Power generation in November 2024 went up nearly 6 percent year-on-year at 7.7 billion units. This comes at the back of a nearly 8 percent year-on-year increase in October. While not extraordinary numbers by any stretch, in the context of last 30 months where positive year-on-year variances have been a rare sighting –this has got people excited. It must be noted that November’s growth is coming on the back of last year’s double-digit dip, which was itself a dip from a year before.
On a cumulative basis, the grid power generation at 57 billion units during 5M 4 percent year-on-year is the lowest in six years, the previous low being reported in 2018. It is down 11 percent from the peak of FY22 and marks. On a 12-month rolling average, consider that the current 10 billion units moving average was first achieved back in September 2018. Any and all growth in generation from hereon has to be viewed against this backdrop and not be rejoiced.
The nominal growth for November is also a reflection of the warmest November in at least 64 years, following the warmest October a month ago. And not warmest by a small margin either. Day-time, night-time, mean, median – every indicator returned a reading higher by 15-20 percent from average November temperatures, as per the Pakistan Metrological Department. A 6 percent year-on-year increase in generation in this context is hardly anything to boast about.
For the second month running, the actual monthly power generation was higher than the reference power generation. The year-to-date actual generation is still 8 percent shy of the reference generation of 62 billion units, used to compute the Power Purchase Price for base tariffs. For the fifth month running, the monthly Fuel Charges Adjustment (FCA) sought stayed in the negative zone. It must be mentioned that the reference fuel charges for FY25 are significantly higher than last year, for instance, 64 percent higher for November 2024 over November 2023. A more realistic reference generation mix coupled with stable currency and commodity prices have helped keep fuel costs in check.
The winter incentive package is now in place and will be tested once December generation numbers are out. The incremental 25 percent consumption priced at marginal cost is not likely to move the needle much on the domestic consumption side, given limited use case scenarios. With the revision in the incentive package criteria, which now includes all net-metered consumers across categories, industries could well throw a refreshing surprise. With captive power generation slated to come to a halt, grid generation stands to benefit and should go a long way in keeping consumer end tariffs in check.
Comments
Comments are closed for this article.