NEPRA approves ISMO Integrated System Plan 2025‑35, omits $900 m BESS and K‑Electric 2028 transmission line
The National Electric Power Regulatory Authority (NEPRA) has cleared the ISMO Integrated System Plan (ISP) for FY2025‑35 but excluded the proposed battery storage investment and a key K‑Electric transmission line, signalling tighter regulatory scrutiny on power‑sector expansion.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Power sector faces delays and uncertainty as NEPRA excludes BESS and K‑Electric line, leading to a Don't buy bias for related stocks.
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Desk call: Do not buy · Negatively affected
- PowerNegatively affected
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Sectors: Power — Negative · Do not buy. PSX tickers: KEL, HUBC. Power sector faces delays and uncertainty as NEPRA excludes BESS and K‑Electric line, leading to a Don't buy bias for related stocks.
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Open on Business Recorder## Regulatory approval of ISP‑2025‑35
The National Electric Power Regulatory Authority (NEPRA) has given its nod to the Independent System and Market Operator’s (ISMO) Integrated System Plan (ISP) covering FY2025‑35. The approval is limited to the revised Base/Recommended Case of the Indicative Generation Capacity Expansion Plan (IGCEP)‑2025 and the updated Transmission System Expansion Plan (TSEP)‑2025, subject to a set of observations and directions issued by the regulator.
## Exclusions and key revisions
NEPRA specifically excluded two major items from the approved plan: - A proposed USD 900 million Battery Energy Storage System (BESS) investment, which NEPRA said requires further technical and economic justification. - The K‑Electric transmission line slated for commissioning in 2028, which will now be omitted from the revised Base/Recommended Case.
The regulator also directed ISMO to treat the Riali‑II Hydropower Project as a committed asset, noting its 90 % physical progress.
## Cost and capacity outlook
The approved ISP‑2025 envisions a present‑value cost of USD 47.08 billion over the planning horizon. It incorporates the 269 MW JCM wind‑solar hybrid project at Dhabeji, reducing the overall wind capacity and marginally lowering the cost from USD 47.13 billion.
The original IGCEP projected peak demand of 35,521 MW by 2035, with total installed capacity reaching 62,657 MW. However, NEPRA raised concerns over the demand forecasts, citing recent declines in grid demand, higher rooftop solar penetration, captive generation, and consumer‑level storage.
## NEPRA’s directives
NEPRA instructed ISMO to: - Strengthen demand forecasts through consultation with DISCOs and inclusion of actual spatial demand data, behind‑the‑meter solar, captive generation, net‑metering and consumer‑level BESS. - Provide a comprehensive technical and economic study for the BESS proposal, covering sizing, technology, location, reliability and cost‑benefit analysis. - Align future transmission planning with DISCO investment plans and the National Grid Company (NGC) transmission plan, and to justify any deviations. - Ensure greater transparency by publishing all input parameters, assumptions and modelling criteria, and to reconcile tariff impact assessments with the Pakistan Power Management Company (PPMC). - Subject future ISPs to independent third‑party technical review before submission.
## Market implications
The regulator’s decision to drop the BESS investment and the K‑Electric line signals tighter scrutiny on large‑scale power‑sector projects and may delay expected capacity additions. Companies reliant on new transmission infrastructure or battery storage projects could face postponed revenue streams, while firms with already‑committed projects may see a relative advantage.
## Outlook
NEPRA’s emphasis on realistic demand forecasting and transparent planning could lead to a more disciplined rollout of generation and transmission assets. Stakeholders will be watching for ISMO’s response to the BESS study requirement and for any revised timelines for the K‑Electric transmission line.