Friday June 21, 2024

Nuclear power costs surge by 17pc, coal by 33pc

By Israr Khan
April 18, 2024
Steam rises from the cooling towers of the power station on November 28, 2023. — AFP
Steam rises from the cooling towers of the power station on November 28, 2023. — AFP

ISLAMABAD: The costs associated with nuclear and local coal power generation in Pakistan have seen significant surges in recent months, posing a challenge to the energy industry, lastest data showed on Wednesday.

According to recent data submitted by the Central Power Purchasing Agency (CPPA) to NEPRA, nuclear-based power generation has seen a staggering increase in expenses by over 17 percent, while local coal costs have jumped by a third in one month.

As of January 2024, nuclear-based power generation held the top spot as the primary contributor to the national grid. However, the landscape swiftly shifted in February and March of the same year, as nuclear power slipped to second place. This shift coincided with a startling 17.22 percent increase in operational expenses within a single month, signaling a notable financial strain on nuclear power producers.

Similarly, local coal generation costs witnessed a substantial spike, escalating by over one-third within just one month. Despite their immunity to exchange rate fluctuations or other external factors due to their local nature, the sudden surge in expenses poses a significant obstacle to the stability of the sector.

CPPA on behalf of Ex-WAPDA Power Distribution companies (XWDISCOs) has asked permission to charge Rs2.94/unit additional from power consumers on account of Fuel Charges Adjustments for March 2024. This will have an impact of around Rs27 billion on consumers in their May 2024 bills. This multi-billion charge also includes a sales tax on power consumption.

CPPA stated that the reference fuel charge for March stood at Rs6.4417 per unit, while the cost of energy delivered to Discos amounted to Rs9.3819 per unit. Therefore, CPPA has requested an increase of Rs2.94 per unit over the reference charges for FCA in March.

The proposed increase also includes previous adjustments totaling Rs7.615 billion or Rs0.9492 per unit. If accepted in full by NEPRA, this petition would burden electricity consumers with over Rs 27 billion, inclusive of FCA and GST. NEPRA is set to conduct a public hearing on April 26, 2024, to consider the petition.

Breakdown of the data provided reveals varying costs across different generation sources. Nuclear power generation costs stood at Rs 1.5488 per unit, while electricity imported from Iran was the most expensive at Rs 30.3729 per unit.

According to CPPA-G data shared with NEPRA, a total of 8023 GWh was generated in March 2024, with a total energy cost of Rs 66.68 billion or Rs 8.3109 per unit. This generation marked an eight percent decrease compared to March of the previous year.

Electricity generation from hydel sources constituted 27.63 percent of total generation in March, with zero cost of power generation. However, local coal generation costs surged by 35.53 percent to Rs 16.7779 per unit, with a decrease in generation by 13.28 percent compared to the previous month.

Generation from local gas accounted for 9.91 percent of total generation at Rs 13.6857 per unit, while RLNG-based generation constituted 20.67 percent at Rs 22.1917 per unit, marking a 14.34 percent increase from February.

Nuclear-based power generation increased by 24.70 percent from February, but its per unit generation cost saw a significant increase of 17.22 percent in March compared to the previous month.