Wind Power Curtailment Threatens Pakistan Renewable Energy Sector

Atif Ikram Sheikh، President FPCCI

Pakistan’s renewable energy sector is facing a growing crisis as wind power producers warn that continued curtailment of electricity generation is pushing projects toward financial collapse.

A consortium of leading wind energy companies, backed by Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has strongly rejected claims by the Independent System and Market Operator (ISMO) that curtailment is either minimal or effectively managed.

Cheap Wind Power Being Wasted

Industry representatives say wind energy—currently among the cheapest sources at approximately Rs14 per unit—is being throttled despite its cost advantage.

According to the consortium, this practice not only undermines Pakistan’s energy security but also places billions of rupees in renewable investments at risk.

The issue was highlighted during a meeting of the FPCCI Committee on Renewable Energy chaired by Fawad Jawed on March 17, 2026.

Compensation Mechanism Under Scrutiny

Wind power producers argue that the existing compensation model, known as Non-Project Missed Volume (NPMV), fails to adequately cover losses incurred due to reduced generation.

They describe the mechanism as insufficient and damaging to project liquidity, warning that current curtailment levels—reducing plant utilisation to around 70 per cent—are making it increasingly difficult to meet international debt obligations.

Policy Gaps and Grid Constraints

Producers say that wind projects were developed under a “must-run” policy framework, which guaranteed power offtake. However, they now face unexpected grid limitations and reduced dispatch.

The consortium also criticised authorities for prioritising more expensive thermal power generation over cheaper renewable sources, adding that such decisions increase the overall economic burden.

Concerns were also raised over policy inconsistencies, including the promotion of new “wheeling” auctions despite underutilisation of existing infrastructure.

Dispute Over Solar and Market Dynamics

The ISMO’s justification linking curtailment to increased rooftop solar capacity was rejected by producers, who argue that demand forecasting and licensing fall under regulatory oversight.

They said shifting responsibility onto market dynamics reflects a failure in planning rather than a justification for limiting renewable output.

Industry Calls for Immediate Reforms

The consortium has urged urgent intervention from the Ministry of Energy Pakistan and National Electric Power Regulatory Authority (NEPRA).

Key demands include:

• Full implementation of the “must-run” policy for renewable energy
• Reform of the NPMV compensation formula to ensure full recovery of losses
• Prioritisation of wind power over costly thermal generation
• Improved grid infrastructure and transmission capacity
• Integration of battery energy storage systems (BESS)
• Suspension of new energy auctions until existing plants are fully utilised

Economic and Sectoral Risks

Industry stakeholders warn that failure to address these issues could lead to a broader financing crisis in Pakistan’s renewable energy sector.

They argue that continued underutilisation of wind energy—despite full operational readiness—represents both an economic inefficiency and a setback for the country’s clean energy transition.

Outlook: Urgent Policy Action Needed

Energy experts stress that transparent dispatch policies, regulatory reforms and infrastructure upgrades are critical to stabilising the sector.

Without timely intervention, they warn, Pakistan risks undermining investor confidence and missing key opportunities in sustainable energy development.