Pakistan power generation hits FY26 high in August at 14,218 GWh

Power generation in Pakistan surged to 14,218 GWh in August, marking a 8% year-on-year (YoY) and 1% month-on-month (MoM) increase, as high summer temperatures and seasonal demand continued to drive energy consumption.

The latest figures show August recorded the highest monthly output in FY26 to date, narrowly surpassing July’s generation of 14,123 GWh.

According to official data, cumulative generation for the first two months of FY26 (July-August) stood at 28,431 GWh, up just 1% compared to 28,059 GWh in the same period last year.

While the generation mix remained broadly stable, furnace oil usage—once in decline—made a notable comeback. The data revealed that hydropower remained the largest contributor in August, accounting for 39% of the energy mix with 5,517 GWh. However, output declined 3% from July.

Coal-based generation posted a strong 30% YoY growth, reaching 2,580 GWh, despite a 2% MoM dip. Gas and RLNG-based generation saw MoM declines of 5% and 11%, respectively. RLNG output dropped to 2,180 GWh, while gas generation slipped to 1,035 GWh, both reflecting subdued demand and possibly dispatch prioritization due to fuel cost differentials, said a report of Taurus Securities.

Furnace oil (FO), though still a minor component of the mix, recorded a YoY jump to 92 GWh. Analysts believe this reflects seasonal demand pressures and adjustments to dispatch agreements with FO-based independent power producers (IPPs).

Nuclear power generation made a significant MoM leap of 53%, reaching 2,145 GWh as reactors returned online after maintenance outages. Despite the monthly spike, YoY nuclear output remained lower.

“The August data reflects a classic summer demand curve, but what’s notable is the return of furnace oil, albeit modestly,” said an energy analyst. “With RLNG prices softening and nuclear capacity normalizing, the merit order is being reshuffled more frequently.”

Demand trends and structural risks

Grid-based electricity demand continues to rise steadily, supported by summer consumption and tariff revisions that have temporarily improved plant load factors. However, the outlook remains clouded by deeper structural shifts.

“We’re seeing residential and commercial consumers increasingly shift toward solar, which is starting to erode DISCOs’ long-term demand base,” said a senior research analyst. “Unless distribution reforms catch up, this could challenge the sustainability of Pakistan’s centralized power model.”

Generation cost falls

The average fuel cost of generation fell to PKR 7.3 per kilowatt-hour in August, down 6% MoM and 3% YoY. The decline was largely due to lower RLNG prices and a strong hydropower contribution.

Additionally, the sharp increase in nuclear generation—a relatively low-cost energy source—helped offset the cost impact of rising furnace oil usage.

“From a cost perspective, the mix is temporarily favorable,” the energy analyst said. “But volatility in nuclear availability and weather-linked hydel output makes this difficult to rely on for long-term pricing stability.”