A little too late?

The country’s power generation mix is most diversified today. With depleting natural gas reserves, and financially burdening furnace oil taking a backstage, RLNG and coal along with renewables have been dependable options. And after imported coal power plants, finally the national grid started receiving electricity from the indigenous coal resource: Of the two 330MW Engro Powergen Thar Limited’s coal power plants in Thar – project under CPEC - one of them started producing electricity earlier this week.

This development came as good news as Thar has long been touted to hold huge coal reserves for an energy starved country. Also, the commencement of power generation from Thar was celebrated as another key CPEC energy project nearing completion.

Using local coal will definitely save the precious foreign exchange; but there is a constant tussle between the proponents of thermal energy and environmentalists over coal as a source of power generation. Currently, coal accounts for a little over 3 percent in total power generation, and Pakistan’s global carbon footprint isn’t an issue unlike countries like China and India that are under continuous international pressure reduce it.

However, it is also true that Pakistan’s increasing reliance on coal is at odds with the world that is moving from coal to cleaner and renewable energy sources like hydel, wind, solar etc. About 70 percent of the total energy projects under CPEC are coal-based. And according to NEPRA’s State of Industry Report 2017, share of coal-based generation is likely to increase from 3.09 in FY17 to 18 percent by FY21, and to 19.56 percent by FY25 mainly on Thar coal based projects. Though this will lower the oil import bill as well as imported RLNG bill, little attention is being given to the environmental repercussions of the staggering increase in coal’s share in just a span 7-8 years. If things go as planned, Pakistan’s coal consumption five years from now will stand higher that where Indonesia– the fifth largest consumer of coal - stands today (18-19 percent)

On the other hand, China that is the sole largest investor in the country’s coal based power plants is shutting down its domestic coal power plants to fight carbon emission. While there is no evidence of it, one cannot help but notice the timing as many of those against coal-based power generation point out that China is relocating its coal investments.

Also, with the already poor air quality of most urban centres in the country, what has recently been noticed is the illegal dumping of coal at Pakistan International Bulk Terminal (PIBT) in the Port Qasim area. Companies are reportedly dumping coal in areas other than those designated coal and are importing additional coal to cut costs.

Changing the fuel mix has been inevitable, and neglecting local coal that has been untapped for all these years made little sense. However, what policy makers and the government need to think is whether to continue tilting towards coal for a yet another asymmetric fuel mix that has severe environmental and health repercussions; or have a fuel ratio that is in sync with the global Sustainable Development Scenario (read increasing the share of renewables as well).