For decades, Pakistan treated energy efficiency and conservation as peripheral concerns-desirable, but never urgent. Power shortages, circular debt, and rising fuel import bills dominated the debate, while the cheapest “fuel” of all-saved energy-remained largely ignored. Between 2020 and 2025, that mindset began to shift. Slowly at first, and then decisively, the country recognised energy efficiency not as an environmental luxury but as an economic and national security imperative. Without effective demand-side management, peak energy demand would continue to rise unchecked, putting additional strain on the system.
The period after 2020 marked the formative years of establishing an institution. Although the National Energy Efficiency and Conservation Act (NEEC Act) was passed in 2016, progress prior to 2020 had been dormant. Pakistan laid the foundations for operational reform: a dedicated budget was allocated, human resource regulations were formulated, and internal staffing for the National Energy Efficiency and Conservation Authority (NEECA) was established. Early interventions, including the UNEP-supported energy-efficient lighting project, helped phase out incandescent bulbs and strengthen market and technical frameworks.
By 2022, structural weaknesses in Pakistan’s energy model had become impossible to ignore. Soaring global fuel prices, IMF conditionalities, and a deepening balance-of-payments crisis exposed the unsustainability of the energy sector. Energy efficiency finally gained attention-not for climate diplomacy, but because Pakistan could no longer afford inefficiency. Prime Minister Shahbaz Sharif extended his patronage to energy efficiency, recognising that expanding generation capacity without curbing demand was futile, even as practical reforms were still in their early stages.
Under this patronage, the year 2023 marked a decisive turning point. The NEEC Policy 2023 introduced comprehensive reforms: energy efficiency was formally treated as a “first fuel,” national energy-intensity reduction targets were set, a 2023-2030 Action Plan was launched, NEECA’s mandate was strengthened, the Energy Conservation Building Code (ECBC-2023) was updated, and appliance standards and labelling were expanded. Pakistan emerged as one of the fastest improvers in the region, reflecting a fundamental shift in the national energy paradigm.
Pakistan emerged as one of the fastest improvers in the region, reflecting a fundamental shift in the national energy paradigm.
According to the World Bank RISE Report, Pakistan has been one of the region’s fastest improvers, strengthening legal, institutional, and regulatory frameworks, especially after the 2023 NEEC Policy. While energy intensity remains high, these reforms reflect a rapid shift toward structured, measurable, and internationally recognised energy efficiency governance.
The uphill task of implementation at the national and provincial levels under the dynamic Power Minister, Sardar Awais Ahmed Khan Leghari, was initiated. Public buildings began energy audits, provincial adoption of ECBC-2023 was advocated, appliance labelling gained traction, and an innovative electricity tariff for EV Charging Stations/Battery Swapping Stations created strong behavioural incentives.
Energy efficiency is not merely about kilowatt-hours saved. It directly affects fuel import dependence, circular debt, fiscal space, industrial competitiveness, and emissions reduction without constraining growth. Every unit of energy saved is a capacity the country does not need to finance, fuel, or subsidise.
Looking ahead, Pakistan’s success depends on embedding energy efficiency across the economy-from industrial modernisation and urban planning to smart grids and digital energy management. Expanding financing for retrofits, unlocking ESCO markets, and integrating efficiency with renewables can amplify savings and reduce reliance on imported fuels. Tariff policies that reward efficiency and penalise waste can create strong incentives while curbing costly fuel imports, helping stabilise the power sector and reduce fiscal pressure. Sustained efficiency gains could boost industrial competitiveness, free fiscal space, enhance climate resilience, and support a transition to a lower-carbon economy. If implemented effectively, energy efficiency can become a strategic driver of sustainable growth and national prosperity, delivering benefits well beyond the electricity meter.
The writer has worked as a Sustainable Energy Sector Reform Expert with the Japan International Cooperation Agency/Economic Reform Unit, Ministry of Finance.
The writer is a freelance columnist.