Latest news with #PakistanElectricityReview2025
Business Recorder
12-05-2025
- Business
- Business Recorder
Tariff anomalies: PTEA seeks rectification among industrial consumer categories
ISLAMABAD: Pakistan Textile Exporters Association (PTEA) has sought rectification of tariff design anomaly between B-2, B -3 and B-4 industrial consumer categories based on voltage level, system losses and metering configuration. In a letter to different ministers including Commerce Minister, Jam Kamal and Power Minister, Sardar Awais Leghari PETA has shared critical structural anomaly in the industrial electricity tariff design recently notified by NEPRA. According to the Association, the current tariff structure contradicts standard grid cost principles and unintentionally dis-incentivizes industrial consumers from investing in high-voltage grid connections, which are otherwise more efficient and economical for the system. Pakistan Electricity Review 2025 launched As per the current NEPRA tariff applicable from July 1, 2024, the off-peak variable energy charges are as follows: (i) B2 (400V): Rs. 28.56/kWh ;(ii) B3 (11 kV): Rs 29.39/kWh; and (iii) B4 (132 kV): Rs. 29.11/kWh. According to technical analysis, industry feedback and research, this tariff design is counterintuitive and regressive as standard cost-of-service methodology prescribes lower tariffs for higher-voltage connections due to reduced distribution and transformation losses, avoidance of LT infrastructure and utility O&M and improved grid load profile and reactive power management. PETA maintains that despite these benefits, B3 and B4 consumers are being charged higher rates than B2, even though they bear full capital and O&M costs of their own internal power systems while providing low-loss load to the grid. There is also metering disparity and system responsibility as B2 and B1 consumers are metered after the transformer, meaning utility bears transformer losses and LT O&M whereas B3 and B4 consumers are metered at the HT terminals, and maintain their entire downstream infrastructure independently. This fundamental difference means B3/B4 consumers relieve the utility of significant cost burden-yet are penalized with higher rates. Another factor is distorted industrial behaviour and technical losses. This anomaly has triggered non-technical bifurcation of industrial load. Large industries are splitting sanctioned loads across multiple B2 (LT) connections to avoid the B3/B4 tariff. This leads to inefficient grid expansion, higher technical losses due to LT delivery, reduced network visibility for DISCOs, revenue losses and fragmented billing. In advanced energy systems, HT consumers are incentivized through lower tariffs. Examples from India, Bangladesh, and past WAPDA practices show HT industrial users are charged 10-15% less per kWh than LT consumers, ensuring system efficiency and stability. PETA has submitted the following recommendations ;(i) tariff rationalization so that B3 and B4 industrial consumers are provided a minimum Rs. 2/kWh discount compared to B2 ;(ii) incorporate voltage level, metering point, and network ownership into industrial tariff design, consistent with engineering and cost-of-service principles; and (iii) introduce regulatory disincentives for industrial consumers operating multiple B2 connections when a B3/B4 interconnection is technically feasible. 'This realignment will reduce system losses, improve grid utilization, promote technically sound industrial expansion, and enhance DISCO financial performance without requiring additional subsidies,' said Khurram Mukhtar, Pattern In-Chief PETA. Copyright Business Recorder, 2025
Business Recorder
10-05-2025
- Business
- Business Recorder
Pakistan Electricity Review 2025 launched
ISLAMABAD: The Pakistan Electricity Review 2025, recently launched by Renewables First, an Islamabad-based energy think tank — presents a comprehensive analysis of key trends and challenges that shaped Pakistan's power sector during the fiscal year 2024 (FY24). The report identifies FY24 as a transformative year, marked by record imports of solar PV panels from China. This surge in imports spurred rapid growth in rooftop solar installations across the country, both net-metered and behind-the-meter. By March 2025, Pakistan had installed 4.9 GW of net-metered solar capacity, signaling strong momentum in distributed renewable energy. However, a substantial number of behind-the-meter installations remain undocumented, suggesting that the actual installed capacity may be significantly higher. From crisis to clean energy: Pakistan emerges as top solar market in 2024 Pakistan's total installed power generation capacity reached 46.2 GW in FY24, following the addition of three new utility-scale solar plants. This marginally increased the share of utility-scale renewables in the generation mix from 6% to 7%. Despite these additions, the overall contribution of renewable sources (wind, solar, and bagasse) to electricity generation remained stagnant at 5%, well below projected targets and off-track from the 2030 goal of achieving a 30% renewable energy share. Total electricity generation in FY24 stood at 137 TWh. Transmission bottlenecks and overloaded grid infrastructure continued to impede efficient power transfer, particularly from the south to the energy-demanding north. These constraints forced the system operator to reduce dispatch from lower-cost plants, instead relying more heavily on expensive RLNG based generation. As a result, the energy purchase price ballooned to PKR 1.3 trillion, with RLNG generation alone accounting for PKR 568 billion, approximately 51% of the total energy purchases. RLNG-based plants generated 24 TWh during the year, nearly four times higher than the regulator's projections. The report also highlights a decline in electricity sales from the national grid, a continuation of a downward trend for the second consecutive year. Overall sales fell by 3%, with the industrial sector experiencing the sharpest drop. Industrial consumption declined from 31 TWh in FY23 to 28 TWh in FY24, reflecting an 11% year-on-year decrease. This drop underscores both ongoing economic challenges and the sector's gradual shift toward more competitive energy sources. On the financial front, capacity payments surged to PKR 1.9 trillion in FY24, marking a 46% year-on-year increase. This sharp rise is largely linked to the commissioning of new coal and RLNG power plants in FY23, which typically entail high fixed costs, especially during their initial debt repayment periods. When such plants operate below optimal capacity, the cost of unused capacity is still borne by consumers through higher tariffs, further stressing the sector's financial sustainability. Conversely, the decline in electricity generation contributed to a 7% year-on-year reduction in the energy purchase price—offering a modest reprieve amid rising sectoral costs. Despite timely implementation of fuel cost adjustments (FCAs) and quarterly tariff adjustments (QTAs) by Nepra, the sector's circular debt continued to climb. By the end of FY24, it had reached PKR 2.4 trillion, a 3.6% increase over the previous year, adding PKR 83 billion to the existing stock, compared to a 2.6% rise (PKR 58 billion) in FY23. Overall, the Pakistan Electricity Review 2025 offers a sobering assessment of the sector's ongoing structural issues, while also highlighting areas of progress. It serves as both a reality check and a policy prompt for stakeholders navigating the country's complex energy transition. Copyright Business Recorder, 2025
