In a recent session of Parliament, the Minister for Power, while responding to a question about the energy sector planning, quoted an old Chinese saying: “You cannot discuss the ocean with a well frog.” It was meant to dismiss the criticism by opposition; suggesting that those raising concerns do not see the bigger picture.

But sometimes, the frog inside the well genuinely believes that the well is the ocean, or he might have jumped into a swimming pool considering it as an ocean.

And that is exactly our problem. We think we are planning, seeing the full energy landscape, making data-driven decisions. But the truth is, we are still stuck inside the same old planning mindset. And the well we have mistaken for the ocean is built around one comfortable but misleading idea: the Levelized Cost of Electricity (LCOE).

The IGCEP 2025-35 is an approval away to be submitted to NEPRA and as per publicly available information, it is coming with the same old methodology i.e., LCOE.

Every time a new IGCEP is announced, the hope returns that maybe this time it will be different. That it will be based on better data, sharper modelling, and a more realistic understanding of demand and generation needs. But the same core mistake keeps repeating itself. In this article we shall discuss why this IGCEP is also likely to misguide investment decisions, and what are simplistic workable solutions which can make this document an accurate and reliable planning tool.

LCOE looks neat on paper. One number that tells you the cost of electricity from any project, no matter the technology. It feels scientific. But that is the problem, it only feels that way. In reality, LCOE ignores the most critical parts of our power system. It does not care when electricity is produced, whether it is during peak summer hours or chilly winter nights. It does not care where the plant is located, whether near a load centre or hundreds of kilometres away, where expensive transmission lines will be needed.

And it does not care how the plant contributes, whether it is flexible, dispatchable, seasonal, or completely dependent on weather. It treats all kilowatt-hours as equal, even when the grid does not. On top of that, it hides the real impact of financing terms. A slight change in........

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