Pakistan Looks to Massive Coal Reserves to Fire Power Generation Gap

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). With power generation gaps looming for Pakistan, the government has announced that it will give priority to developing its massive coal reserves for power generation, rather than rely solely on the addition of new hydropower and gas-fired projects.

The federal minister for water and power, Liaqat Ali Jatoi, has said that extensive reserves in Thar, Sondha, and Lakhra could be utilized to meet the country's energy needs more effectively and announced that the government would now be placing a new emphasis on coal. He assured Pakistani provinces that support from the federal government would be available in pursuit of coal-intensive generation, and that private investors would be able to recoup their investments in coal-fired generation within three years.

Pakistan is the eighth largest coal producing country in the world. In Sindh province, there are an estimated 184 billion tons or more, and of that total over 175 billion tons are in the Thar region, Sunda has seven billion tons, and Lakhra 1.3 billion tons. Business Recorder reports that Thar has been divided into four zonal blocks of which one block has been awarded to a Chinese company, Shen Hua, which is already working on constructing two 300 MW power plants.

Pakistan's electrical power consumption increased 8.6% in the first nine months of 2003/04 on a year-on-year basis. This increase was driven by an industrial growth rate of 18% in 2004. About 60% of the population has access to electricity and total installed generating capacity, which has grown 9.6% in the past year, is about 20,000 MW.

In the total installed capacity, public sector state companies such as Wapda and Karachi Electric Supply Corporation (KESC) supply about 70% of demand, with independent power companies supplying about 30%. Demand and supply projections indicate that power shortages loom in 2005/06 and are expected to increase to 5,500 MW in 2010. In this scenario Pakistan is currently using less than 1% of coal-fired power generation and coal's total contribution to national energy usage is less than 5%. In the next three years 2,600 MW of new thermal power projects could start generation.

The government is promoting coal gasification plants for answering local domestic power needs and for creating employment in the coal mining industry and is setting up a $4.2million plant in Bhakkar, Punjab, which will use the vertical retort destructive distillation process and produce 100 tons of coke a day as by product.

Industrialinfo.com is currently tracking 21 projects, totalling nearly $8.6 billion in planned grassroot power plants in Pakistan. Click on the image at right to view a breakdown of this spending by state.

Other established sources of power generation are also receiving support, with a possible $12.8 billion to be spent on hydropower projects in the next five years with the launch of at least three large-scale projects. The plan includes 30 projects of 50MW and above and the total investment could generate an additional 13,000 MW of power. Some estimates show that Pakistan could generate 42,000 MW of hydropower to meet future power demands.

Combined gas cycle plants are to be constructed. A 450 MW plant will be constructed at Faisalabad, a 500 MW plant at Uch and a 350 MW cogen project near Lahore. The government has been promoting foreign investment in these projects through an international roadshow in February and March.

The UAE will install two 240 MW power plants in the Korangi and Binqasim townships of Karachi and a 1,000 MW Hubco and KESC interlinking project will be completed in 2006. The two schemes combined will give Karachi an additional 1,480 MW of power. The Karachi area also has 395 MW of windpower projects in various stages of planning execution.

Transmission systems are being refurbished and developed to run parallel to the demand for electrical power delivery in the country. The water and power development authority asked government in late 2004 for $1.35 billion to improve transmission lines and set up new grid stations. Opportunities exist for foreign investment in the transmission sector. For related news item see - September 15, 2004 - Pakistan Cuts to Power Chase with 50 Projects in Queue and $580 Million Network Upgrades

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