Sustainable, low-cost power crucial for industrial growth

Energy reforms must deliver a reliable and commercially viable system capable of supporting Pakistan's productive industries

These challenges were discussed at a multi-stakeholder dialogue titled “Threads of Accountability: Traceability and Energy Policy for Textile Competitiveness”, bringing together textile producers, power-sector experts, sustainability and verification professionals, business representatives and renewable-energy stakeholders.

The discussion centered on how Pakistan’s textile industry can engage with a changing power market while maintaining dependable energy supplies and complying with increasingly demanding international sustainability requirements.

Participants said an effective energy transition would require more than liberalizing the electricity market or expanding renewable-energy generation. Transparent tariffs, dependable networks, commercially practical market structures, reliable environmental data, suitable risk-sharing arrangements and stronger coordination between industry, regulators, utilities, financiers and global buyers would be essential.

A key part of the discussion focused on Pakistan’s emerging Competitive Trading Bilateral Contract Market (CTBCM) and what it could mean for industrial consumers. Muhammad Usman Bin Ahmed, Energy Transition Officer at Alternate Development Services (ADS), outlined the practical requirements for industrial participation, including eligibility, competitive procurement, bilateral contracts and wheeling arrangements.

He also drew attention to several commercial and operational considerations within the emerging market, including Use of System Charges (UoSC), security and performance guarantees, SMP exposure, balancing and settlement mechanisms, hybrid bulk power-consumer arrangements and firm-capacity requirements for renewable-energy supplies. He presented a CTBCM readiness toolkit designed to help industrial consumers understand the conditions and practical requirements for entering the competitive market.

The financial viability of wheeling emerged as a major concern. Analysis shared during the dialogue showed that Nepra’s September 2026 determination sets effective UoSC at Rs9.46 per kWh for B-3 consumers and Rs12.32 per kWh for B-4 consumers, including a Rs3.23 per kWh distribution-of-subsidy surcharge. Participants noted that these charges would be a significant factor for industries considering alternative electricity procurement models.

A panel on the power market, featuring Syed Iftikhar Ali, a power-sector professional, Saham Qamar, Director of Power Matrix, and Hasnat Khan, Senior Vice Chairman of the Pakistan Solar Association, discussed network capacity, metering and settlement systems, transmission limitations, UoSC and the level of predictability industrial consumers require.

The panel noted that allowing industries to participate in a competitive electricity market would not be sufficient on its own. Adequate infrastructure, functioning systems and commercial certainty would also be necessary to make participation workable for industrial consumers.

The broader cost structure of Pakistan’s power sector also came under scrutiny. Rehan Javed, Head of the Energy Advisory Committee at FPCCI, pointed to significant cost pressures across the country’s generation portfolio, citing a combined Rs2.899 trillion rise in the disclosed costs of five major hydropower projects. Cost increases for individual projects ranged from 21% to 285%. Dasu was cited as a prominent example, with its approved cost of Rs486 billion rising to Rs1.737 trillion, an increase of 257%.

For the textile industry, however, the energy challenge goes beyond electricity. Asim Riaz, Energy Adviser at Aptma, connected power-market reforms with broader competitiveness concerns facing the sector. He discussed developments in domestic and international energy markets, gas-market liberalization, captive generation, energy efficiency, renewable integration and the economics of industrial energy supplies. His remarks underlined that investments in renewable energy, captive generation, efficiency and electrification must ultimately remain economically viable for manufacturers.

Energy prices and reliability have a direct impact on textile production and export performance. Rising electricity and gas costs can squeeze manufacturing margins, while unreliable supplies can interrupt production and raise the expenses associated with maintaining backup power sources.

Meanwhile, international textile markets are increasingly seeking evidence of sustainable manufacturing, reliable carbon data and traceable supply chains. ESG compliance, traceability and measurement, reporting and verification are consequently becoming increasingly important to export competitiveness.

Participants pointed to fragmented environmental information, limited verification capabilities and inconsistencies in reporting as continuing obstacles. They emphasized the importance of linking factory-level operational data with credible sustainability claims made by textile exporters.

As a result, energy management is becoming increasingly connected to international market access. Manufacturers need to demonstrate the environmental gains from efficiency improvements and renewable-energy investments through reliable data and proper documentation.

ADS Chief Executive Amjad Nazeer called for a shift away from compliance-focused relationships towards shared investment, technical support, long-term procurement arrangements and credible monitoring and reporting systems.

Participants further emphasized that decarbonization should begin with measurement, energy efficiency and process optimization, including waste-heat recovery, before industries consider electrification, renewable generation and storage where appropriate. Greater efficiency can lower both energy costs and emissions while improving the economic case for future investments in renewable energy and storage.

The dialogue concluded that Pakistan’s textile industry requires more than access to new electricity procurement mechanisms and renewable-energy alternatives. Transparent pricing, reliable networks, trustworthy data, suitable risk-sharing, storage and firm-capacity solutions, as well as stronger institutional coordination, will be necessary to make the energy transition commercially sustainable.

The discussion ultimately linked Pakistan’s energy policy directly with its export ambitions. Power-market reforms that fail to deliver reliable and competitively priced energy could weaken industrial competitiveness, while a renewable-energy transition without sufficient storage, network planning, effective market mechanisms and credible data could create further technical and financial pressures for manufacturers.