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Thursday, May 23, 2024

Pakistan to move towards coal-based power generation

Pakistan plans to maximize its domestic coal-fired capacity to reduce power generation costs.

The Energy Minister, Khurram Dastgir Khan, said that the government would not build new gas-fired plants in the future as it seeks to ease a crippling foreign-exchange crisis. 

A shortage of natural gas plunged many areas of Pakistan into hours-long darkness, as it accounts for over a third of the country’s power output. Similarly, a surge in global prices of liquefied natural gas (LNG) after the Russia-Ukraine crisis and the current economic crunch has made LNG highly unaffordable for Pakistan.

The Energy Minister said; 

“LNG is no longer part of the long-term plan”

He further said that in order to overcome the energy crisis, its necessary to increase domestic coal-fired power capacity up to 10 gigawatts (GW) which is 2.31 GW currently.

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Furthermore, the plan to switch to coal to provide reliable electricity to the people has certain challenges such as; effective decarbonization strategies at which Pakistan being a developing country is struggling. Despite an increasing power demand, the country’s LNG imports fell to the lowest levels in the last five years as European buyers elbowed out price-sensitive consumers. 

The Minister said in an interview;

“We have some of the world’s most efficient re-gasified LNG-based power plants. But we don’t have the gas to run them.”

Reduce imports

Battling with political instability and a wrenching economic crisis, Pakistan is seeking to reduce its fuel imports to protect itself from bankruptcy and geopolitical shocks. The country’s foreign exchange reserves have fallen to the lowest at $2.9 billion which is not sufficient enough to cover three weeks of imports.

The initiative of producing energy from domestic coal would not only fulfill the energy needs but would also create jobs for local people and energy would be available at a much more affordable price, the Minister said. 

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Pakistan is rich in coal and the government needs to expeditiously exploit the coal in Thar to cater to its energy demands. The Shanghai Electric plant in Thar has a potential of 1.32 GW and it runs on domestic coal. The plant is funded under the China-Pakistan Economic Corridor (CPEC) project and has successfully started to produce power recently. 

Additionally, Pakistan also needs to boost its solar, hydel, and wind power generation in order to enhance renewable and sustainable energy initiatives in the country. Last year the power generated was 28.5 GW, which was 35% less than the power generation capacity of 43.77 GW. 

Moreover, the coal-fuel power initiative would boost the country’s energy sector and attract investors from China and Japan that have been backing out of funding fossil-fuel projects in recent years.