KARACHI: Share of furnace oil in power generation sharply fell to 8.3 percent in February as compared to 26.3 percent in the same month a year earlier, a brokerage said on Thursday, as government is phasing out expensive imported fuel with availability of other thermal alternatives.
“The decline in furnace oil based generation was witnessed due to induction of RLNG (re-gasified liquefied natural gas) and coal power plants,” Rao Amir, an analyst at Arif Habib Limited said.
Government has already banned new power plants based on furnace oil in the wake of a growing import of LNG.
The country has currently two LNG terminals with a production capacity of 1.2 billion cubic feet/day, which is quite a relief for the country facing a gas shortfall of around two billion cubic feet/day. Presently, gas-combusted power plants produce half of electricity, followed by 20 percent from hydropower.
RLNG-based power generation increased 149 percent to 1,340 gigawatt hours (GWh) in February over the same month a year ago. “However, the newly inducted RLNG-based plants continue to face teething issues and are running on much lower load factor,” Amir added.
In February, power generation increased 9.3 percent to 6,979 GWh over the same month a year earlier due mainly to increase in gas-combusted electricity.
The brokerage said major contributors to power generation included gas (24pc), hydropower (19.4pc), re-gasified liquefied natural gas (19.2pc), coal (15.8pc), nuclear (8.7pc) and furnace oil (8.3pc) during the last month. Power generation, however, fell 12.6 percent in February over January.
Currently, coal-based power plants are operating at a much higher load factor. For example, Sahiwal coal power plant is running at 80 percent load factor and one unit of Port Qasim coal power project with production capacity of 660MW at 65 percent load factor.
Sahiwal coal-fired power project, the first of the China-Pakistan Economic Corridor’s priority energy projects, was commissioned in July last year.
First unit of the Port Qasim electric power project with a cumulative capacity of 1,320MW was connected to the national grid in November 2017, whereas the second unit is scheduled for commissioning in June this year. Government has envisaged various coal-based power plants of cumulative capacity of over 6,900 megawatts to be completed by December 2020.
Average fuel cost of power generation declined 19 percent to Rs4.91/kilowatt-hour (KWh) in February as compared to Rs6.09/KWh in January due to lower furnace oil generation.
Cost of RLNG and furnace oil-based generation declined 2.5 percent and 2.4 percent, respectively on monthly basis. However, the coal and gas-based cost of generation increased 11.9 percent to Rs5.8/KWh and 1.8 percent to Rs4.7/KWh, respectively.
During the first eight months of FY18, power generation sector depicted a growth of 11.2 percent to 76,632 GWh as compared to 68,914 GWh in the corresponding period last year.