Electric Power Generation grows substantially

August 30, 2019 (MLN): Power generation in Pakistan is improving at a good pace now as the total generation has risen from 13, 751GWh in July 2018 to 14,231GWh in July 2019, reported National Electric Power Regulatory Authority (NEPRA).

On a year-on-year basis, a growth of 3.5 percent does not strike any chords but given the crucial economic situation that Pakistan is in at present, this growth comes off as a breath of fresh air.

The diversification of generation sources from Furnace Oil (FO) and High Speed Diesel (HSD) to Coal and RLNG supported the government’s aim to switch to cheaper fuel. The massive decline in FO and HSD sources by 60% and 96 % respectively contributed in lowering the cost of power generation by 4.36%/1.05% on MoM/YoY basis to PKR5.26/kwh. Consequently, there came the sharp rise in usage of inexpensive sources i.e. Coal and RLNG by 38 % and 35% respectively.

Looking at source- wise contribution in July 2019, we see that the high numbers of hydel generation indicate highest contribution amongst all which is the result of good rainfall and an extension in plant.

Problem can arise if cost of generation per unit increases due to expected high capacity payments. The question is, what comes next in revision of power tariffs due to IMF programme? Will there be availability with affordability? One can only guess.

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