KARACHI: The country’s power generation decreased by 3.7 per cent to 9,886 GWh in the month of October this fiscal compared to 10,262 GWh in the same month of last financial year.
On a MoM basis, power generation declined sequentially, falling 21.5 per cent, reflecting seasonal effects.During the first four months of this fiscal, generation totalled 50,819 GWh, stable from the previous year.
Analysts attributed the decline in October’s power generation to rising distributed generation. “However, this was despite lower tariffs and captive consumers shifting to the grid after the levy imposed on captive,” said Zayan Babar Khan, an analyst, at Arif Habib Limited.
He noted that the impact of power purchase agreement (PPA) terminations and renegotiations had already flowed through via quarterly tariff adjustments (QTAs), with Nepra approving a negative QTA of Rs 1.89/kWh for the fourth quarter of FY25, applied in August, September and October 2025. “QTAs are expected to normalise next month, which should result in slightly higher tariffs,” he added.
Adjusted fuel cost during the month stood at Rs8.72/kWh, lower than the reference cost of Rs9.37/kWh. Consequently, DISCOs have requested a negative FCA of Rs0.37/kWh, driven mainly by lower-than-expected oil prices and a smaller share of FO and imported coal in the generation mix compared to Nepra’s reference assumptions.
Zayan noted that lower imported coal prices further supported the negative adjustment. Nepra had assumed Brent at $73/barrel, while actual prices averaged $64/barrel in October 2025.Imported coal-based generation cost fell to Rs 14.39/kWh, down 14.9 per cent YoY, as coal prices declined. The cost gap with Thar coal narrowed to Rs 1.29/kWh, versus the historical Rs 4/kWh difference.
Hydel and RLNG generation exceeded NEPRA’s reference, while nuclear, Thar coal, and imported coal generation fell short of forecasts.The data showed that hydel generation fell 15.1 per cent YoY to 2,705 GWh in October 2025 due to lower flows, though Nepra had already factored this in. Output was 2.9 per cent above the reference, resulting in no impact on fuel costs or the FCA.
RLNG-based generation dipped 2.7 per cent YoY to 1,949 GWh during the month but remained 6.6 per cent above the October reference target, raising fuel costs, though partly offset by lower oil prices.
Imported coal generation fell 48.4 per cent YoY to 466 GWh in the month and also remained 30.4 per cent below Nepra’s reference, likely due to higher system constraints during the winter season.
Power generation in October 2025 was 8.7 per cent below the 10,828 GWh reference, with a concerning surplus of 942 GWh despite lower tariffs and captive consumers switching to the grid.
Zayan anticipated that power generation in November is expected to decline due to seasonal factors, particularly lower temperatures. “Hydel output may remain constrained this year amid reduced water flows, resulting in higher fuel cost and hence positive FCAs,” he said, adding that Nepra projects power demand to grow by 2.8 per cent YoY in FY26.
