KARACHI: Pakistan’s overall power generation during March 2019 stood at 7,621Gwh, down 13 percent against 8,741Gwh in the corresponding month of last year, while electricity generation was up 14 percent compared with the preceding month.[the_ad id=”31605″]“Lower electricity generation during the month is primarily due to decline in RFO & RLNG based generation which plummeted 97 percent YoY and 16 percent YoY to 40Gwh and 1,784Gwh respectively during March 2019. However, power generation through hydel increased significantly, up 84 percent to 1,601Gwh during the month,” a report issued by Pearl Securities noted.
On a cumulative basis, total power generation for the country during 9MFY19 (July-March 2018-19) clocked in at 87,232 Gwh, depicting an increase of 2 percent YoY. “The slender rise in power generation has been led by higher RLNG/Coal based generation (+87 percent YoY/+57 percent YoY), thereby incrementing their share in country’s power mix to 34 percent during 9MFY19 from 20 percent during the same period last year,” Pearl Securities report said.
RFO based generation in March 2019 witnessed a hefty decline of 97 percent YoY to only 40Gwh owing to change in government’s policy towards other sources of power generation (coal and RLNG) which are relatively cheaper and more efficient than FO based IPP’s. “However, with the government’s recent decision to allow import of FO to meet base-load demand, FO-based generation could see improvement in the coming months,” Ali Zaidi at JS Global Capital said.
Coal based power generation decreased 15 percent YoY to 1,069Gwh in March 2019 as compared to 1,264Gwh during the same month last year. Cumulatively, in 9MFY19, notable rise of 57 percent was witnessed which indicates government’s resolve to increase reliance on low cost power generation.
Hydel power generation improved 84 percent YoY to 1,601Gwh in March 2019 whereas on a MoM basis, hydel generation was 5 percent higher as heavy rainfall across the country restored water level in the reservoirs. Moreover, during 9MFY19, the growth in hydel generation was 8 percent YoY.
While overall cost of generation during March 2019 was down by 19 percent YoY to Rs5.00/KWh, it increased marginally by 2 percent from the previous month. In particular, RFO was among the most expensive fuel sources at Rs11.36/KWh. It is pertinent to mention here that RFO has remained the single most expensive source of power generation during 9MFY19 and 3QFY19 averaging at Rs14.11/KWh (up 44 percent YoY) and 12.40/KWh (up 19 percent YoY/down 20 percent QoQ), respectively.
Coal-based generation cost 6.97/KWh in March 2019, down 12 percent MoM. Despite a 21 percent YoY increase, gas was among the more economical sources in March-2019 at a cost of Rs5.76/KWh. On the contrary, each KWh generated using RLNG cost Rs9.85, reflecting an 11 percent increase YoY.
With regards to power generation mix in March 2019, share of hydel based power increased to 21 percent (+11ppsYoY) while that of gas arrived at 24 percent (+3ppsYoY). RFO share in March 2019 plunged significantly to a meager 1.0 percent (-15ppsYoY) whereas share of RLNG & coal remained almost stagnant at 23 percent and 14 percent , respectively.
Going forward, analysts expect power generation from RFO based plants to depict slender increase as petroleum division has recently sought approval for import of 350k tons of FO to meet higher demand in the upcoming months. 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 dwindle as new LNG/coal based power plants become fully operational and hydel power generation increases owing to incumbent government’s focus on improvement/addition of water reservoirs.