Engr. Syed Faizan Ali Shah

Sometime in the summer of 2023, a schoolteacher in Faisalabad opened her electricity bill and didn’t recognize the number. It wasn’t a mistake. Her usage hadn’t changed much. What had changed was everything happening thousands of kilometres away, in currency markets, in gas terminals in Qatar, in a war in Ukraine she’d never think to connect to her ceiling fan. Multiply her story by tens of millions of households, and you have the real starting point for this article: not a policy paper, but a five-year emergency that hit ordinary Pakistanis first, and that the Power Division has spent the last two years trying to bring under control. This is the story of how that happened; the storm that built up and the fight since 2024 to turn the ship around.

For most of the 2010s, Pakistan’s power sector was, if not healthy, at least predictable. The price of a unit of electricity crept up slowly, from around Rs 9.6 in 2013 to about Rs 11 by 2019 and the rupee weakened gradually too, from roughly Rs 100 to the dollar in 2013 to about Rs 155 by 2019. Behind the scenes, two costs made up every bill: what it actually cost to burn fuel, and a separate fixed fee paid to power plants simply for being ready to run, a retainer, paid whether the lights were on or not. That second cost quietly grew for years as Pakistan built more plants than it actually used. It was a slow-building problem, but a survivable one, because the currency hadn’t yet betrayed it. Then, within the space of about eighteen months, three things went wrong at once.

The first blow was home-grown. As Pakistan’s economy stumbled through 2022, the rupee didn’t just weaken, it collapsed. From an average near Rs 178 to the dollar in FY22, it slid past Rs 200 by year-end, then, in the chaos of 2023, briefly touched over Rs 300, a currency that had lost nearly two-thirds of its value in within two years. Because so many power plants are paid in dollars, this alone would have been enough to send bills soaring.

But it wasn’t alone. In February 2022, Russia invaded Ukraine and Europe — cut off from Russian pipeline gas — went shopping for the same imported gas cargoes Pakistan depended on, bidding prices toward USD 70 per unit. Pakistan, a smaller and poorer buyer, simply couldn’t compete. Contracted shipments didn’t show up, and emergency cargoes had to be bought at exactly the worst possible price.

The result of these two forces colliding was brutal and fast. The average price of a unit of electricity, around Rs 11 in 2021, jumped past Rs 16 the following year, then nearly Rs 20, and by 2024 had reached almost Rs 25 — the highest in the country’s history. Meanwhile, the amount lost every year to theft, unpaid bills, and leaking old wires at the companies that deliver power to homes had ballooned to nearly Rs 600 billion. It was, by any honest measure, a sector in crisis, squeezed from outside and drained from within.

This is where the story could have simply ended in decline. Instead, starting in 2024, something shifted. The Power Division set out to fix what it actually could; not the war in Europe, not the value of the rupee, but the waste and the missed opportunities closer to home.

The first fight was against the “leaky bucket” i.e., the distribution companies bleeding money every year. Through merit-based leadership changes and tighter enforcement on billing and recovery, annual losses were pushed down from roughly Rs 591 billion in FY24 to about Rs 397 billion the next year and to around Rs 326 billion this year, over a quarter of a trillion rupees recovered in two years, money that no longer has to come out of consumers’ pockets.

The second front was fuel indigenization. Piece by piece, Pakistan had been quietly reducing how much of its electricity depended on a ship arriving on time: hydel, solar, and, increasingly, local Thar coal now together account for roughly 75 percent of the electricity generated in the country. Nobody fully appreciated what that shift was worth until the second storm hit in 2026 and it turned out to be worth a great deal. With international fuel markets in chaos, Pakistan absorbed much of the blow simply because most of its electricity was no longer waiting on a cargo ship to clear a warzone.

Thar coal carried a good share of that weight. Since 2019, a cluster of power plants has been burning coal straight from the mine mouth, adding roughly 2,640 megawatts that no shipping delay, price spike, or falling rupee can reach. But the story isn’t finished: a large part of the coal fleet was still built to run on imported coal, and remains exposed to exactly the risks the rest of the system has started to escape. The Power Division is now working to convert these plants too. A pilot blending local and imported coal is already running and feasibility studies for a full switch to Thar coal are underway, with early results encouraging enough to suggest the bigger transition is within reach.

And the ambition doesn’t stop at swapping one fuel for another. As solar and wind take up more of the grid, battery storage is being pushed hard as the piece that makes that intermittent power usable soaking up the surplus a sunny afternoon produces, and releasing it back into the system when the evening peak arrives. Between more home-grown generation, a slow conversion of the imported-coal fleet, and batteries learning to catch and release renewable power on demand, the system now being built is one that gets a little less rattled by the next war, the next currency swing, the next shipping delay whenever it comes.

The third front nobody planned for, but had to respond to anyway: solar. Frustrated by high bills, millions of Pakistani households and businesses simply started generating their own electricity; on rooftops, in factories, on farms. Distributed solar capacity has now climbed to nearly 38,000 megawatts (with 54,000MW solar panels imported), counting both grid-connected and off-grid systems, putting Pakistan among the fastest-adopting countries in the world. It’s a genuine success story for consumers. But it created a new headache for the system operator and distribution utilities: the wires, substations, and long-term power contracts that keep the grid running don’t get cheaper just because fewer units are billed through it. As more people quietly leave the grid’s revenue base, its fixed costs get divided among fewer remaining customers, a problem the Power Division is still learning to solve fairly, not one it has already fixed, but rather curtailed to some extent through the new prosumers regulations better known as Net billing regulations.

A fourth front opened almost as an afterthought, but it may be one of the cleverer moves in the whole story: electric vehicles. If millions of households were already stepping back from the grid, the logical counter-move was to give people a reason to plug something back in. So, the tariff for dedicated EV charging stations was slashed by nearly half, from around Rs 71 per unit to about Rs 39.70. It’s engineering logic dressed up as a subsidy: pull EV charging into the hours the system has the most room to spare, and every EV owner becomes a new customer helping spread the grid’s fixed costs rather than escaping them the way a solar rooftop does. Paired with efforts to make it easier for rooftop solar, home batteries and other small distributed resources to plug into the grid rather than disconnect from it, it’s a bet that the future can be a partnership between the grid and the millions of Pakistanis now generating their own power.

Just as the numbers were beginning to stabilize, the tariff easing back from its 2024 peak, a second crisis arrived from a direction nobody in Islamabad controlled. In early 2026, war broke out around Iran, and shipping through the Strait of Hormuz, the passage carrying roughly a fifth of the world’s oil and gas, was disrupted. Global gas prices spiked again, in places more than doubling in a single day. Pakistan has already had to scramble for extra emergency fuel shipments this summer, echoing the same scramble of 2022.

It is a sobering coincidence: two global energy shocks, both born of wars fought by other countries, both landing on Pakistani electricity bills within less than five years of each other. A country that depends heavily on imported fuel will keep being ambushed by crises it has no say in. The steadier path, coal that never leaves Thar, a rooftop panel, an EV charging on idle grid capacity, a distribution network that stops leaking money is not a quick fix, but it is the only kind of fix a foreign war cannot undo overnight.

None of this is finished. The fixed cost burden from the solar boom hasn’t been resolved. A large block of coal capacity still waits on a railway line to become truly local. The subsidy bill keeps growing. And a war half a continent away is testing whether the last two years of progress can hold. But the direction has changed for the first time in years, Pakistan’s power sector is not simply absorbing every shock that comes its way. It is fighting back against the ones it can control: leaky distribution networks, inflating imported-fuel bill, an unfinished coal conversion and a grid still learning to live with renewables — all at once and at all fronts.

(The writer is an energy expert and renewable energy enthusiast, advising organizations on energy transition and renewable energy integration)