Magazine article Economic Review

Coal-Based Power Plants

Magazine article Economic Review

Coal-Based Power Plants

Article excerpt

The government has announced the policy for power generation projects that lays emphasis on promotion indigenous fuels and developing renewable sources of energy.

Coal is considered a significant low cost alternative to other fuels. Fortunately, Pakistan has coal resources to the extent of 185 billion tonnes, which can be exploited to the economic well-being of the country. Recently renewed efforts were made by the government to chalk out an action plan aiming at optimizing the use of indigenous coal for power generation. The policy thus encourages setting up of indigenous coal-fired projects of various capacities in private and public sector. Whereas over 20 MW capacity projects will be allowed by the federal government as an integrated coal mining and/or power generation complex, the smaller power plants of size up to 20 MW will be implemented through a one-window facility at the provincial level.

Global shift back to utilization of coal as a major source of energy is imminent as the worldwide coal share in energy is currently around 40 percent and is sharply increasing. It is the most common fuel for utility and industrial energy generation as shown in the following chart.

Economic factors are in favour of coal utilization for power generation because of ever increasing furnace oil prices and depleting natural gas reserves the world over. World coal consumption in 1997 was 5.3 billion tonnes, and is projected to be 7.6 billion by the year 2020. The coal, primarily used for power generation, has applications in steel production, cement industry and industrial process heating as well. Utilization of coal as source of energy in Pakistan at the time of its creation was 60 per cent, which at present is only six per cent. Similarly, the contribution of coal-based power plants to current power generation is hardly one per cent.

The policy document proposes to develop coal based power projects with cumulative capacity of at least 4,350 MW. The schedule of projects include 600 MW project based on Thar coal on which the Chinese are already working, and 150 MW project as expansion of Lakhra Project, both to be commissioned by December 2015. The long-term plan includes additional three projects based on Thar coal, each of 1,200 MW. It is thus evident that in future indigenous coal will be used as a major source of power generation. Coal (44%), Hydro (20%), Nuclear (16%), Oil (10%), Gas (9%), Other (1%).

Nonetheless, serious initiatives and strategy formulation are required, on the part of the investors as well as the government, to develop these power projects. First and foremost is the need for coal mining and infrastructure. Modern methods of coal mining are to be employed as Thar coal and Lakhra coal are economically viable for large scale mechanized mining. A 1,000 MW power plant would require about 4 million tonnes of coal annually. The prospective owners and operators of the power plants have to be confident of regular supply of coal. Neither the private investor nor the government alone can do this, as there are many risks involved for the private investors to undertake mining operations, besides involving huge investments. Recongnizing this fact, the policy encourages public-private partnership for mega projects.

The other vital issue is that of appropriate technology for power generation. Various coal technologies have been developed and are in use the world over. In Pakistan, coal ranges from lignite to sub-bituminous having high volatility (26-45%), sulfur (3-6%), high ash content (3-38%), moisture (7-11%), and a calorific value of 5,000 to 12,00 BTU/lb. The limiting factor for use of coal for power generation, besides the moisture and ash, is the content of sulfur, major source of environmental pollution. But high content sulfur is no longer a constraint, thanks to modern technology. Conventional boilers are used for coal with sulfur below 4 per cent where as coal with 4 to 7 per cent must be consumed under fluidized bed technology, known as clean coal technology. …

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