The National Electric Power Regulatory Authority (NEPRA) has approved a $47 billion power expansion plan aimed at meeting Pakistan’s electricity generation and transmission requirements through 2035, while rejecting a $900 million investment in a battery energy storage system as unnecessary.

NEPRA approved the Integrated System Plan 2025-35 submitted by the Independent System and Market Operator (ISMO). However, it rejected the proposed Battery Energy Storage System (BESS) investment, saying it had not been properly evaluated through the ISMO optimization model.

NEPRA also revealed that Pakistan’s cheapest renewable electricity had not been incorporated into national planning for more than a year despite repeated warnings by the regulator.

According to the plan, the country’s maximum electricity demand is expected to rise from 26,950 megawatts in 2025 to 35,521 megawatts in 2035. To meet this demand, a total of 26,045 megawatts of new generation capacity will be required, including 17,485 megawatts from already allocated projects and 8,560 megawatts of newly optimized proposed capacity.

During the period, 2,577 megawatts of generation capacity is estimated to be retired. The expected cost of the power generation projects is $47.13 billion, while another $10.65 billion will be required for upgrades to the transmission system.

NEPRA refused to approve the proposed battery energy storage system, stating that its cost had not been realistically incorporated and tested in ISMO’s optimization model. The regulator directed that a comprehensive technical study be conducted on the project, after which it could be reconsidered.

NEPRA also did not endorse the proposed completion of the NGC-K-Electric interconnection transmission line by 2028. According to the regulator, the proposed timeline was not realistic as construction of the line would take around five years.

The plan has been prepared by ISMO, the institution responsible for operating and managing Pakistan’s electricity system. The Integrated System Plan primarily consists of two components: construction of new power plants in the country and development of new transmission lines for electricity transmission.

NEPRA directed ISMO to address several shortcomings before preparing its next plan, including providing greater clarity in the data and resolving discrepancies in electricity tariff projections.

An important aspect of the decision was that NEPRA members were not completely unanimous, with each member recording separate notes outlining their concerns.

NEPRA member Maqsood Anwar Khan objected to the removal of several hydropower projects from the plan, including Gabrial Kalam, Madian, Kalam Asrit and Asrit Kadam projects. These projects had previously been approved and considered protected.

Maqsood Anwar Khan maintained that the projects had been quietly excluded from the plan without clear or legal justification, which could discourage investors who had invested on the basis of earlier assurances.

Various stakeholders, including planners, business organizations and provincial governments, also expressed concerns, saying Pakistan already has an additional power generation capacity of 15 to 20 gigawatts, while existing power plants are operating at only around 45% of their capacity.

The stakeholders warned that further investment could increase circular debt and capacity payments, ultimately placing the burden on electricity consumers through higher power bills.

The strongest criticism from within NEPRA came from member Amina Ahmed. In her dissenting note, she said K-Electric had secured tariffs as low as 3.09 US cents per kilowatt-hour during a renewable energy auction in late 2024, the lowest tariff achieved so far in Pakistan.

According to her, ISMO had failed to include projects with a combined capacity of around 640 megawatts in its plans for more than a year, despite NEPRA raising questions over the matter several times, including through an application in March 2026.

Amina Ahmed revealed that ISMO had used incorrect data in its model. After the data was corrected in July 2026, it was found that incorporating the cheaper electricity would reduce rather than increase the system’s cost.

She said the situation had significantly affected NEPRA’s confidence in ISMO’s optimization process.

NEPRA Chairman Waseem Mukhtar supported the final decision but highlighted a major issue, saying Pakistan was paying for more power generation capacity than required, which was causing electricity bills to remain expensive.

He said electricity demand from the national grid had already declined to around 12,000 megawatts during daytime hours as more people were using solar panels and other alternative sources instead of relying on the