The much discussed China Pakistan Economic Corridor (CPEC), having an investment portfolio of $46 billion, envisages several electricity generation projects to be set up at a cost of around $35 billion. These projects include those depending on gas, solar energy and coal. It is predicted that around 10,400 MW of energy would be added to the national grid by March 2018, against the total projected supply of 16,400 MW on the completion of these projects.

Against this backdrop, there is a debate about the use of imported coal as source of energy and the environmental cost of using "inefficient" coal power plants reportedly being decommissioned by China. Arguments are also in the favour of coal powers provided they are based on locally available raw material and supported by cleaner technologies that minimise CO2 emissions.

TNS talked to experts this week to get a deeper insight into the issue.

Naveed Iftikhar, former governance specialist at Pakistan’s Ministry of Finance and currently a PhD student in Public Policy at University of Delaware, USA, says the country shall go for clean energy. He tells TNS though there are many rumours about inefficient technology of coal plants being installed with the help of China, he does not have any evidence to establish that.

Iftikhar says: "There is one perspective that coal power can decrease basket price of electricity. Fine, but there is need to address loopholes and leakages in transmission and distribution, instead of mere focussing on power addition. Without improving transmission and distribution system, all efforts to resolve energy crisis will fail." Another perspective, he adds, is that power projects should not be part of CPEC because most of them are in Punjab and in this way other provinces will feel marginalised.

Kaiser Bengali, economist and technical adviser to Balochistan chief minister, opines that Pakistan needs energy and has two abundant local sources for producing power -- hydel and coal. Today, he says, Pakistan is expending huge amount of scarce foreign exchange to import furnace oil to generate electricity. New (imported) coal and (imported) LNG power plants will accelerate foreign exchange outflows, worsening the balance of payments. With abundant local resources, he says, there is absolutely no justification for importing any kind of fuel for generating electricity.

Bengali believes the Western demands from Pakistan to forgo coal power are not justified. "After all, Pakistan is contributing less than one per cent to world greenhouse gas emissions." He says the West has double standards. "The World Bank pulled out of the Thar Coal project, citing the Rio protocols, but financed a $3 billion coal-based power project in southern Africa. Coal is polluting, but technology exists to make it clean. No doubt it will make electricity more costly (relative to hydel), but expensive electricity is preferable to no electricity," he adds.

He clarifies that "China is not making us dependent on imported coal; this is our decision. But if we do decide to set up coal-based power plants, it is likely that China will provide us with their second hand plants that they are de-commissioning." It will be good business sense for China, but China cannot and should not be expected to make good business decisions for Pakistan, he adds.

Pervaiz Amir, an Islamabad-based water and energy expert, tells TNS that coal power plants planned in Tharparkar and also possibly near Lillah in the Punjab allow gas with coal-fired projects at a competitive rate using local resources. The massive digging for coal has already started. However, he says until two months back there was little or no progress on the actual installation of plants even though the prime minister had inaugurated the Thar Coal project site adjacent to the Atomic Energy Project.

Amir sheds light on the pros and cons of having coal power in Pakistan. He says it is a cheap source of power generation, utilises local resources, generates employment (less likely China prefers to bring its own labour of prisoners), has logistical support in the form of local development infrastructure and road system and promotes transfer of technology. The negative points on the other hand, he says, are that the dirty carbon dioxide (CO2) emitting technology these plants use. These plants have been shunned by many countries and China is shipping its old and outdated plants that have poor reputation internationally.

Amir tells TNS that initially China will bring coal for these plants from China. The plants will be a major environment hazard, he says, adding Pakistan has already put five coal power plants on hold for further investigation. He suspects that being close to border and depending on wind direction, India may start campaigning against Pakistan for emitting high levels of carbon and creating trans-boundary environmental issues. "The country will undoubtedly come under the scanner as everyone else is trying to go green and move to hydropower, biogas, nuclear etc."

He says the questions that the government shall answer are: Where is the Environmental Impact Assessment? How does Chinese technology compare with international best practice technology? What is India using? The US is heavily coal-based, how have they have internalised emissions? "How do we ensure minimal Co2 emissions? Can China provide the add-on technology to restrict Co2 emissions to international standards?" He categorically states that the country must use 100 per cent of its own coal and must not import this raw material from abroad.

Arshad Abbasi, energy expert and advisor Sustainable Development Policy Institute (SDPI), believes that coal power is not only unclean but financially non-feasible as well. He says it was a better option than furnace oil when the prices of crude oil were hovering around $130 to $140 per barrel. But now the price coming down to around $30 per barrel, the electricity produced from furnance oil is far more feasible that coal power.

Abbasi, who is a strong advocate of hydel power, says that countries that have gone for coal power have done that after fully exploiting their potential of generating hydel power. But Pakistan is opting for this option without exploiting even a fraction of its hydel power potential. He says the topography of Pakistan is such that its northern areas have the potential of producing 1,20,000 MW energy.

He dispels the impression that the global oil prices will rebound and says they will remain below $40 for long. He attributes the sustainable fall in oil prices to the "Sheikh versus Shale" scenario in which shale gas has emerged as a major and abundant source of energy. "At the moment, the US is producing 32 billion cubic feet of shale gas per day and Canada 4 billion cubic feet per day," he adds.

Abbasi also questions the logic of deciding a tariff of 9.5 cents per unit of coal power produced in Pakistan by Chinese companies as compared to 4.5 per cent unit in Bangladesh. The efficiency of the coal power plants planned here, he says, is around 30 per cent to 35 per cent against the maximum possible efficiency of 50 per cent in coal power technology. He says dependence on imported coal also means higher tariffs as fuel costs comprises more than 70 per cent of the tariff.