Power production drops 10.5% to 13,104 GWh

Commercial power production dropped to 13,104 gigawatt-hours (GWh) in September 2020 as industrial and residential consumers continued to switch over to cheaper options like generating their own electricity from solar and gas-fired plants to avoid comparatively expensive electricity from the national grid system.

Power production dropped 10.5% in September compared to August 2020 and decreased almost 4% compared to September 2019, according to data compiled by power sector regulator National Electric Power Regulatory Authority (Nepra) and research house Arif Habib Limited (AHL).

“Industries have gradually shifted to their own captive (inhouse) generation over the year as power from the national grid costs comparatively higher,” Topline Research Deputy Head Shankar Talreja said while talking to The Express Tribune.

AHL Head of Research Tahir Abbas gave a similar reason for the drop in commercial power production and said several large industrial units had set up their own coal-fired power plants of notable capacity (of up to 120 megawatts), like the ones at cement and fertiliser manufacturing plants in Pakistan.

Similarly, a number of large, medium and small business houses and households opted for solar power during day time and used electricity from the grid from evening to morning hours, he said.

Abbas said the significant drop of 10.5% in power production on a month-on-month basis in September was in line with expectations as consumption fell ahead of the winter season.

Some parts of the country like Balochistan experienced a drop in temperature from evening to morning hours in September. Besides, people avoided using air conditioners with the fall in temperature.

According to Abbas, power production peaks during MayAugust every year and consumption starts dropping from September onwards. September saw a drop in power production by hydel, gas and oilbased plants while production by coal and wind-based plants improved.

The country continued to take the largest chunk of electricity from the cheapest source ie hydel plants with generation of 4,872 GWh in September. However, change in weather impacted production by that source.

Hydel production dropped 3.6% in September 2020 compared to September last year while it declined almost 11% compared to August 2020. “Hydel production peaks during summer months from May to August as comparatively higher temperature results in melting of glaciers and improves the flow of water in dams.

A drop in the flow of water during winter reduces production by hydel plants,” Abbas said. Talreja said coal-based power generation increased 2.3% on a year-on-year basis as generation from the dirty fuel was cheaper than gas.

“RLNG (imported gas)-based generation declined 2.2% as on the economic merit order coalbased power plants remain at the higher level,” he said.

The AHL report said gas-based power generation fell 8% in September compared to the same month of last year, followed by a 10% decline in nuclear-based and 7% fall in furnace oil-based generation. Hydel and RLNG-based generation decreased 4% and 2% respectively.

However, coal and wind-based generation grew 2% and 17% respectively in September compared to the same month of last year. Cumulatively during nine months (Jan-Sept), the commercial power production dropped 1.6% to 97,854 GWh compared to 99,454 GWh in the same period of previous year.