Power generation cost drops 19.1pc in four months

KARACHI: Power generation cost fell 19.1 percent in the first four months of the current fiscal year of 2023-24, as electricity production increased 3.7 percent with higher hydel and coal output, data from the National Electric Power Regulatory Authority (NEPRA) showed on Tuesday.

Power generation declined 10.6 percent year-on-year to 9,572 gigawatt hours (GWh) in October, compared with 10,705 GWh in the same month last year, according to a report by brokerage Arif Habib Limited, based on NEPRA data. On a monthly basis, generation also decreased 28.2 percent.

However, in the July-October period, power generation rose 3.7 percent year-on-year to 53,710 GWh, compared with 51,786 GWh in the same period last year. The actual generation in October was 17 percent lower than the reference generation, the report said.

The data showed that hydel power generation increased 9.9 percent in the four-month period, while power generation from regasified liquefied natural gas (RLNG) increased 29 percent. Electricity generation from local coal jumped 222 percent, while power production from wind and solar sources increased 22 percent and 2.8 percent, respectively.

Electricity generation from nuclear sources registered a nominal decrease of 1.2 percent, while gas and imported coal power generation declined 23 percent and 54 percent, respectively. Power generation from residual fuel oil (RFO) dropped 62 percent in the four-month period.

The fuel cost for power generation decreased 8.4 percent year-on-year to an average of Rs8.26 per kilowatt hour (KWh) in October, compared with an average cost of Rs9.02 per KWh in the same month last year. Fuel cost also increased 11.4 percent month-on-month.

Cost of power generation is still higher than the reference cost of Rs7.89/KWh. During the month under review fuel cost for power generation decreased to an average of Rs8.26/KWh compared with an average cost of Rs9.02/KWh during the same month of last fiscal.

The decrease in fuel cost was mainly due to a decline in imported coal and RLNG-based cost of generation, the report said. Fuel cost of RFO generation decreased 6.5 percent and RLNG power generation declined 7.3 percent in the four-month period.

Cost of power generation from imported coal and local coal fell 20 percent and 18 percent, respectively. The power generation from gas and nuclear sources increased 29 percent and 20 percent, respectively.

The share of hydel power in the power mix increased to 36.6 percent in the four-month period, compared with 34.5 percent in the same period last year. The share of RLNG increased to 18.1 percent, compared with 14.6 percent last year.