LAHORE: The energy sector experts have wondered how Pakistan will finance the proposed coal fleet because the financial institutions in China and Japan, being biggest financiers of coal units in developing countries, are backing out of funding fossil-fuel projects in recent years amid pressure from activists and Western governments.
They have also raised eyebrows over the statement of federal minister for energy Khurram Dastgir that setting up new plants will depend on ‘investor interest’ that he expects is likely to increase when newly commissioned coal-fired plants are proved viable.
It may be noted that the reliability run test of Thar Coal Block-12x660MW Coal Fired Power Plant by Shanghai Electric has been completed successfully at 12:00 o’clock on 4th February 2023. The Project will officially enter into the commercial operation stage from 00:00 hours of 5th February 2023.
The operation of the Project has an annual production capacity of 9 billion kW h, which can meet the demand of 4 million local households and bring economic benefit by reducing fuel import, saving foreign exchange reserves and enhancing energy security of Pakistan.
According to experts, requesting anonymity, it is good news but unfortunately Pakistan would still need to pay the tariff in dollars, as has happened in the case of Independent Power Producers (IPPs) based on domestic gas or domestic furnace oil or equity contributed in rupees.
They said the IPP policy and line losses or unfound gas (UFG) are the worst things to happen to Pakistan’s Energy Sector. There is no doubt that both the factors have played havoc with the energy sector of Pakistan, they added.
“Only economically strong nations with leadership interested more in the welfare of their country and its people rather than a cut in the financial proceeds of commercial agreements will execute such agreements,” they pointed out.
These energy experts said the maximum power demand met by Pakistan during the year ended June 2022 was 28.25 GW, more than 35 percent lower than power generation capacity of 43.77 GW. In a situation, they quipped, there are cuts in coal projects worldwide and Pakistan was bearing capacity charges of IPPs in dollars, what a game to get stranded scrapped coal plants at inflated capital expenditure by the investors.
Already, they said, mismanagement in the energy sector had started with faulty IPPs Policy, followed by unchecked transmission and distribution losses and politically motivated pricing of electricity. Similarly, they said, the gas sector suffered from unchecked UFG losses, followed by politically motivated pricing of gas. Resultantly, unviable gas connections for domestic users increased manifold.
Accordingly, a very healthy Energy Sector, probably the best in Asia has been gradually converted into a highly unviable sector over the last three decades or little more.
The energy experts have feared that the future generations will suffer because of greed, politics, incompetence or mere inefficiency of policymakers.
Copyright Business Recorder, 2023