Wenlan Yang , Jiaqi Gao & Qian Zhu
Under the dual pressures of an energy crisis and climate challenges, Pakistan is undergoing a silent yet profound energy revolution.
This country, long plagued by electricity shortages, is now forging an innovative path toward energy self-sufficiency through a market-driven transition to renewable energy.
According to the International Energy Agency’s (IEA) Special Report on the Global Photovoltaic Market released in July 2024, Pakistan imported a total of 13 gigawatts of solar panels from China in the first half of the year.
As market forces converge with clean technology, could Pakistan’s energy revolution become a paradigm for Global South countries seeking to break free from development constraints?
The rapid penetration of solar technology is reshaping Pakistan’s energy landscape, with the dramatic decline in the Levelized Cost of Electricity (LCOE) serving as a key catalyst.
The cost of photovoltaic power generation in Pakistan has fallen to $60 per megawatt-hour, which is $20 lower than that of natural gas-based generation. This economic advantage has spurred a collective shift across industrial, agricultural, and residential sectors.
In Sindh’s textile industrial zones, 40% of factories have installed rooftop solar systems; Punjab’s agricultural heartlands are adopting a new “solar + water pump” irrigation model; and even Karachi’s commercial centers are witnessing the emergence of “zero-carbon office buildings.”
This bottom-up transformation has unexpectedly outpaced policy-driven diffusion effects. Wind energy development presents an alternative pathway. The Gharo-Jhimpir wind corridor, with a theoretical potential of 50 gigawatts, is gradually being harnessed, with a 50-megawatt pilot project already operating at full capacity.
The innovative “wind-solar hybrid” model has significantly improved land utilization by 70% and boosted system efficiency to over 85%, thereby easing grid integration challenges. This approach has also set a regional record for cost efficiency, with a levelized electricity cost of just 2.7 cents per kilowatt-hour, offering a strategic solution to Pakistan’s grid vulnerability.
Pakistan’s renewable energy development exhibits distinctive characteristics of a market-driven transition, primarily reflected in three interrelated dimensions.
First, it has achieved substantial economies of scale. Second, the hybrid deployment of “distributed solar + centralized wind farms” has increased the renewable energy penetration rate to 12% of total electricity generation.
Third, Pakistan has pioneered a three-pronged development strategy comprising electricity price marketization reforms, grid access liberalization, and third-party financing mechanisms. At the national level, Pakistan’s clean energy transition has catalyzed a series of institutional innovations and economic dividends.
In terms of energy governance, the rapid increase in renewable energy’s share has necessitated continuous innovation in electricity market regulations. The Competitive Power Trading Rules revised in 2023 established South Asia’s first renewable energy quota trading platform, positioning Pakistan at the forefront of electricity market reform among developing countries.
From a fiscal sustainability perspective, distributed solar energy reduces fossil fuel import expenditures by $800 million annually, significantly alleviating Pakistan’s chronic energy trade deficit and enhancing the stability of foreign exchange reserves.
Additionally, Sindh’s solar panel manufacturing cluster has achieved a 40% domestic production rate, driving a 17% increase in high-tech exports, thereby altering Pakistan’s passive position within the global value chain.
Pakistan’s experience in addressing the dual challenges of climate change and energy security offers a compelling case study of a “market-adaptive transition” for Global South countries.
The country’s subsidy-free expansion of renewable energy demonstrates the feasibility of low-carbon development under fiscal constraints.
In terms of energy security, Pakistan’s hybrid system of distributed solar and centralized wind power has exhibited remarkable resilience. During extreme climate events in 2022, renewable energy-powered regions experienced 82% fewer blackout hours compared to those reliant on conventional grids.
This anti-fragility characteristic holds significant reference value for other developing countries facing similar climate risks.
Pakistan’s clean energy transition is crafting a new development narrative—one where every installed solar panel represents not just a technological choice but a redefinition of developmental trajectories. This transition moves beyond the binary debate of “environment versus development,” instead leveraging market mechanisms to demonstrate their mutual reinforcement.
Looking ahead, as more countries draw inspiration from Pakistan’s experience, the global climate movement may witness a true awakening—not one driven by crisis-induced urgency, but by a deliberate and conscious shift in developmental priorities.
This transformation will not remain confined to solemn commitments in international agreements but will manifest in the everyday realities of local communities.
The path to reconciliation between humanity and nature must unfold like the ever-turning wind turbines in Sindh—steadily advancing through pragmatic exploration, broadening as it progresses.
*Wenlan Yang , Research Assistant, School of Economics, Sichuan University of Science and Engineering, P.R.China, Jiaqi Gao, Research Assistant, School of Administrative Law, Southwest University of Political Science and Law, P. R. China and Qian Zhu, Research Assistant, School of Administrative Law, Southwest University of Political Science and Law, P. R. China.
*The views expressed in this article are those of the authors and do not necessarily reflect the views of The Diplomatic Insight.
The Diplomatic Insight is a digital and print magazine focusing on diplomacy, defense, and development publishing since 2009.
