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Currently, it constitutes 30 per cent of the total energy mix in America, China and India, the three major economic powers. But official lethargy and bias against coal-based generation has so far prevented exploitation of the vast reserves of Sindh and Punjab. Instead, the authorities have encouraged (the depleting) gas resource as an alternative to furnace oil for generation. Consequently, we have only one coal-based power plant in Lakhra. But attitudes are undergoing a change. The government realises that thermal power based on imported fuels is making electricity unaffordable and dragging down growth. It is also putting pressure on its budget.
Though electricity produced from coal-fired power plants is more expensive than that generated from hydel sources, it is cheaper than energy generated from gas and costs only a fraction of power produced from furnace oil. The prime minister's recent announcement to produce 35,000MW of electricity from coal-based projects reflects this change in official policy. The National Electric Power Regulatory Authority has also advised the Private Power and Infrastructure Board to encourage projects to be run on imported coal until the Thar deposits are exploited and used for generation because furnace oil is becoming unaffordable.
The inferior quality of local coal is believed to have delayed the utilisation of this resource. Investors have shied away from putting their money in coal mining because the mineral has no domestic usage and has no buyers in foreign countries. The establishment of power plants will make coal mining in the country profitable for investors. A private investor is trying to set up a 1,200MW coal power plant in Sindh that will use Thar coal as fuel for generation. Its successful setting up will pave the way for more coal-based generation. Nevertheless it is the official resolve to shift power generation to coal that will actually determine the future of coal-based power generation in the country.
