Pakistan has been actively pursuing plan to increase share of cleaner energy sources in its energy mix, as carbon-based energy not only harms the environment but is also costly.
For the first time, nuclear energy became Pakistan’s top power source, meeting more than 27 percent of the country’s energy demand in December 2022 at a cost of less than half a US cent. In November, nuclear generation was the second-most important source after hydropower. The national grid received 2,338 GWh of electricity from nuclear sources.
Pakistan has been actively pursuing a plan to increase the share of cleaner energy sources in its energy mix, as carbon-based energy, particularly oil and gas, not only harms the environment but is also costly. Islamabad spends billions of dollars each year on fossil fuel imports.
Nuclear energy generated 27.15 percent (or 2,284.8 GWh) of total electricity generated in December at Rs1.073/unit, followed by hydel with 20.44 percent (1,720.4 GWh), coal-based power at 18.1 percent (1,520.9 GWh) at Rs11.5/unit, natural gas at 15.13 percent (1,273.8 GWh) at Rs10.5/unit, and RLNG at 13.7 percent (1,153.7 GWh) at Rs20.2/unit.
Furthermore, 0.46 percent (38.91 GWh) of expensive electricity was generated in December from furnace oil at Rs 25.7971 per unit. High-speed diesel produced no electricity. In December 2022, wind power contributed 2.5 percent (or 211.6 GWh) of electricity to the national grid, biomass-based power contributed 1.2 percent (101 GWh) at Rs5.97 per unit, and solar-based energy contributed 0.8 percent (or 69.5 GWh).
According to data released on Thursday, this resulted in a 14.5 percent decrease in Pakistan’s December 2022 power generation costs. According to the data, overall power generation in the country fell by 4.7 percent in the month under review when compared to the same month last year.
Fuel costs for power generation fell by 14.5 percent year on year in December 2022, to an average of Rs 7.04 per KWh, compared to Rs 8.24 per KWh in the same month the previous fiscal year. However, it increased by 17.6 percent month over month.
On a year-over-year basis, the decrease in fuel costs was primarily due to an increase in nuclear and solar generation, as well as a 14 percent YoY decrease in coal-based generation costs due to the addition of local coal-based plants.
According to Tahir Abbas, Head of Research at Arif Habib Limited, the increase in fuel costs was caused by a decline in hydropower generation and nuclear-based generation on a monthly basis.
Based on lower-cost energy generated in December, the Central Power Purchasing Agency (CPPA-G) has requested approval from the National Electric Power Regulatory Authority for a tariff reduction of Rs2.1995 per unit for Ex-Wapda Distribution Companies (XWDiscos) customers due to fuel charge adjustments (FCA) for December 2022. Discos will refund it in February 2023 bills if it is approved.
The CPPA-G stated in its petition to NEPRA on behalf of XWDiscos that the reference fuel charges from consumers in December were Rs9.3193/unit, while the actual fuel cost was Rs7.1198/unit. As a result, it should be allowed to refund the Rs. 2.1995 per unit that it overcharged consumers.
During the month, Rs59.289 billion (or Rs7.0441/unit) of electricity was generated, and Rs57.648 billion (or Rs7.1198/unit) of electricity was delivered to discos. Transmission losses were 3.35 percent (or 282.10 kWh) in December.
On January 30, 2023, the power regulator will hold a public hearing on the CPPA-G petition.
Due to the high cost of imported fuel, NEPRA was allowed to collect additional amounts from consumers in previous months. The FCA for November 2022 was Rs4.3/unit, which would be collected in bills issued in January 2023. However, the FCA was negative 0.3213/unit in October, which was refunded to consumers in their December bills.
It should be noted that the cost of other fuels increased year over year. RFO prices increased by 16%, RLNG prices increased by 12.5%, and domestic gas prices increased by 25%.
According to power generation data, it was down 4.7 percent YoY in December of this fiscal year compared to the same month last year. Power generation fell by 4.7 percent year on year to 8,417 GWh (11,313 MW) during the month under review compared to 8,828 GWh (11,866 MW) during the same month of the last financial year. On a month-over-month basis, generation increased by 0.6 percent.