KARACHI:
Amid nationwide protests against soaring electricity bills and rising tensions with China's coal mining partner in Thar, the federal government has given long-awaited approval to a critical infrastructure project.
The project involves the construction of a 105-kilometer rail line connecting Thar to Bin Qasim to seamlessly connect Sindh's coal mines with national and global energy markets.
The strategic rail line will serve as a lifeline for Thar's rich coal reserves and ensure their efficient transportation to power projects across the country.
The primary objectives are to increase the share of cost-effective coal-based energy in Pakistan's energy mix and to ease the financial burden on end consumers by reducing overall electricity bills.
In addition, this rail network will facilitate the supply of Thar coal to fertilizer and cement manufacturers and offer potential for coal-to-gas conversion.
At present, coal transportation is largely dependent on trucks, which proves to be a costly and time-consuming method that is not suitable for mass scale-up of supplies.
In a recent interview with The Express Tribune, Abu Bakar Ahmed, Secretary, Sindh Energy Department, revealed that it has received federal approval for the construction of a 105-kilometer railway line that spans from Chorr to Islamkot and will eventually connect to Port Qasim, a deep-sea port in Karachi.
The ambitious project is expected to be completed by December 2024 and is estimated to cost Rs 58 billion, with equal financial participation from the federal and Sindh governments.
The overarching vision of this effort is to convert 4-5 thermal power projects currently dependent on imported coal to Thar coal, thereby reducing the national import bill.
Pakistan currently spends around $2 billion a year on coal imports.
Thar coal ranks among the two most cost-effective energy sources in Pakistan's diverse energy landscape, with Thar coal power projects consistently offering some of the most cost-effective energy solutions out of the country's 74 power projects.
While Pakistan currently gets around 3,500 megawatts of power from coal-fired projects, the country's peak power demand reached 25,500 megawatts in August 2023.
It is worth noting that coal-fired power projects were virtually non-existent in Pakistan a few years ago. Minister Ahmed emphasized that sustainable energy production in Pakistan requires reliance on fossil fuels and Thar coal stands out as one of the most cost-effective fuel options available.
He highlighted the challenges faced in setting up power projects near coal mines, including water scarcity and inadequate power transmission infrastructure in the Thar region.
Therefore, a strategic transition to rail transport for the distribution of coal across the country is necessary. This transition also opens up the possibility of exporting coal if needed.
Thar coal, classified as lignite, shares similar combustion and moisture characteristics to the coal Germany has used extensively for decades. India has almost completely exhausted its coal reserves in the Rajasthan region.
In contrast, Pakistan holds a whopping 175 billion tonnes of coal reserves in Tharparkar alone, equivalent to 50 billion tonnes of oil equivalent (TOE) – which, according to the Sindh Engro Coal Mining Company, exceeds the oil reserves of Saudi Arabia and Iran combined ( SECMC ).
While these coal reserves could potentially meet Pakistan's electricity demand for centuries, their use goes beyond electricity generation and opens up avenues for a variety of uses.
Ahmed said the escalating use of expensive fuels such as imported heating oil has driven the cost of power generation to a record high of Rs 72 per unit compared to Rs 28 per unit just two years ago.
This increase in production costs is a major contributor to the recent rise in electricity bills that has sparked public protests. Thar coal is emerging as a viable and sustainable solution to the ongoing energy crisis, with its increased use expected to ease the financial burden on consumers.
Meanwhile, China Machinery Engineering Corporation (CMEC), the operator of China's coal mine in Thar Block-II, has issued a warning that it will stop coal mining if $50 million in outstanding claims are not settled by September 10.
CMEC conveyed its concerns to the Sindh Engro Coal Mining Company (SECMC) through a letter, revealing that it had not received any payments in August, resulting in overdue claims of $50 million by July 2023.
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