Thar coal: energy and efficiency

News Analysis

Pakistan houses the 7th largest coal reserves in the world which have so far been largely unexploited. The reserves were discovered in 1991 but the plan to develop the region and exploit its reserves has only recently come into fruition. Pakistan’s coal reserves have the potential to become a major contributor to the country’s energy mix for years to come.

The Government of Sindh as well as the federal government now have a keen interest in mining Thar. Private companies like Engro, Habib Bank Limited and Hubco have also become major players in Thar, partnering with the government. Additionally, Thar is seen as a vital part of the China Pakistan Economic Corridor, and recent projects have inducted Chinese help to expedite the process.

Work on the Thar Engro Coal Power Project was begun in 2014 and in an important milestone yesterday, a 330 megawatt coal-powered power station was successfully synchronized to begin producing electricity for the national grid.

Engro Powergen Thar CEO Ahsan Zafar Syed told the Tribune that, “We are schedule to test one of the two 330-megawatt power plants based on Thar coal any day between March 20 and March 25.”

Although the second plant in the Thar project will be tested in late April, both the coal energy plants are set to produce a maximum of 660-megawatt of energy that will be connected to the national grid through the 232 kilometer Thar-Mitiari power line, during the initial testing phases.

CEO Ahsan Zafar Syed added, “We are four months ahead of the timeline set for switching on the power plants. The project is almost done well within the budgeted cost of $1.1 billion while we have significantly saved cost of the mining project, which was originally estimated at $845 million.”

To produce the 660-megawatts of energy, the two plants need 12,500 tons of coal each day. This is one of the early power projects scheduled for the China-Pakistan Economic Corridor (CPEC).

The first phase will produce 660-megawatts of electricity, with other scheduled phases to increase the power supply in the coming years.

The plants will be formally inaugurated  in June.

Thar coal: the positives

The positive aspect of this project is that Pakistan will be able to utilize its own natural resources and produce a large quantity of energy. Most of the nation’s energy is still dependent on foreign bought fuels such as furnace oil and LNG which have a negative impact on the fiscal deficit by adding to the import bill. In the recent past, Pakistan has suffered greatly at the hands of inadequate energy for the masses, which resulted in constant load-shedding across the whole country. If anything, this project may help curb this issue as well.

This utilization of indigenous resources will also make the country less dependent on foreign fuel mix.

According to Business Recorder, both coal mining projects will be able to save up to $1.6 billion per year in foreign exchange savings.

Thar coal: the negatives

Thar coal’s negative impacts are mostly due to environmental concerns as coal is considered one of the worst fuel sources for the environment.

The excessive burning of coal to produce energy will undoubtedly leave a long lasting effect on the environment of not only the region in particular but also the country in the long run. In fact, using coal goes directly against the new PTI government’s Clean Green Pakistan initiative, although given the economic benefits of the initiative they cannot be faulted for promoting it.

Another issue is the effect on the health of the labour that will be working there. Coal mining is infamous for causing serious effects on health and in some cases leading to death. The industry is also extremely exploitative in nature and checks must be put into place to make sure the labour is treated well in Thar.

The history

The Thar Coalfield is located in the Thar Desert in the Tharparkar District of Sindh. In 1991, the Geological Survey of Pakistan (GSP) and the United States Agency for International Development discovered the 7th largest coal deposits in the world.

The coal stored in these areas is mostly of Paleocene and Eocene rock sequences. It is one of the largest lignite deposits ever found anywhere in the world. The coal deposits spread over more than 9,000 km2 and contains 175 billion tons of coal, which is sufficient to meet Pakistan’s fuel requirements for centuries.

The project was first introduced in 2008 when the government of Pakistan invited both the public and the private sector for plans regarding the development of the coal reserves. As a result, the Sindh-Engro Coal Mining Company (SECMC) was formed in 2009.

As per the Joint Venture agreement, the Engro Corporation is responsible for managing and financing the project, while the Government of Sindh is responsible for infrastructural development, attaining requisite consents and approvals for the project.

Topography

The coalfield is part of the Thar Desert, which is the 9th largest desert in the world. The terrain itself is harsh with massive sand dunes forming most of the topography. The climate is both arid and semi-arid, with scorching summers and cold winters. It is also one of the most densely populated deserts in the world, consisting of roughly 91,000 people.

The change?

Unlike many other projects that start and never meet deadlines or go above the budgeted cost, the Thar coal project has been a success so far mostly due to private sector involvement and high government interest in the project.

Compared to the Bus Rapid Transit (BRT) project in Peshawar, that has gone a year above the designated time and used 30 billion rupees more than expected, the Thar coal project is a good change of pace as it shows that many companies are still capable of efficiency.

More importantly however, it shows that even though the majority, approximately 51%, of the stake in the project belongs to the Sindh government, the private companies involved in this project have ensured that the cost is reduced and the completion of the project is well under the designated time. Whereas, the BRT project that is solely being run by the Khyber Pakhtunkhwa (KP) government has constantly shown inefficiency, lack of progress and disappointment in the government.

We can argue that the stake for both the projects is different and that maybe the BRT is more significant, but under those circumstances, is it not better to have completed the Peshawar project beforehand? The BRT has been a nuisance to the people of the area, whether in terms of traffic congestion or in the form of air and noise pollution.

The complexity of the Thar coal project and the speed with which it was eventually completed is a feat in itself.


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