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November 12, 2018

Thar coal-based plant to start supplying power in January

Top Story

November 12, 2018

THARPARKAR: After succeeding in the first-ever Thar coal-based power project of the country and making it a potential destination for power sector investors, Sindh Engro Coal Mining Company (SECMC) is persuading more investors to go there and emphasised that the next projects should be awarded after competitive bidding to get rationalised prices.

“All the projects which are not installed up till now should go through competitive process, everything should go through competition. All the renewable projects should go through competition and thermal projects too. The best possible rates should be determined,” Shamsuddin Shaikh, CEO of SECMC, said while talking to a Islamabad-based group of journalists in Tharparkar.

“I know the future belongs to renewable and not fossil fuel. Today the price of renewable (wind, solar) is around four cent/unit,” he said, adding, “This (coal) is very important for us, because power plants run 24 hours a day, while the wind and solar cannot.”

Under the umbrella of the China Pakistan Economic Corridor (CPEC), the first-ever Thar-based lignite coal power plant of 660 megawatts will start adding power to the National grid in January 2019, as less than seven percent work on powerhouse and its coal mine remains, he said. “Prime Minister Imran Khan is going to come here when we start the project (adding power to grid) in January 2019,” he said.

Thar is now open and it has good quality of access roads being built by the Sindh government. “We came here first and worked on the block and succeeded. Now anybody can come here. Hence, we are calling upon the government that for the next projects coming here, their prices should be rationalised and we would also rationalise our prices,” the CEO said.

He said that in Pakistan, the earlier imported coal-based power plants were ‘ill conceived’; they should have all been based in Thar. “These installed plants are in Karachi, Port Qasim, Hub and Sahiwal. The Sahiwal coal power project is a ‘national suicide’ and it should have been built in Thar,” he said. Shamsuddin said Sahiwal is a green area, and setting up a plant there was not a good idea.

Regarding Nepra’s tariff determination for projects, he said, “I don’t think, Nepra determines the right price, it hasn’t the ability to give the right price, so it has given projects at escalated prices.”

He also advised that investors should also reduce their rate of return to make the projects more viable. “Nepra, CPPAG and all these people should sit together and go through the competitive bidding. Open it (Thar) for all,” he said.

He further said that all this coal would go waste unless we go for its other uses. He said that apart from electricity generation, we can make plastic, gas, fertilisers and other things out of it. “Since Pakistan’s natural gas is fast depleting, while we are producing fertilisers from gas, so it would be a challenge for us and our agriculture sector. We cannot solely rely upon its import, while LNG is too expensive. If something odd happens at international level (sanctions, etc), then how would we import urea?” he said.

“This is the right time to think about coal into gas and gas into fertilisers, as in next eight years, our natural gas would get almost depleted,” he said. To a question regarding carbon dioxide emission from coal plants, he said they still remained under the number they were supposed to maintain under the Paris accord on environment. He said Pakistan has very low carbon footprint, as it has much little coal consumption. “90 kilometres from here, at the other side of the border (in India), there are hundreds of power plants in Gujarat, Rajasthan and Maharashtra. We don’t produce carbon dioxide, but we are on the receiving end from there,” he said. He proposed that all coal projects in Pakistan should use at least 20 percent Thar coal by blending it with imported coal, which will save foreign exchange and indigenous resources would be utilised.

Shamsuddin said Pakistan has 180 billion tons of coal reserves, of which Thar holds 175 billion tons, which is 50 billion ton of oil equivalent (TOC) that is more than Saudi Arabia and Iran oil reserves. He said Thar is important for Pakistan, but electricity from here at high cost is of no use. “We are very conscious about it. Pakistan’s power sector is bankrupt, as today we are sitting on more than a trillion rupees circular debt. The reason is that our generation cost is very high, there are line losses and power theft too. The government should work on controlling it and bringing down the cost,” he said.

Regarding its 660MW lignite coal power plant, he said that its power project is 94 percent completed while its coalmine project has achieved 92 percent and both are five months ahead of their schedule and will add the first electron from Thar to the national grid by January, 2019. Engro Power Thar Limited (EPTL) and SECMC are the largest private investment under CPEC, and the only investments which are 95 percent owned by Pakistanis.

On August 1, 2018, EPTL successfully connected its power plant with the national grid to receive back-feed power supply for plant start-up. The next part of this dream will be achieved by December 2018 or January 2019, when the first electron from Thar coal will be added to the national grid.

Talking about the progress on mine project, he said that there is 92 percent progress on mine with the capacity of 3.8 million tons per annum. The progress on mine project is four months ahead of schedule and the project cost is 20 percent less than the approved cost. “Currently, we have removed approximately 154 meters of soil and we would be able to extract coal from 160 meters,” he said. He said that coal from Thar is cheaper, indigenous and abundant resource now after the success of first ever large scale open pit coalmine in Pakistan. “We have set an example for the world that Pakistan is an attractive market for investment in coal mining and coal-based power production,” he said.

Shamsuddin said the Sindh government owns 54 percent of the project, but unmatched political support has been received from all political parties and governments for the Thar coal project. He added that SECMC was created with the vision to develop a technically and commercially viable coal mining project in Thar Block-II to bring energy security to Pakistan. He said the total reserves of block II are sufficient to support 5,000MW energy for 50 years, enough to pull the country out of the energy crisis.

Shamsuddin informed that out of current 4,400 workers working at the SECMC site, 75 percent workers are natives of Thar. Engro is operating 24 schools, constructing a 250-bed hospital and several water projects for the natives of Thar.

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