Pakistan Power Generation Surges 12.1% YoY in January 2026

Pakistan’s energy sector marked a significant start to the year, with power generation increasing by a notable 12.1% year-on-year in January 2026. According to the latest data, the country produced 9,140 Gigawatt-hours (GWh) of electricity, a substantial rise from the 8,153 GWh generated in January 2025.

While this surge in output signals increased energy availability, a closer look at the generation mix reveals a complex picture with significant cost implications for consumers.

A Look Inside the Pakistan power generation Energy Mix

The increase in power generation was largely driven by thermal sources, particularly those reliant on imported fuels. Hydropower, traditionally a cornerstone of Pakistan’s energy supply, saw a sharp 18% decline in its contribution, dropping from 866 GWh in January 2025 to just 713 GWh this year.

The primary contributors to the grid in January 2026 were:

• Regasified Liquefied Natural Gas (RLNG): Leading the pack, RLNG-based plants generated 2,002 GWh, accounting for nearly 22% of the total electricity produced.
• Nuclear: Proving to be a reliable and cost-effective source, nuclear power plants supplied 1,599 GWh, making up 17.5% of the total generation.
• Imported Coal: Power plants running on imported coal generated 1,580 GWh.
• Local Coal: Domestic coal sources contributed another 1,404 GWh to the national grid.
• Hydropower: As mentioned, hydel generation was significantly lower at 713 GWh.
• Residual Fuel Oil (RFO): Generation from RFO stood at 274 GWh.
• Renewables: Other renewable sources, including wind, solar, and bagasse, had a minimal contribution during this period.

The Cost of Power: A Heavy Reliance on Expensive Fuels for Pakistan power generation

The composition of the energy mix has a direct impact on the cost of electricity. The total generation cost for January 2026 amounted to Rs106.36 billion, translating to an average per-unit cost of Rs11.64.

However, the costs varied dramatically by source:

• RLNG was the most expensive source at Rs19.93 per unit.
• Imported Coal followed, with a generation cost of Rs13.49 per unit.
• Local Coal was slightly cheaper at Rs11.62 per unit.
• In stark contrast, Nuclear power was the most economical source, generating electricity at just Rs2.24 per unit.

This heavy reliance on expensive imported fuels has led to a higher overall cost of power. Consequently, the Central Power Purchasing Agency (CPPA-G) has petitioned for a fuel cost adjustment (FCA) of Rs1.78 per unit for consumer bills in March. This adjustment is intended to cover the gap between the reference fuel cost and the actual cost incurred, which reached Rs12.1768 per unit after accounting for transmission losses and other factors.

The Path Forward for Pakistan power generation

The January 2026 figures highlight a critical challenge for Pakistan: balancing growing energy demand with affordability and sustainability. While the 12.1% increase in generation is a positive indicator of the system’s capacity, the dependence on costly imported fossil fuels puts pressure on both the national exchequer and the wallets of consumers.

The stark cost difference between thermal sources and nuclear power underscores the economic benefits of diversifying the energy mix. As Pakistan moves forward, a strategic pivot towards more affordable and sustainable domestic resources, including an expansion of nuclear and renewable energy capacity, will be crucial for ensuring long-term energy security and economic stability. This comes at a time when Pakistan has seen positive economic indicators, such as a current account surplus, making it an opportune moment to address structural challenges in the energy sector.