Competitiveness hinges on affordable, sustainable energy

Reforms must produce commercially viable and reliable energy system capable of supporting productive industry Competitiveness hinges on affordable, sustainable energy Pakistan's export-oriented textile sector is facing a defining energy challenge as the country moves towards a more competitive power market while global buyers impose increasingly stringent requirements for sustainability, traceability and environmental performance. Industry faces the challenge of balancing reliable, affordable energy with pressure to improve efficiency, integrate renewables and cut emissions. These issues came under discussion at a multi-stakeholder dialogue titled "Threads of Accountability: Traceability and Energy Policy for Textile Competitiveness", which brought together textile manufacturers, power-sector professionals, sustainability and verification specialists, business representatives and renewable-energy stakeholders. The central question was how Pakistan's textile industry can participate in a transforming power market while maintaining reliable energy supplies and meeting increasingly demanding global sustainability standards. Participants stressed that successful energy transition would require more than simply opening the electricity market or increasing renewable-energy capacity. Transparent pricing, reliable networks, commercially workable market mechanisms, credible environmental data, appropriate risk allocation and stronger coordination among industry, regulators, utilities, financiers and international buyers would all be necessary. A major focus of the dialogue was Pakistan's emerging Competitive Trading Bilateral Contract Market (CTBCM) and its implications for industrial consumers. Muhammad Usman Bin Ahmed, Energy Transition Officer at Alternate Development Services (ADS), examined the practical requirements for industrial participation, including eligibility, competitive procurement, bilateral contracting and wheeling. He also highlighted several commercial and operational issues associated with the emerging market, including the Use of System Charges (UoSC), security and performance guarantees, SMP exposure, balancing and settlement, hybrid bulk power-consumer arrangements and firm capacity requirements for renewable-energy supply. He presented a CTBCM readiness toolkit to help industrial consumers understand the requirements and practical considerations of participating in the competitive market. The commercial viability of wheeling emerged as a key concern. Analysis presented at the dialogue noted that Nepra's September 2026 determination places effective UoSC at Rs9.46 per kWh for B-3 consumers and Rs12.32 per kWh for B-4 consumers, including Rs3.23 per kWh in distribution-of-subsidy surcharge. Participants noted that such charges would be an important consideration for industries evaluating alternative electricity procurement arrangements. A power-market panel featuring Syed Iftikhar Ali, power-sector professional, Saham Qamar, Director of Power Matrix, and Hasnat Khan, Senior Vice Chairman of the Pakistan Solar Association, examined network capability, metering and settlement infrastructure, transmission constraints, UoSC and the predictability required by industrial consumers. The discussion highlighted that industrial participation in a competitive market would require not only a regulatory framework allowing consumers to participate but also adequate infrastructure and commercial certainty to make such participation practical. The wider cost structure of Pakistan's power sector was also examined. Rehan Javed, Head of the Energy Advisory Committee at FPCCI, highlighted major cost pressures within the country's generation portfolio, citing a combined Rs2.899 trillion increase in the disclosed costs of five major hydropower projects. Individual project cost overruns ranged from 21% to 285%. Dasu was cited as an example, with its approved cost of Rs486 billion compared with the current cost of Rs1.737 trillion, representing a 257% increase. For the textile industry, the energy challenge extends beyond electricity. Asim Riaz, Energy Adviser at Aptma, linked power-market reform with the sector's wider competitiveness challenges, discussing changing national and global energy markets, gas-market liberalisation, captive generation, energy efficiency, renewable integration and the economics of industrial energy supply. His intervention highlighted that decisions involving renewable energy, captive generation, efficiency and electrification must ultimately make economic sense for manufacturers. Energy costs and reliability are directly linked with textile production and export competitiveness. Higher electricity or gas costs can affect manufacturing margins, while unreliable supplies can disrupt production and increase the cost of maintaining alternative sources of power. At the same time, global textile markets are increasingly demanding evidence of sustainable production, credible carbon information and traceable supply chains. ESG compliance, traceability and measurement, reporting and verification are therefore becoming important elements of export competitiveness. Participants identified fragmented environmental data, limited verification capacity and inconsistencies in reporting as persistent challenges. They stressed the need to connect factory-level operational information with credible sustainability claims made by textile exporters. This means that energy management is increasingly connected with access to international markets because manufacturers must be able to demonstrate the environmental benefits of efficiency measures and renewable-energy investments through credible data and documentation. ADS Chief Executive Amjad Nazeer calls for moving beyond compliance-only relationships towards shared investment, technical assistance, long-term procurement arrangements and credible monitoring and reporting mechanisms. Participants also stressed that decarbonisation should begin with measurement, energy efficiency and process optimisation, including waste-heat recovery, before industries move towards electrification, renewable generation and storage, where appropriate. Improving efficiency can simultaneously reduce energy costs and emissions while strengthening the economic case for future renewable-energy and storage investments. The dialogue concluded that Pakistan's textile sector needs more than access to new electricity procurement models and renewable-energy options. Transparent pricing, reliable networks, credible data, appropriate risk allocation, storage and firm-capacity solutions, and stronger institutional coordination would all be required to make the transition commercially sustainable. The discussion ultimately connected Pakistan's energy policy with its export strategy. Power-market reform that fails to provide reliable and competitively priced energy could undermine industrial competitiveness, while a renewable-energy transition without adequate storage, network planning, market mechanisms and credible data could create additional technical and financial challenges for manufacturers. The writer is a freelance journalist