Pakistan’s electricity generation recorded a notable increase in July 2026, rising 7% year-on-year to 15,122 GWh, according to an AKD Securities report based on data from the National Electric Power Regulatory Authority (NEPRA).
Generation also climbed 13% month-on-month from 13,431 GWh in June, reflecting stronger seasonal electricity demand. However, the increase in output came alongside higher generation costs, raising concerns about the financial pressure facing the power sector.
Hydel Power Remains Pakistan’s Largest Generation Source
Hydropower continued to dominate Pakistan’s electricity mix during July.
Hydel generation reached 6,019 GWh, accounting for 39.8% of total generation. Output increased 6% compared with July 2025 and was 15% higher than the previous month.
The strong contribution from hydropower highlights the continued importance of water-based generation in meeting Pakistan’s electricity requirements, particularly during periods of elevated seasonal demand.
Coal Generation Records Sharp Increase
Coal-fired power generation registered one of the strongest increases during the month.
Coal generation rose 45% year-on-year to 3,819 GWh, giving it a 25.3% share of the overall generation mix.
Imported coal was the main contributor to the increase, with generation from imported coal surging 90% to 2,169 GWh. Generation from local coal increased 10% to 1,650 GWh.
The growing contribution of imported coal is significant because it can increase exposure to international fuel prices and foreign exchange movements.
Electricity Generation Costs Continue to Climb
Despite higher overall generation, the cost of producing electricity remained a major concern.
Average generation cost increased 17% year-on-year to Rs9.61 per kWh in July. It was also 8% higher than June’s Rs8.91 per kWh.
The increase indicates that stronger electricity production is not necessarily translating into cheaper power. A shift towards relatively expensive fuels could continue to place pressure on the power sector and ultimately consumers.
RLNG Generation Falls as Furnace Oil Rises
The fuel mix showed notable changes across different sources.
RLNG-based generation declined 33% year-on-year to 1,629 GWh, while gas-fired generation dropped 9%.
In contrast, furnace oil generation nearly doubled compared with the same month last year, reaching 215 GWh.
Nuclear power generation increased 9%, while generation classified under the “Others” category rose 20% to 923 GWh.
Higher Output Comes With Greater Cost Pressure
The July figures present a mixed picture for Pakistan’s power sector.
On one hand, the 7% annual increase in electricity generation and 13% monthly rise indicate stronger demand and greater utilisation of the power system. On the other hand, the 17% increase in generation costs highlights the financial challenges associated with the current fuel mix.
The sharp rise in imported coal generation, together with higher furnace oil usage, has contributed to the increase in average generation costs.
Power Sector Faces a Difficult Balancing Act
Pakistan’s power planners will need to carefully monitor the fuel mix in the coming months.
Sustained growth in electricity demand can be positive for generation companies and the wider energy sector, but rising production costs could create additional pressure on consumers and the power sector’s financial position.
For Pakistan, the challenge will be to meet growing electricity demand while increasing the share of cost-efficient domestic and renewable sources and reducing reliance on expensive imported fuels.
The July data therefore points to an electricity sector producing more power, but at a significantly higher cost—a trend that could remain important for tariffs, circular debt and the broader energy outlook.