Pakistan Energy 2035-FINAL 20th October 2014

Pakistan Energy Vision - 203565% (36% on RFO and 29% on gas) of the electricity is generated through thermal resourceswhile 32% is obtained through hydropower (See Figure2). The increased share of furnace oil ingeneration mix is attributed to the Power Policy-1994 which attracted investment of privatesector in thermal power plants and led to the reversal of energy mix from hydro vs thermalratio of 50:50. It is significant to highlight here that in purview of lack of gas availability forpower generation, the thermal power plants are compelled to run on furnace oil. Thus, thisincreased dependence on furnace oil is directly translated into increased cost of generation andconsequently increased tariff due to expensive fuel component.Figure 2: Generation Mix of Pakistan, Source: State of Industry Report, 2012As discussed above the greater the share of thermal energy resources (Gas & FO), greaterwould be the cost per GWh. Curtailment of natural gas necessitating the use of RFO andoverall decline in the share of hydel generation in total generation has led to the higher costinputs for DISCOs. The average costs of unit delivered to the DISCOs in 2012-13 is givenTable 2:Table 2 Average Cost of Unit delivered to DISCOs (2012-13)Hydro Coal HSD RFO Gas Nuclear Import Mixed WindGWh 28,643 66 1,474 30,662 23,431 4,413 296 730 6% Share 31.93 0.07 1.64 34.18 26.12 4.92 0.33 0.81 0.01Cost( Mln Rs) 4,660 206 27,848 488,617 99,340 4,978 2,662 9,331 51Cost(Rs/Kwh) 0.16 3.12 18.89 15.94 4.24 1.13 8.99 12.78 9.12Source: State of Industry Report, 2011-1217 | P a g e