Power production jumps 14% as new projects come online

Generation from nuclear, coal and RLNG plants increases, hydel’s share in energy mix drops

KARACHI: Government’s efforts to overcome the energy crisis started to bear fruit as addition of new nuclear, coal and imported gas-fired power projects helped increase electricity generation in July 2017.

The power regulator has reported an increase of 14% in power production to 12,496.63 gigawatt-hour (GWh) in July from 10,991.82 GWh in the same month of previous year.

“RLNG (re-gasified liquefied natural gas), nuclear and coal-based generation registered a year-on-year surge of 51.4%, 93.7% and 68.2 times, respectively,” Arif Habib Limited analyst Rao Aamir Ali said in a note to his clients.



He said power generation through imported gas RLNG grew due to the addition of two new RLNG power plants to the system ie Quaid-e-Azam Thermal Power (Private) Limited and Haveli Bahadur Shah.

The uptick in nuclear-based generation was led by new generation from Chashma Nuclear-lll, having capacity of 340MW. Sahiwal’s coal power plant (1,320MW) has also commenced production. Resultantly, coal-based generation has gone up by 68.2 times year-on-year.

“On a month-on-month basis, the generation displayed a growth of 9.4% compared to June 2017,” he added.

According to the National Electric Power Regulatory Authority (Nepra), the production from nuclear projects rose 1.18 percentage points to 5.13% (641.59 GWh) in total production on an annual basis.

Coal-based generation improved 2.90 percentage points to 2.95% (368.05 GWh) and gas/RLNG-fired production increased 1.62 percentage points to 29.29% (3,269.67 GWh) in the energy mix.

Production from diesel-based generators rose 2.09 percentage points to 2.69% (335.59 GWh) from 0.60%.

On the other hand, Nepra added, production from the largest source hydel dropped to 30.79% (3,847.55 GWh) in July 2017 in the energy mix from 35.92% in the same month of previous year.

Generation from furnace oil-fired projects stood lower, decreasing to 25.59% (3,198.50 GWh) from 28.99%, it added.

Hydel and nuclear are the cheapest sources of power generation followed by coal and RLNG, while diesel and furnace oil-based generation remains highly expensive.

In the last winter, the government switched off a few mega diesel and furnace oil projects to keep the energy price low.

Meanwhile, the analyst added, average cost of generation rose 8.9% year-on-year to Rs5.05 per KWh compared to Rs4.63 in July 2016. “Uptick in the generation cost is mainly due to the lower share of hydel-based generation,” Ali remarked.

“The share of low-cost generation sources to increase going forward. Currently, gas (including RLNG) and hydel-based generation have a major share in the fuel pie of 29.8% and 29.7%, respectively, followed by furnace oil (26.1%).”



Hydel and coal would be the key contributors to the domestic generation mix. At the end of 2025, hydel would have a share of 38%, whereas coal would have 20% share in the fuel mix, assuming the said plants came online as per deadlines, he commented.

Published in The Express Tribune, September 8^th, 2017.

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