Key Takeaways
- K-Electric's 640MW renewable energy portfolio, despite regulatory approvals and competitive tariffs, has been excluded from the draft IGCEP 2025.
- The exclusion raises concerns over higher electricity costs, energy security, and investor confidence.
- Integration of these projects could reduce KE’s total system costs by USD 432 million.
K-Electric (KE) has faced a setback as its 640-megawatt (MW) renewable energy portfolio, which includes three competitive auctions for solar and wind projects, has been excluded from the base case of Pakistan’s draft Indicative Generation Capacity Expansion Plan (IGCEP) 2025.
The study, titled ‘Successful Renewable Auctions, Uncertain Outcomes: A Techno-Economic Assessment of K-Electric’s 640MW Renewables 2026,’ was jointly published by Renewables First and the Policy Research Institute for Equitable Development (PRIED).
Despite securing regulatory approvals from the National Electric Power Regulatory Authority (Nepra) and competitive tariffs ranging from Rs8.9 to Rs11.2 per unit, KE’s projects were not included in the base case of the IGCEP 2025.
The portfolio comprises a 150MW solar project at Bela awarded to Master Group, a 220MW hybrid wind-solar project at Dhabeji awarded to JCM, and a 270MW solar project at Deh Metha Ghar and Deh Halkani awarded to KAPCO.
The exclusion means KE cannot rely on these low-cost renewable projects for future capacity planning, despite having completed the required regulatory process.
KE’s existing generation system remains heavily dependent on imported liquefied natural gas (RLNG), which accounts for nearly 90 percent of its installed generation capacity. The utility also imports nearly half of its electricity requirements from the National Grid Company through the interconnection tie-line.
The study noted that reliance on imported RLNG exposes KE to international fuel price volatility, supply chain disruptions, and geopolitical risks, including those arising from maritime trade route disruptions such as the Strait of Hormuz.
Using power system modelling through PLEXOS and PyPSA software, the study estimated that commissioning the 640MW portfolio from FY2027 would reduce KE’s total system costs during FY2025-FY2035 by approximately USD 432 million, while lowering the average electricity basket price from around 13 US cents per kilowatt-hour to 12.58 US cents per kilowatt-hour.
The study further projected that expanding renewable capacity to include 2,408MW of solar generation, 1,232MW of wind power and 200MW of battery energy storage systems (BESS) by FY2035 could reduce cumulative system costs to approximately USD 12.7 billion, generating total savings of nearly USD 1.56 billion over the planning horizon.
