Assessing the Role of Policy and Regulatory Frameworks in Pakistan’s Energy Crisis: Developing an Alternative Model for Sustainable Transformation

Abstract

This study investigates how Pakistan's energy policies and regulations shape the sector, focusing on governance hurdles and outlining more sustainable pathways. Using an explanatory sequential mixed-methods approach, it compares secondary quantitative indicators from national energy publications with primary qualitative insights drawn from semi-structured interviews and focus groups, thus placing top-level policy ambitions beside everyday implementation challenges. The analysis shows that, while the Alternative and Renewable Energy Policy 2019, the National Electricity Policy 2021, and pledges under the Paris Agreement and SDG 7-follow global sustainability norms, real-world outcomes remain disappointing owing to fragmented institutions, uncertain rules, poor finances, and limited technical know-how. Overlapping responsibilities at NEPRA, AEDB, WAPDA, CPPA-G, and provincial authorities breed duplication, delays, and skewed incentives. Meanwhile, circular debt exceeding PKR 2.6 trillion compounds inefficiencies in procurement, billing, subsidies, and cost recovery, undermining public confidence. In addition, ageing infrastructure and a lack of trained staff slow grid upgrades and the smooth entry of renewables. Local actors warn that top-down planning ignores community priorities and call for decentralized, inclusive models such as solar mini-grids backed by capacity-building and capital. Drawing on the frameworks of Institutional Rational Choice and fiscal federalism, this article contends that Pakistan's enduring energy shortfall is, at its core, a crisis of governance. Absent institutional coherence rooted in stable rules, realistic finances, coordinated planning, strengthened capacities, and decentralization that centers on communities, the country's long-term energy goals will remain out of reach. The analysis therefore puts forward a comprehensive governance model that includes a centralized Energy Transition Authority, clearer regulatory pathways, open tariff-setting, capacity-building initiatives, and planning frameworks grounded in local priorities.