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ISLAMABAD: K-Electric (KE) and M/s Oracle Power PLC have indicated their intent to relocate Thar coal-based 1320-MW plant, for offtake by K-Electric seeking assistance from Minister for Planning, Development and Special Initiatives Ahsan Iqbal.

In a joint letter written by Naheed Memon, CEO Oracle Power PLC, CEO K-Electric Syed Moonis Abdullah Alvi and Country Representative of Power China International Group Company for Pakistan Yang Jian Duoto to Ahsan Iqbal it has explained that the project, which is already listed as a China Pakistan Economic Corridor (CPEC) energy priority project, would be of national significance.

It would not only bring in base load power fuelled by indigenous coal, but also contribute towards economic growth, result in creation of jobs, and further increase the utilization of Thar coal resources which is primed to be the cornerstone of the future energy security of Pakistan.

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Energy Department Government of Sindh (GoS), Oracle Power PLC (Oracle), K-Electric Limited (KE), Power China International Group Company (Power China International) have recently entered into a Memorandum of Understanding (MoU) to promote the project. The understanding reached amongst these parties underscore their seriousness to contribute meaningfully towards the economic uplift of the country.

The project was envisioned to be at the Thar Block VI, and the parties have agreed to evaluate its possible relocation to Port Qasim subject to technical, commercial and timely development considerations.

A brief background of the initiative is that Oracle has been engaged with the development of the project since 2010, and was awarded a concession from the GoS in 2012. The company has invested substantial financial resources to carry out the development works of the project. Another significant milestone was achieved in 2017, when the project was elevated to “priority project” status within the CPEC framework, and further incorporated into the oil & gas group at the 9th JCC meeting in 2019. The project still remains in the list CPEC projects following the 10th JCC meeting held in 2020.

According to the letter, this is the last CPEC coal to power project, and considering the increased restrictions imposed by the global financial institutions to develop coal power plants, this cooperation arrangement to develop the Project presents the best opportunity for Pakistan, to further develop and utilize Thar coal to generate inexpensive power.

Both companies are of the view that the inexpensive base load power generated from the indigenous coal power plants is a pivotal requirement to curtail the burgeoning electricity price and stem the outward flow of foreign currency from the country. KE stands to be the largest power buyer in province of Sindh, as well as the most favourable off-taker for Chinese financiers, for supporting new power projects.

KE is currently in the process of finalizing its long-term business plan to cater for the ever-increasing demand in its system. In order to meet this rising power need of the city of Karachi, KE plans to optimize its fuel mix through inducting a combination of renewables and base load plants, based on indigenous resources including local coal. It is projected that the requirement for new base load power will arise from the financial year of 2028-29.

Copyright Business Recorder, 2023


Comments are closed.

Mohsin Merchant Jun 02, 2023 10:35am
It will escalate the cost of transportation of local coal to Port Qasim all the way from Thar. What is the economics in it to do that?
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Syed Muhammad Abid Raza Jun 02, 2023 11:11am
@Mohsin Merchant, KE will preserve transmission cost by doing this. Moreover distribution cost will be catered through railway network which is in plan of Pakistan Railway Network.
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Muhammed Jun 02, 2023 02:46pm
Has the Cost/Benefit analysis been made? Cost of Laying & transporting power through H.T. Transmission Line & cost of transporting coal all the way from Thar to Karachi, which one is better?
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Muhammad Waseem Jun 02, 2023 03:33pm
@Mohsin Merchant, usual, at some point in time, secretely secure permission to use imported coal instead of / in addition to Thar power, and than siphon off the funds to secure offshore locations with kick back on imported coal. Traditional, honest way of business is so boring in Pakistan.
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Energy Guru Jun 02, 2023 06:06pm
@Mohsin Merchant, the already developed coal plant of Lucky 660MW at Port Qasim will be utilising the Thar coal, the cost of coal transportation through rail for the plant will be ~10$/Tonne, with additional installations at Port Qasim, the incremental cost of coal transportation will be much more lower. Plus, it will have the additional benefit of being nearby the sea, which will reduce the additional cost required to transport water to Thar, for running the coal power plant. Furthermore, the requirement of wheeling through NTDC’s transmission network will also be not there.
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Imran Jun 02, 2023 07:26pm
@Energy Guru, what about environmental hazards which will face by Karachi population, thar area is a least population area as compare to karchi where millions of people live
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Knhaq Jun 02, 2023 08:30pm
Sir, who thinks of karachi or its citizens. Perhaps the promoters have some hidden agenda, which in their opinion is more important than health and environment. Have you ever heard of the concept " Coal by wire"?
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Ahmad Kamal Jun 02, 2023 08:33pm
@Mohsin Merchant, exactly there is no point moving power plant location from Thar to Karachi. Transportation of coal to Karachi will increase the cost. Whereas electricity can be transmitted at lower cost. Possibly KE dont want third party to know exact amount of electricity produced and transmitted.
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Talha Jun 03, 2023 11:18pm
Pooray karachi ko dabonay mai k.e ka hath hai I hate k.electric
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Mohsin Merchant Jun 08, 2023 04:30pm
Need to construct a 105KM rail line from Islam Kot to Choor Railway station with an initial investment of PKR58Bil. Environmental factors to be considered in this dirty business.
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Mohsin Merchant Jun 08, 2023 04:31pm
@Energy Guru, Can you give me some reference as to the cost of transportation $10/mt
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