NEPRA's Annual Report Reveals Shift in Power Generation Licensing
ISLAMABAD – The National Electric Power Regulatory Authority (NEPRA) has not issued any generation licences to renewable energy-based Independent Power Producers (IPPs) during the fiscal year 2024-25, according to its latest annual report. This marks a notable departure from previous years, as three licences were granted to furnace oil/HSD and gas-based power plants in the last fiscal year. However, the regulator did provide generation concurrences to only two solar IPPs, with a modest total capacity of 4MW.
Surge in Net Metering Adoption
In contrast to the limited activity in renewable IPP licensing, NEPRA issued a significant 9,150 net metering generation licences and concurrences in FY2024-25, boasting a combined capacity of 1,250.90MW. This surge indicates a growing trend among consumers and businesses towards adopting distributed solar power systems across Pakistan.
Detailed Breakdown of Generation Licences and Concurrences
Overall, six generation licences and concurrences with a cumulative capacity of 1,364.90 MW were issued in the last fiscal year. Among these, five applications for generation licences, with an installed capacity of 831.90 MW, were at various processing stages. Three licences, totaling 810.90MW, were approved, while two applications remain pending.
The issued generation licences included two for furnace oil/HSD-based power plants with a combined capacity of 34.20MW, and one for a gas-based power plant with a capacity of 776.70MW. This highlights a continued reliance on conventional fuel sources in the licensing process.
Regulatory Framework and Concurrence Mechanism
Under Section-14B(5) of the NEPRA Act, generation companies must submit detailed schemes for concurrence. The five-year period for this provision ended on April 26, 2023. As the mechanism for phasing out generation licences has not been notified, NEPRA continued granting licences until that date and then shifted to issuing concurrences.
During FY2024-25, 12 applications for concurrence, with an installed capacity of 2,096.256 MW, were under process. Three generation concurrences were issued for facilities with a combined capacity of 554.006 MW, including Burj Solar Energy Private Limited (3.006MW), Fazal Solar Energy (Pvt) Limited (1MW), and Kotaddu Power Company Limited (550MW).
Case Study: Kot Addu Power Company Limited
Kot Addu Power Company Limited (KAPCO) applied for licence extension/renewal on June 21, 2024, reducing its capacity from 1,600MW to 550MW due to an expired Power Purchase Agreement (PPA). NEPRA treated this as a new facility and granted a fresh concurrence on April 18, 2025, under Section 14B(5) of the NEPRA Act.
Net Metering Distribution Across DISCOs
The report provides a detailed distribution of net metering licences and concurrences among distribution companies (DISCOs):
- FESCO: 1,871 licences/concurrences with 205.55MW capacity
- LESCO: 1,745 with 303.70MW capacity
- MEPCO: 1,631 with 240.50MW capacity
- KE: 1,026 with 109.41MW capacity
- GEPCO: 910 with 116.11MW capacity
- IESCO: 890 with 100.71MW capacity
- PESCO: 775 with 109.80MW capacity
- HESCO: 121 with 27.55MW capacity
- TESCO: 69 with 9.24MW capacity
- SEPCO: 68 with 18.58MW capacity
- QESCO: 44 with 9.74MW capacity
This data underscores the widespread adoption of net metering, particularly in urban and industrial centers, contributing to Pakistan's energy diversification efforts.
