Electricity fuel: Govt opts to replace coal-run power plants with LNG

[Kabira]

ISLAMABAD:
Addressing the acute energy crisis, the federal government has suggested abandoning the plan of developing two coal-based power plants in exchange for liquefied natural gas (LNG) power plants, which will be established in Punjab.
The proposal recommends fixing the upfront tariff for 3,600-megawatt LNG-based plants at Rs8.85 per kilowatt hour (kWh).
Giving a detailed briefing, a senior official of the Water and Power Ministry said that gas-fired power plants can be established in two to three years.
“LNG prices across the globe are coming down which provides an opportunity to Pakistan to set up LNG-based power plants.”

The Ministry of Water and Power has proposed Rs8.85 per unit upfront tariff to the National Electric Power Regulatory Authority (Nepra) for the LNG-based power plants. The official added that the “government will work towards establishing LNG-based power plants in Punjab.”

“By providing upfront tariff, we have kept the field open for power plants. It is up to the investors to establish energy plants whatever capacity they desire, so that it is not felt that the government is supporting a specific party or company,” he added.

Earlier, the government intended to establish three imported coal-fired power plants in Punjab but now the focus is on LNG. The official further stated that the government has replaced two imported coal-fired plants with LNG plants. However, one imported coal-fired plant in Sahiwal is being pursued by the government.
“The Punjab government, the Ministry of Railways and the Chinese agreed that heavy investment is needed at the port to handle coal and transport it to the plant, in addition to environmental issues,” he said.
Another argument was that the price of imported coal is very close to LNG so priority should be given to LNG as these plants will be established in a reduced time.

According to the official, since work is already under way to construct an LNG pipeline in Punjab, it would be easier to develop LNG-fired plants at load centres in place of imported coal power plants.
“Work on LNG power plants and LNG pipeline will progress simultaneously,” he said.
Three power distribution companies of Punjab, Lahore Electric Supply Company (Lesco), Gujranwala Electric Power Company (Gepco) and Faisalabad Electric Supply Company (Fesco) face shortfall in supplies.
“If LNG power plants are established in load centres of Fesco, Lesco and Gepco, losses in the transmission system and the transportation cost will be minimised,” he said.

According to the official, the government has started replacing old meters with smart meters in the areas covered by Multan and Peshawar electric supply companies as pilot projects. In the next phase, smart meters will be installed in the areas covered by Islamabad and Lahore electric companies. These meters will control the power load and also run on installation of cards.

In reply to a question, sources said that a separate mechanism will be formulated to ensure payment for imported LNG through an Escrow account.

The Ministry of Water and Power is not in the loop with regard to LNG to be imported by the Ministry of Petroleum. However, prevalent prices of LNG at the global level are around 8.5 cents per million British thermal units (mmbtu).

According to the information provided by the ministry, China is the only country which has shown interest in coal-fired power plants whereas investors across the globe are interested in gas-based power plants.
The official said that the amount of circular debt is Rs254 billion due to the steps taken by the Ministry of Water and Power and Ministry of Finance with the latter arranging Rs65 billion for the power sector.
He claimed that the Ministry of Water and Power owes Rs131 billion to Pakistan State Oil (PSO).
The government intends to bridge the gap between demand and supply in the shortest possible time and this can only be done through the establishment of gas-fired power plants.
Published in The Express Tribune, February 5th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

 

[That Guy]

Bad idea, bad bad idea. LNG is far too expensive, and coal would have been far more reliable and cheaper. This is the stupidest decision that the government could make.

 

[Hyde]

Well there is no denial that energy prices are not likely to rise again but still it would be better to have energy mix particularly Hydro, Coal and Nuclear on top priority. Get the benefit of low energy prices by taking sigh of relief and choosing cheaper and sufficient source of energy for long term goal

 

[WishLivePak]

Bad idea, bad bad idea. LNG is far too expensive, and coal would have been far more reliable and cheaper. This is the stupidest decision that the government could make.

LNG is expensive, but at the same time it's better for environment than coal.

It is the brightest idea. Pakistan should pursue gas power plants and nuclear plants. Lahore is filled with smog and there is a lot of air pollution in Pakistan dense areas. It's time to invest in better environmental generating electricity plants and think about long term.

There is a hidden cost to coal plants that is "environmental damage."

Read this: 4 Reasons Coal Declines Even As Natural Gas Prices Rise: EIA - Forbes

Well there is no denial that energy prices are not likely to rise again but still it would be better to have energy mix particularly Hydro, Coal and Nuclear on top priority. Get the benefit of low energy prices by taking sigh of relief and choosing cheaper and sufficient source of energy for long term goal

hydro is the best way to considering it help stop floodings, but sadly Sindh kp won't let some major dams be built.

 

[razgriz19]

a coal power plant creates 100 times more radiation than a nuclear power plant with the same capacity.
LNG is good as long as they can keep flowing the gas.

 

[WishLivePak]

a coal power plant creates 100 times more radiation than a nuclear power plant with the same capacity.
LNG is good as long as they can keep flowing the gas.

I think the LNG thing is going be finished by end of this month so imports can start.

The gas will flow as long as we can make payments.

 

[That Guy]

LNG is expensive, but at the same time it's better for environment than coal.

It is the brightest idea. Pakistan should pursue gas power plants and nuclear plants. Lahore is filled with smog and there is a lot of air pollution in Pakistan dense areas. It's time to invest in better environmental generating electricity plants and think about long term.

There is a hidden cost to coal plants that is "environmental damage."

Read this: 4 Reasons Coal Declines Even As Natural Gas Prices Rise: EIA - Forbes



hydro is the best way to considering it help stop floodings, but sadly Sindh kp won't let some major dams be built.

If it was about the environment, then just invest in renewables such as solar and wind. This is nothing but money grubbing, and has nothing to do with environmental concerns. Coal is the cheapest source, and right now, it is badly needed as Pakistan has a hard time paying for electricity from other sources.

 

[SBD-3]

Even if they use costless resources like water unless they supply this electricity to places like Kirk, they will add nothing but circular debt.

 

[Judge]

Expensive but environmentally better.

 

[pursuit of happiness]

ISLAMABAD:
Addressing the acute energy crisis, the federal government has suggested abandoning the plan of developing two coal-based power plants in exchange for liquefied natural gas (LNG) power plants, which will be established in Punjab.
The proposal recommends fixing the upfront tariff for 3,600-megawatt LNG-based plants at Rs8.85 per kilowatt hour (kWh).
Giving a detailed briefing, a senior official of the Water and Power Ministry said that gas-fired power plants can be established in two to three years.
“LNG prices across the globe are coming down which provides an opportunity to Pakistan to set up LNG-based power plants.”

The Ministry of Water and Power has proposed Rs8.85 per unit upfront tariff to the National Electric Power Regulatory Authority (Nepra) for the LNG-based power plants. The official added that the “government will work towards establishing LNG-based power plants in Punjab.”

“By providing upfront tariff, we have kept the field open for power plants. It is up to the investors to establish energy plants whatever capacity they desire, so that it is not felt that the government is supporting a specific party or company,” he added.

Earlier, the government intended to establish three imported coal-fired power plants in Punjab but now the focus is on LNG. The official further stated that the government has replaced two imported coal-fired plants with LNG plants. However, one imported coal-fired plant in Sahiwal is being pursued by the government.
“The Punjab government, the Ministry of Railways and the Chinese agreed that heavy investment is needed at the port to handle coal and transport it to the plant, in addition to environmental issues,” he said.
Another argument was that the price of imported coal is very close to LNG so priority should be given to LNG as these plants will be established in a reduced time.

According to the official, since work is already under way to construct an LNG pipeline in Punjab, it would be easier to develop LNG-fired plants at load centres in place of imported coal power plants.
“Work on LNG power plants and LNG pipeline will progress simultaneously,” he said.
Three power distribution companies of Punjab, Lahore Electric Supply Company (Lesco), Gujranwala Electric Power Company (Gepco) and Faisalabad Electric Supply Company (Fesco) face shortfall in supplies.
“If LNG power plants are established in load centres of Fesco, Lesco and Gepco, losses in the transmission system and the transportation cost will be minimised,” he said.

According to the official, the government has started replacing old meters with smart meters in the areas covered by Multan and Peshawar electric supply companies as pilot projects. In the next phase, smart meters will be installed in the areas covered by Islamabad and Lahore electric companies. These meters will control the power load and also run on installation of cards.

In reply to a question, sources said that a separate mechanism will be formulated to ensure payment for imported LNG through an Escrow account.

The Ministry of Water and Power is not in the loop with regard to LNG to be imported by the Ministry of Petroleum. However, prevalent prices of LNG at the global level are around 8.5 cents per million British thermal units (mmbtu).

According to the information provided by the ministry, China is the only country which has shown interest in coal-fired power plants whereas investors across the globe are interested in gas-based power plants.
The official said that the amount of circular debt is Rs254 billion due to the steps taken by the Ministry of Water and Power and Ministry of Finance with the latter arranging Rs65 billion for the power sector.
He claimed that the Ministry of Water and Power owes Rs131 billion to Pakistan State Oil (PSO).
The government intends to bridge the gap between demand and supply in the shortest possible time and this can only be done through the establishment of gas-fired power plants.
Published in The Express Tribune, February 5th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

--
why the hell you dont build small hydro projet..
coal based roject
soalr enegry ..

 

[OrionHunter]

Bad idea, bad bad idea. LNG is far too expensive, and coal would have been far more reliable and cheaper. This is the stupidest decision that the government could make.

While price remains the primary factor in the short-term race between gas and coal, three other factors help gas displace coal in the long term, according to EIA:

1. Efficiency: The efficiency of power generation from gas means it competes with coal even when it costs 1.5 times as much. When the ratio of natural gas prices to coal prices is approximately 1.5 or lower, a typical natural gas-fired combined-cycle plant has lower generating costs than a typical coal-fired plant.
2. Competitiveness: For new builds, natural gas and renewables generally are more competitive than coal.
3. Flexibility: In general, combined-cycle (gas) units are considered to be more flexible than steam turbines. They can ramp their output up and down more easily, and their start-up and shutdown procedures involve less time and expense.

 

[niaz]

While price remains the primary factor in the short-term race between gas and coal, three other factors help gas displace coal in the long term, according to EIA:

1. Efficiency: The efficiency of power generation from gas means it competes with coal even when it costs 1.5 times as much. When the ratio of natural gas prices to coal prices is approximately 1.5 or lower, a typical natural gas-fired combined-cycle plant has lower generating costs than a typical coal-fired plant.
2. Competitiveness: For new builds, natural gas and renewables generally are more competitive than coal.
3. Flexibility: In general, combined-cycle (gas) units are considered to be more flexible than steam turbines. They can ramp their output up and down more easily, and their start-up and shutdown procedures involve less time and expense.

Agreed. Gas fired combined cycle power plants are far more efficient, cheaper to build and more environmentally friendly. However a power plant has 30 year life, who can predict what would happen? Oil & gas prices can as easily go back up.

I would personally want a mix; that is least 20% of the electricity generation based on coal fired power plants. Especially since sooner or later, Thar coal would be exploited and if we had coal fired plants already in operation; it would be easy to switch the same to Thar lignite. But in Pakistan there are few with long term perspective. So be it.

 

[WishLivePak]

If it was about the environment, then just invest in renewables such as solar and wind. This is nothing but money grubbing, and has nothing to do with environmental concerns. Coal is the cheapest source, and right now, it is badly needed as Pakistan has a hard time paying for electricity from other sources.

Solar and wind is expensive.

You can't be extreme on either side. Gas is a compromise between the two, with coal being very damaging and solar/wind being very clean. We face an immiment electricity shortage and for that, gas is the best solution. After few years when budgets are stable, we can look at solar/wind energy, which happens to be getting cheaper as new technological advancements are made.

Coal is indeed cheapest source, but countries are moving away from coal, so why invest in something which countries are dropping?

Read the link I posted, you'll learn more about gas vs coal.

 

[That Guy]

Solar and wind is expensive.

You can't be extreme on either side. Gas is a compromise between the two, with coal being very damaging and solar/wind being very clean. We face an immiment electricity shortage and for that, gas is the best solution. After few years when budgets are stable, we can look at solar/wind energy, which happens to be getting cheaper as new technological advancements are made.

Coal is indeed cheapest source, but countries are moving away from coal, so why invest in something which countries are dropping?

Read the link I posted, you'll learn more about gas vs coal.

Actually, one thing I like to correct here, solar and wind are expensive to set up, their long term costs are next to nothing, and are much easier to maintain.

Why should Pakistan invest in coal? Because it has little financial incentives to do otherwise.

 

[WishLivePak]

Actually, one thing I like to correct here, solar and wind are expensive to set up, their long term costs are next to nothing, and are much easier to maintain.

Why should Pakistan invest in coal? Because it has little financial incentives to do otherwise.

Expensive to set up and for which we have little money. Even Germany produces only some 30% of its electricity through solar/wind (Afaik), despite being a super rich country.

We're looking for short term cheap relief, which doesn't mean we take Pakistan's environment to trash.

Again, read the article and do a bit of research on coal vs gas.