Textile body flags flaws in Pakistan’s 2025-35 power generation expansion plan

The All Pakistan Textile Mills Association (Aptma) has questioned government projections to increase Pakistan’s generation capacity by 50% to 64,000 megawatts over 2025-35, describing the targets as unrealistic and requiring around $50 billion in investment that could lock in “high-cost power.”

According to reports, Aptma, in detailed submissions to the National Electric Power Regulatory Authority (Nepra), called for a thorough review of the demand forecasts underpinning the Indicative Generation Capacity Expansion Plan (IGCEP 2025-35), saying they were based on population and GDP growth assumptions without accounting for ground realities in the power sector.

The association criticized the econometric methodology used in IGCEP, stating that the regression model linking grid consumption to GDP and population growth ignored substitution effects from captive power, rooftop solar, gas-fired boilers, and other decentralized sources. Aptma argued this omission inflated projected grid demand, leading to overestimated capacity additions, stranded assets, and higher financial stress on the system.

“This upward bias encourages excessive generation additions, which in turn produce inflated capacity payments and heightened financial stress,” the association said, highlighting that IGCEP’s demand forecast could exacerbate escalating power tariffs. Aptma noted that capacity payments have surged from Rs2 per unit to Rs17.06 per unit over the past decade, cumulatively exceeding Rs6 trillion—more than total fuel costs.

The group stressed that affordability must become a central principle in energy planning, arguing that new generation additions should only proceed once the capacity payment burden is reduced to below Rs5 per unit. Aptma warned that failure to align forecasts with real demand risks overcapacity, idle plants, and further circular debt.

Citing current trends, the association pointed out that industrial demand fell by around 4 percent in FY2025, while agricultural consumption dropped by more than one-third as farmers shifted to diesel and solar alternatives. Despite this stagnation, IGCEP projects nearly 20,000 MW of new capacity, creating a potential mismatch between supply and demand.

Aptma called for a more disciplined approach to planning, emphasizing transparency, affordability, and alignment with on-the-ground realities to prevent financial stress and safeguard industrial competitiveness.