Power generation eases by one percent in FY20

KARACHI: Power generation in Pakistan declined by one percent YoY to 121,867 GWh (23,618 MW) during FY20 as compared to 122,708 GWh (23,781 MW) in FY19 due to overall slow economic activity during the year and the impact of COVID-19 related lockdowns and restrictions during Mar-May 2020, analysts said on Thursday.

The analysts at Topline Securities said that power mix during FY20 moved in favor of Hydel (32 percent in FY20 against 26 percent in FY19) and Coal (21 percent in FY20 against 13 percent in FY19), replacing Gas (12 percent in FY20 against 18 percent in FY19) and Furnace Oil based generation (3 percent in FY20 against 7 percent in FY19).

RLNG contributed 20 percent to the overall power mix, with Nuclear and Wind based generation clocking in at 8 percent and 2 percent, respectively during the year.

Coal power generation has increased due to the commencement of China Hub Power Generation (1,220 MW) and Engro Powergen Thar (660 MW), while Hydel power generation increased due to improved availability of water amidst higher water availability during the year.

The demand for Furnace Oil and Gas based power fell due to their higher cost of producing power, which resulted in their respective decline in merit order list.

The installed Capacity in the country touched 34,157MW in Jun-2020 compared to 30,590 MWin Jun-2019.

Power Generation started to decline in Mar-2020 (down by 9 percent YoY to 6,911 GWh from 7,621 GWh in Mar-2019) largely due to COVID-19 related lockdowns and restrictions.

A similar trend was also witnessed in Apr-2020 and May-2020 as Power Generation declined by 14 percent YoY and 5 percent YoY, respectively.

However, encouragingly Power Generation has picked up, though up 1 percent YoY, it is has almost double (+92 percent) from the low recorded in Mar-2020.

With industries opening up post COVID-19 lockdown and subsequent pick up in economic activity, we expect demand for Power to increase from here forth.

The average fuel cost was down by 3 percent YoY to Rs5.97/KWh in FY20 compared to Rs6.13/KWh in FY19.

This is mainly due to increase in Hydel based generation by 20 percent YoY (no fuel cost) and increased in coal based power generation at a lower cost of Rs6.1/Kwh.

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