Islamabad, February 2025: Pakistan’s power generation saw a 2 percent year-on-year (YoY) decline in January 2025, dropping to 8,152 gigawatt-hours (GWh) compared to 8,314 GWh recorded in January 2024, according to a report by Arif Habib Limited (AHL).
The decrease in power generation is attributed to a lower overall demand driven by reduced temperatures and a rise in solar power adoption. On a cumulative basis, power generation in the first seven months of the fiscal year 2025 (7MFY25) fell by 3 percent to 74,794 GWh, compared to 77,296 GWh in the same period last year.
Segment-Wise Breakdown
Hydel power generation witnessed a 6 percent YoY drop, falling to 866 GWh in January 2025 from 924 GWh in January 2024. Meanwhile, nuclear power generation surged by 26 percent, reflecting an increasing reliance on this energy source.
The power sector saw a mixed trend in coal-based generation. Electricity production from imported coal increased by 21 percent YoY, whereas generation from locally sourced coal fell by 8 percent YoY, settling at 1,269 GWh.
Fuel Cost Decline
Despite the dip in power generation, fuel costs saw a significant 22 percent YoY decline in January 2025, averaging Rs. 10.79 per unit compared to Rs. 13.79 per unit in January 2024. However, on a month-on-month (MoM) basis, fuel costs increased by 19 percent from Rs. 9.09 per unit in December 2024.
Among fuel sources, furnace oil remained the most expensive at Rs. 30.44 per unit, while re-gasified liquefied natural gas (RLNG) was the second most costly fuel source during the period.
For the first seven months of FY25, the overall fuel cost for power generation declined by 2 percent, reaching an average of Rs. 8.66 per unit.
Outlook
The decline in generation aligns with a broader shift towards renewable energy sources and efficiency improvements. However, the fluctuating cost of fuel remains a critical factor affecting electricity prices. Industry experts suggest that the trend in power demand and fuel cost variations will play a pivotal role in shaping the energy sector in the coming months.
