Karachi, July 30, 2021 (PPI-OT): Monthly Power Generation Data – Jun-21: Generation up by +8%YoY; FO plants moved down in merit order list

As per latest data available on NEPRA’s website, overall power generation during the month of Jun-21 increased by +8%YoY to 14,361Gwh. Power production through RFO/Coal clocked in at 1,174/2,590Gwh up by +82%/+20%YoY, during Jun-21. Generation through Hydel/Gas and LNG dropped by 22%/6%YoY. Generation is up by +10%MoM during Jun-21 compared to May-21.

This brings total generation for FY21 to 130,223Gwh up by +7%YoY primarily led by +50%/+8%/+6%YoY incline in production through RFO/Coal/Gas and LNG contributing 5%/21%/32% of the total power generation during FY21.

RFO: Power generation through RFO in Jun-21 leaped up by +82%YoY (up by 528Gwh) to 1,174Gwh, owing to higher generation from Hub Plant, Narowal, Liberty, Saba Power, Atlas, AES Lalpir, Nishat Chunian, Pakgen and Nishat Power, cumulatively contributing 439Gwh. This brings total generation for FY21 to 6,271Gwh up by +50%YoY owing to higher generation from Atlas, KAPCO Block I, Attock Gen, Lalpir, Pakgen, Atlas, Nishat Chunian and Nishat Power.

Gas: Gas/LNG based power generation dropped by 6%YoY (257Gwh) to 4,005Gwh in Jun- 21 on the back of lower generation from GENCO II (contributing 255Gwh), KAPCO Block-I (down by 62Gwh) and Baloki (297Gwh), while generation from smaller IPPs increased (contributing 425Gwh). This brings total generation in FY21 to 41,276Gwh up by +6%YoY led by higher generation from QATPL, Baloki, Haveli Bahadurshah and other smaller IPPs.

Coal: Coal based power generation inclined by +20%YoY (434Gwh) to 2,590Gwh during Jun-21 on the back of higher generation from CPHGC, Coal Fired Power Plant and Port Qasim (up by 485Gwh) while generation from Engro Powergen Thar declined during the month of Jun-21. For FY21 generation is up by +7%YoY to 27,548Gwh led by higher generation from CPHGC and Coal Fired Power Plant (Huaneng Shandong Ruyi Energy (Pvt) Ltd) while lower generation from Engro and Port Qasim.

Generation cost on RFO up by +15%YoY to PKR 14.5/Kwh during Jun-21: As per NEPRA, power cost on RFO during Jun-21 is up by +15%YoY (up by +1%MoM) to PKR 14.53/Kwh. However, gas price increased to PKR 8.17/Kwh up by +19%YoY while generation cost through LNG stood at PKR 10.58/Kwh, up by +29%YoY or up +5%MoM.

FO and LNG plants remained mixed in merit order list during Jun-21: FO plants remained mixed in merit order list as cost of generation was up +1%MoM while for LNG plants moved down in the merit order list as cost increased by +5%MoM compared to May-21. However, during Jul-21 most of the FO plants moved up in the merit order list while coal plants moved down merit order list compared to Jun-21 as international coal prices have increased substantially. LNG plants also moved down in the merit order list for a second consecutive month.

Outlook: As a result increase in prices and depleting gas reserves, FO plants have moved up in the merit order list. RFO plants are likely to remain up in the merit order list as summer approaches while generation through gas is also likely to pick up as demand from domestic sector reduces post winters. Generation through coal is likely to remain strong owing to lowest cost of generation, however, recent spike in coal prices have led to rise in generation cost on coal. LNG based power generation may gain further traction from 2022 onwards as new LNG contract at lower prices comes in to effect.