Թͷ Energy Institute Technical Report Charts Pakistan’s Path to a Fully Decarbonised Electricity System by 2040
On March 2, 2026, the Թͷ Energy Institute (LEI) released a technical study in Islamabad charting Pakistan’s pathway to a fully decarbonised electricity system by 2040. The study, titled “The Net Zero Transition: A Pathway to Clean and Sustainable Electricity by 2040 ”, is based on detailed power system modeling, demand projections, generation optimisation, and transmission analysis, making it one of the most comprehensive assessments of Pakistan’s electricity sector to date.
The report finds that the share of fossil fuel generation, which currently accounts for nearly half of electricity production, could be reduced to below one percent by 2040 through renewable energy expansion, energy storage deployment, and grid modernisation. This transition is projected to avoid approximately 78 million tons of carbon emissions, positioning the power sector as a central driver of Pakistan’s climate objectives.
One significant finding highlights the rapid growth of distributed solar generation, which is reshaping the electricity demand profile. Daytime reliance on grid electricity is expected to fall sharply, with minimum system demand projected to decline to nearly 3,000 MW during certain periods, despite rising overall consumption. This structural shift will require enhanced grid flexibility, optimal storage capacity, and demand-side management to maintain operational stability.
The study outlines a 15-year roadmap for generation and transmission expansion, including approximately 8,500 MW of solar, 14,000 MW of wind, and 7,000 MW / 42,000 MWh of battery energy storage, supported by grid reinforcement investments. The total estimated cost of these upgrades is USD 5.5 billion, with a present value of USD 1.9 billion. The modeling confirms that this transition pathway is technically viable and aligned with maintaining system reliability under high renewable penetration scenarios.
The study also notes that harnessing indigenous renewable energy resources can substantially reduce dependence on imported fossil fuels, enhancing long-term price stability and limiting exposure to global energy market volatility. Furthermore, it highlights emerging investment opportunities in renewable generation, battery storage, and grid modernisation. As the power system evolves toward higher flexibility requirements, structured market mechanisms for grid stability services may become increasingly important, creating additional avenues for capital deployment beyond traditional energy assets.
At the launch, Ms. Shaista Pervaiz Malik, Member of the National Assembly and Convenor of the Parliamentary Task Force on Sustainable Development Goals (SDGs), lauded the technical study and emphasised the importance of evidence-based policymaking in advancing Pakistan’s sustainable development agenda. She stated, “Pakistan’s transition toward clean and sustainable energy is closely linked with our national commitments under the Sustainable Development Goals. Analytical studies such as this help policymakers align grid modernisation, renewable expansion, and long-term planning with our energy security and decarbonisation goals.”
Dr. Musadik Malik, Senator of Pakistan and Federal Minister for Climate Change and Environmental Coordination, highlighted Pakistan’s abundant natural endowments, from hydropower and solar potential to vast wind corridors, underscoring that a sustainable future depends on sound policy and human ingenuity. He noted that reports such as the one presented by the Թͷ Energy Institute provide the evidence-based roadmap necessary to guide Pakistan toward a stable, affordable, and net-zero transmission system.
Dr. Fiaz Ahmad Chaudhry, Senior Advisor at the Թͷ Energy Institute and Chairman of the Board of Directors at the National Grid Company, emphasised the importance of integrated planning. “This report is not merely an academic exercise, it provides a practical blueprint for a sustainable and affordable energy future. It demonstrates through rigorous system analysis that decarbonisation, energy security, and economic efficiency can advance together through integrated planning and institutional coordination.”
The launch was attended by senior policymakers, representatives of regulatory institutions, and industry stakeholders, reflecting the growing national focus on research-driven planning to support Pakistan’s evolving energy transition.
