Cost of Electricity Generation in Pakistan

Project Duration: 2019 to 2020

Comparison of Levelized Cost of Electricity of CPEC Coal Plants with Oil and Natural Gas Based Plants Commissioned in 2010-14

This project compares the cost per kWh of oil and gas-based power projects in Pakistan commissioned during 2010-14 with coal-based power projects approved under the CPEC agreement after updating all costs from June 2017 and June2019. It shows that the average long run cost of power generation of oil and gas-based plants is higher than the average long run cost of coal-based plants.

For June 2017 this result continues to hold when environmental costs are taken into account but the cost differential is reduced from Rs1.44 per kWh to Rs0.22 per kWh provided all plants operate at 85 percent of their generation capacity. Accounting for security costs for CPEC projects, makes coal based power generation possibly more expensive than oil and gas based generation. For June 2019, the same result continues to hold when environmental costs are taken into account but the cost differential is reduced from Rs3.98 per kWh to Rs2.29 per kWh provided all plants operate at 85 percent of their generation capacity.

The latest output for this project is based on June 2019 data, which updates ‘Working Paper No. 02-19: Cost of Electricity Generation in Pakistan – Comparison of Levelized Cost of Electricity of CPEC Coal Plants with Oil and Natural Gas Based Plants Commissioned in 2010-14’, which was based on June 2017 data.