Why wind is underutilized in Pakistan for power generation?

KARACHI: Pakistan’s power generation has plummeted to its lowest in over three years. February 2024 saw a significant 14% month-on-month (MoM) decrease, with the generation clocking in at just 7,130 gigawatt-hours (GWh).

This downturn marks the most substantial dip since mid-2020, underscoring a worrying trend in the nation’s energy sector, suggests JS Global Capital.

The primary energy sources contributing to this month’s power generation were Hydel (25%), Nuclear (23%), Regasified Liquefied Natural Gas (RLNG) (20%), and Coal (16%). Notably, Hydel’s share surged from a mere 11% in January 2024, reflecting a strategic shift towards more cost-effective power generation methods.

This shift has had a pronounced impact on the average cost of power generation, which fell by a remarkable 36% MoM to stand at Rs9.4 per kilowatt-hour (KWh). The decline is largely attributed to the increased reliance on Hydel power, coupled with a reduction in Coal usage, which dropped from 23% to 16% in the energy mix.

Despite the domestic and manufacturing sectors wrestling with soaring electricity tariffs, the demand for power has remained relatively muted. The financial strain is evident as the country navigates through economic challenges, with the energy sector being no exception.

Renewable energy sources, including Wind, Solar, and Bagasse, contributed marginally to the overall generation, accounting for 1.5%, 1.3%, and 1.4%, respectively. These figures, while small, are indicative of Pakistan’s gradual transition towards embracing renewable energy.

Year-on-year (YoY), however, the cost of generation has seen a 10% increase, driven by rising costs across all fuel sources. This juxtaposition of decreasing MoM costs against a backdrop of increasing YoY expenses paints a complex picture of Pakistan’s energy economy, one that stakeholders must navigate with caution and foresight.

As the nation grapples with these fluctuations, the focus on sustainable and cost-effective energy sources becomes ever more critical. The recent statistics serve as a clarion call for continued innovation and investment in Pakistan’s energy infrastructure to ensure a stable and prosperous future.