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Pakistan Power: Power Generation falls 1% in FY20; Jun-2020 generation showing signs of economic recovery

• Power generation in Pakistan declined by 1% YoY to 121,867 GWh (23,618 MW) during FY20 as compared to 122,708 GWh (23,781 MW) in FY19 due to (1) overall slow economic activity during the year and (2) the impact of COVID-19 related lockdowns and restrictions during Mar-May 2020.
• Power mix during FY20 moved in favor of Hydel (32% in FY20 vs. 26% in FY19) and Coal (21% in FY20 vs. 13% in FY19), replacing Gas (12% in FY20 vs. 18% in FY19) and Furnace Oil based generation (3% in FY20 vs. 7% in FY19). RLNG contributed 20% to the overall power mix, with Nuclear and Wind based generation clocking in at 8% and 2%, respectively during the year. 
• Coal power generation has increased due to the commencement of China Hub Power Generation (1,220 MW) and Engro Powergen Thar (660 MW), while Hydel power generation increased due to improved availability of water amidst higher water availability during the year.
• The demand for Furnace Oil and Gas based power fell due to their higher cost of producing power, which resulted in their respective decline in merit order list.
• The installed Capacity in the country touched 34,157MW  in Jun-2020 compared to 30,590 MW in Jun-2019.
• Power Generation started to decline in Mar-2020 (down by 9% YoY to 6,911 GWh from 7,621 GWh in Mar-2019) largely due to COVID-19 related lockdowns and restrictions. 
• A similar trend was also witnessed in Apr-2020 and May-2020 as Power Generation declined by 14% YoY and 5% YoY, respectively.
• However, encouragingly Power Generation has picked up, though up 1% YoY, it is  has almost double (+92%) from the low recorded in Mar-2020.
• With industries opening up post COVID-19 lockdown and subsequent pick up in economic activity, we expect demand for Power to increase from here forth.
• The average fuel cost was down by 3% YoY to Rs5.97/KWh in FY20 compared to Rs6.13/KWh in FY19.

This is mainly due to increase in Hydel based generation by 20% YoY (no fuel cost) and increased in coal based power generation at a lower cost of Rs6.1/Kwh.