By Muhammad Zulqarnain

China's diversified approach to energy development offers practical lessons that could help Pakistan build a more reliable, affordable and industry-oriented power sector through a balanced energy mix, stronger local manufacturing, concessional financing and closer integration of energy policy with industrial growth, experts say.

Speaking to Wealth Pakistan, Ammara Aslam, Assistant Research Manager at the Policy Research Institute for Equitable Development (PRIED), said China's energy success is built on multiple complementary pillars rather than dependence on a single source of power.

She said one of the defining strengths of China's strategy is its diversified energy mix.

"China did not abandon conventional energy overnight. Instead, it gradually diversified its power generation by combining coal, hydropower, nuclear energy, wind and solar," she said.

According to Aslam, China's electricity generation currently draws on multiple energy sources, with solar accounting for about 30.8%, wind 16.4% and coal 32.4%, while renewable energy, including hydropower, represented around 60% of the country's generation mix in 2025.

She said another important lesson is China's gradual policy shift toward green and alternative energy while maintaining energy security through conventional sources during the transition.

Aslam also highlighted China's decentralised governance model, under which provincial and local governments play an important role in energy planning, generation, pricing, distribution and financing.

She said such institutional flexibility has enabled faster implementation of energy projects and better alignment with local economic needs.

Drawing a comparison with Pakistan, Aslam said China's electricity demand is largely driven by industry, whereas Pakistan's demand is dominated by household consumption.

"Contrary to Pakistan, where nearly half of electricity demand comes from domestic consumers, China follows an industry-centric consumption model," she said.

She added that China has supported industrial growth by investing heavily in utility-scale renewable energy.

According to Aslam, China has installed around 1,380 gigawatts of utility-scale solar capacity, whereas Pakistan has only about 780 megawatts and lacks adequate battery storage systems to support large-scale renewable integration.

She also identified local financing as another major strength of China's energy model.

Public-private partnerships and domestic investment, she said, have reduced dependence on external financing while helping maintain greater price stability for consumers.

Amina Shahab, Research Associate for Energy Transition at PRIED, told Wealth Pakistan that Pakistan can realistically adopt several elements of China's model without attempting to replicate it wholesale.

She said one immediate priority should be developing local manufacturing capacity for solar equipment.

Pakistan currently imports most of its solar infrastructure, making renewable energy projects more expensive because of import costs and taxation, she said. Expanding domestic assembly and component manufacturing would lower costs while creating new industrial opportunities.

Shahab also called for replacing high-interest commercial borrowing with concessional financing and targeted government support for utility-scale renewable energy projects.

According to her, Pakistan should also rethink the role of renewable energy by treating it not merely as an environmental objective but as a catalyst for industrial development.

She suggested introducing dedicated industrial renewable tariffs to provide stable and affordable electricity to manufacturers using renewable energy, while establishing utility-scale solar parks close to industrial estates to reduce transmission losses and improve supply reliability.

She further recommended redirecting government incentives from broad consumption subsidies towards supporting solar manufacturing, renewable financing and industrial investment.

Experts believe Pakistan's energy transition should extend beyond increasing renewable generation alone. They say China's experience demonstrates the importance of combining a diversified energy mix, local manufacturing, supportive financing, decentralised governance and industry-focused policies to create a power sector that strengthens both economic competitiveness and long-term energy security.

Credit: INP-WealthPk