Fuel cost for power generation declines.

KARACHI -- The cost of fuel for electricity generation in February went down 28.5 per cent to Rs8.01 per unit from a month ago, according to data recently released by the National Electric Power Regulatory Authority. The drop in the fuel cost was 10.3 per cent on a year-on-year basis.

According to Tahir Abbas, head of research at Arif Habib Ltd, the drop was triggered by a 39.2pc annual increase in hydel-based power generation, which requires zero fuel. The share of hydel in the power generation mix rose to 26.5pc in February from 9.4pc a month ago and 18.2pc a year ago.

In addition, relatively cheap nuclear-based electricity generation was up 86pc year-on-year, denting the overall cost of fuel. The share of nuclear power increased to 24.3pc in February from 22pc in the preceding month and 12.5pc in February 2022. The fuel cost for nuclear power generation is only Rs1.07 per unit, lowest of all sources except renewables.

The coal-based cost of generation decreased 4pc year-on-year owing to the addition of local coal-based plants. The per-unit cost of coal-generated power decreased 21.7pc to Rs12.57 from the preceding month.

China Power Hub Generation and Thar Energy Ltd produced no electricity during February owing to the problems relating to coal imports and transmission constraints caused by a delay in the second transmission line between Thar and Matiari Converter Station, said Mr Abbas.

Thar coal isn't benchmarked to the international prices and is, therefore, significantly cheaper than its...