Power generation remains flat at 7,719Gwh in December

KARACHI: Total power generation during the month of December 2018 remained almost flat declining by a meager one percent year-on-year (YoY) at 7,719Gwh as against 7,763Gwh recorded in December 2017, the latest numbers showed.

National Electric Power Regulatory Authority- (NEPRA) released figures revealed electricity generation through hydel, coal, and RLNG arrived at 1,334, 1,563 and 961Gwh, which shows a YoY growth of 8.0 percent, 72 percent, and 240 percent, respectively.

However generation through Furnace Oil (RFO) and gas plummeted 59 percent YoY and 5.0 percent YoY to 931Gwh and 1,679Gwh during December 2018.

On a cumulative basis, total power generation during six months (1HFY19) clocked in at 65,159Gwh, up 5.0 percent.

Asif Taimoor at Pearl Securities said this accretion was mainly led by rise in coal/RLNG- based generation which contributed 33 percent towards total power generation.

Residual fuel oil- (RFO) based generation in December 2018 plunged 59 percent YoY to 931Gwh on a shift in government’s policy towards alternative sources of power generation (coal and RLNG) which are relatively cheaper and more efficient than FO based Independent Power Producers (IPP's).

Hydel power generation improved 8.0 percent YoY to 1,334Gwh in December 2018.

However, on a monthly basis, it truncated by a massive 48 percent due to decline in reservoirs water levels coupled with seasonal effect.

According to NEPRA, power cost for RFO registered a significant increase of 56 percent YoY to Rs15.25/Kwh, which can be attributed to the higher FO cost due to notable rupee devaluation.

Moreover, the cost of generation through RLNG and coal also surged by 60 percent YoY and 59 percent YoY to Rs10.12/Kwh and Rs6.80/Kwh, respectively. In December 2018, share of hydel based power in the generation mix decreased to 17 percent (34 percent in November 2018) while that of RLNG arrived at 12 percent (17 percent in November 2018). However, the share of coal improved to 20 percent (14 percent in November 2018) while gas contribution was at 22 percent (20 percent in November 2018).

“Going forward, we expect power generation from RFO based plants to increase in the upcoming months due to winter season and offloading of RFO production from local refineries, while gas based generation is expected to decrease due to a delay in liquefied natural gas (LNG) imports.

However, in the long run, RFO based generation is expected to decline as new LNG/coal-based power plants become fully operational and hydel power generation improves with the restoration of water levels in the reservoirs, a Pearl Securities report noted.