by: Farhan Mujeeb
Pakistan’s power sector is undergoing a rapid transformation, driven by an influx of solar energy from rooftop solar PV installations.
While this shift aligns with the country’s renewable energy targets, it also presents significant challenges for grid stability, economic dispatch, and real-time energy adjustments. Without a structured balancing market, Pakistan risks increased system inefficiencies, renewable energy curtailment, and economic losses.
The integration of intermittent solar power creates supply-demand mismatches, leading to frequency fluctuations and costly grid interventions. The duck curve phenomenon—where solar reduces daytime demand but creates steep ramp-up needs in the evening—is becoming a growing concern. Additionally, excess solar generation during off-peak hours often leads to curtailment, where valuable renewable energy goes unused. Currently, Pakistan’s Single Buyer Market Model, managed by the Central Power Purchasing Agency (CPPA-G), lacks a real-time balancing mechanism. Without a dedicated market for short-term flexibility services, adjustments rely on expensive and inefficient manual interventions, often increasing electricity costs for consumers.
A competitive balancing market can address these challenges by providing real-time price signals and procuring flexibility services from a mix of technologies, including Battery Energy Storage Systems (BESS).
BESS can play a pivotal role in supporting grid stability, especially in a high-renewable energy environment. By providing fast-response frequency regulation, peak load management, and energy arbitrage, BESS can mitigate the variability of solar power. According to Dr. Tariq Mehmood, an energy expert and professor at the National University of Sciences and Technology (NUST),
“Battery storage technology has proven itself as a key enabler for renewable energy integration worldwide. Pakistan must take proactive measures to incentivize its deployment to ensure a stable and reliable power system.”
His insights underscore the necessity of modernizing Pakistan’s grid infrastructure and creating incentives for storage investments.
The benefits of BESS are vast. It can respond within milliseconds to grid fluctuations, reducing reliance on expensive spinning reserves. Excess solar energy can be stored during the day and discharged during evening peaks, flattening demand curves. Instead of wasting surplus solar energy, BESS can absorb excess supply and release it when needed. Moreover, BESS can provide backup power and participate in the balancing market, ensuring real-time adjustments at minimal cost.
Dr. Ayesha Khan, a senior policy advisor in the renewable energy sector, highlights:
“Pakistan needs an integrated approach where policy frameworks, financial incentives, and technological advancements work together to support energy storage and grid flexibility.”
To fully harness solar energy and BESS potential, Pakistan must introduce a well-structured balancing market and regulatory framework. Creating a transparent, competitive market for procuring short-term flexibility services is essential. Regulatory support must be provided to recognize energy storage as a market participant, allowing it to offer ancillary services. Smart grid development, including SCADA and metering infrastructure upgrades, should be prioritized to enable real-time dispatch and grid optimization. Financial mechanisms, such as capacity payments, should be introduced to encourage private-sector investment in BESS. Additionally, engaging rooftop solar owners in grid balancing through time-of-use tariffs and virtual power plant models can enhance efficiency and sustainability.
Pakistan stands at a crossroads. Without market-driven reforms, increasing solar penetration could lead to inefficiencies, instability, and economic losses. By implementing a balancing market and promoting BESS adoption, the country can ensure a reliable, cost-effective, and sustainable energy future. It is time for policymakers, regulators, and industry leaders to act decisively.
The future of Pakistan’s power sector depends on smart market mechanisms that enable the seamless integration of renewable energy.
