High cost of electricity
Electricity prices in Pakistan vary significantly. The recent government policy of reducing electricity prices has lowered the price for industrial users by 7.59 rupees per unit. This is certainly good news for factories, but it only partially alleviates the long-standing pressure of electricity costs.
The actual electricity price environment is more complex. Grid electricity prices vary considerably at different times of the day. According to the Pakistan Electricity Regulatory Commission, grid electricity prices can reach as high as 60 rupees per kilowatt-hour during peak hours, while solar feed-in tariffs can be as low as 7.5 to 11 rupees per kilowatt-hour. This price difference creates significant economic value for energy storage systems.
Stability issues of mains power
Pakistan’s power grid faces severe supply-demand imbalances and reliability issues. According to an energy policy review document, peak demand in Pakistan’s power system exceeds 30,000 megawatts, primarily driven by cooling needs. However, current supply can only meet 25,000-27,000 megawatts. Even in off-peak months, system utilization is only 23%, indicating a significant mismatch between power generation capacity and actual demand. Key problems behind this phenomenon include inefficient power transmission and distribution, resulting in factories struggling to obtain stable power even when generation capacity is sufficient. Grid constraints and unpredictable power outages severely impact manufacturing production plans, particularly in energy-intensive industries such as textiles.
Guidance of national policies
The Pakistani government has recognized the importance of energy storage to its energy system. Electricity Minister Leghari has explicitly stated that “energy storage is crucial to Pakistan,” and that whether it’s battery storage, pumped hydro storage, or microgrids, they will support the integration of renewable energy and drive energy security and economic development. Government policy support is multi-layered. They are pushing forward reforms to simplify regulatory approvals for energy storage projects and expedite land approvals for energy industrial parks. In early 2025, the government also approved a new system providing a unified electricity price for special economic zones and industrial parks, which will help improve the electricity pricing environment for industrial users.
