Solar Power Sours Pakistan's Energy Deals

Pakistan's energy policy is facing a significant challenge due to contracts designed for an older energy system becoming increasingly expensive in a market transformed by solar power.

The rapid expansion of solar generation has fundamentally altered electricity demand, particularly during daylight hours when gas-fired generation can become less economical.

The country's LNG commitments were negotiated on assumptions that did not foresee such a dramatic change in consumption patterns.

This makes the take-or-pay arrangements especially problematic, transferring demand risk to an already financially constrained buyer.