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Power production up 60% on LNG import, cheaper oil

Power production up 60% on LNG import, cheaper oil

KARACHI: Records of the government reveal that electricity generation has increased significantly over the last four months with the availability of imported liquefied natural gas (LNG), cheaper furnace oil and high-speed diesel to the power plants.

Data of the Central Power Purchasing Agency (CPPA) showed that power production, excluding the output of K-Electric, increased by approximately 60% in the past four months to hit 10,737 gigawatt-hours (GWh) in June 2016.

The production stood at 10,003 GWh in May, 7,814 GWh in April and 6,735 GWh in March, the CPPA said.

Water and Power Secretary Mohammad Younus Dagha told The Express Tribune the higher generation was achieved through better maintenance and increased production from the ministry-run plants at Guddu and Muzaffargarh.

“We achieved the all-time high generation of 17,340 megawatts during the period of peak demand in Ramazan {June 7 to July 5},” he said.

He added no new power plants were added last year and “even the hydel generation was a bit lower this summer due to low release of water by the regulatory authority from the dams.”

No respite from outages

However, the surge in power production does not reflect in the daily life of common man, as urban and rural areas continue to endure hours-long load-shedding every day.

The increase in production has apparently been absorbed by the high power-consuming goods including air conditioners as their consumption has gone up with the rise in temperature.

The increase in production is also seasonal. The CPPA data suggested that the output gradually improved during April, May and June 2016 as compared to the same months of last year.

Pakistan’s total power production increased by 8% to 10,737 GWh in June 2016 compared to 9,927 GWh in June 2015.

“The rise in production primarily came on the back of increased furnace oil-based generation that rose 38% year-on-year {in June 2016} to 3,421 GWh and an additional 743 GWh through re-gasified LNG, which we assume was previously bundled with gas,” Mehwish Zafar, an analyst at Taurus Securities said in a note.

“Furnace oil and high-speed diesel prices have waned 31% and 13% year-on-year, respectively, thus, encouraging power producers to make greater utilisation of these fuel sources compared to gas,” she said.

Zafar added gas-based power production dropped by a significant 29% to 1,924 GWh as opposed to 2,722 GWh in June 2015.

“Generation companies in the private sector saw an increase of 18% in total production year-on-year to 1,746 GWh, which is primarily due to higher generation on furnace oil,” she added.

Also on month-on-month basis, total electricity generation registered an upsurge of 16% in June 2016 from May 2016, primarily owing to 25% and 4% higher generation based on furnace oil and hydel source respectively.

The CPPA has also introduced a separate column to record power production from imported gas (LNG).

The higher production
in June is also attributed to the availability of RLNG to the plants mostly installed in recent months and years in Punjab.

Courtesy : Express Tribune



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