Power generation increases 7pc to 115,862 GWh in Jul-May

KARACHI: Pakistan’s power generation rose around seven percent to 115,862 GWh in the first 11 months of the current fiscal year with share of regasified liquified natural gas (RLNG) plants showing growth, official data showed.

Share of hydropower decreased to 29.8 percent compared to 31.2 percent. Coal power share was flat at 21.5 percent. Share of gas power production fell to 11.3 percent compared to 12.6 percent. Nuclear power share decreased to 8 percent compared to 8.1 percent. Furnace oil share in energy mix increased to 4.4 percent from 3.3 percent.

Of total production, power generation from RLNG-based power plants increased 15.4 percent to 24,235 GWh in the July-May period. Share of the imported fuel in power generation increased to 20.9 percent from 19.3 percent.

However, hydropower was still contributing the largest share of 34,581 GWh in the total power generation, up 2.1 percent.

Coal power production stood at 24,958 GWh during the period under review, showing around seven percent.

Electricity generation from gas declined 4.3 percent to 13,036 GWh. Nuclear power increased around 5 percent to 9,253 GWh. Furnace oil-based power generation witnessed a highest jump of 44.3 percent to 5,097 GWh during the period.

After many years of power outages, the country recorded an installed power generation capacity that was more than sufficient to meet the total demand in the country in the last fiscal year of 2019/20. Total 13,298 MW power generation capacity was added to the system between 2016 and June 2020.

The surplus power generation is causing circular debt issue, according to the government officials.

The government has to pay billions of rupees in capacity payments to power generation companies and that is also one of the major reasons of circular debt build-up.

The power sector’s circular debt is expected to reach 5.2 percent of GDP or Rs2.1 trillion till June-end because of capacity payments on overbuilding of plants, Finance Minister Shaukat Tarin said.

Circular debt grew in size over the years, rising from 1.6 percent of GDP (Rs161 billion) in 2008.

In 2018, the volume of capacity payments to the power generators was Rs450 billion/year which may go up to Rs1.5 trillion by 2023.

The inefficiencies of the DISCOs have been a major drag on the sector’s financial health, as there are losses and low recoveries.

“The high cost of electricity, inefficient distribution services and load-shedding policy on high loss feeders is pushing consumers away from the DISCOs.

The distributed generation through solar power solutions has made a significant ingress in the domestic consumer base of DISCOs which are losing the consumers with high consumption and paying capacity,” the National Electric Power Regulatory Authority said in a latest annual report.

“Similarly, the commercial, educational and industrial outfits are also inclined to drift away from DISCOs and opt for self-generation through solar power.”