Pakistan:Gas-Based Power Production Surges To Over 40% Of Energy Mix

Pakistan succeeded in achieving a record high power production from environment-friendly sources – gas and re-gasified liquefied natural gas (RLNG) – in February 2018 after launching LNG-based projects and enhancing supply of imported gas in the country.

The regulatory authority reported on Wednesday that combined electricity production from the locally produced gas and imported LNG increased to 43.17% (3,012.94 gigawatt-hours – GWh) of total production in February 2018.

It was 6.6 percentage points higher than the contribution of 36.57% (2,334.48 GWh) in February last year, according to the National Electric Power Regulatory Authority (Nepra).

The jump in power production from clean sources became possible primarily due to the launch of three RLNG-based power projects in Punjab that had cumulative production capacity of 3,600 megawatts.

Breakdown of the data shows Pakistan produced 19.20% (1,340.07 GWh) of electricity from RLNG and 23.97% (1,672.87 GWh) from locally produced gas.

RLNG an expensive option

However, electricity production from the imported gas has not proved cheap when compared to the locally produced gas. The tariff for RLNG-based electricity was almost equal to the cost of power produced with the help of expensive furnace oil. The government is gradually abandoning the consumption of furnace oil in power plants.

RLNG-based power tariff was estimated at Rs9.02 per unit, which was almost double the tariff for electricity produced from local gas at Rs4.71 per unit. The tariff for furnace oil-based electricity was Rs10.17 per unit, according to Nepra.

Despite this, the regulator has accepted for hearing a petition seeking reduction in power tariff for the end-consumers by Rs2.19 per unit to Rs5.06 for February 2018.

Cheaper, but dirty option

The proposal for a notable reduction in power tariff was put forward after production from the cheaper, but dirty coal surged in the total energy mix.

February 2018 saw power production from coal at 15.79% (1,102.03 GWh) of the energy mix at a tariff of Rs5.81 per unit. Coal-based production was standing at a meagre 0.07% (4.62 GWh) in February 2017.

The surge in production became possible after two coal-fired power projects of cumulative capacity of over 2,600 megawatts came on line – one in Punjab and the other in Sindh.

As per government’s plans, power production through furnace oil fell to 8.33% (581.39 GWh) in February 2018 compared to 26.28% (1,667.53 GWh) in February 2017. Along with this, production from the most expensive source – diesel – dropped next to zero at 0.01% (0.77 GWh) at Rs14.18 per unit in February 2018 from 0.09% (5.95 GWh) in the same month of previous year.

Production from the cheapest and environment-friendly source – hydel – also fell to 19.44% from 23.40%.