· Power generation decreased by 16% YoY to 12,284 GWh (16,510 MW) during May’23, compared to 14,657 GWh (19,700 MW) SPLY. The YoY decline in the power generation was owed to lower generation from FO (-81%), Wind (-22%), Nuclear (-18%), Gas (-13%), RLNG (-11%) and Hydel (-8%). Our view is 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.

· Major contributors during May’23 were Hydel (share: 27.0%), RLNG (share: 24.3%), Coal (share: 16.8%), Nuclear (share: 12.6%), Gas (share: 10.3%), Wind (share: 4.9%), FO (share: 2.0%), Solar (share: 1.0%), and Bagasse (share: 0.6%).

· China Power Hub Generation generated 32GWh (Load Factor: 3%) during May’23. The load factor of the plant remained low because of coal import issues. Thar Energy Limited (TEL)’s load factor remained at 58% during May’23 (Apr’23: 8%); the plant generated 142 GWh during the month under review. To recall , due to transmission constraints, TEL was unavailable from Feb’23 to Mar’23 for power generation.

· The total hydel-based generation declined by 8% YoY due to zero generation from Neelam Jhelum, the plant is unavailable for generation since Aug’22 due to some technical issues.

Fuel cost decreased by 26% YoY during May’23

· During May’23, fuel cost for power generation decreased by 26% MoM to an average of PKR 9.72/KWh compared with an average PKR 13.15/KWh cost. YoY decline was witnessed during May’23 which was led by the following reasons;

o Coal-based generation cost decreased by 42% YoY due to cheaper local coal-based power plants added in the system.

o FO-based cost of generation also decreased by 31% YoY.

o RLNG-based generation cost also decreased by 12% YoY to PKR 24.5/KWh due to the 9% YoY decline in RLNG prices to PKR 3,833/mmbtu.

o Solar-based generation increased by 38% YoY.

Courtesy – AHL Research