Power generation stabilises after falling for two years
Pakistan's power generation reached 127,159 gigawatt-hours (GWh) in financial year 2024-25, remaining almost unchanged as compared with previous year's production of 127,059 GWh, according to a report released on Monday.
The stability in power generation came following a decline over the past two years. Year FY25 could be divided into two parts – in the first nine months (July-March), power generation fell 2% to 90,147 GWh while in the fourth quarter (April-June), the generation increased 7% to 37,012 GWh. The recovery in the latter part of the year helped offset the earlier decline, said Topline Research in its report.
The uptick in 4QFY25 was led by the diversion of captive power plants to the national grid after the government imposed an off-grid levy on captive power users, effective from February 2025. Furthermore, the government also announced a reduction in the overall unit cost in the April-June quarter after using savings that stemmed from tariff negotiations with the independent power producers (IPPs) and the reallocation of petroleum development levy (PDL).
In the first three quarters, the report mentioned, the electricity generation declined as bulk buyers largely relied on their own captive power production by using furnace oil, gas and other fuel sources.
Hydel electricity contributed the most to total production, having a 31.44% share in FY25 compared to 31.38% in FY24. It was followed by re-gasified liquefied natural gas (RLNG)-based power production, which accounted for 17.48% of total production against 18.70% a year earlier.
Local coal-fired plants contributed 12.23% in FY25 vs 12.51% in FY24 while imported coal-run plants had a 7.13% share compared to 3.40% in FY24. Nuclear, gas, wind and furnace oil-based generation contributed 17.66%, 8.82%, 3.02% and 0.41%, respectively.
Three new hydroelectric power additions to the system include SK Hydropower Station, initially commissioned at 221?megawatts, with total planned capacity of 884?MW; Pehur Hydel Power Plant, having capacity of 18?MW; and Marala Hydropower Plant, with a capacity of 7.64?MW. Additionally, the Lakhra Power Plant (Genco-IV), a 150MW coal-fired facility, has also been added.
In FY25, the average generation cost edged down 2% to Rs8.6 per kilowatt-hour (kWh) compared to Rs8.8 per kWh in FY24. In June alone, the fuel cost dipped 9% year-on-year (YoY) but was up 1% month-on-month to Rs7.9 per unit.
"It is interesting to note that around 46% of power generation came from RLNG, coal and gas with average fuel cost of Rs16.5 per unit in FY25," Topline commented.
Separately, the cost of imported coal-based generation declined 28% YoY to Rs16.7 per kWh due to a 5% drop in international coal prices. Similarly, the RLNG cost decreased 1% on the back of a decline in international crude oil prices by 12% to $70 per barrel in FY25.
"We expect 5-8% growth in electricity consumption in FY26 due to gradual and continuous transition of captives to the national grid and imposition of PDL on furnace oil. Furthermore, gradual economic recovery amidst easing interest rates will also help increase power generation," the report added.
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