Electricity generation up 3pc to 96,938GWh in 10 months

KARACHI: Electricity generation rose three percent, while cost of power production increased seven percent year-on-year in the first 10 months of the current fiscal year as thermal sources, especially coal and gas, continued to dominate renewable energy, a brokerage reported on Thursday.

Aggregate power generation rose to 96,938 gigawatt hours (GWh) on the back of a 52 percent increase in re-gasified liquefied natural gas- (RLNG) based production and a 42 percent rise in coal-based generation, while power produced using furnace oil fell 59 percent to 7,999 GWh during the period under review.

In July-April, average cost of electricity generation was Rs5.38/kilowatt hour (kWh), up seven percent year-on-year, evidently on the back of a RLNG-based generation (16 percent more expensive) and coal-based generation (36 percent more expensive).

In April, electricity generation surged nine percent year-on-year to 9,717GWh.

“The increase in production is mostly on the back of a 77 percent rise in RLNG-based generation and a 46 percent uptick in hydropower – cumulatively contributing to over half of energy mix,” Ali Zaidi, an analyst at JS Global Capital said, citing the National Electric Power Regulatory Authority's data.

Total power generation saw a 28 percent surge from March 2019 mostly on the back of a 68 percent month-on-month growth in RLNG-based generation and a 39 percent month-on-month rise in hydropower.

Gas remained the third largest contributor with 1,789 GWh of power generated, up eight percent year-on-year in April.

As the government shifting focus away from furnace oil-based production, furnace oil-based

production saw a 69 percent year-on-year decline due to high base effect.

In April, FO-based power production increased nearly 11 times month-on-month to 4,81GWh on low base effect to meet base-load demand during the summer.

Average cost of power generation decreased 13 percent year-on-year in April, while it increased 10 percent month-on-month to Rs5.52/kWh. Furnace oil remained the most costly source of power generation at Rs12.34/kWh, up 54 percent year-on-year and nine percent month-on-month.

In April, RLNG remained the second most expensive source at Rs9.40/kWh. Coal, which

contributed to nearly 10 percent of the power generated, was

comparatively cheaper at Rs6.91/kWh, up seven percent year-on-year, down three percent month-on-month.

Similarly, gas, which contributed over 18 percent toward the aggregate production, saw a 20 percent year-on-year rise in cost/unit produced.

“RLNG’s share in the energy mix saw a substantial rise from 23 percent in March 2019 to 31 percent in April 2019,” Zaidi said.

“However, it appears that while shifting reliance from furnace oil in favor of RLNG is only relatively economical.”

RLNG and a significant amount of coal used in power generation are imported and therefore further depreciation in the rupee against the dollar could push up generation costs.

“Furthermore, the rising trend of crude oil prices, to which RLNG and FO prices are linked, could further inflate the cost of production, at least in the short term.”