Electricity in Pakistan is generated, transmitted and distributed by two vertically integrated public sector companies, first one being Water and Power Development Authority (WAPDA) responsible for the production of hydroelectricity and its supply to the consumers by electricity distribution companies (DISCOS) under the Pakistan Electric Power Company (PEPCO) being the other integrated company. Currently, there are 12 distribution companies and a National Transmission And Dispatch Company (NTDC) which are all in the public sector except Karachi Electric in the city of Karachi and its surrounding areas. There were around 36 independent power producers (IPPs) that contribute significantly to the electricity generation in Pakistan. As of 2025, the Government of Pakistan is focusing to re-structure the agreement with IPPs and facilitate the end users.

As of 2022, 95% of Pakistan's population had access to electricity. Pakistan aims to generate 60% of its electricity from renewable sources, and has set targets for reduction in greenhouse gas emissions. It is already facing a 'solar boom', adding an estimated 17 GW worth of clean solar energy to the grid in 2024 alone, partly due to availability of cheap Chinese solar panels and tax exemptions from the government.

Following 2022 dearth of imported LNG in Pakistan, the country indicated it would quadruple its coal power plants, which use domestic coal. Electricity generation capacity from coal has seen significant growth in recent years, owing to its utilization of cheap domestic coal to meet the country's rising electricity demands. The frequent increases in electricity, natural gas, petrol, and diesel prices are substantial contributors, driving inflation and consequently decreasing industrial production.

Pakistan's electricity sector is a developing market. For years, the matter of balancing the country's supply against the demand for electricity had remained a largely unresolved matter. The country faced significant challenges in revamping its network responsible for the supply of electricity. Electricity generators were seeking a parity in returns for both domestic and foreign investors indicating it to be one of the key issues in overseeing a surge in electricity generation when the country was facing growing shortages. Other problems included lack of efficiency, rising demands for energy, and political instability. Provincial and federal agencies, who are the largest consumers, often do not pay their bills. At one point electricity generation had shrunk by up to 50% due to an over-reliance on fossil fuels. The country was hit by its worst power crisis in 2007 when production fell by 6000 MW and massive blackouts followed suit. Load shedding and power blackouts had become severe in Pakistan before 2016. Economic Survey of 2020-21 indicated that Pakistan's installed capacity to generate electricity had surged up to 37,261 MW by July 2020, which stood at 22,812 MW in June 2013, showing the growth of 64% over 7 years.

According to the Pakistan Economic Survey 2024–25, the installed electricity generation capacity reached 46,605 MW in March 2025, reflecting an increase of 1.6% from previous year. The electricity transmission network, currently, has the capacity to handle more than 53,000 MVA. In FY 2024, Pakistan generated 127,523 GWh of electricity, of which 54.26% was generated from hydel, nuclear or renewable energy sources. More than 50% of the electricity was generated from hydropower, renewable or nuclear power plants. Although fossil fuels represent 55.6% of installed capacity, they are underutilized and actually only responsible for 46.3% of electricity generated.

Pakistan’s power sector continues to face significant challenges, with underutilization of generation capacity remaining a core issue despite recent renegotiations of independent power producers’ (IPPs) power purchase agreements. In recent years, Pakistan has added more than 2,813 MW of capacity to the grid owing to domestic solar net metering.

The country’s overall power consumption declined by 3.6% in FY 2024-25, attributed to increased power tariffs, off-grid solar solutions and decreased industrial activity. with total consumption standing at 86% of power generated. During FY2024, total electricity consumption stood at 111,110 GWh, of which sector-wise share is as follows:

Recent reforms include the unbundling and corporatization of the Water and Power Development Authority (WAPDA) into 10 regional distribution companies, 4 government-owned thermal power generation companies and a transmission company, the National Transmission and Despatch Company. The hydropower plants were retained by WAPDA as WAPDA Hydroelectric. All are fully owned by the government. K-Electric Limited (formally known as Karachi Electric Supply Company), which is responsible for power generation and distribution in the Karachi area, is listed on the stock exchanges and is privately owned. Privately owned independent power producers generated 53% of the country's power in FY2016.