In April, the amount of power produced dropped by a huge 14%, reaching 8,640 gigawatt-hours (GWh). This decrease happened because electricity prices went up a lot, industries slowed down, and many businesses and homes started using solar power instead of the regular electricity grid. This made the problem of capacity payment and debt even worse for the country.
Despite the weather getting hotter in April, the amount of energy produced went down. This happened because the government and energy companies decided to cut off power to some areas more often. They did this to avoid selling expensive electricity to people who couldn’t afford it. Last April, the amount of electricity produced was higher, at 10,010 GWh. This information comes from NEPRA, a group that oversees power in the country.
The cost of the fuel used to make electricity went down by 10% to Rs9.2 per unit in April, compared to Rs10.2 per unit the year before. But even though fuel costs went down, people didn’t see a decrease in their electricity bills. That’s because they still had to pay for previous fuel costs and extra charges.
During the first ten months of the current fiscal year, which started in 2023, the amount of electricity produced went down by 3% compared to the same time last year. It totaled 100,980 GWh, down from 103,593 GWh.
A person named Muhammad Awais Ashraf, who works at Akseer Research, said that high electricity prices have made people use less electricity. Also, more homes and businesses are using solar power, which reduces the need for electricity from the main grid. Ashraf said people are choosing solar power because it only costs money to install, and the government keeps increasing electricity prices.
He also said that fewer businesses are making things in Pakistan because interest rates are high, and it’s hard to get materials from other countries. He thinks this will keep happening until the central bank lowers interest rates and the government makes it easier to import things.
Ashraf thinks power production will stay low until September 2024, when the central bank might lower interest rates. This could happen because the government is going to talk about the budget in June 2024 and try to get another loan from the International Monetary Fund (IMF) by July 2024. But if they get the loan, the central bank might not lower interest rates.
There were some good things though. Hydropower production went up by 11% in April compared to last year because the government started using a big new hydropower system. Also, nuclear power production went up by 7% because they added a couple of new nuclear power plants. Hydropower and nuclear power are cheaper to make because they don’t need much fuel.
