In Pakistan, bringing a feasible innovation to a government department almost always meets the same fate: delay, rejection, or an indefinite review. The instinct is to stall rather than to test. The ready-made answer is familiar: “we tried this before, it failed.”
Case closed.
Nowhere is this reflex more entrenched than in the power sector; a microcosm of Pakistan’s broader financial and governance dysfunction. Even the most rational proposals, backed by evidence and global precedent, are brushed aside before a pilot can begin. Ideas that thrive in Africa, Europe and Asia often die here before reaching testing stage. True, our economic realities are unique. But so are those of every country that has successfully adapted global frameworks to local needs. If we can import governance models, why not adapt the solutions too?
A Grid Stuck in the Past, Slipping into Decay
Speak to anyone who has worked in Pakistan’s power sector for over a decade, and they will tell you that the stories don’t change. From the outset, utilities and distribution companies have treated decentralised solar as a nuisance rather than an opportunity. Battery storage, which in other markets strengthens the grid by providing ancillary services, remains sidelined. Market reforms like the Competitive Trading Bilateral Contract Market (CTBCM) are still incomplete years after being announced. Even modest & rationale ideas; feeder outsourcing, regional power trading, or monetising idle capacity are endlessly discussed but never tried.
The solution does not require reinventing the wheel but establishing a regulatory sandbox - a safe space for controlled pilots under temporary, flexible rules
The result is stagnation turning into decline. On one side, the system still runs like a Nokia 3310: reliable for basic functions, but unable to support anything new. On the other, consumers are already on iPhone 16 Pros; installing solar, experimenting with storage, running AI-enabled energy management. This widening gap doesn’t just freeze progress, it erodes trust and resilience. Forcing these two worlds to interact is like plugging a rotary phone into a fibre-optic network. And the reason isn’t that the technology doesn’t work — it’s that the system built around it, or better said the ecosystem, refuses to change.
Not a Technology Problem
The decay in Pakistan’s power sector is not about lagging technology. The tools exist … and in many cases, households and industries are already using them. The real barrier lies in governance. Monopoly rights remove incentives to adapt, regulatory approvals drag on for years, and pilots are treated as permanent reforms rather than controlled experiments. As one insider put it, “policy culture rewards avoiding blame more than delivering success.”
In my own experience with TESCO, a proposal to monetise a few additional hours of surplus electricity each day was dismissed as “peanuts” compared to the trillion-rupee circular debt. Around the same time, a demand-response pilot in an Islamabad educational institution — where the campus would cut demand during fewer than 100 peak hours in exchange for a fixed annual incentive was brushed aside with the warning: “Kamil, why do you want us to get booked by NAB?” Even dynamic pricing, a tool used worldwide to balance supply and demand, has never been seriously tested here.
These are not futuristic experiments. They are feasible, rational innovations already proven elsewhere. In Pakistan, they rarely make it past the drawing board.
The Cost of Standing Still
And the cost of shelving such ideas is not abstract; it shows up in every electricity bill. Pakistan is now paying for megawatts it doesn’t use, financing plants that sit idle, and driving consumers away from the grid.
“The price of resisting innovation in a sector that bleeds money while demand continues to fall.”
This year alone, more than PKR 1 trillion will be spent on capacity payments — money paid to power plants simply for being available, even when they produce no electricity. Nearly the same amount will go into subsidies. Yet despite this mountain of spending, consumption is shrinking. High tariffs have pushed industries and households to cut back or defect to rooftop solar, leaving even more installed capacity idle.
The paradox is painful: as consumers pay more, they use less, and the system becomes even less efficient. Every kilowatt-hour that could have been saved through demand-response, or absorbed through storage and dynamic pricing, is instead lost. Every reform delayed is another year of compounding debt and eroding trust.
Elsewhere, these same tools are not luxuries but operating norms. Storage is paid to stabilise grids. Dynamic pricing helps align demand with supply. Peer-to-peer trading allows small producers to sell their surplus. Pakistan, by contrast, remains locked in a cycle of high spending and low delivery.
Sandbox for Solutions
The irony is that none of this requires reinventing the wheel. The technology exists, the examples exist, and to an extent even capital exists. What is missing is the willingness to test; to try reforms in a controlled way without treating every idea as a permanent change in law.
That is precisely what a regulatory sandbox offers: a safe space for pilots under temporary, flexible rules. Instead of burying ideas in files, regulators can define clear objectives, waive a few restrictive rules, and allow 6–12 month live trials with transparent results.
We already know this can work in Pakistan. The State Bank’s fintech sandbox showed that innovators could operate under supervision, within guardrails, and deliver insights without requiring sweeping legislative overhaul. NEPRA could do the same for power sector: run small pilots, publish results, and scale what works.
High-impact, low-regret pilots are waiting at our doorstep: ancillary services from hybrid inverters and storage, peer-to-peer trading in housing societies, dynamic peak pricing, dynamic line rating to unlock hidden transmission capacity, and feeder outsourcing tied to performance incentives. Each could be trialled quickly, with minimal risk, but with lessons that could reshape the sector.
The Need to Stop Saying No
Pakistan is not short of ideas, technology, or even investors. What it lacks is permission. Every month that pilots are delayed, the country spends billions on idle megawatts while households and industries bear rising costs.
A sandbox is not a luxury; it is the only realistic way to bring innovation into the power sector without triggering political paralysis. If the State Bank could do it for fintech, NEPRA can do it for power.
The question is no longer whether Pakistan can innovate. It is whether we can stop saying “no” long enough to keep the lights on at a price people can actually afford.