Discuss PSX Power Generation & Distribution Sector

  • ALERT! Investment Disclaimer
    All the information on FORUMS.COM.PK / Finance.PK is provided for information purpose only. The information has been obtained from the sources believed to be reliable. Analysis provided is opinion only. BUY / HOLD / SELL call may be True / False / or Misleading. You are solely responsible for all types of investment and trading decisions made by you.
  • جو شخص بہانہ بنانے میں بہت اچھا ہو ، وہ کسی اور کام میں اچھا نہیں ہو سکتا
  • پیسہ بدترین آقا ہے، مگر بہترین غلام بھی ہے
  • کسی فرد یا قوم کو برباد کرنا ہے تو اس کی امید کو مار ڈالیے اور اگر اسے تعمیر کرنا ہے اس کی امید کا دیا روشن کیجئے
  • کامیابی سوچ سے ملتی ہے
  • زندگی کی دوڑ میں دوسروں سے آگے نکلنے کیلئے تیز چلنا ضروری نہیں، بلکہ ہر رکاوٹ کے باوجود چلتے رہنا اور مسلسل چلتے رہنا ضروری ہے
  • جب باتیں آمنے سامنے ہوتی ہیں تو جھوٹ اور غلط فہممی کا خاتمہ ہو جاتا ھے
  • بہت اونچے پہاڑ پر چڑھنے کے لئیے قدم آہستہ آہستہ اٹھانا پڑتے ہیں
  • تین چیزیں نیکی کی بنیاد ہیں، تواضع بے توقع, سخاوت بے منت اور خدمت بے طلبِ مکافات
  • غربت اور افلاس کی وجہ پیداوار کی کمی نہیں، بلکہ اسکی غلط تقسیم ہے
  • دولت ہونے سے آدمی اپنے آپ کو بھول جاتا ہے اور دولت نہ ہونے سے لوگ اس کو بھول جاتے ہیں

Apr 11, 2017
709
1
18
#21
Power Generation & Distribution: Tackling circular debt


11 June 2018

BIPL Securities Limited



  • According to the latest news reports the circular debt level has reached PKR573bn (1.7% of GDP), higher than the pre-2013 settlement level of PKR503bn (2.2% of GDP) despite the decline in international oil prices in the past three years. Given the limited fiscal space, we expect power subsidies as well as any one-off settlements like that of 2013 seems unlikely. However, if Pakistan enters in another IMF program a partial settlement may be on the cards. We examine the factors that weigh in on further accumulation of circular debt, namely: i) increasing generation, ii) system inefficiencies to keep line losses elevated, iii) low recovery of bills and iv) high cost of generation. In order to sustainably address the issue Pakistan needs to reduce its generation costs as well as improve the transmission network. Until these core issues are addressed we expect circular debt to continue to accumulate to the tune of ~PKR183bn/yr
  • Pakistan faces the chronic issue of circular debt primarily as a result of an antiquated transmission infrastructure, unfavorable energy mix as well as the non-performance of DISCOs. With the upcoming increase in power generation to bridge the demand shortfall we expect the system slippages to exacerbate the issue, whereby according to our calculations circular debt is expected to accumulate to the tune of PKR184bn/yr-208bn/yr in FY19-23. The unsatisfactory performance of DISCOs leads to the build up of circular debt whereby an improvement in recovery and T&D losses by 1% will decrease the circular debt build up by 6.8% and 6.2%, respectively.
  • Historically, higher tariffs for end consumer have led to a decline in recovery as well as a spike in T&D losses. Consequently an increase (decrease) in tariff cannot be taken in isolation as it would result in commensurate increase (decrease) in T&D losses as well as a decline (rise) in recoveries. If the electricity tariff is increased, ceteris paribus, it will result in decline in the accumulation of circular debt. However, such a measure has high social costs associated with it.
 
Apr 11, 2017
709
1
18
#22
Power Generation & Distribution: Newly Inducted RLNG Power Plant’s Load Factor has increased to 54%


25 June 2018
Arif Habib Limited




  • Power generation registered a growth of 9.9% YoY to 12,118 GWh (16,287 MW) in May’18, as compared to 11,024 GWh (14,817 MW) during May’17. Major contributors to power generation were RLNG, FO, Hydel, Gas, Coal and Nuclear with a share of 23.9%, 19.3%, 18.3%, 16.3%, 12.1% and 5.4%, respectively. On a MoM basis, generation went up by 19.6%. Whereas during 11MFY18, generation depicted a growth of 11.6% YoY to 107,626 GWh (13,386 MW) compared to 96,400 GWh (11,990 MW) during 11MFY17.
  • The share of RLNG has increased by 16ppts YoY to 23.9% in May’18 compared to 7.8% in May’17. The rise in share of RLNG has increased on the back of higher generation from newly installed plants. The newly inducted RLNG-based plants witnessed a growth of 50% MoM to 1,458 GWh, which translate into load factor of 54% (QATPL: 59%, Haveli Bahadur Shah: 63%, Baloki: 42%).
  • The rising share of coal and RLNG has eaten the share of FO which has declined by 11pps YoY to 19.3% compared to 30.0% during May’17. However, the load factor of Sahiwal coal-based power plants has declined to 65% from 84% in previous month. On the other hand, load factor of Port Qasim Coal Power Plant arrived at 90% compared to 64% in the prior month. Meanwhile the average load factor of Hydel-based generation clocked-in at 43% vis-à-vis 65% during May’17, however it was seen at 30% during Apr’18.
 
Apr 11, 2017
709
1
18
#23
Power Generation & Distribution: May ’18 Back to square one


28 June 2018
AKD Securities Limited



  • Electricity generation during May’18 stood at 12.1TwH, up 10%YoY as the onset of summer season led to increased output from hydel sources (18.3%), while demand continued to soar on the back of hot weather and Ramadan. Major contribution of 2.90TwH (23.9%) came from RLNG, where generation on the same was skewed towards the recently commissioned plants (Bhikki, Balloki and Haveli Bahadur Shah combined generating 1.45TwH). However, Furnace Oil, having been regarded as an “expensive” fuel, saw its resurgence occupying the 2nd place with 2.33TwH of energy output (19.3%). HUBCO and KAPCO combined generated ~1.03TwH on FO. Cost wise, FO remained the most expensive source of generation with a per unit cost of PkR12.97 followed by RLNG at PkR9.33. Amongst our IPP universe, KAPCO still remains our top-pick with an attractive dividend yield of 16.8/16.3% for FY18F/19F and a capital upside of 15.8%.
  • Despite heavy claims of completely phasing out Furnace Oil, the GoP seemed to give in ever increasing demand spurred by hot weather and Ramadan. In this regard, FO took the 2nd spot in the overall generation list with 2.33TwH of energy output (19.3%). IPPs made up a major portion of the generation where HUBCO and KAPCO alone generated 1.03TwH of energy. As per our sources, all 4 units of HUBCO were made operational during the latter half of May after a gap of several months as demand crawled upwards. May also witnessed the highest ever generation on newly commissioned RLNG plants at Bhikki, Balloki and Haveli Bahadur Shah, where the 3 combined generated 1.45TwH of energy, while overall generation on RLNG was recorded at 2.90TwH (23.9%). Coal based generation made up 12.3% of the pie at 1.43TwH of electricity output.
  • Energy prices are marking their new highs on geopolitical tensions, and consequently, cost of generation is also moving north with overall per unit cost of PkR6.90/unit. Furnace Oil remained the most expensive source at PkR12.97/unit, followed by RLNG at PkR9.33/unit (barring import). Coal prices, dropping slightly during May’18 kept generation cost lower at PkR6.12/unit vs. PkR6.73/unit in the previous month. Hydel and Nuclear, on the other hand, remained the cheapest sources of generation at PkR0.114/1.02/unit.
 
Apr 11, 2017
709
1
18
#24
Power Generation & Distribution: Higher Contribution from RLNG and Coal with Lower Hydel Generation


02 July 2018
WE Financial Services Limited




  • The Power Generation & Distribution Sector expanded not only in generation and transmission capacity but also in terms of distribution. In the last five years, the sector has witnessed 30% growth in installed capacity (standing at 29,573 MW in March 2018 versus 22,812 MW in FY13), whereas generation increased by 2% (recorded at 68,956 GWH in March 2018 versus 68,592 GWH in FY13).
  • In 11MFY18, power generation has depicted 9.8% YoY growth (from 11,024 GWH to 12,118 GWH). However, average consumption by sector has remained static YoY with share of household, commercial, industry and agricultural recorded at 51%, 8% , 25% and 10% respectively.
  • Major Power generation sources are Hydel, Coal, RLNG, Gas and Nuclear where RLNG constitutes a major share surging 3.4x in May-18 from 7.8% to 23.8% YoY. 63% of RLNG was consumed by newly installed power plants namely Bhikki, Haveli-Bhadur Shah, Balloki, Halmore, Orient, Rousch, KAPCO Saif & Sapphire Power plants. The surge in RLNG and Coal came at a cost of decreasing FO demand with the latter declining from 30% to 19% YoY in May 2018.
  • Total installed capacity remained at 29,573 MW till March 2018 and 1700 MW is added in order to meet the surging demand during FY18. With total capacity YTD, the major energy generation sources (FY18) are thermal 64% , no change recorded YoY basis and Hydro which decreased to 27% against 30% in corresponding year.
 
Apr 11, 2017
709
1
18
#25
Power Generation & Distribution: Higher Contribution from RLNG and Coal with Lower Hydel Generation


02 July 2018
WE Financial Services Limited




  • The Power Generation & Distribution Sector expanded not only in generation and transmission capacity but also in terms of distribution. In the last five years, the sector has witnessed 30% growth in installed capacity (standing at 29,573 MW in March 2018 versus 22,812 MW in FY13), whereas generation increased by 2% (recorded at 68,956 GWH in March 2018 versus 68,592 GWH in FY13).
  • In 11MFY18, power generation has depicted 9.8% YoY growth (from 11,024 GWH to 12,118 GWH). However, average consumption by sector has remained static YoY with share of household, commercial, industry and agricultural recorded at 51%, 8% , 25% and 10% respectively.
  • Major Power generation sources are Hydel, Coal, RLNG, Gas and Nuclear where RLNG constitutes a major share surging 3.4x in May-18 from 7.8% to 23.8% YoY. 63% of RLNG was consumed by newly installed power plants namely Bhikki, Haveli-Bhadur Shah, Balloki, Halmore, Orient, Rousch, KAPCO Saif & Sapphire Power plants. The surge in RLNG and Coal came at a cost of decreasing FO demand with the latter declining from 30% to 19% YoY in May 2018.
  • Total installed capacity remained at 29,573 MW till March 2018 and 1700 MW is added in order to meet the surging demand during FY18. With total capacity YTD, the major energy generation sources (FY18) are thermal 64% , no change recorded YoY basis and Hydro which decreased to 27% against 30% in corresponding year.
 

Forum statistics

Threads
982
Messages
4,740
Members
143
Latest member
Shagufta

Latest posts