Pakistan approves four coal generation projects

The projects are to address the current energy crisis and the gap between supply and demand, while supplying electricity at affordable prices. Overall, Pakistan aims to increase power generation to 54,000 MW by 2015.

At a recent press conference, the Minister for Water and Power and the Finance Minister announced that the Planning Commission will set up a 50-MW underground coal gasification plant within a year, using indigenous technology and aided by a nuclear scientist. Although there were initial reservations over the coal gasification plants, these have been resolved and the Planning Commission will set up a pilot 50-MW gasification project, followed by further plants. The pilot plant will be increased in capacity to 1,000 MW in three years.

In a joint venture with the Sindh provincial government, Engro Chemical Pakistan Limited aims to set up a 1,000-MW power plant, which will be increased to 4,000 MW of capacity over the next four to six years, while the Pakistan Electric Power Company Limited (Pepco) will set up a 1,000-MW gasification plant.

In another project, Cougar Energy (UK) Limited, a subsidiary of Cougar Energy Limited, has signed a memorandum of understanding with the Sindh Coal Authority to develop a 400-MW power plant that will be fuelled by underground coal gasification. Both the Pepco and Cougar plants will see capacity augmentation in the later stages.

The Federal government of Pakistan and the Sindh provincial government plan to invest $963 million in infrastructure projects in Thar during the next two to five years to assist investors in exploiting the estimated 185 billion tons of coal reserves. In addition to the proposed power plants, diesel and fertilizer products are expected to be developed from the underground gasification of the coal reserves.

The value of the Thar coal reserves is estimated to be equivalent to the oil reserves of both Saudi Arabia and Iran, yet coal currently contributes just 1% to the power generation of Pakistan. China, the world's largest consumer of coal, meets 78% of its energy requirements from this fuel, while the United States addresses 60% of its energy requirements from coal. The low usage of coal in Pakistan is largely a result of the requirement for massive upfront capital investment to develop the reserves and previous concerns about the quality of the coal.

In other power projects, the Executive Committee of the National Economic Council recently approved the construction of the Diamer-Basha Dam project for generating hydroelectricity at a projected cost of $12.6 billion. Construction is planned to start next month, and completion is expected some time in 2016. Construction on the 5,450-MW Bunji hydroelectric power plant is also expected to start soon.

However, there is an urgent need for an increase in electricity supply in Pakistan. Last week, the Economic Coordination Committee (ECC) approved a plan for the development of 1,500 MW of rental power plants to end to the country's immediate power crisis. The EEC also requested that the power ministry arrange for the provision of a further 2,200 MW of power generation capacity from 14 companies and to organize 200 million cubic feet per day of gas from the petroleum ministry to enable the generation of 700 MW from the existing power system.