Renewable Energy: Clean Electrification of Pakistan's Economy

[Riaz Haq]

Access to abundant and cheap electricity is essential for running a modern competitive economy. The rapidly growing power demand for generative AI data centers makes it even more important. The best way to ensure it is in switching to renewable energy sources. That is why Pakistan is in the midst of a renewable power boom. It is ramping up generation of clean energy with solar, hydro, wind and nuclear power. 13 gigawatts of solar panels have been imported in the first half of this year alone. Another 10 gigawatts of hydroelectric power projects are under construction for completion by 2030, bringing the total hydropower capacity to 20 gigawatts. Pakistan's total nuclear energy production capacity rose to 3,620 MW, when the country's sixth nuclear power plant opened two years ago. Pakistan and China have recently signed a $4.8 billion deal to build another 1,200 MW nuclear power plant. There are 36 private wind projects producing approximately 1,845 MW in the country.  Pakistan is phasing out old fossil fuel power plants. It has negotiated the termination of power purchase contracts with five independent fossil fuel power producers (IPPs), including Hubco, the largest IPP currently operating in the country. More negotiations are underway to terminate additional IPP contracts. Payments to these IPPs are a huge burden on the nation’s economy and ordinary consumers alike. There have been violent protests against high electricity rates across the country. 

Renewable Energy. Source: Easy-Peasy.AI

A number of auto companies have announced plans to manufacture electric vehicles. Pakistani automobile joint ventures with Chinese automakers BYD and Changan have recently launched several all-electric and plug-in hybrid models of automobiles in Pakistan. Honda Atlas Cars Pakistan Limited has announced plans to build a hybrid electric vehicles plant in the country. Other major brands like Toyota, Haval, and Hyundai are already offering similar models in the country. It all began with the 2019 electric vehicle policy approved by the government of Prime Minister Imran Khan to incentivize the electrification of the auto industry. Pakistan EV policy goal is to achieve 30% of new cars sales, 50% of new 2-wheeler and 3-wheeler sales and 30% of new truck sales by 2030. By 2040, the target is 90% of all new vehicle sales to be electric. The main incentive is the reduction of sales tax from 17% for internal combustion engine (ICE) vehicles to 1% for all-electric (EV) vehicles.

Pakistan is currently experiencing a huge economic drain in terms of fossil fuel imports. In the first two months of the current fiscal year, Pakistan's oil import bill increased by 23% compared to the same period in 2023. Paying for huge amounts of imported coal, gas, and oil in US dollars has become disastrous, particularly after 40% depreciation of Pakistani currency over the last two years. Switching to cheap renewable sources will have a salutary effect on the country's climate and economy. It will help grow the nation's exports by increasing its exporters' competitiveness. It will also make it easier to manage inflation and reduce the need for recurring IMF bailouts. 

The GenAI revolution is another factor that will dramatically increase global power demand. Wall Street investment bank Goldman Sachs forecasts that the new high-performance AI data centers alone will grow electricity demand by 160% by 2030. Pakistan needs to prepare for it if it wants to be competitive in this brave new world of generative artificial intelligence (Gen AI). 

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[Riaz Haq]

Pakistan’s 22 GW Solar Shock: How a Fragile State Went Full Clean Energy - CleanTechnica

https://cleantechnica.com/2025/04/04/pakistans-22-gw-solar-shock-ho...


It’s more solar than Canada has installed in total. It’s more than the UK added in the past five years. And yet it didn’t make a blip in most Western media. While the U.S. continued its decade-long existential crisis about grid interconnection queues and Europe squabbled over permitting reforms, Pakistan skipped the drama and just bought the panels.

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How does a country once considered a textbook fragile state leapfrog into solar hyperscale? You can’t make sense of it without going back two decades. In the early 2000s, Pakistan was better known for insurgencies and instability than infrastructure upgrades. Terror attacks were frequent, electricity shortages were the norm, and governance was, to put it kindly, patchy. Political cycles flipped with the military’s mood, floods battered the countryside, and inflation hollowed out public services. Not exactly the backdrop for a clean tech success story.

But something changed. Slowly, unevenly, Pakistan started building institutional muscle. The terrorism that plagued the country for over a decade was brought under control through a combination of military operations and negotiated truces. Civilian governments, for all their dysfunction, managed peaceful handovers of power. The technocratic class—policy analysts, engineers, civil servants—began steering the country toward energy pragmatism. It wasn’t a revolution. It was governance on hard mode, with better outcomes.

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This isn’t just a solar story, though. Wind has been building quietly in the south for years, especially in the Gharo-Jhimpir corridor. Hydropower continues to play a big role, and bagasse from the sugar industry chips in some renewable electrons too. Battery storage is the next act, mostly in the form of hybrid inverters and lithium-ion packs tucked into homes and businesses. They aren’t grid-scale yet, but they’re everywhere you’d want resilience—factories avoiding outages, households tired of flickering bulbs. The pieces are in place for a distributed energy system that doesn’t wait for the grid to catch up. Which is good, because Pakistan’s grid is not remotely ready for this volume of variable generation. Utilities are already reeling from the revenue shock as high-value customers opt out of dependence. No one likes selling electrons when your best clients are making their own. That looming utility death spiral? It’s not theoretical in Lahore or Karachi.

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Pakistan’s electric vehicle transition is picking up momentum too, driven by a mix of foreign investment and homegrown innovation. Chinese companies have taken the lead in setting up large-scale operations, with firms like BYD announcing plans to open a production facility in Karachi and the ADM Group committing $350 million to build EV manufacturing capacity and install thousands of charging stations nationwide. These moves dovetail with Pakistan’s goal to convert 30% of all vehicles to electric by 2030.

But the real action is happening closer to the ground, where indigenous startups are rolling out electric two- and three-wheelers at a pace that could reshape urban mobility. Companies like Jolta Electric and Vlektra are assembling locally made e-motorcycles that target the country’s massive base of two-wheeler users—millions of whom rely on scooters and bikes for daily transport. With soaring petrol prices and worsening air quality in cities like Lahore and Karachi, these electric alternatives are fast becoming the obvious choice. The economics are simple: lower fuel costs, less maintenance, and in many cases, the ability to charge with rooftop solar. While car-scale EV adoption remains limited, the grassroots uptake of electric bikes and rickshaws—many of them assembled in Pakistan—is proving that the EV revolution here will likely be led from the bottom up.