Power Costs Up By 25% Due to Rising Oil Prices

Despite increasing electricity production in Pakistan, the cost of electricity has increased. In January, the cost of electricity production increased by 25% when compared to December.

The reason cited for this price hike is due to lower production from hydro electric plants and higher production through gas/oil fired plants.

Overall cost of electricity production in January 2017 was Rs. 6.39 per KWH compared with Rs. 5.13 in December 2016. The cost is higher still compared with January 2016 where per unit cost stood at Rs. 5.53.

These statistics have been reported by National Electric Power Regulatory Authority (NEPRA). The total share of power produced by furnace-oil based power plants was 43% or 3,005 GWH in January 2017, increasing from 37.13% or 2,673 GWH in December 2016. In January 2016, production share for furnace oil based power plants stood at 50% or 3,387 GWH.

Lower Availability of Water Affecting Hydel Power

Hydroelectric power stations’ share fell to 7.40% in January 2017 compared with 22.82% in December 2016. In January 2016 however, production share was higher for hydroelectric power stations, at 12%. The share for hydroelectric dams was even higher in November 2016 at 41%.

According to an analyst, this was due to lower availability of water in January this year. Water levels drop every year in the winter season.

Nuclear Power is The Second Cheapest Source of Electricity

Nuclear power’s share went up to 8% in January 2017, double the value it exhibited in January 2016 (4%). December 2016 saw nuclear power’s share at 6%.

This increase in overall nuclear power production was due to the 340 MW Chashma-III power plant which was inaugurated in December 2016.

It was also the cheapest source of electricity after hydel (which is obviously free) and stood at Rs. 0.81 KWH in January this year.

Diesel and Furnace Oil Are The Most Expensive

Diesel based power production also increased in January 2017. Diesel happens to be the most expensive means of electricity production as well with a 5% overall share in production at Rs. 13.71 per KWH in January this year. In December 2016 production stood at 0.84% and cost Rs. 12.03 per KWH.

Furnace oil based power plants on the other hand cost Rs. 8.83 per KWH in January 2017, making it the second most expensive source of electricity production after diesel.

Electricity Production Increased by a Mere 4%

The first 7 months of the financial year 2017-2017 saw overall electricity generation in Pakistan rise by 4%. Furnace oil based plants and Hydels accounted for a total of 62% of power produced with both of them having a 31% share.

An analyst from Topline Securities adds,

The share of RLNG (re-gasified liquefied natural gas) and nuclear-based electricity widened by 4 and 2 percentage points to 4% and 5% respectively while gas-based generation contracted 5 percentage points to 24% during the period.

The share of RLNG (re-gasified liquefied natural gas) and nuclear-based electricity widened by 4 and 2 percentage points to 4% and 5% respectively while gas-based generation contracted 5 percentage points to 24% during the period.

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