KARACHI: As per latest data released by National Electric Power Regulatory Authority (NEPRA), total power generation during February 2019 declined 4.0 percent to 6,687 Gwh against 6,979 Gwh in the corresponding month of last year.[the_ad id=”31605″]“Lower power generation during the month is owing to decline in Furnace Oil (RFO) and RLNG based generation which plummeted 81 percent YoY and 16 percent YoY, respectively during February 2019. However, power generation through Hydel & Coal increased 12 percent YoY and 6.0 percent, respectively,” an analyst at Pearl Securities noted.
On a cumulative basis, total power generation for the country during July-February 2018-19 (8MFY19) clocked in at 79,611 Gwh, depicting a surge of 4.0 percent. “The accretion in power generation has been led by notable rise in Coal/RLNG based electricity generation (72percent/117percent), thereby incrementing their share in country’s power mix from 18 percent in 8MFY18 to 34 percent during the same period in current fiscal year,” analyst said.
As expected, RFO based generation in February 2019 witnessed a hefty decline of 81 percent YoY to 112 Gwh on the back shift in government’s policy towards alternative sources of power generation (coal and RLNG) which are relatively cheaper and more efficient than FO based independent power producers (IPP’s).
Coal based electricity generation increased 6.0 percent YoY to 1,168 Gwh in February as compared to 1,102 Gwh during the same month last year. Cumulatively, in 8MFY19, notable rise of 72 percent was witnessed which indicates government’s resolve to opt for low cost power generation.
Hydel power generation improved 12 percent YoY to 1,523Gwh in February, whereas on a MoM basis, hydel generation improved significantly (219 percent) as heavy rainfall across the country restored water level in the reservoirs. However during 8MFY19, the growth in hydel generation was a tepid 4.0 percent.
According to NEPRA, cost of generation in February 2019 for coal registered a significant increase of 36 percent-YoY/16 percent-MoM to Rs7.89/Kwh whereas power cost from gas rose 23 percent-YoY/14 percent-MoM to Rs5.79/Kwh. Cost for RFO-based electricity generation increased 17 percent YoY but fell 14 percent MoM to Rs11.91/Kwh.
With regards to electricity generation mix in February 2019, share of hydel based power in the increased to 23 percent (+4pps) while that of RLNG arrived at 17 percent (-2pps). RFO share in February 2019 plunged significantly to a meager 2.0 percent versus 8.0 percent in February 2018, whereas share of gas and coal almost remained stagnant at 24 percent and 17 percent, respectively.
“Going forward, we expect power generation from RFO based plants to depict slender increase from current levels in the upcoming months as demand peaks in the summer and government prioritizes offloading of RFO production from local refineries. Moreover, RLNG based generation is also expected to increase due to rise in LNG imports. However, in the long run, RFO based generation will continue to decline as new LNG/coal based power plants become fully operational and hydel power generation improves owing to government’s strong focus on new water reservoirs,” Pearl Securities report added.