Pakistan risks staying tied to costly coal-fired power agreements even as households and industries shift quickly towards solar energy, experts warned at a policy dialogue held during the Sustainable Development Policy Institute's (SDPI) four-day Sustainable Development Conference in Islamabad. The session, titled 'From Coal to Clean: Towards a Phased, Just Energy Transition', was held on Wednesday, the third day of the conference. Speakers said falling demand from the national grid, mounting capacity payments and delayed policy reforms could deepen the financial crisis in the power sector. Capacity payments are fees paid to power plants for being available to generate, whether or not they are used heavily.
Retire early or convert to Thar coal?
The session exposed a basic policy split. One side argued that expensive imported coal plants should be retired early with help from international financing. The other side argued that they should be converted to Thar coal, a domestic fuel, to reduce fuel imports and keep reliable generation.
Malik Amin Aslam, a former federal climate change minister who chaired the session, said Pakistan's main obstacle was a lack of political will rather than a lack of finance. He questioned capacity payments to underused plants and alleged that earlier demand projections had been deliberately inflated to encourage investment by independent power producers (IPPs), which are private firms that sell electricity to the grid. This was presented as an allegation, not an established finding. He urged Pakistan to examine the Asian Development Bank's Energy Transition Mechanism and other international options for early coal retirement.
An SDPI official said seven Chinese-financed coal plants built under the China-Pakistan Economic Corridor (CPEC) posed a major financial challenge, with falling utilisation, dollar-linked obligations and capacity payments adding pressure. Muhammad Basit Gauri of Renewables First said imported coal plants were already becoming stranded assets, meaning assets that lose value before their working life ends, as cheaper solar power cut into their competitiveness. Citing research on the Sahiwal coal power plant, he said negotiated early retirement could potentially avoid billions of dollars in future capacity payments.
Ali Nawaz Leghari of the Private Power and Infrastructure Board defended coal projects, saying they helped overcome severe shortages when other generation and transmission infrastructure was inadequate. He said converting imported plants to Thar coal could reduce dependence on foreign fuel and bring substantial foreign exchange savings. Badr Alam, Chief Executive Officer of PRIED, disagreed, arguing that inaccurate demand forecasting had created excess capacity while consumers still faced high tariffs and unreliable supply.
Solar growth and the rules around it
Lt Gen Muhammad Zafar Iqbal (retd), Special Assistant to the Prime Minister on Energy, said about 7,000 megawatts of solar capacity had been added over the past five years, largely through investment by consumers rather than government-led projects. He said another 11,000 megawatts of hydropower was planned over the next decade, and that no new coal, re-gasified liquefied natural gas (RLNG) or furnace-oil power plants would be added. The government is also targeting a 30 percent share of electric vehicles in new vehicle sales by 2030.
Other speakers said solar's rapid growth has outpaced regulation, storage and grid capacity. Saadullah Ayaz of the Pakistan Climate Change Authority said the difficulty lay less in the absence of climate policies than in their inconsistent implementation, especially where federal and provincial responsibilities overlap. Muhammad Arif Goheer of the Global Change Impact Studies Centre warned that solar, wind and hydropower infrastructure could itself be exposed to floods and extreme temperatures. MNA Riaz Fatyana questioned continued IPP payments amid prolonged load shedding and urged tariff cuts and tax relief for renewable equipment.
What comes next
The sessions set out options rather than decisions. Tom Wang, joining from China's Shanxi province, warned that coal retirement could threaten livelihoods without retraining and alternative jobs, referring to a survey of 9,000 coal-sector workers. Dr Christoph Nedopil Wang of the University of Queensland said retirement talks should reflect the realistic future value of plants rather than revenues guaranteed under existing contracts. Michael Williamson of the UN Economic and Social Commission for Asia and the Pacific said a joint ESCAP-SDPI study is looking at repurposing coal plant sites for solar, wind and battery storage.
Aasan alfaaz mein
Experts ne Islamabad mein SDPI ki conference mein kaha ke Pakistan mehngi coal bijli ke muaahidon mein phansa reh sakta hai, jabke ghar aur industry tezi se solar ki taraf ja rahe hain. Bahas is par hai ke imported coal plants jaldi band kiye jayen ya Thar coal mein tabdeel kiye jayen. Grid ki demand kam hone se bijli ka bojh kam logon par pad sakta hai aur tariff barh sakta hai. Is liye aap ke bill par is bahas ka asar ho sakta hai.
