THAR - Calling for competitive bidding for future generation process and rationalising the existing prices, CEO Sindh Engro Coal Mining Company Shamsuddin Shaikh said cost of electricity was too high in the country as Nepra was incapable of determining the right tariff.
The existing electricity tariff is too high as Nepra does not determine the right prices because of lack of capability to work out accurate tariff, said CEO Sindh Engro Coal Mining Company Shamsuddin Shaikh while talking to media here.
Talking to a group of Islamabad-based journalists, he said the government needed to rationalise the existing tariff, adding generation licences should be issued on the basis of competitive bidding to the companies ensures provision of the cheapest electricity.
He said the companies were required to rationalise the generation cost. Regarding the Return on Equity to Sahiwal coal power project, he said “The Return on Equity of 27.2 percent for Sahiwal coal power project is very high as in other parts of the world, it is only around 13-14 percent,” he added.
Sheikh further said “The installation of coal power plant in fertile land like Sahiwal was a national suicide.” He said future belonged to renewable, not fossil fuel. In next 20 to 25 years, it will be all the renewable energy and the use of fossil fuel will be minimised, he said.
When asked that after switching over to renewable energy, what will be the future of the 175 billion tonnes of coal reserves in Thar, he replied “This is the right time to convert the coal for other purposes, because otherwise it will waste.
We should not see our coal just as a resource to produce power, in fact, the world is now converting coal into diesel and gas and we should also start working in this direction.”
Thar coal reserves are huge and we can convert it into gas that can be used for fertilizer sector and we can also use it for plastic. Our gas reserves are depleting fast and within 7 to 8 years, the country will be out of gas, he said.
It is the right time we start working in the direction to produce gas through coal,” he added.
Shaikh said that the first ever Thar-based 660MWs Lignite Coal Power plant was all set to become operational by January 2019.
With 94% and 92% completion already, the power project and mine project are 5 months ahead of their schedule and will add the first electron from Thar to the national grid by January 2019, he said.
He said that Engro Power Thar Limited (EPTL) and Sindh Engro Coal Mining Company (SECMC) were the largest private investments under CPEC, and the only investments which are 95% owned by Pakistanis. He also said that on 1st August 2018, EPTL successfully connected its power plant with national grid to receive back-feed power supply for the plant start up.
The next part of this dream will be achieved by December 2018 or January 2019, when the first electron from Thar Coal will be added to the national grid, he said. He said that Prime Minister Imran Khan was expected to inaugurate the project.
Shaikh stressed the government that all coal projects in Pakistan should use at least 20% of Thar coal by blending it with imported coal, which would save foreign exchange and our indigenous resources would be utilised.
He said that cost of per unit of power production from Thar coal block II would reduce significantly after the phase II and III become operational. We would be able to start producing electricity from Thar by January 2019, he said.
Regarding the environmental effects of the Thar coal project, he said that currently, 660MWs of power project was subcritical but we have requested the government that in phase II and phase III, all projects should be supercritical, which are 3% more efficient than subcritical plants. Besides, he said that the company was planting one million trees in the area to keep the environment clean.
Talking about the progress on mine project, he said that there was 92% progress on mine with the capacity of 3.8 million tons per annum. The progress on mine project is 4 months ahead of schedule and project cost is 20% less than approved cost.
He said that currently we have removed approximately 154 meter of soil already and we would be able to extract coal from 160 meter. He said that coal from Thar is cheaper, indigenous and abundant resource now after the success of first ever large scale open pit coal mine in Pakistan.
We have set an example for world that Pakistan is an attractive market for investment in coal mining and coal based power production.
Sindh Government is 54% owner of the project but we have received unmatchable political support from all political parties and governments for the Thar coal project.
Shaikh said that out of the current 4,400 workers at the SECMC site, 75% were natives of Thar.
Engro is operating 24 schools, constructing a 250-bed hospital and several water projects for the natives of Thar, he said.
There is a heavy reliance on imported fuels which results in constant depletion of foreign exchange and insufficient control over the fuels supply chain.
This inappropriate fuel mix leads to energy losses at each level of the value chain and inadequate recoveries lead to power outages, unaffordable electricity and circular debt, he said.
He added that SECMC was created with the vision ‘to develop a technically- and commercially-viable coal mining project in Thar Block-II to bring energy security to Pakistan’.
He said that total reserves of block II were sufficient to support 5,000MWs of energy for 50 years, enough to pull the country out of the energy crisis.
Talking about the CSR initiatives, he revealed that for the first time in Pakistan, inhabitants of the project area had been made project beneficiaries by government of Sindh. This has been achieved by diluting 3% of the government’s shareholding for the project-affected persons who would become shareholders in the project.
In addition, as part of the SGD framework, the company continues to work on key impact areas such as education, health, livelihoods, gender equality, water and women empowerment amongst other focus areas.