Karachi, This month has seen a normalization in power generation costs despite a noticeable decrease in power generation on both a month-on-month and year-on-year basis. February's figures revealed a 14% drop from the previous month and an 8% decrease from the same period last year, recording the lowest monthly level of power generation in the past three and a half years.

According to JS Global, the subdued demand for electriKarachi, influenced by high tariffs in both domestic and manufacturing sectors, has played a significant role in these dynamics. The report indicated that the major sources of power generation for the month were hydropower, nuclear, regasified liquefied natural gas (RLNG), and coal, contributing to 25%, 23%, 20%, and 16% of the total mix, respectively. Notably, the proportion of hydropower increased significantly from 11% in January 2024, helping to reduce the overall cost of power generation.

The average cost of generation for February stood at Rs9.42 per kWh, marking a 36% decrease from the previous month. This reduction is largely attributed to a shift in the energy mix away from more expensive sources like coal, which saw its share decrease compared to January, and the inclusion of more cost-effective sources such as hydropower. Additionally, the elimination of furnace oil from the month's energy mix, which previously accounted for 9% of January's total, further contributed to the cost decrease.

However, on a year-on-year basis, the cost of generation has risen by 10%, driven by increases across all fuel sources. The analysis further highlighted that renewable energy sources such as wind, solar, and bagasse marginally contributed to the overall power generation, representing 1.5%, 1.3%, and 1.4% respectively.

This report from JS Research, which cites data from the National Electric Power Regulatory Authority (NEPRA), underscores significant shifts in the energy sector, reflecting broader trends in fuel consumption and power generation costs.