Power generation remains flat at 14,052 GWh in August

KARACHI: The country’s overall electricity generation during August 2019 remained flat at 14,052 gigawatt hours (GWh) as against 14,017 GWh in the corresponding month of last year, official data showed on Friday

Coal and hydropower exhibited a hefty increase of 39 percent and 27 percent, respectively in August, whereas furnace oil (FO) and gas-based generation decreased significantly by 69 18 percent, respectively, during the month.

“The recent torrential downpours have been a significant contributor to higher hydropower generation in recent months, as August marked the fourth consecutive month of hydel domination in the energy mix,” Ali Zaidi, an analyst at JS Global said, citing data from the National Electric Power Regulatory Authority (Nepra). Total power generation for the country clocked in at 28,283 GWh in July and August, depicting a meager increase of two percent year-on-year.

“The slender rise in power generation has been led by higher coal and hydel-based generation, thereby improving their share in the country’s total power generation mix to 40 percent and 13 percent, respectively during 2MFY20 compared to 32 percent and 10 percent during the same period last year,” a Pearl Securities said in a report.

“Going forward, with peak demand season nearing conclusion, we anticipate power generation to gradually subside in the coming months owing to seasonal factors,” Pearl Securities said. “Moreover, with government aiming to phase out inefficient generation companies and increase reliance on LNG (liquefied natural gas) and coal-based generation, we estimate their share to further increase in the country’s overall generation mix.”

In August, FO-based power generation witnessed a hefty decline of 69 percent owing to shift towards other sources, which are significantly cheaper than FO.

Coal-based power generation increased 39 percent in August. Cumulatively in 2MFY20, a notable rise of 27 percent was witnessed in coal-based electricity generation, thereby indicating government’s resolve to increase reliance on low-cost power generation.

Power generation from hydel improved 27 percent in August. During 2MFY20, growth in hydropower was recorded at 23 percent.

Cost of generation in August for coal declined 13 percent to Rs5.57/kilowatt hour (kWh), cost of FO-based generation fell 14 percent to Rs12.51/kWh, whereas generation cost from gas surged 54 percent to Rs7.66/kWh and cost of RLNG-based generation increased 11 percent to Rs11.50/kWh.

Share of hydel-based power in energy mix increased to 40 percent while share of coal-based generation arrived at 13 percent. However, share of furnace oil plunged significantly to a meager four percent in August, whereas share of gas-based electricity generation declined to 12 percent.

Analysts said persistent delay in resolution of mammoth circular debt has exacerbated liquidity issues for the energy sector and hence forced power producers to meet their working capital requirements through high cost debt financing.