Demand for Power is picking-up, recovers marginally in June’20

July 24, 2020 (MLN): Power Generation in Pakistan declined by 0.7 % YoY to stand at 121,867 GWh (13,192 MW) in FY20 as compared to 122,708 GWh (23,781 MW) in FY19, primarily on account of overall slowdown in economic activity during the year and the impact of covid-19 related lockdowns and restrictions during March-May 2020.

Whereas, in the month of June’20 the Power generation increased by 1% YoY to 13,288 GWh (18,45 6MW) compared to 13,157 GWh (18,274 MW) during Jun’19, showing signs of economic recovery

Source-wise, Hydel Power contributed the most in generating electricity during the year, as its share in total generation increased from 26% in FY19 to 32% in FY20. This was followed by Coal, whose share in total generation jumped to 21% from 13% in FY19.

According to a report by Topline Securities, Coal power generation has increased due to the commencement of China Hub Power Generation (1,220 MW) and Engro Powergen Thar (660 MW), while Hydel power generation increased due to improved availability of water amidst higher water availability during the year.

Another report by Arif Habib Limited highlighted that the rise in hydel based generation is majorly driven by 53% YoY (724GWh) rise in generation from Tarbela 4th Extension

RLNG plants, another significant contributor to our power generation, contributed 20% to the overall power mix with Nuclear and Wind based generation clocking in at 8% and 2%, respectively during the year.

However, generation from FO based and Gas based power plants reduced to 3% and 12% respectively from 7% and 18% in FY19.

The demand for Furnace Oil and Gas based power fell due to their higher cost of producing power, which resulted in their respective decline in merit order list, a report by Topline securities mentioned.

On the other hand, fuel cost for power generation went down by 11% YoY to Rs 4.77/KWh, this is mainly due to increase in Hydel based generation (no fuel cost) and increased in coal-based power generation at a lower cost of Rs 6.1/Kwh.

Demand for Power after Covid-19

Since March 2020, the power generation has been on a declining trend mainly due to Covid-19 related lockdowns and restrictions, as it exhibited a fall of 9% YoY in March 2020, 14% YoY decline in April 2020 and 5% YoY in May 2020.

However, encouragingly, Power Generation has picked up, though up by 1% YoY, it has almost doubled (+92%) from the low recorded in Mar-2020, a report by Topline stated.

With industries opening up post COVID-19 lockdown and subsequent pick-up in economic activity, the demand for Power is expected to increase from now onwards, the report added.

Copyright Mettis Link News

Posted on: 2020-07-24T16:20:00+05:00

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