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Nawaz govt plans coal-based power

The PML-N-led government has almost finished its homework to increase the share of coal-based power generation in the country’s energy mix and win over business magnates to begin installing coal-based power plants.

At present, the country’s existing energy mix is heavily reliant on thermal electricity generation based on costly furnace oil and diesel. The main obstacle in the way of massive investments needed to install coal-based power plants has also been removed as the National Electric Power Regulatory Authority (Nepra) has announced two kinds of upfront tariffs at 9.60 and 9.64 cents per unit as an incentive for investors till 2019.

The 9.64 cents per unit tariff will be applicable to 200MW projects, which will be run on imported coal, while the 9.19 cents per unit tariff will be applicable to 600MW projects, which will run on indigenous coal. However, the upfront tariff will be at 8.75 cents per unit for 1000MW projects. These projects will be based on local coal as fuel and established with local financing.

On the other hand, the regulator has given an upfront tariff of 9.60 cents per unit for 200MW projects, 9.15 cents per unit for 600MW projects and 8.74 cents for 1000 MW project, which will run on imported coal with the help of local financing. In the case of foreign financing, the tariff will be 8.2 cents for 200MW projects, 7.77 cents for 600MW and 7.49 cents for 1000MW projects, which will all be run on imported coal.

A tariff of 8.29 cents will be applicable to 200MW projects, 7.79 cents for 600 MW and 7.49 cents for 1000 MW projects, which will run on local coal as fuel.Nepra officials also told The News that the power regulator will later announce an upfront tariff for smaller coal-based projects with a capacity between 50MW and 150MW.

The officials went on to add that the ‘attractive’ upfront tariff will secure the maximum investment in the sector, which will ultimately reduce the average tariff of consumers and change the existing energy mix. Increasing coal based-power generation will also help reduce the oil import bill which is devouring foreign exchange reserves, the official added.

Business leaders, who have close ties with the Sharifs, are expected to put up the investment for these power plants, which are projected to run for the next 30 years. “We are very upbeat and will succeed in massively increasing coal-based power generation,” a source close to the top leadership of the PML-N told The News.

“At present, the existing the 50MW Lakhra power plants is non-operational due to the indifference of power ministry officials, who are influenced by the mighty oil lobby,” he added.

However, the move by the PML-N to install more power plants has been censured by members of the outgoing PPP government, who argue that it was the PML-N who had been claiming that the ongoing power crisis was artificial since the country already generated enough power from its existing installed capacity.

“Instead of utilising the existing capacity, the PML-N government is going to install more power plants and if they are indeed sincere to change the power generation mix, they should first take steps to convert the existing diesel and furnace oil run power plants to coal,” said a PPP leader, requesting anonymity.

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