Three major IPPs to be shifted to Thar coal to slash energy costs

ISLAMABAD: In a move to counter escalating energy costs, the government has set up a special committee to oversee the conversion of three major imported coal-based Independent Power Producers (IPPs) to Thar coal.

The targeted plants — Sahiwal, Port Qasim, and Hub — together have a combined capacity of 3,960 MWs and are part of the China-Pakistan Economic Corridor (CPEC) framework.

They are expected to benefit from the vast coal reserves in Thar.

The shift of Huaneng Shandong Ruyi, Sahiwal, Port Qasim Project, Karachi and China Power Hub Generation, Hub, to local coal is expected to alleviate some of these financial pressures and support broader reforms aimed at reducing electricity prices and improving energy efficiency. Each of these three IPPs has a capacity of 1,320 megawatts.

The federal minister for energy (Power Division) has constituted this committee, to be led by the Additional Secretary-I of the Power Division.

The committee also includes Ali Nawaz, Director General (Thermal) at the Private Power and Infrastructure Board (PPIB), alongside private sector experts Shamsuddin Sheikh and Shahab Qadir, the Chief Strategy Officer of K-Electric.

The primary objective is to coordinate with the IPPs and other stakeholders to develop joint, bankable technical and financial feasibility studies for converting these plants to use Thar coal.

A significant challenge is the logistics of transporting coal from the Thar mines to the project sites, a task that will demand innovative solutions to ensure cost-effectiveness and efficiency.

The committee will look into the logistics for transportation of coal from mines to project sites.

In addition to conducting feasibility studies, the committee is also responsible for reviewing and finalizing these studies, and then providing the government with clear recommendations and an implementation plan if the conversion is deemed feasible.

It will report its findings to the Secretary of the Power Division, who may also involve other relevant organizations and departments as needed.