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Sunday April 21, 2024

‘Pakistan can’t afford early retirement of coal power plants’

By Rasheed Khalid
February 22, 2024

Islamabad: Ali Nawaz, Director-General (Coal), Private Power and Infrastructure Board (PPIB), Ministry of Energy (Power Division), has said that the coal contributes to the energy security of Pakistan and early retirement of coal-powered electric power plants will pose bigger challenges, especially since the coal fleet of Pakistan is young, highly efficient, high on merit and has legal constraints.

The image shows the Thar Block-1 Integrated Coal Mine Power Project. — APP File
The image shows the Thar Block-1 Integrated Coal Mine Power Project. — APP File

Mr Nawaz was speaking at a dialogue on "Beginning of the end transitioning away from coal: forging an orderly, equitable and just energy transition in Pakistan" organised here by Sustainable Development Policy Institute (SDPI) as part of its Clean Energy Transition Programme.

Mr Nawaz said that if we do a regional comparison, the coal power generation in Pakistan is very less than other regional countries. The coal power projects brought a paradigm shift in the lives of local communities of Thar region through their corporate social responsibility initiatives, he said adding that Pakistan will need huge financing for doing away with coal power plants.

Asadullah, Specialist (Market Pricing & Simulations), Central Power Purchasing Agency (CPPA-G), pointed out that the energy access and affordability are the leading challenges in the country. He said the cost of externalities such as environmental social footprint is not a part of the government’s planning, whereas there is a need to develop such financial models. “Environmental sustainability should be our priority that is now the future,” he said. He maintained that the local coal resources are considered reliable, as they have limited effect on foreign exchange reserves and ensure the economic security of the country.

Michael Williamson, a representative of the UN Economic and Social Commission for Asia and the Pacific (ESCAP), said the Clean Energy Transition is the toughest question faced by the regions and states along the Pacific region and beyond. However, he said, Pakistan has just begun its coal power projects’ journey, whereas no country can afford retiring an asset which is just a few years old. The financial burden in retiring the 5,000 MW power plants should be compared with the investments in other energy projects to assess the financial burden ofshutting down the asset, he said.

Ehtasham Khattak, Senior Project Officer, Asian Development Bank, said the objective is not only to transition away from coal but to transition towards the low carbon fuels. It is incumbent upon the government to address concerns of the communities whose resources are being utilised for power generation, he added.

Basit Ghauri, Manager Research & Networks, Renewables First, said the country’s nationally determined contributions (NDCs) for shifting over renewables was already five times more than the global threshold making it a leading country in achieving the ambitious goal. However, it entailed a responsibility on the country to aggressively work on its goals pertaining to renewable energy solutions. We need to realign our narrative as we have no more Chinese funding for coal power plants after President Xi’s moratorium on coal power plants, he added.

Aqeel Jafri, Director Policy, PPIB said that the government is cautious about environment and it had three objectives that are accessibility, affordability, and security in energy sector. However, its goal is to decarbonise the country’s energy mix, he said, adding that Coal power plants retirement is not an easy task and might be a huge financial burden on the government that will hit the sustainability and affordability part of the country’s policy.