric Power Company (SEPCO), and Peshawar Electric Supply Company (PESCO) will be offered under a Concession Model through long-term agreements. Tribal Electric Supply Company (TESCO) and Quetta Electric Supply Company (QESCO) will be retained by the government. The Power Division, with support from the World Bank under Non-Lending Technical Assistance (NLTA), has completed a consolidated report detailing key deliverables, which has been submitted to the Privatisation Commission. The Power Division has met the Conditions Precedent (CPs) set by the Cabinet Committee on Privatisation (CCoP) and the Government of Pakistan, along with additional requirements identified by the World Bank as of January 31, 2025. The Financial Advisor for Phase-I DISCOs was appointed by the Privatisation Commission, with the Financial Advisory Services Agreement signed on February 11, 2025. The process is structured into four phases: (i) phase I: Sector-level due diligence, inception report, market sounding, and global experience review – completed by March 18, 2025; Phase II: Company-level due diligence (legal, technical, financial, environmental, and HR) – reports submitted May 8, 2025, currently under review; Phase III: Transaction preparation, including restructuring plans and preliminary financial modeling – due June 20, 2025; and Phase IV: Transaction implementation, including investor roadshows, information memoranda, bidder pre-qualification, bidding documents, contract awards, and financial closure – targeted for completion by January 15, 2026. On January 1, 2025, Prime Minister had directed Power Division to thoroughly examine the Provincialisation of DISCOs (ie transferring the ownership and control of Discos from the federal government to the provincial governments) in consultation with provinces and prepare a roadmap with the timelines for the review/approval of the Prime Minister. The Prime Minister Office had further directed that Power Division work simultaneously on the privatisation of Discos identified for privatisation in the first phase i.e. IESCO, FESCO and GEPCO. Power Division shall follow the agreed schedule and complete all the prior actions (conditions precedents) before January 31, 2205. The Committee! constituted by the Prime Minister on Tariff Reduction chaired by the Deputy Prime Minister/Foreign Minister Senator Ishaq Dar has been tasked to thoroughly review the proposal prepared by the Power Division while taking Provincial Governments on board. The firm up proposal shall be submitted for approval of the Prime Minister. Copyright Business Recorder, 2025
Business Recorder
26-05-2025
- Business
- Business Recorder
KE's turning point
Finally, NEPRA has announced the Multi-Year Tariff (MYT) for K-Electric's Transmission and Distribution Network segments for FY2024 to FY2030 (MYT period). This is a welcome development. It unlocks value for the company and provides an opportunity for the integrated power utility to meet Karachi's growing energy needs in a sustainable manner. While the approval of the supply tariff is still pending, this move clears part of the uncertainty surrounding the company's financials. Stakeholders and financiers can now breathe a partial sigh of relief. It is worth noting that the MYT for the supply segment and the motion for the review of the approved Investment Plan for the MYT period are currently under NEPRA's consideration. This is a critical requirement for the preparation of financial statements for the period after June 30, 2023, according to a notice posted on the Pakistan Stock Exchange (PSX). It is important to highlight, however, that this component will not currently impact the consumer tariff, which remains uniform across Pakistan and is determined by the federal power regulator. Nonetheless, despite the holdup, progress is evident as the government makes strides in the energy sector—particularly ahead of its plan to privatize other DISCOs. K-Electric's supply tariff and pending write-offs should be the next items on the agenda. Over Rs75 billion remains unresolved in the form of write-offs. While other DISCOs are allowed to transfer their losses to the government's account, K-Electric must absorb its write-offs and wait for regulatory approval. This is despite KE having shown considerable progress in recovering outstanding dues and exhausting all other avenues. Meanwhile, the government has announced the allocation of 2,000 megawatts of electricity in the first phase of a national initiative to power bitcoin mining and AI data centers. In this context, ensuring that the power sector operates efficiently and remains under control must be a top priority. The power sector is the backbone of any economy, and it must be agile to respond effectively to government policy changes. Agility comes from proactive engagement, swift decision-making, and inclusive stakeholder involvement. The government has also prioritized renewable energy. In that pursuit, efficiency and cost-effectiveness should be the main criteria—even for KE projects. If KE's projects offer better outcomes, they should be prioritized accordingly. As the government pushes forward with energy sector reforms and the privatization of other DISCOs, KE is already demonstrating successful transformation. The challenge for KE is to continue showing resilience and to leverage its experience in managing the complex energy demands of Karachi while navigating Pakistan's broader power sector challenges. It has already gained international recognition. Now is the time for the government to support and collaborate with KE to power Pakistan's economic hub. This goal cannot be achieved without a financially viable, sustainable, and efficient K-Electric.
