KARACHI: The rising coal prices in the world market, coupled with the recent devaluation of the rupee, has disturbed the viability of coal-fired power plants, especially captive power plants (CPPs) which are run by individual industrial units.
According to industry sources, coal prices have increased up to $103 per tonne from $90 per tonne, reflecting a 14 per cent increase. The recent devaluation in the rupee price by over 10pc further made coal imports costlier, rendering power generation through coal costlier for coal-based CPPs.
Talking to Dawn, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) former President Mian Muhammad Adrees said that the government has to take urgent measures for restoring viability of coal-fired power plants. However, in case the government fails to do so, he warned, many industries that have CPPs will have no option but to shift to national grid which would result in unbearable load on the Wapda system.
Another industrialist, Zubair Motiwala, said that presently around 500 megawatts of coal-based CPPs are operating in the country with their average production cost per unit at around Rs6. However, after the rise in coal prices in the world market and devaluation of the rupee the cost has gone high thereby challenging the viability of the industry.
Responding to a question, he said, the government should immediately withdraw 5pc import duty on coal. That would not only help save huge investments made by CPP’s industry in coal-fired plants but also prevent their move to the national grid.
Industries having coal-fired CPPs mostly belong to cement, steel melters, furnaces and re-rolling mills, textiles and chemical industry.
Published in Dawn, March 25th, 2018