Welcome to official website of PRES

Govt considering shifting power plants to imported coal

Pakistan government is working on a plan to shift furnace oil based power plants to imported coal for bringing down electricity generation cost, senior officials said.

They said that the government is also seeking a loan from the Asian Development Bank (ADB).

“We are in touch with the ADB for a loan to covert furnace oil based plants and in the first phase we have asked the bank to extend a loan for converting two plants one each at Faisalabad and Multan,” a senior government official told The News.

The dependence on furnace oil for power generation increased significantly in recent years that is not sustainable in the long-term due to rising international oil prices. Per unit cost of electricity on furnace oil stands at Rs18.72 per unit. As current energy mix which is heavily tilted to residual furnace oil (RFO) based plants, National Electric Power Regulatory Authority (NEPRA) has determined power tariff of Rs11.91 per unit which will be implemented on May 1.

In case the government manages to switch power plants to imported coal as a fuel then the determined tariff would reduce to Rs9 per unit.

When the official was asked about environmental aspects of the move, he said that the government intends to first use clean coal as fuel with high-tech plants that would be environmentally friendly. But with the use of imported coal in power plants, the country would be in a position to generate cheaper electricity, he added.

The official said that the ADB has promised to consider the government’s proposal for credit lines.

“We have reduced furnace oil demand from 32,000 metric tons to 26000 tones per day to reduce the impact of fuel cost on power tariff.” The cost of furnace oil has swelled to Rs90,000 per ton at the maximum from Rs 45000 per ton, which is why the option to run power plants on furnace oil is being considered more seriously.

The other option to bring down power tariff is to ensure proper allocation of gas to the power plants. The power sector requires 210 mmcfd gas per day and if it is ensured to the power sector then the energy mix will further improve in favour of consumers in terms of affordability. The electricity generation cost on gas stands at Rs5 per unit. If 210 mmcfd gas is provided then system will produce 1,100 megawatt at Rs5 per unit.

Comments are closed.