Pakistan's Power Generation Costs Spike by Nearly 20%

Karobar Karobar
Dec 21, 2023 - 16:35 Updated: Dec 21, 2023 - 03:20
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Pakistan's Power Generation Costs Spike by Nearly 20%

In a notable development, the cost of power generation in Pakistan experienced a significant uptick of almost 20% in November 2023, raising concerns amid already soaring electricity bills and economic challenges.

According to Arif Habib Limited (AHL), a leading brokerage house, the average cost of power in November reached Rs7.17/KWh, marking a substantial increase from the Rs5.99/KWh recorded in the same period the previous year—a substantial 19.7% year-on-year surge.

AHL attributed this yearly increase in fuel costs to a decline in nuclear, wind, and solar-based generation. Notably, the fuel costs for local coal-based generation rose by 55% YoY, while Regasified Liquid Natural Gas (RLNG) and gas-based generation saw increases of 17% YoY and 38% YoY, respectively.

While the spike in power generation costs adds to the financial strain on the populace, grappling with high inflation and sluggish economic activity, there is a silver lining on a monthly basis. The cost of power generation saw a 13.2% decrease compared to the average cost of Rs8.26 in October.

In terms of power output, Pakistan generated 7,547 GWh (10,482 MW) in November 2023, marking a 9.8% decrease compared to the same period in the previous year when power generation stood at 8,367 GWh.

AHL highlighted that the YoY decrease in power generation was influenced by declines in nuclear (down by 32.8% YoY), RLNG (down by 21.1%), gas (down by 41.5%), and wind (down by 6.2%).

Monthly figures also reflected a 21.2% decrease in power generation compared to October's 9,572 GWh.

Looking at the broader picture, during the first five months of FY24, power generation increased by 1.8% YoY, reaching 61,258 GWh compared to 60,153 GWh in the same period during FY23.

In November, hydel power emerged as the leading source, constituting 36.5% of the overall generation mix and becoming the country's largest electricity source. Nuclear followed with 20.8%, and local coal contributed 13.1% to the power generation share.

Among renewables, wind, solar, and bagasse collectively made up 2%, 0.7%, and 0.4% of the power generation mix, showcasing the diverse sources contributing to Pakistan's energy landscape.