A strong lobby in the country seems bent upon creating hurdles in the setting-up of plants to generate electricity from Thar coal reserves in Sindh.
The Sindh government, according to official sources, is well aware of the challenges facing the mega project, and the provincial political leadership fears the issue might be politicised, like in the case of the Kalabagh dam (KBD) project.
Despite a severe power shortage in the country and ever-increasing electricity rates, it seems really strange that the Centre is showing no eagerness to generate cheap electricity from the coal reserves, and no mentionable funds have been allocated in the Public Sector Development Programme (PSDP) of the federal budget 2010-11, for the project. It is another disturbing fact that the Pakistan People's Party (PPP) is doing almost nothing to initiate the mega project, though its main leadership belongs to the Sindh province, and the party is at the helm of affairs in the Centre as well as in Sindh.
The dream of generating electricity from Thar coal reserves will take a long time to come true, even if the government begins work on the project today. To attract foreign or local investment, Thar would need basic infrastructure, including highways, link roads, electricity and water etc. No heavy machinery could be transported to the proposed sites in the absence of a road network. The most important in infrastructure is the setting-up of a high tension transmission line for distributing power in different parts of the country. At the moment, the infrastructure is non-existent. The Sindh government has, for the first time, suggested allocation of Rs. 10 billion for the high voltage transmission line in the upcoming budget of financial year 2011-12. Sindh Chief Minister, Syed Qaim Ali Shah, had expressed the hope in his budget speech that the federal government would also share its responsibility and contribute to the funding for developing infrastructure in Thar.
Earlier, the government had planned a Rs. 5512 million project in collaboration with China, to install a 500-KV power transmission line from Thar. Besides, in April 2002, a state-run Chinese company, Shenhua Group Corporation, was assigned to develop block-two of the Thar coalfields, accepting its proposal to establish a 600-MW power plant at the mine-mouth with associated captive coalmines. The Shenhua Group carried out studies related to coal-geological and hydro-geological possibilities in the area, and a project feasibility report was finalised.
Unfortunately, the project ran into various snags. Since then, a number of foreign investors have shown interest to develop these resources, but without any breakthrough. In April 2005, AES-Oasis Ltd. of the USA showed interest in developing an integrated mining-cum-power project of 1,000-MW capacity, utilising block-one Thar resources. The sponsor, after a year, finally backed out.
According to an estimate, at least Rs. 100 billion would immediately be required for setting up a high voltage transmission line and other infrastructure in Thar to start work on the actual coal power production plants. Keeping in view this huge funding, allocation of only Rs. 20 million in the PSDP in 2010-11 budget is negligible.
Another important factor that should be mentioned here is non-inclusion of the Thar coal power project in the priority list of the Planning Commission of Pakistan. As mentioned on its official website, the commission authorities have put emphasis on generating electricity through hydel and thermal power projects only. However, a Planning Commission document has mentioned, in its feasibility study, the use of Thar coal for the cement manufacturing industry. The document says 90 per cent of the cement manufacturing plants have abandoned furnace oil and opted for coal energy during the past decade. It has helped save a huge amount of precious foreign exchange which was earlier spent on import of furnace oil. With this major change in the cement industry's energy needs, coal consumption has gone up to five million tonnes per annum.
The Sindh Thar Coal and Energy Board is trying to lure investors into investing in Thar coal fields and projects. The board was set up by the Sindh chief minister, who is also the head of the board, to establish the ownership rights of Sindh over the coal reserves. However, the lobby creating hurdles in the Thar coal project seems very strong. The lobby might be opposing the plan to deprive Sindh of a mega energy project, say the sources. The lobby consists of oil importers, rental power brokers and other vested interests, according to the Sindh Thar Coal Board officials.
International energy politics might also have a hand in the delay of the project. The World Bank had organised an energy conference in Washington in 2009, to convince the world financing groups to invest in Thar coal in Sindh. However, in the same year, an environment conference was held in Copenhagen, which strongly stressed the need for minimising the use of coal for generating energy, to save the environment from hazardous effects of coal burning.
During the Copenhagen summit, the US advocated development of no, or low, carbon energy sources in the developing countries. That the US opposes coal-fired power is something difficult to believe because it has 600 coal-fired plants within the country which provide more than half of its energy supply. Another 60 coal-fired plants are at various stages of planning. The US refuses to accept limits to its domestic greenhouse gas emissions, though it did agree, for the first time, to modest cuts in Copenhagen.
The World Bank wrote a letter to the Government of Pakistan, seeking assurance that the Thar coal power generation projects would not affect the environment adversely. A Sindh government official, privy to the developments, alleged that the federal government was sitting on the letter and no reply was sent to the WB in this regard. The Sindh government, say the sources, is upset over the situation. The newly-appointed Federal Finance Minister, Dr. Abdul Hafeez Sheikh, who hails from Sindh, has reportedly talked to the WB authorities and tried to convince them that the use of new technology would help minimise the hazardous effects of coal use for power generation. However, Sindh Chief Minister, Syed Qaim Ali Shah, has alleged that a lobby in the federal government bureaucracy does not want power generation through the Thar coal reserves and it is creating hurdles in this regard.
The World Bank, perhaps, has become cautious after facing worldwide condemnation for extending a $3.75 billion loan to South Africa in April 2009, to build one of the world's largest coal plants. The decision drew sharp criticism, even from the Obama Administration. An international coalition of grassroots, church and environmental activists launched a massive protest against the controversial loan, saying that it would hurt the environment by putting out 25 million tonnes of carbon dioxide a year.
In Pakistan, the World Bank's decision not to finance the Thar coal project apparently for environmental reasons is not convincing enough, because the country's industry does not contribute much to carbon emissions and its carbon footprint is one of the lowest. So, not much harm to the ecology could be expected from the Thar coal project on completion.
Engro Energy, which has leased a block at Thar, wants the government to convince the WB in this respect because Pakistan happens to be one of the least polluters.
Meanwhile, Dr. Samar Mubarakmand, a nuclear scientist, who earned fame for his instrumental role in the 1998 nuclear tests, is working on a project for generating electricity through gasification of the Thar coal reserves. It will be ready by next year, and if implemented successfully, it will eliminate the problem of pollution by converting Thar coal into clean energy. According to Dr. Samar, the Thar coal reserves of 175.5 billion tonnes, discovered in 1992, have potential to generate 5,000 MW for at least 800 years.
The Sindh government, according to official sources, is well aware of the challenges facing the mega project, and the provincial political leadership fears the issue might be politicised, like in the case of the Kalabagh dam (KBD) project.
Despite a severe power shortage in the country and ever-increasing electricity rates, it seems really strange that the Centre is showing no eagerness to generate cheap electricity from the coal reserves, and no mentionable funds have been allocated in the Public Sector Development Programme (PSDP) of the federal budget 2010-11, for the project. It is another disturbing fact that the Pakistan People's Party (PPP) is doing almost nothing to initiate the mega project, though its main leadership belongs to the Sindh province, and the party is at the helm of affairs in the Centre as well as in Sindh.
The dream of generating electricity from Thar coal reserves will take a long time to come true, even if the government begins work on the project today. To attract foreign or local investment, Thar would need basic infrastructure, including highways, link roads, electricity and water etc. No heavy machinery could be transported to the proposed sites in the absence of a road network. The most important in infrastructure is the setting-up of a high tension transmission line for distributing power in different parts of the country. At the moment, the infrastructure is non-existent. The Sindh government has, for the first time, suggested allocation of Rs. 10 billion for the high voltage transmission line in the upcoming budget of financial year 2011-12. Sindh Chief Minister, Syed Qaim Ali Shah, had expressed the hope in his budget speech that the federal government would also share its responsibility and contribute to the funding for developing infrastructure in Thar.
Earlier, the government had planned a Rs. 5512 million project in collaboration with China, to install a 500-KV power transmission line from Thar. Besides, in April 2002, a state-run Chinese company, Shenhua Group Corporation, was assigned to develop block-two of the Thar coalfields, accepting its proposal to establish a 600-MW power plant at the mine-mouth with associated captive coalmines. The Shenhua Group carried out studies related to coal-geological and hydro-geological possibilities in the area, and a project feasibility report was finalised.
Unfortunately, the project ran into various snags. Since then, a number of foreign investors have shown interest to develop these resources, but without any breakthrough. In April 2005, AES-Oasis Ltd. of the USA showed interest in developing an integrated mining-cum-power project of 1,000-MW capacity, utilising block-one Thar resources. The sponsor, after a year, finally backed out.
According to an estimate, at least Rs. 100 billion would immediately be required for setting up a high voltage transmission line and other infrastructure in Thar to start work on the actual coal power production plants. Keeping in view this huge funding, allocation of only Rs. 20 million in the PSDP in 2010-11 budget is negligible.
Another important factor that should be mentioned here is non-inclusion of the Thar coal power project in the priority list of the Planning Commission of Pakistan. As mentioned on its official website, the commission authorities have put emphasis on generating electricity through hydel and thermal power projects only. However, a Planning Commission document has mentioned, in its feasibility study, the use of Thar coal for the cement manufacturing industry. The document says 90 per cent of the cement manufacturing plants have abandoned furnace oil and opted for coal energy during the past decade. It has helped save a huge amount of precious foreign exchange which was earlier spent on import of furnace oil. With this major change in the cement industry's energy needs, coal consumption has gone up to five million tonnes per annum.
The Sindh Thar Coal and Energy Board is trying to lure investors into investing in Thar coal fields and projects. The board was set up by the Sindh chief minister, who is also the head of the board, to establish the ownership rights of Sindh over the coal reserves. However, the lobby creating hurdles in the Thar coal project seems very strong. The lobby might be opposing the plan to deprive Sindh of a mega energy project, say the sources. The lobby consists of oil importers, rental power brokers and other vested interests, according to the Sindh Thar Coal Board officials.
International energy politics might also have a hand in the delay of the project. The World Bank had organised an energy conference in Washington in 2009, to convince the world financing groups to invest in Thar coal in Sindh. However, in the same year, an environment conference was held in Copenhagen, which strongly stressed the need for minimising the use of coal for generating energy, to save the environment from hazardous effects of coal burning.
During the Copenhagen summit, the US advocated development of no, or low, carbon energy sources in the developing countries. That the US opposes coal-fired power is something difficult to believe because it has 600 coal-fired plants within the country which provide more than half of its energy supply. Another 60 coal-fired plants are at various stages of planning. The US refuses to accept limits to its domestic greenhouse gas emissions, though it did agree, for the first time, to modest cuts in Copenhagen.
The World Bank wrote a letter to the Government of Pakistan, seeking assurance that the Thar coal power generation projects would not affect the environment adversely. A Sindh government official, privy to the developments, alleged that the federal government was sitting on the letter and no reply was sent to the WB in this regard. The Sindh government, say the sources, is upset over the situation. The newly-appointed Federal Finance Minister, Dr. Abdul Hafeez Sheikh, who hails from Sindh, has reportedly talked to the WB authorities and tried to convince them that the use of new technology would help minimise the hazardous effects of coal use for power generation. However, Sindh Chief Minister, Syed Qaim Ali Shah, has alleged that a lobby in the federal government bureaucracy does not want power generation through the Thar coal reserves and it is creating hurdles in this regard.
The World Bank, perhaps, has become cautious after facing worldwide condemnation for extending a $3.75 billion loan to South Africa in April 2009, to build one of the world's largest coal plants. The decision drew sharp criticism, even from the Obama Administration. An international coalition of grassroots, church and environmental activists launched a massive protest against the controversial loan, saying that it would hurt the environment by putting out 25 million tonnes of carbon dioxide a year.
In Pakistan, the World Bank's decision not to finance the Thar coal project apparently for environmental reasons is not convincing enough, because the country's industry does not contribute much to carbon emissions and its carbon footprint is one of the lowest. So, not much harm to the ecology could be expected from the Thar coal project on completion.
Engro Energy, which has leased a block at Thar, wants the government to convince the WB in this respect because Pakistan happens to be one of the least polluters.
Meanwhile, Dr. Samar Mubarakmand, a nuclear scientist, who earned fame for his instrumental role in the 1998 nuclear tests, is working on a project for generating electricity through gasification of the Thar coal reserves. It will be ready by next year, and if implemented successfully, it will eliminate the problem of pollution by converting Thar coal into clean energy. According to Dr. Samar, the Thar coal reserves of 175.5 billion tonnes, discovered in 1992, have potential to generate 5,000 MW for at least 800 years.
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