‘Pakistan must reckon hidden costs of coal power also’

Islamabad:Muhammad Ayub, former Managing Director, National Transmission and Dispatch Company (NTDC), has acknowledged coal’s role in diversifying the energy mix post-2013 but warned that the real cost of coal is far greater than calculated.

Mr Ayub was speaking at a roundtable on "Weighing the actual cost of coal power generation in Pakistan: an E3 approach" organised here by Sustainable Development Policy Institute (SDPI) under its Network for Clean Energy Transition (NCET).

Mr Ayub said that weak institutional frameworks and political resistance are stalling tariff reforms that include environmental and social costs. He highlighted that any tariff reforms require a coordinated strategy.

Ubaid ur Rehman Zia from SDPI highlighted that Pakistan has already faced a substantial cost of climate catastrophes leading to its financing needs of over $348 billion, that are expected to further increase if no action is taken. Climate change needs to be integrated within the economic planning and development agenda of the country, he added.

Presenting the report, SDPI’s Zainab Babar highlighted that while coal remains a reliable energy source, it embeds significant unpriced costs that go unnoticed in power bills. The health damages alone amount to $15.98 per MWh. Sahiwal Coal Power Plant incurs Rs18,271.51 per MWh in externality costs, while Engro Power Generation’s figure is a staggering Rs40,392.72 per MWh, she said.

From the preliminary findings of the study, she said that coal-fired power plants (CFPPs) contribute nearly 27% of Pakistan’s total CO emissions with the Sahiwal and Engro plants emitting 887 kg/MWh and 2154.05 kg/MWh, respectively. Transport emissions and environmental degradation further amplify the real cost of coal-based electricity. She advocated for the introduction of a Pigouvian Tax, a pricing mechanism for hidden costs.

Ali Nawaz, Director-General, Private Power and Infrastructure Board (PPIB), however, called for data recalibration, questioning discrepancies in emissions data.