Pakistan’s energy question is no longer academic. Growing demand, crushing power-sector arrears and a fast-changing global market have made the pace and shape of Pakistan’s energy transition a matter of national security and economic survival. The core worry is simple: can Pakistan move away from oil and gas fast enough to stop paying for imported fuel and mounting debt, or will the country remain trapped in a hydrocarbon-heavy system that limits growth and deepens fiscal risk?
Where Pakistan Stands Today
Electricity generation in Pakistan remains a mixed picture. In recent years the country produced a significant share i.e, up to 47% of its electricity from low-carbon sources, led by hydropower, but fossil fuels still supply a large portion of demand. External trackers show Pakistan’s electricity mix was roughly half low-carbon and half fossil-fuel in 2024, with hydro an important component while wind and solar were still small slices of the pie.
At the same time official and sector reports make clear renewables have not scaled as fast as planners hoped. A 2025 electricity review notes wind and solar growth accelerated from earlier years but remained well below the targets needed to reach the government’s longer-term objectives, and transmission bottlenecks limit how much clean power can be delivered to load centers. That shortfall helps explain why thermal plants, many running on imported LNG and oil, continue to play a decisive role.
You May Like to Read: The Circular Debt of Governance: How Fiscal Mismanagement and Energy Sector Crises Are Systematically Undermining State Capacity
Economic, and Institutional Barriers
Two linked problems help keep Pakistan tied to hydrocarbons. First, the power sector’s chronic circular debt and unpaid liabilities force policymakers into stopgap choices, keeping expensive or underused plants online and relying on imported fuels to avoid blackouts. In 2025 Islamabad negotiated sizable financing and restructuring moves aimed at easing the debt burden, but the scale of arrears and the fiscal cost of fuel imports remain a powerful constraint on investment in alternatives.
Second, gas and LNG are still central to Pakistan’s energy system, for industry, fertilizer and power. Recent data show Pakistan’s LNG imports have been substantial and volatile as the country adjusts shipments to seasonal and price realities. That dependence on global gas markets feeds both balance-of-payments risk and domestic fiscal strain.
Early Signs of a Different Path
Despite these barriers, there are clear signs of momentum in clean energy. Private and distributed solar, rooftop systems, microgrids and behind-the-meter installations, have surged as consumers and businesses seek cheaper, more reliable power. Independent reporting and analysis also point to large imports of solar modules and battery packs in recent years, evidence that market actors are stepping in where public investment lags. If these trends continue, they can materially change daytime load patterns and reduce fuel burn at thermal plants.
Pakistan’s natural advantages should not be ignored. The country has substantial wind corridors and solar potential; academic and technical studies estimate very large theoretical capacity for wind and solar if complementary grid and storage investments follow. Properly harnessed, these resources could supply a major share of future demand.
You May Like to Read: The ‘New Energy Policy:’ The Political and Economic Challenges of Importing Russian Oil and Gas
What Needs to Change? Practically
A faster, credible transition requires action on multiple fronts at once. First, solve the financing and governance problem: transparent restructuring of circular debt, clear tariff paths that reflect costs, and targeted subsidies for vulnerable households rather than across-the-board price freezes. Second, invest in grid upgrades and regional interconnection so wind and solar can flow to demand centers. Third, create incentive structures that attract long-term private capital into storage, grid services and distributed generation rather than one-off project finance. Global investment trends show capital is available for bankable, well-structured clean projects, but Pakistan must reduce policy and offtake risk to tap it.
A Balanced, Realistic Strategy
The right strategy is not an abrupt abandonment of hydrocarbons, that would invite shortages and social pain, but a phased shift that protects consumers while accelerating low-cost renewables. That means prioritizing least-cost daytime solar and distributed systems to reduce expensive fuel use, investing in storage and demand management, dramatically improving revenue collection to free funds for investment, and negotiating smarter purchase and financing terms for legacy plants. Done well, these steps can cut import bills, improve reliability and create an industrial market for renewables and batteries.
You May Like to Read: Pakistan’s Energy Crisis: Can Renewable Energy Save the Day?
Conclusion
Pakistan is not fated to be permanently hydrocarbon dependent. The country has the resource base, a growing private market for solar and batteries, and international capital interested in the transition. What is missing is the political and technical will to fix the power-sector economics, unblock grids, and create bankable projects at scale. If policymakers move decisively on debt restructuring, sensible pricing and grid investment, Pakistan can shift from paying for fuel to building assets, and with that change comes a chance to protect growth and households from repeated energy shocks. The alternative is closer to business as usual: high imports, heavy bills, and stalled progress. The choice is clear; what remains to be seen is whether Pakistan will act with the urgency the moment demands.
