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