ISLAMABAD : Energy experts have proposed sector coupling reforms, smart demand-side management, renewable energy integration and localized manufacturing to address Pakistan’s mounting power sector losses, reduce wind energy curtailment and unlock investment opportunities for the Chinese investors under the China-Pak Economic Corridor (CPEC).

The call was made at a policy dialogue, titled: “Unlocking Sector Coupling Potential in Pakistan: Investment Opportunities for the Chinese Private Sector, organized by Sustainable Development Policy Institute here, said a press release issued on Saturday.

The dialogue focused on Pakistan’s excess generation capacity, declining industrial demand and renewable energy losses caused by transmission bottlenecks and inefficient grid management. The speakers stressed the need for dynamic electricity tariffs, battery storage systems, EV charging infrastructure, industrial electrification and coordinated policymaking among energy regulators to improve grid stability and lower capacity payment burdens.

Opening the discussion, Muhammad Umer, Research Associate at SDPI’s Energy Unit, said Pakistan’s power sector continued to suffer from low system utilization despite having 41 gigawatts of installed generation capacity. He noted that thermal plant utilization remained below 40 per cent while wind power projects faced severe curtailment, resulting in billions of rupees in financial losses and non-project missed volume payments.

He suggested introducing sector coupling mechanisms through power-to-transport and power-to-industry models to absorb surplus electricity during low-demand hours. He stressed the need for incentivized daytime EV charging, dynamic tariffs and flexible industrial loads such as green ammonia plants and cold storage facilities to flatten the national load curve and lower electricity basket prices.

Umar said simulation models showed that dynamic EV charging based on wholesale electricity pricing could generate net system benefits, while fixed charging tariffs increased evening demand peaks and system losses. He also proposed establishing sector coupling cells in power sector institutions, deploying utility-scale battery storage systems and promoting technology transfer under the Power Sector Indigenization Plan.

Tanvir Ahmed Mirza, Director Operations and Coordination and Company Secretary at United Energy, said Pakistan should stop pursuing additional conventional power generation projects and instead focus on renewable energy integration and sector coupling initiatives. He proposed launching pilot renewable-powered industrial zones for export-oriented sectors, including textiles, garments and sports goods under CPEC Phase-II. He also proposed providing targeted incentives, tax relief and dedicated renewable energy supply to selected industries to increase exports and industrial electricity demand.

Mirza highlighted opportunities in electric transport and suggested collaboration with China to establish EV charging corridors and deploy electric heavy vehicles linked with Gwadar Port operations. He further proposed expanding ethanol fuel production using Pakistan’s sugarcane resources to reduce dependence on imported fossil fuels.

Renewable energy expert and wind power developer Irfan Ahmed said wind energy curtailment in Sindh was causing major financial losses and damaging investor confidence in Pakistan’s renewable energy sector. He stated that weak transmission infrastructure, shrinking industrial demand and lack of grid modernization were the main reasons behind continued renewable energy curtailment.

He recommended integrating renewable energy with underutilized nuclear power plants such as K-2 and K-3 to stabilize the grid and increase renewable penetration. He also called for provincially integrated energy plans, local manufacturing of wind towers and electrical systems, and adoption of concrete wind towers to reduce project costs and increase project life spans.

Kamil Maqsood, Senior Advisor and Team Lead for Policy and Strategy and Power Planning, said several projects were already underway to address transmission bottlenecks and improve renewable energy integration, including utility-scale battery storage systems, transmission line upgrades and advanced metering infrastructure deployment.

He said around two million smart meters had already been installed and emphasized the importance of demand-side management regulations, integrated planning frameworks and private sector participation in distribution companies. He identified batteries, transmission systems, smart meters, charging infrastructure and grid digitization as major investment opportunities for Chinese investors.

Maqsood further stressed the need for integrated energy planning and improved coordination among institutions to support cross-sectoral energy integration and optimize investments in the renewable energy sector.