THE recent power outages in big cities including Karachi have brought into focus the need for additional power generation capacity together with revamping of transmission and distribution networks.

To improve energy supply, the government has been working on different options including Iran-Pakistan-India oil pipeline and import of electricity and gas from the Central Asian Region. Hydro power generation by planned large dams is also on the cards.

And the development of alternate energy resources is receiving more attention. The exploitation of the Thar coal mines for power generation is one of the important options.

The $12 billion trade deficit recorded last fiscal is a clear message for controlling big-ticket imports particularly fuel for power generation. Although the local gas is being used for power generation, the gas distribution companies are finding it difficult to make long-term commitments for supply to new power plants.

So, there a strong justification for exploiting Thar coal reserves (Sindh) estimated at 175 billion tons as the government has decided to raise the share of coal in overall energy mix from five to 18 per cent by 2018.

The Sindh government has so far reportedly invested over Rs4 billion on infrastructure development such as roads network, town planning, water, telephone, electricity and power supply systems and other schemes. Work is still continuing.

Wapda is working on 500-kv transmission line to connect the proposed coal-based power plants to the national grid. In addition, it would also construct Rainee-Thar canal to irrigate the region and to meet water requirements of the power projects.

Presently, two power projects are under process at Thar. The Chinese 600 MW power plant based on block-one is stuck due to disagreement on the tariff at which power will be sold in bulk to NTDC.

The American 1,000 MW power plant based on the block-two, initiated on the basis of a study prepared by German consultants, is under further detailed review due to investors’ reservations on the availability of underground water required for cooling purposes and consequently for change of project site to a location with abundant water supply.

The prospective investors may assess the respective project parameters and the government might look into their reservations.

There have been reports of coal-based power plants or coal-washing facilities being considered by local entrepreneurs as well. Coal has been used as fuel for power generation in a number of developed counties but Thar coal is said to have a number of special characteristics. Heating value is said to be relatively low, while the level of moisture, ash, volatile matter and sulfur is slightly on the higher side.

These characteristics have implications for plant design as well as supply of coal, disposal of ash and management of environmental pollution. Such matters have also a bearing on the attractiveness of Thar coal for investors.

For the development of this field in the shortest possible time, the federal and the provincial governments might have to reduce investment uncertainties by appropriate measures aiming at good governance, improved law and order situation, construction of physical infrastructure and provision of level playing field to the local and foreign investors.

Some suggestions are offered here for consideration:

The Power Policy-2002 may not provide sufficient incentives to investors to address issues associated with exploitation of Thar and other fields for power generation.

The announcement of a special policy, namely Thar Coal Development & Power Generation Policy may perhaps expedite the project.

Important parameters such as policy on leasing, handling and transportation of coal to site, provision of water, power generation from coal burning, sale of bulk power to NTDC, handling of emission gases, disposal of ash, etc might be discussed and agreed among the major stakeholders.

Efficient use of such power generation while complying with environment considerations may require the use of advanced technologies which promise low emissions from coal-based electricity generation and may push up the tariff for the electricity genera acceptable balance has to be found.

The provincial policies might not be fully appropriate for protection and optimal exploitation of the natural resources in matters such as mine lease period, levying and collecting of royalty, minimizing damage to the landscape, saving the population from harmful pollutants, etc. These might be updated.

The potential investors are likely to adopt technologies which are reasonably modern and tested and at the same time acceptable, both technically and environmentally, to international lenders who are likely to be financing major cost of power projects based on Thar coal. PPIB, NEPRA and the Sindh government might engage at different levels experts who understand these modern technologies and would support it in the design of new policies.

Policy support for research and development of such new technologies with possible technology transfer to developing countries might also be arranged. Natural resources are precious and local population must benefit the most from their exploitation.

It is imperative to build capacity and properly motivate different cadres of the government officials associated in the work pertaining to enhancing capacity for power generation and the purchase of bulk power from the IPPs. Capacity building will not come easy or cheaply. Dedicated efforts and support over a long period are required. Liberal budget for capacity building may also be assured.

Sindh already has a 150 MW coal-based power plants (three units of 50MW each) based on fluidised bed combustion technology from China. The plant managed by Lakhara Power Generator Company, district Jamshoro is also coal-based. This plant, expected of becoming the harbinger of coal-based power generation activities, has been plagued with periodic technical or other problems. It might be revamped and made more reliable.

Wapda has been recently allowed to establish new gas-based power generation capacity. The government might consider allowing Wapda to undertake Thar coal-based power generation plants as well. This might expedite the Thar coal project.

A Thar coal research institute needs to be set up preferably in the mine area and it should be developed into a centre of excellence. It may initially require large financial and human resources which might be made available by the government. It should have the wherewithal to set up pilot power plants and operate them over extended periods to establish the most appropriate technologies for burning of coal, control and collection of gases being emitted, disposal and use of ash that remains after coal burning.

To show its commitment for the development of Thar coal, the government might consider becoming an investor (say with 5-10 per cent equity stake) in the plants to be set up in the private sector. Once the power plants are in commercial operation, the shareholding can be off-loaded, possibly at a profit.