According to industry experts, switching three power plants from imported fuel to domestic coal may result in savings of $175 per tonne, or more than $800 million yearly from each unit.
In addition to lowering the country’s import cost, which is mostly borne by fuel imports, the government’s decision to bet on domestic fuel will also result in lower electricity tariff rates, according to one analyst.
Khurram Dastgir Khan, the federal minister for power, announced on June 15, 2022 that the government had decided to switch from imported coal to Thar coal in order to generate 3,960MW of electricity from three coal-fired power plants: Sahiwal coal power plant, China Hub coal power plant, and Port Qasim coal power plant. Instead of converting the plants, the government has already hired specialists to develop a feasibility plan.
Pakistan holds the seventh-best coal reserves in the world, according to research done by the Lahore Chamber of Commerce and Industry (LCCI), with a total estimated reserve of 185 billion tonnes. The Thar coalfield, which is the 16th largest coal deposit in the world, has 175 billion tonnes of estimated coal reserves, which can produce 30,000 MW of power for the next 100 years.
This is sufficient to inform our policymakers to begin utilising nearby coal resources as well, according to experts.The Sindh Engro Coal Mining Company (SECMC) extracts 3.8 million tonnes of lignite every year from coal mined from Block-II. By the end of this year, SECMC’s extraction capacity is anticipated to expand to 7.6 million tonnes, and by the end of 2023, it is anticipated to increase again to 12.2 million tonnes.
An analyst added, “If the government changes all three of the aforementioned facilities to domestic fuel, they will need an additional 24 million tonnes of coal from Thar Block-II.”
Syed Murad Ali Shah, the chief minister of Sindh, officially opened the 330 MW Hubco power plant, increasing the district’s potential to generate electricity to 990 MW from Thar Coal, which has since been integrated into the national grid.