Govt Urged To Avoid Long Term Energy Contracts

Parliamentarians and energy experts have called upon the government to avoid long-term energy contracts that could trap Pakistan in costly take-or-pay obligations and contribute to circular debt, urging instead a more flexible approach towards LNG and other fuel imports as solar rapidly reshapes the country’s energy landscape.

In just a few years, and largely without public subsidy, Pakistan has deployed an estimated 50 GW of solar capacity across utility-scale, net-metered, agricultural, off-grid and behind-the-meter systems. The capacity is estimated to generate roughly 54.75 TWh annually, equivalent on a gross energy basis to nearly 1,279 MMCFD of gas-fired generation. The scale of this deployment represents a structural transformation that has outpaced many of the assumptions underlying Pakistan’s long-term gas and LNG commitments.

Read More: Pakistan power crisis deepens amid LNG shortfall

The discussion took place at a dialogue titled “The Sun and the Pipeline: Energy Contracts in an Era of Solar Disruption in Pakistan,” convened by the Parliamentary Forum on Energy and Economy at Serena Hotel, Islamabad. The dialogue examined Pakistan’s changing RLNG requirements, the impact of geopolitical risks and global market volatility, and policy options to protect consumers while maintaining energy security.

Dr. Nafisa Shah, Convener of the Parliamentary Forum on Energy and Economy and Member of the National Assembly, said Pakistan must rethink its energy mix and regulatory frameworks in light of the rapid deployment of solar energy.

“Pakistan has deployed an estimated 50 GW of solar capacity across its rooftops and other segments. Our energy policies must reflect this new reality and ensure that people finally receive the affordable energy they have missed for so long because of long-term take-or-pay contracts that have trapped us in prohibitively expensive electricity,” she said.

“We are not simply choosing solar over LNG. We are looking for a flexible, competitively priced energy layer that ensures security without penalizing the progress Pakistan has made in distributed generation.”

Barrister Danyal Chaudhry, Parliamentary Secretary for Information and Broadcasting and Secretary of the Parliamentary Forum on Energy and Economy, said the debate should move beyond viewing solar and gas as competing alternatives.

“We should not ask whether Pakistan chooses the sun or the pipeline. We should ask how the sun, the pipeline, the grid and emerging technologies can work together to provide Pakistan with affordable, reliable and secure energy,” he said.

Muhammad Arif, former Member Gas at OGRA and petroleum law, policy and regulatory advisor, emphasized the need to integrate energy governance and develop mechanisms to monetize surplus solar generation, particularly during periods of high solar output.

Asim Riaz, Energy Advisor at the All-Pakistan Textile Mills Association, said Pakistan’s LNG challenge was no longer solely about securing supply.

“Pakistan’s LNG challenge is about demand, flexibility, affordability and market design. The sun has not eliminated the need for LNG. It has changed when RLNG is needed, how much is needed, and what kind of LNG portfolio Pakistan can afford,” he said.

Energy journalist and Energy Flux founder Seb Kennedy noted that Pakistan was experiencing a consumer-led energy transition faster than the state’s planning system could adapt. The transition, he argued, was driven by high tariffs, unreliable supply and falling solar costs, rather than central planning.

He stressed the need to move away from rigid volume commitments towards greater flexibility, optionality and market access, while ensuring that the costs of the transition do not disproportionately fall on vulnerable consumers.

Huma Chughtai called for greater consistency and clarity in policymaking, particularly in understanding supply, demand and the wider challenges facing Pakistan’s economic and energy sectors. She emphasized the need for stronger representation of the Planning Division in the policy process.

Mobeen Arif Jutt highlighted the burden of high electricity tariffs on ordinary citizens and stressed the need for meaningful structural reforms in the electricity sector, with particular attention to low-income and vulnerable communities.

Syed Faizan Shah, Energy Expert and Advisor to the Power Minister, said Pakistan’s priority should not simply be adding more generation capacity.

“Our focus is on building an energy system that is more resilient to external price shocks and more efficient across generation, transmission and distribution,” he said. “Expanding indigenous solar generation, supported by battery energy storage and other modern technologies, can improve system flexibility and reliability, reduce losses, optimize existing infrastructure and provide consumers greater protection against international fuel price fluctuations.”

The dialogue was attended by parliamentarians, experts, civil society and academia.