Electricity generation falls 5.9 percent in October

By Our Correspondent
November 20, 2018

KARACHI: Electricity generation fell 5.9 percent year-on-year to 9,574 gigawatt-hours (GWh) in October as the government shed reliance on furnace oil for power production, a brokerage said on Monday.

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Electricity generation stood at 10,177 GWh in the corresponding month last year. “After a period of 20 months, the country’s power generation went into reverse gear,” analyst Rao Aamir at Arif Habib Limited said.

Major contributors towards power generation during the month remained hydel, re-gasified liquefied natural gas (RLNG), coal, nuclear and furnace oil.

RLNG-based generation’s share witnessed a growth of 826 basis points to 22.9 percent in October compared to 14.7 percent during the same month last year. Power generation on furnace oil declined as the government relied on cheaper options like RLNG and coal to generate power. Therefore, generation on furnace oil dipped 70 percent to 754 GWh from 2,547 GWh and its share in the mix was reduced to 7.9 percent from 25 percent.

“On sequential basis, generation went down by 23.7 percent (in October) mainly due to weather changes,” Aamir added. Power generation grew 9.7 percent to 108,763 GWh in January-October period as opposed to 99,157 GWh. Average generation stood at 14,907 MW compared to 13,591 MW a year earlier.

In October, average fuel cost increased 10.2 percent year-on-year to Rs5.44/kilowatt hour (KWh), led by rise in RLNG fuel cost, which surged 25.2 percent to Rs9.86/KWh. Fuel cost increased 7.8 percent month-on-month due to 913 basis points decline in hydropower’s share in power mix. Power generation cost of RLNG and furnace oil decreased 0.7 percent and 7.3 percent, respectively.

Rise in RLNG-based cost is due to a 39 percent rise in RLNG prices to $12.74/million metric cubic feet per day, according to the Oil and Gas Regulatory Authority. Coal-based power generation cost was down 21 percent to Rs3.38/KWh. Furnace oil’s share in power mix declined but its cost of generation was up 48 percent due to 76 percent rise in furnace oil prices.

Electricity generation capacity surged to 29,573MW till February from 22,812MW in 2012/13 as the government implemented strategies to cope up with the challenges of energy security, a ministry of energy’s document showed.

There has been a 30 percent growth in installed power generation capacity during the last five years due to diversification in energy mix. Power generation increased 22 percent to 117,326 gigawatt hours (GWh) in 2016/17 as compared to 2012/13. Analysts, however, estimated that around 10,000MW of addition in the installed generation capacity during the last five years.

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