Pakistan is wasting Rs3.5 trillion a year — more than three times the federal development budget — on unnecessary and rising energy-sector imports, the LUMS Energy Institute (LEI) said at an event on Pakistan’s energy security in Islamabad.

The institute blamed mismanagement, delays in adopting building codes and the failure to implement a plan for making energy equipment locally, much of which used to be produced in Pakistan. Despite generation capacity of more than 36,000MW, the country’s base electricity load of about 8,000MW did not grow between 2015 and 2023, particularly in the four winter months, even as the population grew. “This means we are getting poorer as a nation” in terms of energy, said National Grid Pakistan chairman Dr Fiaz Chaudhry.

The mismatch shows up in winter fuel use: the country imports $2.7 billion worth of liquefied natural gas (LNG) for four winter months for space and water heating, while much of its electricity capacity sits unused. A federal energy conservation building code approved in 2023 could have cut cooling load by 51 per cent, LEI said, but the provincial governments of Punjab, Sindh and Balochistan have not yet adopted it; only the Capital Development Authority and the Khyber Pakhtunkhwa government have done so.

LEI’s research put the prize for fixing the planning at about $17 billion in projected savings from revised least-cost generation planning under the Indicative Generation Capacity Expansion Plan 2025-2035, and said improving energy efficiency in just 25 per cent of residential buildings could cut peak demand by about 3,000MW and save Rs442.6 billion a year. Its net-zero study mapped a path to near-complete decarbonisation of the power sector by 2040, with fossil-fuel generation falling from 49 per cent in FY24 to about 1 per cent, supplied instead by hydropower (47 per cent), wind (25 per cent), nuclear (18 per cent) and solar (8 per cent).

The institute also identified about Rs1.1 trillion in potential indigenisation opportunities against Rs1.9 trillion in projected equipment demand across transmission and distribution, after assessing the manufacturing readiness of about 49 local manufacturers. It noted that an Engineering Development Board-led team was required to announce electricity equipment indigenisation by June 2026 under the National Electricity Policy 2023, but this did not happen, and urged the government to speed up the long-delayed Power Sector Indigenisation Plan.

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