Pakistan's power generation falls 20% short of target in August

Pakistan's power generation in August saw its sharpest year-on-year decline in 16 months, dropping by 17% compared to last August. It also fell by 20% compared to the reference level (targeted power generation) of 16,515 giga-watt-hour (GWh).

This substantial shortfall is expected to increase the capacity purchase price (CPP) per kilowatt-hour (KWh), a cost that will be passed on to consumers in the coming months.

According to data from the National Electric Power Regulatory Authority (NEPRA), power generation in August was 11% lower compared to last month.

Hydropower's share in power generation increased to 41% — the highest since November 2016 — contributing 5,362 GWh, which is 11% below August 2023 levels but 0.4% higher than July this year.

Imported coal-based generation dropped by 5% YoY, reflecting the overall decline in demand in the system. Nuclear power emerged as the second-largest source, generating 2,190 GWh, a 10% rise from July and a 7% increase from August 2023.

Meanwhile, RLNG-based generation saw a 23% YoY decrease, producing 2,106 GWh, which is also 29% lower than last month's levels. Wind power generation plummeted by 50% YoY, generating 398 GWh compared to 805 GWh in August 2023, and lower than in July this year. On the other hand, solar power saw a 17% YoY increase, generating 98 GWh in August, up from 84 GWh the previous year, though it was 11% lower compared to July.

The cost of power generation in August decreased by 9% YoY to PKR 7.49 per KWh, falling below the reference level of PKR 9.39 per KWh. This reduction in the Fuel Cost Adjustment (FCA) is expected to lower inflation for October by seven basis points.