The cost of generating electricity jumped 72.4%, going up to Rs8.24 kWh in December 2021 compared to Rs4.78 kWh during December 2020.
The increase comes mainly due to rise in furnace oil (FO), and Regasified Liquefied Natural Gas (RLNG) cost of generation, according to a note by brokerage house Arif Habib Limited.
Interestingly, the generation mix reveals coal, hydel and wind-based generation decreased by 8% YoY, 1% and 4% YoY, respectively with FO and nuclear sources of power stepping up to cover the void with a yearly increase of 20.1% and 108.9%, respectively.
It is pertinent to mention that power generation from nuclear energy has made great strides, and now accounts for 17.5% of the entire energy mix in December 2021, as compared to just 9.4% in the same month in 2020.
Meanwhile, power generation went up by 12% YoY to 8,828 GWh (11,866 MW) during December 2021, compared to 7,880 GWh (10,591 MW) during December 2020.
Record high power generation was registered during CY21, at 136,572 GWh, up by 10.6% YoY. During 1HFY22, power generation also increased by 9.3% YoY to 74,396 GWh (16,847 MW) compared with 68,047 GWh (15,409 MW) during 1HFY21.
In December, coal was the leading source of power generation, accounting for 23.8% of the generation mix with 2,104 GWh generated in December 2021, as compared to 2,287 GWh generated in the same month last year, showing a decrease of 8.4%.
Power generation from hydel accounted for 20% of the generation but recorded a decrease of 1.1% to 1,769 GWh in December 2021 from 1,789 GWh in December 2020. Generation from RLNG improved 9% to 1,192 GWh in December 2021, as compared to 1,094 GWh generated in December 2020.
Earlier, the Central Power Purchasing Agency- Guaranteed (CPPA-G) sought an increase of Rs 3.12 per unit in tariffs of power Distribution Companies (Discos) for December 2021, under monthly Fuel Component Adjustment (FCA) mechanism, as generation from coal has overtaken hydel generation in terms of both units and cost.
The main reason, according to CPPA-G, for the proposed increase in FCA was higher generation from expensive fuels and previous adjustments.