The clash took place when the protesters were prevented from marching towards the Mangla hydropower station on the Jhelum river. The protest was organised by the Mirpur Citizens Action Committee.
Footage on television showed policemen firing in the air and using teargas to disperse the protesters.
Both sides hurled stones at each other.
The protesters were later stopped about two kilometres from the power project and officials assured them that power outages would be curtailed.
Residents of Islamabad have been hit by power cuts of 12 hours or more since last week while parts of the nearby garrison city of Rawalpindi had power for only four hours over the weekend.
The situation has been exacerbated by the soaring summer temperatures.
On Friday, Lahore experienced its hottest day in 29 years as the temperature rose to 47 degrees Celsius.
Caretaker Prime Minister Mir Hazar Khan Khoso chaired a high-level meeting this morning to review the energy crisis, an official statement said.
Khoso also directed officials to complete formalities for connecting a new 56.4-MW wind power project at Jhimpir in Sindh to the national grid within 48 hours.
However, the caretaker government has largely failed in its efforts to address the energy crisis.
Government departments have largely ignored Khoso's directive to switch off all air conditioners from May 15.
Over the past few days, at least four key power plants have tripped because of overload.
Independent power plants across the country have a generation capacity of 7,687 MW but produced only 5,024 MW as most of them were closed due to lack of fuel.
Nine of the 26 independent power plants were closed over the weekend. Many plants have no money to buy fuels as government departments and ministries have not paid their bills, resulting in huge "circular debts".
Over the weekend, the average generation of electricity was 10,200 MW while the average demand was 15,000 MW.
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