ISLAMABAD – The federal government has decided to move forward with the construction of a 1,200-megawatt solar power plant in Layyah, Punjab, even as the country grapples with surplus electricity and financial pressures in the energy sector. The project, with a Rs6.2 billion allocation for land acquisition, aims to reduce reliance on fossil fuels but may exacerbate existing challenges in the power sector.
Despite having an installed generation capacity exceeding 42,000MW, the country’s electricity consumption averages only 22,000MW to 24,000MW, leading to costly idle capacity payments. The Ministry of Finance has projected that the circular debt will continue to rise, potentially hitting Rs2.8 trillion by the fiscal year-end, despite planned subsidies and tariff increases.
Energy experts highlight concerns over the decision, questioning its financial viability given the significant increase in land acquisition costs and ongoing power sector inefficiencies. Nonetheless, the government is pushing ahead with renewable energy projects to displace thermal generation and address long-term energy challenges.
Story by Shahbaz Rana
