In a startling development, the cost of power generation in Pakistan has surged by a staggering 23 per cent in January 2024, compared to the same period last year, reports the brokerage house Topline Securities.

The average cost per kilowatt-hour (KWh) soared to Rs13.8, marking a significant increase from Rs11.20/KWh recorded in January 2023.

The substantial hike in costs is attributed primarily to elevated expenses in power generation from gas and nuclear sources, which witnessed a spike of 43 per cent and 24 per cent, respectively, on a yearly basis. Moreover, the fuel cost for furnace oil (FO) also surged by 22 per cent year-on-year, according to data from Topline Securities.

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This surge comes as a severe blow to the populace, which is already grappling with high inflation and sluggish economic activity. Rising electricity bills have compounded the financial burden on citizens.

In terms of power generation, Pakistan witnessed a marginal decline of over 2 per cent in January 2024 compared to the same period last year, with total generation amounting to 8,313 GWh (11,175 MW).

The decline in power generation was predominantly due to a decrease in coal-based generation, which plummeted by 20 per cent year-on-year. Gas and wind power generation also witnessed declines of 10 per cent and 55 per cent, respectively.

However, there was a 9 per cent increase in power generation on a monthly basis, indicating some fluctuation in the generation patterns.

Coal emerged as the primary source of power generation in January 2024, constituting 23.4 per cent of the total generation mix, surpassing nuclear and RLNG (re-gasified liquid natural gas). Nuclear energy accounted for 20.8 per cent of the overall generation, while RLNG contributed 18.2 per cent.

Renewable sources like wind, bagasse, and solar collectively made up a modest portion of the generation mix, indicating a potential for further development and investment in sustainable energy solutions.

Overall, the surge in power generation costs coupled with a slight decline in generation highlights the challenges facing Pakistan’s energy sector and underscores the need for strategic measures to ensure an affordable and sustainable power supply in the country.