Punjab Chief Minister Shahbaz Sharif has announced an ambitious coal-based power projects which would generate a total of 6,000 megawatt electricity during next three to five years. According to him, an investment of eight to ten billion dollars is expected to be made directly in these projects. Not contending with the prospective role of private sector, he also has announced to set up two separate plants of 660 megawatt each under this project by Punjab government in order to complete it at the earliest and thus get desired results.
Punjab government has selected six different sites for launching coal-based power projects in the province which are situated at Qadirabad (Sahiwal), Bhikhi (Sheikhupura), Haveli Bahadur Shah (Jhang), Balloki (Kasur), Taranda Sawaywala (Rahim Yar Khan) and Mouza Karam Dad Qureshi ( Muzaffargarh). Punjab government will transport coal from Karachi by rail for these power plants. It is important to note that coal-power generation is popular in other countries; more than 65 percent electricity is generated from coal in China, 63 percent in India, 60 percent in Germany and 50 percent in America; whereas less than one percent electricity is generated from coal in Pakistan while power generation ratio is 65 percent from thermal and 35 percent from hydel options.
It goes without saying that electricity is indispensable for socio-economic development. But Pakistan faces acute shortage of electricity for the last more than five years. More than 33 percent of total power generation is through oil which is costly and has resulted in expensive energy mix. This phenomenon, along with subsidies, inefficiencies and leakages in the power sector has resulted in inter-corporate circular debt. High cost of power generation results in consumer-end tariff that is not affordable for the majority of consumers. This has adverse implications for competitiveness and national production. Despite being rich and prosperous, Punjab is deficient in energy resources. Oil is expensive while gas is scarce. The hydro and wind power generation potential in Punjab is quite limited. Solar power generation can usefully augment off-grid solutions and can also be connected to grid. It does not, however, provide base-load which is critical to the stability of grid. Punjab has coal reserves which can potentially be used for power generation. Due to high sulphur and ash contents in Punjab’s coal, the choice of technology is limited. Efforts are being made to harness the potential of this reserve. This could, however, take some time and alternate source(s) of coal are needed to be tapped. The coal available in Balochistan is quite suitable for power generation but its regularity and reliability of supply is not assured. The development of Thar coal is also likely to take some time. It is, thus, obvious that Punjab has to rely on imported coal to meet its growing power requirement through base-load generation of electricity. The energy economics of imported coal have to be viewed in comparison to RFO/LNG. Inland transportation of coal is an additional cost which, more or less, is offset by cost of transmission of electricity, if power generation facility is installed at coast.
In world’s electricity generation, more than 40 percent comes from coal. Whereas in Pakistan, less than one present power need is produced from coal. Coal is and will remain, by necessity, a key component in world electricity generating portfolio for the foreseeable future. Its price has remained generally stable as compared to oil and gas. While Punjab government has started work on solar project of 100 megawatt in Quaid-e-Azam Solar Park and bids of this project will be received by mid of February this year; however, coal is still the best option for generating electricity round the clock. The cost of electricity generated through imported oil is Rs. 19 per unit while the cost of electricity generated through imported coal is just Rs. 9 per unit. It is good to note that vast reserves of fine coal exist in Thar whereas; 500 million ton coal exists in Punjab. An Australian company has prepared a feasibility report about it; however, the coal of Punjab is not of good quality. The Punjab government has, therefore, planned to run these plants through imported coal on short term basis, and local coal will be used afterwards. The Punjab Power Development Board (PPDB), which is mandated to facilitate private investment and in power projects, would be the lead agency for facilitation of companies who would be establishing coal based power projects under this Initiative. All agencies and departments of the Government of Punjab would fully backup the PPDB for the purpose. PPDB would work closely with PPIB and related federal entities for facilitation and required documentation.
Coal fired power plant, based on imported coal are preferably installed in the coastal area. Punjab, however, is away from the coast and the plants can only be installed inland.
