September 24, 2020 (MLN): The overall power production during the month of August’20 increased by 4%YoY to 14,630Gwh.
According to the latest data released by NEPRA, power generation through RFO and Coal in August’20 stood at 792 and 2,530Gwh, showing an increase of 57% and 35%, YoY, respectively. However, generation through Gas-LNG and Hydel decreased by 9% and 3%, YoY to 4,460 and 5,470Gwh respectively during August’20.
According to the research by IGI Securities, the decline in generation compared to July’20 (down by 1% MoM) is primarily attributable to power outages in late August’20 due to heavy rains witnessed across Pakistan.
On a cumulative basis, the total generation for CY20TD clocked in at to 84,742Gwh, down by 1% YoY on an account of 30% and 26% YoY decline in production through RFO and Gas-LNG, contributing 4% and 31% of the total power generation respectively while the share from coal-based power generation is up to 21% as compared to 14% in CY19TD.
With regards to power production through RFO, this 57% YoY increase in August’20 was the result of higher generation from Narowal, Attock, Atlas and Lalpir (cumulatively up by 184Gwh) while generation from NPL and NCPL was cumulatively down by 21Gwh. This brings total generation for CY20TD to 3,340Gwh down by 30%YoY owing to lower generation from Hub Plant, KAPCO Block I & II and GENCO I & III along with lower generation from smaller inefficient IPPs such as Lalpir and Pakgen, the research revealed.
On the other hand, the research highlighted, the Gas/LNG based power generation dropped by 9%YoY (424Gwh) to 4,460Gwh in August’20 on the back of lower generation from GENCO I-III (contributing 198Gwh), KAPCO (down by 194Gwh) and Saphire (down by 72Gwh) while generation from other smaller IPPs rose during the month of August’20. This takes total generation in CY20TD to 26,043Gwh, down by 26% YoY led by lower generation from KAPCO, GENCO I-III, and smaller IPPs.
As per NEPRA, power cost on RFO during August’20 came down by 2% YoY (or down by 12%MoM) to PKR 12.23/Kwh. However, the gas price dropped to PKR 7.04/Kwh, down by 8% YoY (flat on MoM) while generation cost through LNG stood PKR 7.02/Kwh, down by 39% YoY or up 2% MoM.
It is prudent to mention that FO plants moved up slightly in the merit in Aug-20 on account of higher demand during the summer season. The cost of generation remained relatively mixed on a monthly basis as Narowal, NCPL, PKGP, and LPL witnessed a drop in fuel cost thus moving up in the merit order list.
Going forward, as demand picks up post-COVID-19 and peak summer season, the research believes FO plants are likely to remain operational whereas in the long-term contribution of FO plants in total generation mix would remain low whereas LNG and coal contribution would increase.
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