ISLAMABAD: As Pakistan grapples with soaring fuel costs and persistent energy shortages, the Independent System and Market Operator (ISMO) has released a revised Economic Merit Order (EMO) that lays bare the stark disparities in the cost of electricity generation across the country’s power plants.
Prepared in collaboration with the Central Power Purchasing Agency (CPPA-G), the EMO ranks power plants by generation cost to guide electricity dispatch decisions. It assumes full-load efficiency, smooth fuel availability, and zero outages, though real-world operations often differ due to fuel shortages, contractual obligations, and system constraints.
Cheapest Power Sources
At the bottom of the cost curve, Uch-I emerged as the cheapest power producer, generating electricity at Rs3.113/kWh. It is followed by Liberty Power at Rs5.1206/kWh and Thar Coal Block-I at Rs5.5171/kWh. Other Thar coal projects—Engro Thar Power (Rs6.5174/kWh), Thar Energy Limited (Rs6.5273/kWh), and Thal Nova (Rs6.5300/kWh)—also ranked among the most economical.
Gas-based plants such as Guddu (Combined Cycle, 747MW) generated at Rs9.664/kWh, while Foundation Power (Rs11.1201/kWh), Lucky Electric (Rs11.3800/kWh), and Engro Qadirpur (Rs11.6533/kWh) followed closely. Imported coal-based Port Qasim also fell in this bracket at Rs11.8668/kWh.
Mid-Range Producers
The cost of generation climbed in mid-tier plants, with Jamshoro (coal) at Rs13.5756/kWh and Guddu (Open Cycle) at Rs13.8450/kWh. Gas-based Uch-II produced at Rs14.4844/kWh, while Engro Qadirpur (gas bdr/PEL) cost Rs14.5812/kWh. Coal-fired Sahiwal Power stood at Rs16.6498/kWh.
RLNG-based producers significantly raised costs, with NPPMC-HBS (Combined Cycle) at Rs19.6565/kWh, NPPMC-Baloki at Rs19.8565/kWh, and QATPL-Bhikki at Rs20.0131/kWh. Punjab Thermal Power (RLNG) generated at Rs20.4755/kWh, while China Power Hub Generation Company followed at Rs20.7993/kWh.
Expensive Producers
Costs rose sharply among older RLNG and RFO-based units. Orient Power generated at Rs24.2531/kWh, followed by Nandipur (Rs24.6553/kWh), Halmore (Rs24.7171/kWh), Sapphire Electric (Rs24.7627/kWh), and Saif Power (Rs24.8272/kWh).
Kapco units ranged between Rs26.0660/kWh (Block-I RLNG) and nearly Rs29/kWh when running on LSFO. Nishat Power (RFO) stood at Rs29.2416/kWh, while Altern Energy (Phase II, RLNG) and FKPCL (RLNG) hovered above Rs29/kWh.
Most Expensive Power Plants
At the high end, K-Electric (RFO) generated at Rs31.0875/kWh, while several RLNG and RFO units crossed Rs32/kWh. Altern Energy (Phase I, RLNG) soared to Rs36.9650/kWh.
The costliest category belonged to plants relying on high-speed diesel (HSD). Attock Gen (RFO) produced at Rs43.2591/kWh, while NPPMC-HBS (HSD) reached Rs44.3070/kWh. Punjab Thermal Power (HSD) cost Rs53.8368/kWh, while Bhikki and Baloki on HSD generated between Rs51–53/kWh.
The steepest costs were recorded at Orient (HSD) Rs58.0221/kWh, Halmore (HSD) Rs58.4464/kWh, Sapphire Electric (HSD) Rs58.5967/kWh, and Saif Power (HSD) Rs58.7404/kWh. Topping the list, Engro Powergen Qadirpur (HSD) stood as Pakistan’s most expensive power plant at a staggering Rs72.8483/kWh.
Policy Implications
The EMO underscores the urgent need for fuel diversification and efficiency improvements in Pakistan’s energy sector. With the cheapest plants clustered around domestic gas and Thar coal and the most expensive reliant on imported HSD and RFO, policymakers face pressure to restructure the country’s generation mix to reduce reliance on high-cost, volatile fuels.
Story by Khalid Mustafa
