High energy prices, cheaper ders stimulate the decentralized power in Pakistan, says IEEFA Report – Mettis Global Link

June 5, 2025 (MLN): The convergence of rising energy prices and falling costs of distributed energy sources (Ders), such as Fotovoltaic (PV) systems on the roof and battery energy storage systems (BESS), has encouraged consumers to adopt decentralized energy solutions.

By one report By the Institute for Energy Economics and Financial Analysis (ieefa) entitled ‘battery storage and the future of Pakistan’s electricity network.

Pakistan leads a solar revolution, with 17 Gigawatt (GW) of solar energy-based capacity implemented on both distributed and levels on utility scale.

Integrating Bess in these systems is the following logical step, especially in decentralized applications behind the meter, according to the report.

Pakistan imported approximately 1.25 Gigawatt hours (GWH) from Bess in 2024 and another 400 megawatt hours (MWH) in January and February 2025.

IEFA estimates that Bess -Import could reach 8.75 GWH by 2030 if the current trends continue, and the annual additions of Bess remain equal to 1.25 GWh.

However, the rapid increase in solarization and generation capacity also forms considerable challenges.

The report contains financial simulations to estimate the payback time for residential, commercial and industrial Bess configurations and assesses how the potential trend of consumers who leaves the schedule on a large scale can reform the dynamics of Pakistan.

Bess has become vital for energy independence and resilience in the residential, commercial and industrial sectors of Pakistan.

These systems help to lower peak loads and energy costs, improve reliability and energy quality and support peak question management.

Despite high taxes and customs duties that add nearly 50% to BESS costs, the combination of sun bites still offers shorter payback time of 3-6 years in all sectors.

Bess stores cheap electricity that are produced during the day and discharges it during the evening peak, the report added.

The inherent peak shears help to flatten the peak demand of the evening peak, which means that the need to reduce plants on fossil fuel -based plants.

This can lead to the under-use of peak plants of expensive liquid natural gas (LNG), which will be locked in the grid for the next 23-28 years, which further strengthens the excess LNG dilemma of Pakistan.

The country had to postpone its LNG agreement with Qatar for 2025 and delay deliveries up to 2026 due to a low use of LNG-based power plants, the most important off-top for contracted LNG.

Since the government is considering eliminating incentives that are provided to net-measured consumers to slow the pace of PV additives on solar energy, consumers can be motivated to add Bess to existing solar PV setups.

This can further reduce the dependence on the consumer of the grid and drive consumers completely on the schedule.

Due to contractual obligations arising from the long -term purchase agreements, the output of paying consumers from the grid leads to an increase in fixed costs or capacity payments for those who stay on the grid.

Energy stored in and sent by Bess can permanently reduce the demand from the schedule, possibly 11.5 Terawatt hours (TWH), or 8.4% of the actual electrical demand of 2024 of the grid annually, depending on the speed of BESSCRAPHING to existing solar PV installations.

The authors suggest that the government must carefully assess new capacity output and switch contracts to a ‘take and pay’ basis, so that utilities only pay for actual energy purchased from factories.

This would prevent peak plants from becoming stranded assets.

Various of the locations and the increasing energy fieldback from PV systems for solar energy in large loading centers have caused problems such as reverse current current and negative load on distribution transformers in feeders with excessive polarization on the roof.

Successful integration of der requires hosting capacity analysis in the distribution network. MEFA recommends the widespread acceptance of smart meters, consumer and transformer monitoring systems and automation at feeding level and modernization to support this integration.

A coherent information and communication technology (ICT) strategy to improve data collection and communication is also needed to improve the planning of the distribution system with a bottom-up load forecast approach, which could reflect the localized demand dynamics more accurately.

This method ensures a grainy insight into consumption patterns, the impact of ders and local limitations, which are often overlooked in top-down prognosis methods, the report added.

A more realistic estimate of future capacity requirements helps to prevent over-processing or under-utilized infrastructure investments, it is further.

Posted on: 2025-06-05T13: 14: 51+05: 00