Power Generation in Pakistan Drops Sharply by 19% in November

Pakistan’s power generation fell sharply by 19 percent compared to October, according to Arif Habib Limited (AHL), citing data from the National Electric Power Regulatory Authority (NEPRA). AHL said the month-on-month decline is mainly attributed to seasonal factors, including lower demand and changes in the generation mix during the winter period. This brings total power generation for the first five months of FY26 to 58,869 gigawatt hours, which is broadly flat compared to the same period last year. Despite stable output, overall power generation remained around 1 percent below Nepra’s reference level for November. Analysts noted that rising distributed generation and the growing shift towards alternative energy sources continue to keep demand for grid-supplied electricity lower than expected. The average fuel cost of power generation declined significantly during the month. Adjusted fuel cost stood at Rs. 6.16 per unit in November, the lowest level since May 2021, reflecting lower global oil prices and a higher share of cheaper hydropower in the energy mix. Hydropower was the largest contributor, producing 3,153 gigawatt hours and accounting for about 39 percent of total generation. Hydel output rose 10 percent year on year and also exceeded Nepra’s reference level, helping contain overall fuel costs. Nuclear power generation increased strongly on an annual basis, rising 23 percent year on year to 2,031 gigawatt hours, although it declined slightly compared to October due to routine operational factors. In contrast, generation from RLNG, gas and coal declined on both a yearly and monthly basis. RLNG-based generation dropped 23 percent year on year and 64 percent month on month, while imported coal-based generation fell 15 percent year on year. Lower fuel costs prompted distribution companies to seek a negative fuel cost adjustment of Rs. 0.72 per unit for November. Analysts said softer oil and coal prices, combined with higher hydel output, supported the decline in generation costs. While falling fuel costs may offer short-term relief to consumers, experts cautioned that lower demand, capacity payments and system inefficiencies remain key challenges for the power sector going forward