ISLAMABAD: NEPRA has approved the revised Integrated System Plan (ISP) 2025-35 of ISMO, but expressed serious reservations over the demand assumptions underpinning the expansion plan amid declining grid demand, growing rooftop solar, captive generation and consumer-level storage.
The National Electric Power Regulatory Authority (NEPRA) observed that demand forecasts are a central planning input as they determine the quantity and timing of generation and transmission capacity and, consequently, the costs ultimately borne by consumers.
The Authority noted that recent declines in grid demand, increasing penetration of rooftop and distributed solar, captive generation and consumer-level storage require demand forecasts to be based on realistic and verifiable consumption trends.
According to the determination, the revised Base/Reference Case envisages a total present value cost of $47.08 billion over the 2025-35 planning horizon and includes substantial generation additions.
The original IGCEP Reference Case had projected peak demand of 35,521 MW by 2035 compared with 26,950 MW in 2025. It envisaged capacity additions of 26,045 MW, including 17,485 MW of committed capacity and 8,560 MW of optimised capacity, while 2,577 MW of existing capacity was scheduled for retirement.
Total installed capacity was projected at 62,657 MW under the original Reference Case.
The representatives of ISMO gave a detailed presentation on the salient features of the submitted ISP-2025 and subsequent addendum.
On the impact of the proposed capacity additions on consumer-end tariffs, Power Planning and Monitoring Company (PPMC) stated that the consumer-end tariff would increase to Rs37.28 per kWh by 2035 from Rs34.00 per kWh in 2024-25 under the Base Case scenario.
On the issue of existing surplus capacity and declining demand, PPMC submitted that the proposed capacity additions in IGCEP-2025 were based on the retirement and decommissioning of inefficient plants, replacement of expensive imported fuel with renewable energy projects, committed projects already at an advanced stage of development and the system’s reserve requirement.
ISMO stated that the demand forecast of DISCOs was used as the starting input for the planning exercise. It said the forecasts were discussed with the Special Investment Facilitation Council (SIFC), the Planning Commission and the task force.
The demand-growth assumptions included captive-load migration of 1,000 MW, electric vehicle penetration, the marginal pricing package, macroeconomic stability and electrification of heating and cooling loads.
The revised optimisation also incorporated the 269 MW JCM Wind-Solar Hybrid Project at Dhabeji, comprising 95 MW of solar and 174 MW of wind capacity. The project was optimised for induction in FY2027 after revised technical and financial parameters were provided.
Its inclusion reduced the overall optimised wind capacity and brought down the Base/Reference Case cost from $47.13 billion to $47.08 billion.
NEPRA also excluded the proposed $900 million Battery Energy Storage System (BESS) investment and the K-Electric transmission line targeted for commissioning in 2028 from the approved Base/Reference Case.
While approving the revised ISP, NEPRA also stressed that integrated system planning is a continuous statutory process intended to evolve through successive planning cycles. The Authority noted that there had been a wide gap after approval of IGCEP 2022-31.
NEPRA emphasised that continuity of the planning process must be ensured and that critical investments in the power sector and investor confidence need to be safeguarded.