Pakistan’s electricity generation surges 2.0pc in June 2019

KARACHI: As per latest data released by National Electric Power Regulatory Authority (NEPRA), total electricity generation during June 2019 registered 2.0 percent YoY increase to 13,157Gwh against 12,914Gwh in the corresponding month of last year.

“Slender rise in electricity generation during the month is primarily attributed to notable improvement in coal & RLNG based generation which exhibited a hefty increase of 34 percent YoY & 11 percent YoY to 2,037Gwh and 3,614Gwh respectively during June 2019,” an analyst at Pearl Securities said.

However as expected, furnace oil (RFO) based generation declined significantly by 40 percent YoY to 695Gwh during the month.

On a cumulative basis, total power generation for the country during FY19 clocked in at 122,710Gwh, depicting a similar increase of 2 percent primarily due to higher RLNG/Coal based generation (+53 percent YoY/+38 percent YoY) as their share in country’s total power generation mix rose 7.7ppsYoY/3.5ppsYoY to 23 percent /13 percent  during FY19.

The decline in RFO based generation continued in June 2019 as it witnessed a hefty decline of 40 percent YoY to a mere 695Gwh owing to change in government’s policy and shift towards other sources of power generation (coal and RLNG) which are significantly cheaper than FO based generation. Moreover, RFO declined 60 percent YoY in FY19.

Coal based electricity generation incremented 34 percent YoY to 2,037Gwh in June 2019 as compared to 1,522Gwh during the same month last year. Cumulatively in FY19, notable rise of 38 percent YoY was witnessed which indicates government’s resolve to increase reliance on low cost power generation.

Hydel power generation improved 7 percent YoY to 3,840Gwh in June 2019 whereas on a MoM basis, hydel generation was 68 percent higher. Moreover, during FY19, the growth in hydel generation was 14 percent YoY.

According to NEPRA, cost of generation in June 2019 for coal registered an increase of 6 percent YoY/1.0 percent MoM to Rs6.09/Kwh whereas power cost from gas rose 31 percent YoY/3.0 percent MoM to Rs6.19/Kwh. Cost for RFO based generation increased 9 percent YoY/7 percent MoM to Rs14.29/Kwh while cost of RLNG incremented 10 percent YoY/7 percent MoM to Rs10.20/Kwh in June 2019.

With regards to power generation mix in June 2019, share of hydel based power increased 1.4pps YoY to 29.2 percent whereas share of coal based generation arrived at 15.5 percent. Moreover RLNG share improved 2.3 percent YoY to 27.5 percent. However, RFO share in June 2019 plunged significantly to a meager 5.3 percent, whereas share of gas declined 1.4pps YoY to 14.3 percent.

“Going forward, we anticipate the prevailing trend to continue with RLNG and coal based electricity generation estimated to further increment their share in country’s overall generation mix. Moreover, with government eyeing another round of Rs200 billion payments through Pakistan Energy Sukuk-II in order to curtail mammoth circular debt, we expect partial resolution of power sector receivables to not only improve liquidity position of producers but also provide room for further enhancement in country’s power generation,” a report issued by Pearl Securities noted.

Edited by Javed Mirza

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