Pakistan faces electricity crisis as power shortfall exceeds 4,000MW

Pakistan is experiencing a significant electricity crisis as the national power shortfall has exceeded 4,000 megawatts. This deficit has forced distribution companies to increase load shedding across urban and rural regions. In the Lahore Electric Supply Company (LESCO) area, the shortfall has reportedly surpassed 1,500MW due to reduced availability of gas, diesel, and hydropower, with some areas facing outages every hour.

Compounding the physical shortage is a financial strain caused by high capacity payments. During the last fiscal year, capacity payments reached Rs1,565 billion, surpassing the Rs1,167 billion actually spent on electricity generation. These fixed charges, paid to keep power plants available even when not fully utilized, represent a major portion of consumer electricity bills.

Data from the State Bank indicates that while installed capacity reached 45,888 megawatts by the end of FY2024, peak demand was only 30,150 megawatts. This low utilization rate, averaging around 44 percent, contributes to the high cost structure. Major recipients of capacity payments included imported coal plants (Rs635 billion), nuclear plants (Rs469 billion), and imported RLNG plants (Rs527 billion).