Karachi, April 21, 2022 (PPI-OT): Pakistan Power: Historic high in power generation for March

Power generation for the CPPA-G system has hit a record number for Mar’22 compared to previous years, with 10,418 GWh being generated in this past month. Generation for March is up 29% MoM and 16% YoY, while total generation for 9MFY22 is up 10% YoY.

Average Cost of Generation is PkR9.22/Kwh, with largest increases in generation from RFO up 110%/370% MoM and YoY respectively. For 9MFY22, HSD saw the largest increase in generation up 215% YoY, along with RFO/Nuclear being up 115%/90% YoY.

Latest news on Circular Debt for the Power Sector put the figure around PkR 2.5tn, with this number increasing by around 2.5x in the last 5 years. Gas shortage faced by the country will force the Power sector to lean towards generation from RFO, one of the costliest fuel source used in generation, hence costs of power generation for the country are likely to remain elevated.

Plants based on RFO might see a surge in utilization and revenue. These include the Base plant and Narowal plant for HUBC, along with NPL and NCPL. Refineries are also expected to witness an increase in offtake, with them being vital in the supply chain of Furnace Oil to the power producers. Current high prices for Oil will lead to a surge in the working capital requirements of IPPs, which along with rising interest rates, means that IPPs are likely to suffer from a cash shortfall.