KARACHI, April 21: The Ministry of Industries and Production is planning to set up coal-fired power generation plants in export processing zones (EPZs) and special industrial estates to provide cheap source of energy to the industrial units.

According to sources in the ministry of industries, the top officials of the ministry have recently held talks with the several prospective foreign investors including that of Saudi Arabia and China who expressed their keen interest in the coal-fired power generation projects.

The reason behind this initiative is the existence of unexploited and world’s biggest coal reserves of 175 billion tons in Tharparkar.

Official sources further said that an announcement in this regard would soon be made by the ministry which was making deliberations with the Board of Investment (BoI) to attract foreign investment in the power generation plans run with coal.

The ministry intends to give special incentives to the investors with the permission of the higher authorities in the federal government.

Industrial experts said that rising cost of electricity was a significant contributor to high cost of production of industrial units.

They said the government had already taken initiative to explore and utilize the coal reserves of Thar with the assistance of China.

They said the share of coal in the overall commercial energy requirements of the country at the time of Pakistan’s independence was about 60 per cent but with the advent of natural gas in 1952, the utilization of coal was gradually replaced with gas. Currently the share of coal in the over all energy mix is less than 5 per cent.

Production of coal in the country in the last fiscal year was 2,248,412 tons. The major consumption of coal was in the brick kiln industry (71.4 per cent) followed by coke (23.5 per cent) and power generation (5.1 per cent).

In Pakistan, the household/ domestic group was the largest consumer of electricity accounting for 45.8 per cent of total consumption followed by industry (28.1 per cent), agriculture (12.2 per cent), bulk supply & lighting (8.7 per cent), and commercial (5.1 per cent).

They said that the transformation of power generation from hydel to thermal had made the electricity expensive. The share of hydel was almost 52 per cent in 1992-93 but declined to almost 30 per cent in 2000-01. On the other hand, the share of thermal increased from 48 per cent to 70 per cent during the same period.

In 1960 the share of hydel was 70 per cent while that of thermal was only 30 per cent. The ratio changed to 58 per cent (hydel) and 42 per cent (thermal) in 1980. By 2002 the ratio changed to 30 per cent and 70 per cent.

The bulk of the installed capacity of Wapda, KESC and Independent Power Projects (IPPs), the Karachi and Chashma Nuclear Power Plants was around 18,000 mw. The share of Wapda has been 55 per cent, followed by the IPPs at 31.3 per cent, KESC plus others at 11.2 per cent and nuclear plants at 2.6 per cent.—APP