Pakistan’s power generation sector has exhibited substantial growth of nearly five percent in the first month of the current fiscal year.
Simultaneously, the cost of power generation has seen a significant decrease of 22.1% during the same period. This promising development comes after a thirteen-month period characterized by challenges in electricity production.
The notable increase in power generation is complemented by a reduction in costs attributed to decreased power generation from coal, furnace oil (FO), and regasified liquid natural gas (RLNG) sources.
Statistical data reveals that Pakistan’s total power generation for July 2023 reached 14,839 GWh (19,945 MW), marking a 4.9% increase compared to July 2022, which recorded 14,151 GWh (19,020 MW).
According to Tahir Abbas, Head of Research at Arif Habib Limited (AHL), this year-on-year increase can be attributed to a higher contribution from RLNG sources (37.7%), coal (21%), and hydel (11%). The month-on-month analysis further underscores an 8.2% improvement in power production compared to June, driven by significant increases in hydel (33.5%), RLNG (14.7%), and nuclear (13.5%) sources.
However, over the first seven months of the current calendar year, power generation has experienced an 8.5% year-on-year decline, totaling 75,861 GWh (14,910 MW), compared to 82,948 GWh (16,303 MW) during the same period in 2022. This decline is attributed to reduced contributions from Residual Furnace Oil (RFO) (-74%), coal (-16.2%), wind (-16.4%), and gas (-11.3%) sources.
Tahir Abbas also noted that the cost of generating electricity in Pakistan witnessed a substantial drop of 22.1% in July 2023, reaching Rs8.34 per KWh, compared to Rs10.71 per KWh in the same period of the previous year.
This significant decline was the result of lowered costs associated with coal, RFO, and RLNG-based power generation, coupled with an 11% year-on-year increase in hydel, and 5% increases in nuclear, wind, and solar-based power generation.