A.Rafay
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ISLAMABAD:
Keen on exploiting the vast Thar coal reserves, the Sindh government has asked the central government to award a multi-billion-dollar coal supply tender to the province and refrain from offering the lucrative contract to international suppliers.
If the demand is accepted, it will put in jeopardy proposed financing of $1.14 billion from the Asian Development Bank (ADB) for 1,080-megawatt coal-fired power plants. The bank will not provide funds for power plants based on Thar coal.
The Sindh government wants the central government to award it the contract for coal supply from Thar reserves in response to the bids invited for coal import to run 1,080MW power plants, an official said.
According to sources, the Thar Coal and Energy Board has approached the central government, saying it can supply coal against the tender.
Earlier, the Genco Holding Company Limited invited bids for pre-qualification of international coal producers, coalmine owners, trading companies and marketing firms for supply of imported coal. The deadline was November 28 for submitting pre-qualification documents.
Coal import was meant for a new 660MW coal-fired power plant and 420MW thermal-based power plants which would be switched to coal, a move expected to reduce circular debt by Rs100 billion a year.
However, the ADB has stalled financing for these plants because of a ban imposed by the prime minister on coal import and directives to use only Thar coal in power plants.
An ADB delegation during a visit to Pakistan last month expressed its willingness to finance the power plants if the government lifted the ban on coal imports. But no decision has been taken so far.
A senior official said Genco was seeking the import of coal having 5,000 kilo calorie (kcal)/kg to 6,000 kcal/kg, the range accepted internationally for coal-fired power plants. However, Thar coal has 2,000 kcal/kg and 60% moisture, considered to be very low energy level in world markets.
This (Thar) coal needs further processing to make it useful for power plants, the official said, adding low calorie was the reason why the ADB was not willing to finance Thar coal-based power projects.
Coal with 8% to 20% moisture and 5,800 to 8,000 kcal/kg is said to be the best for power plants.
According to sources, stakeholders have suggested that if the government wants to secure ADB financing as well as utilise Thar coal and reduce consumption of expensive furnace oil, the prime minister should allow both imported and Thar coal-based power plants.
In the short term, Pakistan should use imported coal to add 1,080MW to the national grid in the next three years and in the long run Thar coal should be utilised, an official said, adding the Thar coal extraction programme lacked infrastructure and access to water and would take a long time.
The government is doling out Rs1 billion in power subsidy because of dependence on thermal power plants and even imported coal-fired plants can curtail the circular debt, he added.
According to a study conducted by the Ministry of Water and Power, the economy will save around $26 billion in fuel costs over the next 15 years after only 420MW thermal plants are switched to coal.
About 68% of the countrys power production comes from oil and gas. Though gas is cheaper, it is increasingly scarce, forcing many plants that can run on both oil and gas to consume furnace oil. This, however, more than doubles the cost of electricity production.
Sindh seeks multi-billion-dollar coal supply contract – The Express Tribune
Keen on exploiting the vast Thar coal reserves, the Sindh government has asked the central government to award a multi-billion-dollar coal supply tender to the province and refrain from offering the lucrative contract to international suppliers.
If the demand is accepted, it will put in jeopardy proposed financing of $1.14 billion from the Asian Development Bank (ADB) for 1,080-megawatt coal-fired power plants. The bank will not provide funds for power plants based on Thar coal.
The Sindh government wants the central government to award it the contract for coal supply from Thar reserves in response to the bids invited for coal import to run 1,080MW power plants, an official said.
According to sources, the Thar Coal and Energy Board has approached the central government, saying it can supply coal against the tender.
Earlier, the Genco Holding Company Limited invited bids for pre-qualification of international coal producers, coalmine owners, trading companies and marketing firms for supply of imported coal. The deadline was November 28 for submitting pre-qualification documents.
Coal import was meant for a new 660MW coal-fired power plant and 420MW thermal-based power plants which would be switched to coal, a move expected to reduce circular debt by Rs100 billion a year.
However, the ADB has stalled financing for these plants because of a ban imposed by the prime minister on coal import and directives to use only Thar coal in power plants.
An ADB delegation during a visit to Pakistan last month expressed its willingness to finance the power plants if the government lifted the ban on coal imports. But no decision has been taken so far.
A senior official said Genco was seeking the import of coal having 5,000 kilo calorie (kcal)/kg to 6,000 kcal/kg, the range accepted internationally for coal-fired power plants. However, Thar coal has 2,000 kcal/kg and 60% moisture, considered to be very low energy level in world markets.
This (Thar) coal needs further processing to make it useful for power plants, the official said, adding low calorie was the reason why the ADB was not willing to finance Thar coal-based power projects.
Coal with 8% to 20% moisture and 5,800 to 8,000 kcal/kg is said to be the best for power plants.
According to sources, stakeholders have suggested that if the government wants to secure ADB financing as well as utilise Thar coal and reduce consumption of expensive furnace oil, the prime minister should allow both imported and Thar coal-based power plants.
In the short term, Pakistan should use imported coal to add 1,080MW to the national grid in the next three years and in the long run Thar coal should be utilised, an official said, adding the Thar coal extraction programme lacked infrastructure and access to water and would take a long time.
The government is doling out Rs1 billion in power subsidy because of dependence on thermal power plants and even imported coal-fired plants can curtail the circular debt, he added.
According to a study conducted by the Ministry of Water and Power, the economy will save around $26 billion in fuel costs over the next 15 years after only 420MW thermal plants are switched to coal.
About 68% of the countrys power production comes from oil and gas. Though gas is cheaper, it is increasingly scarce, forcing many plants that can run on both oil and gas to consume furnace oil. This, however, more than doubles the cost of electricity production.
Sindh seeks multi-billion-dollar coal supply contract – The Express Tribune
