LAHORE -  The country’s power generation has registered a decline of four percent in January 2017 owing to lower electricity off-take during the winter season but this power generation grew by 2 percent if compared to the production of the same period of last year.

According to National Electric Power Regulator Authority (Nepra), thermal based power’s fuel cost has clocked in at Rs8.6 per Kilowatt hour (KWh), up by 38 percent monthly due to increased share of high cost, while on YoY basis average fuel cost per KWh surged by 26 percent.

Nuclear based generation remained the cheapest at Rs0.81/KWh followed by gas (Rs4.5/KWh), coal (Rs5.6/KWh), RLNG (Rs7.6/KWh), FO (Rs9.5/KWh), imported - Iran (Rs10.6/KWh) and HSD (Rs14.22/KWh).

Fuel mix, as expected, remained tilted towards thermal based generation in January 2017, with furnace oil (FO) based power capturing 48 percent of the generation mix (+11% MoM, -2% YoY) followed by gas with 26 percent. Hydel generation on the other hand remained subdued, constituting 7 percent (-15% MoM, -5% YoY) of the country’s power generation, as seasonality factor kicked in due to lower water levels in the winter season.

In 7MFY17, power generation witnessed an increase of 4 percent YoY. Hydel and FO based generation cumulatively captured 62 percent of the power generation mix, each having a pie of 31 percent. RLNG and nuclear based power expanded its share in the mix by 4ppt and 2ppt to 4 percent and 5 percent, respectively, while gas based generation contracted by 5ppt to 24 percent during the period.

Rising FO prices (up 15% YoY in 7MFY17) has augmented the circular debt concerns. 13 IPPs have reportedly called sovereign guarantees on March 3, 2017 to recover outstanding dues amounting to Rs48 billion within 10 days. As per news report, the minister for water and power has stated that the government will pay Rs30 billion, as approved by Economic Coordination Committee (ECC), next week which may cause IPPs to suspend the invocation of sovereign guarantees.

Hashim Sohail, an industry expert from Topline, stated in his report that during 7MFY17, Hub Power (HUBC) base plant’s average load factor stood at 67 percent (73pc last year) generating 802MW, down 8 percent YoY. The decline was mainly due to scheduled major overhauling of unit-1. Narowal’s utilisation improved to 69 percent against 63 percent last year with generation growing by 11 percent to 148MW.