NEPRA Approves $58bn Power Plan Despite Major Reservations

The National Electric Power Regulatory Authority (NEPRA) has conditionally approved Pakistan’s $58 billion Integrated System Plan (ISP) 2025, covering power generation and transmission investments over the next 11 years, but raised significant concerns over project selection, data reliability and the constitutional approval process.

 

The regulator approved the 2025-35 plan in a 45-page decision, with all three NEPRA members, including the chairman, submitting more than 12 pages of dissenting or advisory observations.

 

A key concern was the alleged bypassing of the Council of Common Interests (CCI), which is constitutionally responsible for matters including national energy policy and planning. NEPRA questioned whether major changes to the power plan could be made on the recommendations of a technical committee constituted by the Power Division without referring them back to the CCI.

 

Under the approved reference case, based on the low-growth or business-as-usual scenario, Pakistan is expected to add 26,045MW of generation capacity, including 17,485MW of committed projects and 8,560MW of optimised capacity. Around 2,577MW of existing capacity is also projected to be retired.

 

The plan would take total installed generation capacity to 62,657MW, including 8,120MW from net metering. The estimated cost of the additional generation capacity stands at approximately $47.08 billion.

 

Transmission investments would require another $10.65 billion over the planning period. This includes around $4.6 billion for ongoing and committed projects and approximately $6.05 billion for new transmission expansion schemes.

 

The proposed transmission spending covers power evacuation infrastructure, network strengthening, new extra-high-voltage substations, transformer upgrades and voltage-control facilities.

 

The plan also includes a 40MW on-site power plant for Gwadar and the Makran region following disruptions to electricity imports from Iran amid geopolitical tensions. NEPRA noted that expanding the national grid to the region is currently considered neither technically nor economically feasible.

 

The regulator also raised concerns over changes made to the plan and contradictory positions presented by the Independent System and Market Operator (ISMO) and Power Planning and Monitoring Company (PPMC).

 

NEPRA rejected the proposed $900 million investment in Battery Energy Storage Systems (BESS) until a detailed technical and economic assessment establishes their need, optimal capacity, operational use and cost-effectiveness.

 

The authority further criticised ISMO for disclaiming responsibility for the accuracy, authenticity and completeness of the data and projections used in preparing the ISP.

 

Another major issue was the potential impact on electricity consumers. NEPRA directed that the plan’s effect on consumer-end tariffs be properly quantified and incorporated into the main report. PPMC has projected that the consumer-end base tariff could rise to Rs37.28 per unit by 2035, compared with Rs34 per unit in 2024-25.

 

Despite approving the plan, NEPRA’s reservations indicate that the country’s long-term power expansion strategy remains subject to concerns over governance, demand assumptions, project economics and the eventual cost burden on electricity consumers.