Power generation rises to 79,611Gwh

KARACHI: Power generation rose four percent to 79,611 gigawatt-hours in the first eight months of the current fiscal year of 2018/19 as uses of coal and imported gas in electricity production scaled up during the period, a brokerage reported on Tuesday.

“The accretion in power generation has been led by notable rise in coal/RLNG- (regasified liquefied natural gas) based electricity generation (72/117 percent), thereby increasing their shares in power mix to 34 percent in 8MFY2019 from 18 percent in the corresponding period a year earlier,” Pearl Securities said in a report.

Coal power generation notably rose 72 percent in the July-February period, which indicates government’s resolve to opt for low-cost power generation. Growth in hydropower generation was a tepid four percent during the period.

“We expect power generation from furnace oil-based plants to depict slender increase from current levels in the upcoming months as demand peaks in the summer and government prioritises offloading of furnace oil production from local refineries,” the brokerage said. “Moreover, RLNG-based generation is also expected to increase due to rise in LNG imports.”

Furnace oil-based generation will, however, continue to decline as new LNG/coal based power plants become operational and hydropower generation improves owing to government’s strong focus on new water reservoirs.

The brokerage, citing the National Electric Power Regulatory Authority’s data, said total power generation decreased four percent year-on-year to 6,687GWh in February.

“Lower power generation during the month is owing to decline in furnace oil (81 percent) and RLNG based generation (16 percent) in February,” it added. “However, power generation through hydro and coal increased 12 percent and six percent, respectively.”

Furnace oil-based generation stood at 112GWh in February on the back of shift in government’s policy towards alternative sources of power generation, like coal and RLNG, which are relatively cheaper and more efficient than furnace oil-based independent power producers.