Power generation falls 22.8pc in April as economic slowdown bites


KARACHI: Pakistan’s power generation fell by 22.8 percent in April 2023 to 10,010 GWh from 12,960 GWh a year earlier, as industries faced the brunt of an economic slowdown. The decline was compounded by reduced coal and hydel-based generation and diminishing output from multiple sources.

“Power generation is affected by economic slowdown due to multiple factors such as policy tightening, flood impacts, import limitations, high borrowing, fuel costs and political uncertainty,” said analyst Muhammad Awais Ashraf at Foundation Securities Limited. Lower generation from fuel oil (-86 percent YoY), wind (-31 percent YoY), coal (-16 percent YoY), nuclear (-15 percent YoY), gas (-7 percent YoY) and RLNG (-4 percent YoY) also contributed to the crisis.

Ashraf said resumption of electricity generation from Neelum Jhelum Hydropower Project in July and full utilisation of 2,640 MW electricity from Thar after completion of Matiari-Thar transmission line would improve production on Hydel and local coal. The coal’s contribution to power generation in April was 18.2 percent, nearly equal to that of hydel (18.7 percent). “This decline in power generation is triggered by the overall decline in economic activity across the country. Hence, the best solution is to increase the contribution of local resources to power generation.”

Ashraf mentioned that even coal-based power plants in the country are facing problems due to economic instability. He stated that the government should increase the share of local coal in power generation. Currently, 7.6 million tons per annum (MTPA) of coal is being extractable from Thar Block I & II each. The increase in production output of Thar mines would further reduce local coal prices, making it one of the cheapest sources of fuel.

With an astonishing 175 billion tons of coal deposits in Thar — an indigenous resource — Pakistan has the capability to achieve energy self-sufficiency for years to come. These coal reserves have the potential to produce around 100,000 MWs of electricity over the next 250 years.Prioritising the utilisation of this indigenous resource is not only imperative but also provides a viable long-term solution to alleviate the country’s energy woes. The time has come for Pakistan’s government to seize this opportunity and pave the way to provide cheap electricity to meet the demands of consumers and industries.

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