ISLAMABAD: Amid ongoing negotiations with the International Monetary Fund (IMF), the government has unveiled sweeping energy sector reforms, including plans to sell 7,000 megawatts of surplus electricity to the agricultural and industrial sectors at competitive, unsubsidized rates.
The surplus power—currently idle—will be offered at a flat rate of 7 to 7.5 cents per unit, targeting increased productivity in key economic sectors without relying on government subsidies.
At a consultation hosted by the Private Power and Infrastructure Board (PPIB) on Wednesday, Federal Energy Minister Sardar Awais Ahmad Khan Leghari confirmed that the government has been in talks with the IMF for the past six months to gain approval for the new power sales strategy.
“Our objective is to align supply with demand and ensure reliable, distortion-free electricity,” Leghari said, noting that the reforms are designed to improve efficiency and fiscal sustainability.
Solar Net Metering to Stay, but With New Structure
Addressing recent speculation, Leghari dismissed concerns that the government plans to scrap solar net metering. Instead, he said, the system will evolve into a more transparent and equitable net billing model.
“We are not discouraging solar energy,” the minister stressed. “The goal is to build a balanced and sustainable framework that supports consumer investment while maintaining grid stability.”
He highlighted that solar users typically recoup their investment within three years, particularly when using a significant portion of generated electricity themselves. “If you consume just 40% of the energy you generate, the payback period makes rooftop solar a strong business case,” he added.
Reforms Target Captive Power, Outdated Projects
The government is also canceling 9,000MW of costly and outdated energy projects and introducing levies on captive power producers, encouraging them to shift back to the national grid and boost system-wide demand.
Leghari said industrial electricity rates have dropped by up to 31% since June 2024, thanks to Rs174 billion in cross-subsidies. Consumers in other categories have seen price reductions between 14% and 18%.
Next Steps: Dynamic Pricing, Grid Modernisation
Looking ahead, the energy ministry is exploring dynamic pricing for energy buybacks to reflect real-time market conditions more accurately. Net metering will remain for now, but Leghari emphasized that net billing presents a “more efficient and sustainable” model for integrating distributed solar generation into the grid.
The minister reiterated that all reforms—ranging from pricing to off-grid incentives and modernisation—are part of a long-term strategic overhaul to develop a smarter, more resilient power infrastructure.
“These changes are about building a future-proof energy system that serves both economic growth and environmental responsibility,” he concluded.
