Money Matters

Post-truth politics?

Money Matters
By Manzoor Hussain Zaidi
Mon, 09, 20

Ever since Thar's vast coal resources were discovered in the early 1990s, concerns have been raised regarding their potential to generate electricity, their economic viability, sustainability, the coal quality and the adverse environmental impact it might have. Thar's vast coal resources are the 7th largest in the world; measuring up to 175 billion tons and can sustain the production of 100,000MW of electricity for more than two centuries. With its gas reserves nearly depleted, Pakistan generates 30 percent of its electricity using oil, the most expensive source of power generation, while the reliance on indigenous coal reserves is negligible.

Ever since Thar's vast coal resources were discovered in the early 1990s, concerns have been raised regarding their potential to generate electricity, their economic viability, sustainability, the coal quality and the adverse environmental impact it might have. Thar's vast coal resources are the 7th largest in the world; measuring up to 175 billion tons and can sustain the production of 100,000MW of electricity for more than two centuries. With its gas reserves nearly depleted, Pakistan generates 30 percent of its electricity using oil, the most expensive source of power generation, while the reliance on indigenous coal reserves is negligible.

Over time there are various questions that have been raised on the commercial, technical, social and environmental aspects of the Thar coal mine and power projects with many hyperboles shared by experts and non-experts alike. But the question remains that whether these claims – specifically on account of environmental and social areas – are based on ground realities? The answer is a solid no!

While Thar has great potential to ensure energy security and usher an era of economic prosperity for the nation, the project has long been accused of incorrect environmental degradation claims without taking into account the full picture or the social and economic benefits that accrue out of it.

Long before the Thar coal mine and power plant began operations in Thar; several renowned international organisations were engaged including RWE Germany, SRK UK, Hagler Bailly, Sino Coal China and NCGB China, which conducted feasibility and socio economic impact assessments of the mining and associated projects in Thar cluster.

It is important to highlight this fact because the ecological and environmental impact of mining and power plant activities is a recurrent argument leveraged against the development of Thar coal. The Environmental and Social Impact Assessment (ESIA) conducted by Hagler Bailley Pakistan and other studies have also confirmed minimum possible impact on the environment with regards to emissions and their resultant effects on the desert environment or its residents. For instance, a report recently released erroneously claimed that around 29,000 deaths will result in Thar over 30 years of the project life due to impact of PM2.5 (particulate matter generally 2.5 micrometres in diameter); however, based on the impact assessment of the power plants and mine, the predicted ambient PM2.5 concentrations are well below the annual and 24-hours limits prescribed by both the International Finance Corporation (a subsidiary of the World Bank) and the Sindh Environmental Quality Standards (SEQS).

Another recurrent issue that environmentalists and activists in the country continue to mention is the fact that coal is fast being replaced with renewable energy across the world. This is a mere exaggeration and it is extremely important to verify this statement through facts. If you look at global data, yes, you see a general trend in coal power plants being shut down – but it is critical to understand that these are those power plants that have either outlived their useful life or are first generation power plants – unlike the third generation plants being developed in Thar.

Secondly, it is not true that the rest of the world is not using coal to power their economy. For all countries where base-load demand is high, coal power plants continue to provide energy to fuel their economic growth. A Bloomberg report issued in 2019 shows that a number of countries have planned additions of coal-fired power plants to their energy mix including planned additions of over 200,000MW in China; more than 51,000MW in India; almost 11,000MW in Japan and approximately 27,000MW in rest of the world between 2019 to 2025.

Moreover, if you look at various economies of the world you see that there is still a sizable dependence on indigenous coal sources for primary energy production such as Germany which still produces almost 30 percent of its energy through coal; Vietnam where coal accounts for almost 38 percent of energy mix; India stands at over 50 percent; and Australia at almost 55 percent. So the question remains that if other countries of the world are using indigenous fuel sources to balance their energy mix and reduce dependence on foreign fuel components then why should Pakistan not prioritise its national interests and develop its own local resources? Now let me clarify this point further.

I am not averse to the idea of including renewables in the energy mix; in fact, it is definitely important to ensure that we transition towards a cleaner energy mix – but it is just that! – a transition. While experts continue to argue that globally prices of energy production through renewables is decreasing, they fail to acknowledge the associated costs such as storage, transmission and distribution which still makes it a relatively expensive choice for Pakistan. Additionally, given our inherent issues in the energy value chain (transmission, distribution and storage), on-grid renewable energy is an area which needs to be studied carefully and Pakistan should definitely leap-frog towards it while keeping its national interests at the forefront.

Furthermore, continuing on the advent of renewables, we see that the focus of adoption is pretty much entirely by the developed economies – who not only have the financial means to subsidise mass-renewable adoption but also lie high on the Energy Transition Index – an index developed by the World Economic Forum (WEF) that measures readiness of countries to shift from fossil-based energy production to majority of renewable energy sources.

Just to give a perspective, Pakistan currently ranks 97 out of 115 countries in the world on the readiness index with United Kingdom, Germany and USA (often quoted by environmental experts) ranking 7, 17 and 27, respectively. Even India and Bangladesh rank higher than Pakistan at 76 and 90 respectively. Therefore, while focus on adopting renewables should be maintained, this needs to be underscored logically and factually taking into account the economics of sustainable energy supply, low-cost electricity production, energy access and security amongst other factors.

On the social front, there is no denying the fact that Thar coal power and mine projects have initiated industrial activity in an area which has historically ranked low on socio-economic indicators. These projects currently commissioned and those that will come online in the years ahead are providing much needed economic prosperity in the form of direct employment to the Thari people. As part of the project, we continue to proactively engage and communicate with the local communities, listening to their concerns and addressing them; and yes, while could be a small faction which might have some grievances, by and large, the project is benefitting the communities through various positive externalities. So why should the people of Thar be denied these socio-economic opportunities to secure a better future for themselves and their families?

Just to mention some of the positive aspects of the project, robust infrastructural development in the area has already happened as a direct benefit of these projects, and includes state of the art road networks, construction of bypasses, bridges, airport facilities, water supply scheme, and effluent disposal system amongst many other initiatives – which have been spearheaded by the government of Sindh. The once isolated region is now connected, which has had a significant impact on access to educational facilities, health facilities for the local communities and also disaster relief operations for prevalent drought seasons in Tharparkar.

In the backdrop of such misleading narrative against the Thar coal projects, it is important to establish a culture of positive advocacy with regards to the actual facts of these initiatives, which stand to benefit millions. Encouraging accurate and informed debate regarding all procedures and project related activities is the least we can do for our energy impoverished nation and for the indigenous Thari population – this is not just the ethical thing to do but also our national responsibility!

On the other hand, we remain committed to building Thar positively – by keeping its social and traditional fabric intact – and by providing a better quality of life to the communities under our aim to make Islamkot (Tharparkar) a model tehsil in Pakistan – compliant to United Nation’s SDG framework.

The writer is the CEO of EngroPowergen