Nepra gives nod to decade-long $47bn power expansion plan

• Nepra rejects $900 million battery storage investment.
• Regulator declines to endorse K-Electric transmission line.
• Daytime demand from national grid down to 12,000MW.

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a $47 billion electricity expansion plan, aimed at meeting generation and transmission needs through 2035.

The regulator approved the Integrated System Plan (ISP) 2025-35 submitted by Independent System and Market Operator (ISMO), but rejected a $900 million battery storage investment as unjustified, The News reported on Saturday.

Nepra also revealed that the country's cheapest-ever renewable power sat excluded from national planning for more than a year, despite repeated regulatory warnings.

The ISP 2025-35 plan projects peak demand rising from 26,950 megawatts in 2025 to 35,521MW by 2035, requiring 26,045MW of new capacity (17,485MW "committed" and 8,560MW newly optimised), alongside retirement of 2,577MW, at a projected cost of $47.13 billion. Transmission upgrades add a further $10.65 billion.

Nepra excluded a proposed Battery Energy Storage System (BESS) from approval, ruling its cost had never actually been run through ISMO's optimisation model and calling for a full technical study before reconsideration.

It also declined to endorse a K-Electric transmission line NGC-KEL interconnection slated for 2028, finding the timeline unrealistic since the line actually needs about five years to build.

The plan was prepared by ISMO, the body that manages Pakistan's power system. It is called the Integrated System Plan (ISP) and includes two parts. one for building new power plants, and one for building the transmission lines that carry electricity across the country.

Nepra also told ISMO it must fix several problems, like explaining its numbers more clearly and reconciling difference in tariff (electricity price) predictions, before the next version of the plan is prepared.

What makes this decision unusual is that Nepra's own members did not fully agree with each other, and each one wrote a separate note explaining their concerns.

One member, Maqsood Anwar Khan, objected to the removal of a few hydropower projects, including ones in Gabral Kalam, Madyan, Kalam Asrit and Asrit Kedam, that had earlier been treated as approved and safe.

He said these projects were quietly dropped without a clear or lawful reason, which could scare away investors who had already spent money based on the earlier promise.

Stakeholders, including project developers, trade bodies and provincial governments, raised alarms that Pakistan already sits on a 15-20 gigawatt capacity surplus while existing plants run at just 45% utilisation, warning new spending could deepen circular debt and capacity-payment costs that consumers ultimately absorb.

The sharpest criticism came from within Nepra itself. Member Amina Ahmed, in a pointed dissenting note, wrote that K-Electric secured renewable auction tariffs as low as 3.09 US cents per kilowatt-hour in late 2024, the lowest ever recorded in Pakistan, yet ISMO left roughly 640MW of those projects out of its plans for over a year despite Nepra's repeated queries, including one in March 2026.

She disclosed that ISMO had run its model on incorrect data, and once corrected in July 2026, the cheaper power actually lowered system costs rather than raising them, directly contradicting ISMO's earlier cost objections.

She said the episode had "materially undermined Nepra's confidence in ISMO's optimisation process".

Nepra Chairman Waseem Mukhtar supported the final decision but raised a bigger worry: Pakistan is paying for more electricity-generation capacity than it actually needs, which keeps making bills expensive.

He noted that daytime electricity demand from the national grid has already dropped to about 12,000 megawatts, as more people switch to solar panels and other alternatives instead of relying on the grid.