Nepra highlights drop in Thar coal use for power generation

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) revealed on Thursday that the government significantly underutilised Thar coal for power generation in April 2024, resulting in a 92 per cent reduction in local coal usage compared to the reference generation and imposing a financial burden of Rs32 billion on consumers.

During April, 881 GWh of power was generated from local coal, compared to the reference generation of 1,690 GWh. When asked by Nepra, during the monthly fuel charges adjustment case for April, an official from the Central Power Purchasing Agency (CPPA) representing distribution companies (DISCOs) argued that the majority of the burden stemmed from fuel prices. The official attributed the low generation from local coal to reduced consumer demand for electricity due to weather constraints.

When Nepra inquired about the per-unit impact, the CPPA official stated it was Rs3.8 per unit. Member Maqsood Anwar Khan questioned why more regasified liquefied natural gas (RLNG) was used than the reference if local genera-tion was reduced. The official explained that demand was higher in central Pakistan, there was high pressure in the pipeline system, and economic activity was low.

Khan responded by pointing out that the low generation from less expensive coal was due to operational deficiencies. He criticised the lack of proposals to the power division to address this long-standing issue. The CPPA official coun-tered that several proposals had been submitted to the government and incremental changes are anticipated this year.

Nepra noted that utilising local coal could have avoided reliance on more expensive power generation sources, thus reducing costs. The official added that rains and temperature drops also affected power demand in April.

Nepra Chairman Waseem Mukhtar presided over the proceedings, with authority members Mathar Niaz Rana (Balo-chistan), Eng Maqsood Anwar Khan (Khyber Pakhtunkhwa), and Ms Amina Ahmed (Punjab) in attendance.

DISCOs sought Nepra’s approval to impose an additional charge of Rs3.488 per unit on power consumers in June 2024 bills on account of the fuel charges adjustment (FCA) for April 2024. The petition aimed to collect an additional Rs29.2 billion from power consumers in June.

The authority heard the case and will issue its final decision in a few days. Nepra also asked the CPPA about the contribution of net metering to the national grid during daylight hours. The offi-cial’s response was deemed unsatisfactory. The Nepra chairman mentioned that, according to their estimates and da-ta, 2,000 MW of net-metering capacity is connected to the national system. He further stated that up to March 2024, around 6,600 MW of solar capacity had been imported.

It is noteworthy that a total of 8,639 GWh of electricity was generated in April 2024, with an associated cost of Rs79.55 billion (equivalent to Rs9.208 per unit). Additionally, 8,375 GWh, originally priced at Rs75.205 billion, was delivered to DISCOs, while transmission losses stood at 2.73 per cent. The petitioner has also decided to refund Rs3.06 billion to consumers, reducing the total amount to Rs75.2 billion (or Rs8.98 per unit).

Power generation in April 2024 dropped by 13.7 per cent from the previous year and increased by 7.7 per cent from March 2024. However, compared to the reference demand, it was 17 per cent lower. The generation cost decreased by 10.1 per cent to Rs9.2086 per unit year-on-year but increased by 10.8 per cent from March 2024.

Less electricity was produced from renewable and cost-effective sources compared to the previous month. Had these resources been utilised, the costs would have further decreased, benefiting consumers with lower payments.

In April 2024, hydropower generation increased by 10.6 per cent, while coal (local and imported)-based generation declined by over 50 per cent. Natural gas-based power generation fell by 18 per cent, RLNG-based generation de-creased by 10.8 per cent, while nuclear power saw an increase of 6.6 per cent over the same month last year. No elec-tricity was generated from high-speed diesel and furnace oil.