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Punjab aims to set up coal-based thermal plants

The Punjab government plans to exploit local and imported coal for power generation in the province, said a senior official on Tuesday.

“Punjab wants to start the construction of two coal-based thermal plants with a capacity of 50MW each in the present financial year with a view to provide dedicated supplies to industrial estates,” said the official.

Based on imported coal, these plants would be set up at Sundar Industrial Estate, Lahore and M-3 Industrial Estate, Faisalabad.

Feasibility studies for the projects are being finalised and efforts are being made to start physical work within the current fiscal year, the official said, adding that the option of public-private partnership is being weighed prior to the award of contracts.

The Punjab Power Development Company is currently spearheading construction of these proposed thermal units.

Punjab has allocated Rs10 billion for the energy sector under the development budget for fiscal year 2012-13, the official said, adding that initially, an action plan was evolved for the construction of six coal-fired projects of 50MW each to provide uninterrupted electricity supply to the industrial estates.

However, now the provincial government has decided to prioritise setting up of two thermal plants, the official said.

Besides two small projects on imported coal, Punjab is also contemplating to set up a medium-size coal-fired plant in the Southern tip of the province, which is comparatively close to the coastline.

The Provincial Energy Department is in the process of seeking private investment for 300MW plant proposed to be constructed in Rahim Yar Khan district.

Being landlocked and deficient in natural resources, Punjab’s energy mix is different from that of other provinces. The reliance on coal is an option that can help generate relatively cheap electricity. As far as imported coal is concerned, its availability is not an issue as several countries export it in bulk.

Coal is readily available in the international market at fairly competitive prices, said the official. In fact, he said, Pakistan imports four million tons coal annually to meet cement and steel industry requirements. The most important issue relating to imported coal is its upcountry movement, he said, adding that several logistics-related issues require streamlining. Round-the-year availability of imported coal is a challenge and a major bottleneck in setting up coal-fired thermal plants.

“We are trying to remove such problems in order to smoothen coal supply.”

Besides relying on imported coal, Punjab is also paying attention to domestic sources of coal for power generation. Coal reserves of Balochistan that are being commercially exploited have been targeted, he said.

A coal purchase agreement has been signed for a minimum of 2,400 tons per day of coal supply from Chamalang mine of Balochistan for a 300MW plant in Muzaffargarh district, and for this purpose, negotiations are in progress with the CMEC China.

Punjab too has modest reserves of coal for meeting the energy-related requirements in short-to-medium term. As per revised estimates, Punjab has sizeable coal reserves of around 500 million tons. These reserves are found primarily in the Salt Range in northern parts of the province, he said.

Keeping in view the availability of coal within the province, the provincial government has decided to give special attention to coal-based projects, while utilising indigenous resources.

Punjab is presently grappling with the challenge of providing consistent and affordable electricity to industrial units, he said.

According to an official estimate, the province has a large industrial base of more than 48,000 units. After showing no progress on the generation side in the last few years, Punjab has finally opted to develop the power sector within the province, utilising various energy options.

During the last two years, no policy decision was taken, which resulted in zero progress on this front.

During fiscal year 2011-12, Punjab did not allow projects dependent on imported coal, said the official, adding that under a special package for coal-based thermal power generation, Rs9 billion had been allocated in the provincial budget but failed to yield results.

Now, after a change in the policy, it is expected that some tangible progress will be made on the generation side, he added.

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