Continuing our coverage of CPEC energy projects, let us scrutinize another coal based- power plant included in the coal portfolio of the economic corridor. In its bid to become “self-reliant” when it comes to energy supply, the Punjab government has taken the illogical choice of setting up a coal power plant in one of the most fertile agricultural belts in the province- Sahiwal.
Sahiwal provides a wide array of crops including grain, potato, sugarcane and fodder. Also, being one of the biggest dairy belts in the country. The district is home to an enormous number of indigenous cows and buffaloes.
The Sahiwal coal power plant will have an installed capacity of 1320MW with COD of the first 660MW by the December, 2017 and the remaining by June, 2018.
The project was subsequently included in CPEC and is sponsored by the Huaneng Shandong Power Generation Co. and Shandong Ruyi Technology Group Co.
The project sponsors will provide twenty percent equity and the remaining will be debt financing from the Industrial and Commercial Bank of China (ICBC). The cost of the project will be approximately $1.8 billion, and the project has opted for upfront levelized coal tariff by NEPRA at Rs. 8.1176/kWh.
However, the tariff does not include the transportation cost from Port Qasim to the project site, which is roughly 1100km.The project is to be run on imported coal from South Africa and Indonesia. According to the original draft agreement, Pakistan Railway has demanded a charge of Rs. 3100/tons to transport the coal, which cumulatively will be greater than gas or furnace oil transport.
So on top of being built in the middle of farming land and one of the biggest livestock farming areas in the country, it is going to be run on imported coal transported almost 1000km. “Self-reliance” has apparently led the Punjab government to throw logic and feasibility down the drain.
Another troubling fact that needs to be taken into account is the massive use of water required. According to researchers at the Sandia National Laboratories, which is part of the U.S Department of Energy (DOE), the typical 500-megawatt coal-fired plant burns 250 tons of coal per hour and consumes 12 million gallons of water an hour or 300 million gallons a day for operational purposes.
And we are talking about a 1200MW plant so one can imagine the tremendous amount of water required. It takes common sense to arrive at the logical conclusion that at least one group will suffer, and it will unfortunately be the farmers and livestock as the power plant will be assured of plentiful water supply.
Even though the Environmental Protection Agency (EPA) of Punjab has given an NOC on the project, yet experts believe the coal power plant will take a heavy toll on the natural ecosystem of the district damaging crops, livestock and the human populace in its twenty five years of operation.
Coal power plants are best suited to Sindh and Baluchistan regions where there is availability of indigenous coal that will ultimately be mined for use as well as plenty of sea water for operational purposes. There is also plenty of barren unused land, which does not have an opportunity cost in those regions.
This column is all for alleviating the energy crisis in the country but surely there are better ways to do that than embark on a project just for the sake of making a province self-reliant in their energy needs and ignoring environmental as well as financial implications.