Pakistan’s overall electricity generation up 9.0 percent in September 2019
KARACHI: Pakistan’s overall electricity generation during September 2019 surged 9.0 percent to 13,621Gwh compared with 12,552Gwh generated during the same month last year, latest data released by National Electric Power Regulatory Authority (NEPRA) suggests.
Within power generation mix, coal and hydel exhibited notable increase of 94 percent and 18 percent to 2,232Gwh and 5,053Gwh, respectively during September; whereas furnace oil (FO) and gas based generation declined 20 percent and 18 percent to 817Gwh and 1,615Gwh during the month.
Pakistan’s current total capacity stands at about 354,000MW including about 3,000MW of coal-based plants, 9,700MW of hydropower plants, 20,000MW of thermal plants besides 1,345MW of nuclear and 1,900MW of renewables.
On a cumulative basis, total power generation for the country during 1QFY20 (July-September FY19) arrived at 41,904Gwh, depicting an increase of 4.0 percent. “The slender rise in power generation has been led by higher coal and hydel based generation, thereby improving their share in country’s total power generation mix to 15 percent and 37 percent during 1QFY20 up from 10 percent and 31 percent during the same period last year,” a report issued by Pearl Securities noted.
As expected, FO based generation during September witnessed a hefty decline of 20 percent owing to shift towards other sources, which are significantly cheaper than FO based power producers. Consequently, RFO based generation during 1QFY20 slumped 47 percent to 2,106Gwh.
Coal based power generation rose by a mammoth 94 percent during September. “Cumulatively during 1QFY20, notable rise of 45 percent was witnessed in coal based generation, thereby highlighting government’s resolve to increase reliance towards low cost power generation sources,” the brokerage house report said.
Power generation from hydel improved 18 percent during September. However on sequential basis, hydel based generation was down 11 percent. Moreover during 1QFY20, Hydel generation recorded double-digit growth of 21 percent.
Cost of generation during September for coal declined 17 percent to Rs5.38/Kwh whereas generation cost from gas, RLNG and RFO increased 45 percent, 12 percent and 6.0 percent to Rs7.03/Kwh, Rs11.12/Kwh and Rs16.56/Kwh, respectively.
Share of hydel in the overall generation mix increased to 37 percent, while share of coal increased to 16 percent during September. However, share of FO, gas and RLNG declined to 6.0 percent, 12 percent and 21 percent respectively in country’s overall generation mix.
It may be mentioned here the government plans to increase the country’s power generation capacity by almost 300 percent in next 20 years to 111,000 megawatts and phase out almost all of the existing thermal power plants to meet rising energy demand at affordable costs.
Going forward, analysts anticipate power generation to gradually subside over the coming months owing to seasonal factors. “Moreover, with government’s aim to phase out inefficient generation companies, curtail generation from higher cost FO plants and consequently increase reliance on cheaper sources of generation, we estimate share of coal and LNG to further rise in country’s overall generation mix”.
However, with the government unable to execute issuance of Rs200 billion Pakistan Energy Sukuk-II owing to IMF’s restriction on extending sovereign guarantees, the persistent delay in resolution of circular debt continues to exacerbate liquidity issues for the sector and hence has forced power producers to meet their financing requirements through high cost debt financing.