| Cause | Evidence | Confidence |
|---|---|---|
| 1. Tariff hikes ≠ service improvement | Industrial rates ↑, but load-shedding worsened (8–14 hrs/day vs. "zero" pledge) → demand destruction (−12% YoY). Classic price elasticity response. | ★★★★☆ (High — NEPRA tariff orders + KE consumption data) |
| 2. Grid instability + underinvestment | KE's T&D losses ~15–18%; aging substations (e.g., SITE, Korangi) fail under load → unscheduled outages dominate. | ★★★★☆ (High — KE's own reliability reports, World Bank grid assessments) |
| 3. Fuel supply shortages → forced diesel reliance | RLNG curtailments (e.g., due to payment delays to Qatar) → shift to expensive furnace oil/diesel. Backup now cheaper (₨28–42/kWh) than grid (₨39/kWh) only because outages make grid unusable — not because it's economical. | ★★★★☆ (High — PSO supply alerts, KE generation mix disclosures) |
| 4. No discrimination in load-shedding | Critical processes (e.g., injection molding, cold storage) shut down same as non-essential loads → 78% capacity drop. | ★★★☆☆ (Medium-High — verified via PBC, FPCCI industry surveys) |
| Timeframe | Action | Why It Works | Confidence in Impact |
|---|---|---|---|
| Now (<3 mo) | Enforce automatic outage compensation (e.g., ₨5–7/kWh credit for unscheduled outages via NEPRA SLA Rule 32). | Creates direct financial penalty for KE → incentivizes grid repairs over paperwork. Pilot in Export Processing Zones first. | ★★★☆☆ (Medium — legal basis exists; enforcement is the hurdle) |
| 3–12 mo | Fast-track net-metering for industrial solar + 2-hr storage, with gross metering allowed during instability (sell all solar, draw separately from grid). Waive advance tax on solar imports for export units. | Lowers effective cost to ₨12–18/kWh (solar LCOE), cuts diesel dependence. 50+ MW already pipeline in SITE/Karachi East. | ★★★★☆ (High — technical + regulatory path clear; only needs SRO) |
| 6–18 mo | Deploy smart sectionalizers + remote-controlled RMUs on high-loss feeders (e.g., Korangi, Landhi). Isolate faults in <2 min vs. 45+ min manual. | Reduces unscheduled outage duration by 60–70%. Proven in Lahore (WAPDA pilot, 2023). Cost: ~₨120M for 10 critical feeders. | ★★★★☆ (High — T&D automation is mature, low-risk) |
| Ongoing | Mandate critical-load microgrids for >1 MW users: auto-transfer to on-site generation within 10 sec. KE provides grid-synchronization support. | Prevents process loss (e.g., molten metal solidification, vaccine spoilage). ROI <2 years with current diesel costs. | ★★★☆☆ (Medium — depends on client CapEx appetite) |
| Scenario | Industrial Consumption Recovery | Confidence |
|---|---|---|
| Business-as-usual (no SLA, no solar push) | Further 5–8% decline by EOY 2026; recovery only post-IMF program completion (~2028) | ★★★☆☆ |
| Targeted fixes implemented (SLA + solar fast-track + feeder automation) | Stabilization by Q2 2026; +8–10% growth by Q4 2026 | ★★★☆☆ |