The total cost of generating electricity in the country decreased significantly by 35%, hitting Rs9.63 KWh in June 2023 compared to Rs14.72 KWh registered in the same period of the previous year.
On a YoY basis, the significant decline is attributed to the following reasons;
“Coal-based cost of generation decreased by 32% YoY due to cheaper local coal-based power plants added to the system,” said Arif Habib Limited (AHL), a brokerage house, in a report on Friday.
“Furnace Oil (FO)-based cost of generation also decreased by 28% YoY; whereas, Regasified Liquid Natural Gas (RLNG) based cost of generation also decreased by 15% YoY to Rs24.1/KWh due to the 14% YoY decline in RLNG prices to Rs3,646/mmbtu.
Moreover, “nuclear, hydel, and solar-based generation increased by 47% YoY, 23% YoY, and 22% YoY, respectively”, it added.
The power generation in the country witnessed a marginal decrease of 1% on a yearly basis to 13,715 GWh (19,048 MW) during June 2023, compared to 13,876 GWh (19,272 MW) in SPLY.
“The YoY decline in the power generation was owed to lower generation from FO (-49%), wind (-26%), RLNG (-25%), and gas (-21%),” said AHL.
The brokerage house was of the view that the decline in power generation is triggered by the overall decline in economic activity across the country and lower domestic consumption due to the rise in electricity tariffs.
In FY23, power generation went down by 9.5% YoY to 129,591 GWh (14,793 MW) compared to 143,193 GWh (16,346 MW) in the same period last year.
The YoY decline in power generation was owed to lower generation from FO (-62%), coal (-22%), RLNG (-17%), wind (-11%), and gas (-2%).
“The decline in power generation can be attributed to a combination of factors, with two significant drivers being the overall decline in economic activity across the country and the increase in electricity tariffs leading to reduced domestic consumption,” said AHL.
In June, hydel was the leading source of power generation, accounting for 30.1% of the generation mix, to become the largest source of electricity generation in the country. Followed by RLNG, which accounted for 18.6% of the overall generation, followed by coal which accounted for 17.8% of the power generation share.
Among renewables, nuclear energy accounted for 13.5% of the total energy mix, meanwhile, wind, solar and bagasse generation amounted to 4.4%, 0.8% and 0.5% of the generation mix.
Comments
Comments are closed for this article.