Key Takeaways
- Federal Minister for Power Sardar Awais Ahmad Khan Leghari says the IMF is blocking cheaper electricity tariffs.
- Negotiations on time-based pricing have been ongoing but are facing challenges.
- Minister highlights the importance of energy storage solutions in achieving clean energy targets.
Federal Minister for Power Sardar Awais Ahmad Khan Leghari has stated that the International Monetary Fund (IMF) is currently not allowing Pakistan to offer cheaper electricity during specific hours, despite ongoing negotiations.
Speaking at a conference on renewable energy, Leghari said that time-based pricing could help increase power consumption and improve system efficiency. He noted that such mechanisms are successfully implemented in countries like Australia, where utility companies can adjust pricing to boost demand during different hours of the day.
Leghari maintained that offering lower tariffs during off-peak hours has no fiscal impact and is not linked to IMF programme conditions. However, he acknowledged that Pakistan still faces constraints in implementing such policies.
The Time-of-Use marginal tariff of around Rs6 per kWh during daytime is not being allowed by the IMF, according to Leghari. He added that this challenge is faced by countries like Australia but not by them.
Enabling cheaper daytime electricity could also support energy storage solutions, allowing consumers to store power and use it during expensive peak hours, thereby helping flatten the ‘duck curve’, a term used in the renewable energy sector to describe the demand for electricity over time.
Leghari expressed optimism that Pakistan would eventually convince the IMF, stating that all necessary justifications and data would be presented to secure approval. He also highlighted the need for significant investment in the digitalisation of the power grid, noting that many single-phase meters are not yet digital and lack reverse flow capability required for distributed generation.
Pakistan is undergoing a major transformation in its energy sector, shifting focus from power generation to efficient utilisation and storage. The country’s solar power capacity has surged to nearly 38,000MW, fundamentally altering the energy landscape. Leghari noted that surplus generation during the day and higher demands in the evening have created a new imbalance.
Battery Energy Storage Systems (BESS) are now essential for grid stability and efficient power management, according to the minister. Without battery storage, achieving the target of 90 percent clean energy by 2035 will not be possible, he said. Clean energy currently accounts for about 55 percent of the country’s electricity generation mix.
The minister warned that reliance on imported fuels poses serious risks to energy security, citing recent RLNG supply disruptions from Qatar that led to nighttime load shedding. Solar generation helped stabilise supply during the day but the absence of storage solutions exposed vulnerabilities at night, he remarked.
We approached the IMF three to four months ago to introduce a form of time-based tariff.
Sardar Awais Ahmad Khan Leghari, Federal Minister for Power
Without battery storage, achieving the target of 90 percent clean energy by 2035 will not be possible.
Sardar Awais Ahmad Khan Leghari, Federal Minister for Power
