Hydropower surge cuts electricity costby nearly a fifth to Rs8.27/KWh in August

KARACHI: Pakistan's hydropower generation hit a record high in August, helping to lower the overall cost of electricity by nearly 18 percent from a year earlier, latest data from showed on Wednesday.

The country produced 15,959 gigawatt-hours (GWh) of electricity in August, up 13.6 percent from the same month last year and 7.5 percent from July, according to the National Electric Power Regulatory Authority (NEPRA).

The power generated from imported RLNG contracted by 6 percent in the month of August against the month of July this financial year. However, the low import of RLNG due to scarcity of dollars and its high price in the global market led the country to rely on domestic fuels, especially furnace oil (FO), which saw a massive 120 percent growth in the month under review compared to the month of July.

During the first two months of this financial year, power generation also went up by 9.2 percent year-on-year to 30,799 GWh (20,698 MW) compared to 28,203 GWh (18,954 MW) during the corresponding months of last fiscal.

In the first two months, the hydro-based power generation registered 11.6 percent growth, RLNG-based power generation went up by 46 percent, coal up by 14.4 percent, nuclear 6.9 percent, wind by 4 percent, and solar 10 percent. In the two months under review, the FO-based power generation decreased by 50 percent and from gas it was down by 15.8 percent.

The cost of power generation decreased by 17.8 percent year-on-year during the month of August this fiscal compared to August and was also down by almost 1 percentr against the month of July this financial year. During July-August period of this financial year, the cost of power generation witnessed 20 percent decline compared to the corresponding period of last fiscal.

During the month of August FY23, fuel cost for power generation decreased by 17.8 percent year-on-yearto an average of Rs8.27/KWh compared with an average cost of Rs10.06/KWh during the same month of last fiscal.

Tahir Abbas, head of research at Arif Habib Limited, said that on a year-on-year basis, the decrease in fuel cost is witnessed mainly due to a decline in coal, FO, and RLNG-based cost of generation along with a 106 percent year-on-year, 14 percent year-on-year, 12 percent year-on-year, and 9 percent year-on-year rise in wind, solar, yydel, and buclear-based generation, respectively.

On the other hand, the share of hydel power stood at 37.6 percent, followed by RLNG at 17.2 percent, coal 15.48 percent, nuclear 13.4 percent, and gas 9.4 percent. The government has been trying to diversify its energy mix and increase its renewable and hydropower capacity, which are cheaper and cleaner than fossil fuels.