KARACHI: A scenario-based assessment has found that including K-Electric’s (KE) 640-megawatt (MW) renewable energy projects in the national generation expansion plan could significantly reduce electricity costs, enhance energy security and lower dependence on the National Grid Company (NGC).
According to a new study ‘Successful Renewable Auctions, Uncertain Outcomes: A Techno-Economic Assessment of K-Electric’s 640MW Renewables 2026’ by Renewables First and the Policy Research Institute for Equitable Development (PRIED), KE’s three least-cost 640MW renewable energy projects were not included in the draft Integrated Generation Capacity Expansion Plan (IGCEP) 2025 base case despite completing all competitive bidding requirements.
The projects were instead assessed only as a scenario, although they had been optimised under the least-cost criteria of the Nepra-approved IGCEP 2021-22 and were subsequently incorporated into KE’s Power Acquisition Programme (PAP), which was approved under the Nepra (Electric Power Procurement) Regulations, 2022.
The assessment examined three scenarios: the base case with KE’s existing generation fleet; the addition of the 640MW renewable portfolio as optimisation candidates, with sensitivity analyses for the KENGC tie-line expansion; and a broader renewable expansion scenario incorporating the 640MW projects alongside additional solar, wind and battery energy storage system (BESS) capacity.
The analysis found that under Scenario 2, the model optimised the 640MW renewable projects by FY27, reducing total system costs over the planning horizon from approximately $14.3 billion under the base case to around $13.9 billion. Under the sensitivity cases in Scenario 3, total costs declined further to approximately $12.7 billion.
The assessment also projected that adding the 640MW renewable portfolio will reduce KE’s electricity basket price from 13 US cents per kilowatt-hour to 12.58 US cents per kilowatt-hour by FY27, with further declines in subsequent years. Greater renewable penetration under the Scenario 3 sensitivity cases results in the lowest projected basket prices.
According to the findings, renewable generation under Scenario 2 increases from around 200 gigawatt-hours (GWh) in FY2025 to nearly 1,605 GWh annually from FY27 onwards. This would reduce KE’s electricity imports from the National Grid from 60 per cent to 54 per cent while supplying a cumulative 14,842 GWh between FY25 and FY35.
Under Scenario 3, renewable generation is projected to reach 33,486 GWh over the same period, increasing KE’s renewable share to 15 per cent and reducing National Grid imports to 46 per cent. In the sensitivity cases, the addition of renewable energy and 200MW of battery energy storage could increase cumulative clean energy supply to 55,486 GWh, raise the renewable share to 25 per cent and reduce dependence on the national grid to 37 per cent.
The assessment also highlighted energy security concerns arising from KE’s reliance on re-gasified liquefied natural gas (RLNG)-based generation and the National Grid interconnection. It noted that disruptions affecting RLNG supply routes could expose the utility to supply risks, underscoring the need to diversify its generation mix through lower-cost renewable energy sources.
The report further noted that, in its Multi-Year Tariff Determination for FY2024-FY2030, issued in October 2025, Nepra reduced KE’s tariff from Rs39.97 per kilowatt-hour to Rs32.37 per kilowatt-hour while emphasising the need for sustained cost reductions to ensure the utility’s financial sustainability.
According to the assessment, commissioning the 640MW renewable portfolio by FY27 could generate at least $0.4 billion in cumulative cost savings. It added that expanding renewable capacity to 2,408MW of solar, 1,232MW of wind and 200MW of battery energy storage by FY35 could further reduce KE’s basket price and deliver total savings of around $1.5 billion over the planning period.
GWh, raise the renewable share to 25 per cent and reduce dependence on the national grid to 37 per cent.The assessment also highlighted energy security concerns arising from KE’s reliance on re-gasified liquefied natural gas (RLNG)-based generation and the National Grid interconnection. It noted that disruptions affecting RLNG supply routes could expose the utility to supply risks, underscoring the need to diversify its generation mix through lower-cost renewable energy sources.
The report further noted that, in its Multi-Year Tariff Determination for FY2024-FY2030, issued in October 2025, Nepra reduced KE’s tariff from Rs39.97 per kilowatt-hour to Rs32.37 per kilowatt-hour while emphasising the need for sustained cost reductions to ensure the utility’s financial sustainability.
According to the assessment, commissioning the 640MW renewable portfolio by FY27 could generate at least $0.4 billion in cumulative cost savings. It added that expanding renewable capacity to 2,408MW of solar, 1,232MW of wind and 200MW of battery energy storage by FY35 could further reduce KE’s basket price and deliver total savings of around $1.5 billion over the planning period.
