SSRL proposes levelised COD stage coal tariff of $48.71 per tonne

The Thar Coal & Energy Board (TCEB) held a public hearing on Thursday regarding the tariff petition filed by Sino Sindh Resources Pvt. Ltd. (SSRL) for the determination of the Commercial Operations Date (COD) Stage Tariff for its 7.8 million tons per annum (Mtpa) lignite mine located at Block-1 of the Thar Coalfield.

A statement issued by the Sindh Information Department said the hearing took place at a hotel in Karachi and was attended by various stakeholders, experts, and members of the public. Mr. Tariq Ali Shah, Managing Director TCEB/Presiding Officer, Mr. Ammar Habib Khan, Member Finance/Power, and Dr. Fahad Irfan Siddiqui, Member Mining Thar Coal Tariff Determination Committee, conducted the hearing.

Mr. Li Jigen, CEO SSRL, presented the details and achievements of their company and project. During presentation he said that the project is located in the Thar region of south-eastern part of the Sindh province, and the project includes 2×660MW high parameter super critical coal-fired power generation units, supported by an annual output of 7.8 million tons of lignite open-pit coal mine. Thar Coalfield Block-1 open-pit coal mine project covers 150 km² area with approximately coal reserve of 2.6 billion tons within the block.

Furthermore, the project has been placed at a favorable position in the National Transmission and Dispatch Company (NTDC) merit order list, demonstrating its competitive pricing and cost-effectiveness in comparison to other energy sources by producing electricity unit in PKR 5.52/Kwh USD 0.02 cents/Kwh. He said power generation from Block-1 is much cheaper than from generated through hydro sources.

Thar Block-1 Integrated Energy Project is a key energy project in the "Belt & Road Initiative (BRI)" energy field, and also a core energy cooperation project under the "China-Pakistan Economic Corridor (CPEC)" framework, which is developed and invested by Shanghai Electric, a state owned & listed company based in Shanghai, China, through the model of Build-Own-Operate(BOO), of which the total investment is almost 3 billion US Dollars, which is the highest single Chinese investment in any country.

The project strengthens Pakistan's energy security by tapping into domestic coal resources, reducing the need for costly energy imports. 1,320 MW of stable power supply since December, 2022, Lower fuel costs from Thar coal translate into affordable electricity. By utilizing indigenous coal resources, the project is expected to save approximately USD 1.5 billion in foreign exchange reserves over its operational lifetime, significantly enhancing Pakistan's energy security. Job & Business opportunity for locals, enhances economic growth and livelihoods in the Thar region, CSR expenditure-1.6 million USD.

SSRL has proposed a levelized COD Stage Coal Tariff of USD 48.71 per tonne, which reflects necessary adjustments based on project costs. The total project cost has been petitioned at USD 949.54 million, which includes EPC Cost USD 737.23 million and Non-EPC Cost USD 134.35 million.

The petition outlines operational costs, including variable and fixed operational expenditures, which are crucial for the sustainability of the project. The levelized operational costs are projected at USD 13.72 per tonne for variable O&M and USD 12.74 per tonne for fixed O&M.

The TCEB appreciates the active participation of stakeholders and the public during the hearing. The feedback received will be considered in the final determination of the tariff. The TCEB remains committed to transparency and stakeholder engagement in the decision-making process.