Thar Coal: A gateway to energy for Pakistan – I

Coal trucks drive along a road leading to a mine. – Reuters (File Photo)

 

Pakistan is marred by an energy crisis that has no precedent in its 63-year history. Although, blessed by natural resources, the country has failed to utilise its reserves for the enhancement of its industry and economy. Since the past three years, due to improper planning, lack of long-term strategies, and an increasing circular debt, our energy generation capacity has decreased to dangerously low levels, while the demand is only increasing. As a result, over a billion rupees are lost each year in the frequent power outages (load-shedding) that occur every day throughout the country.


Professor Mrs. Shamim Humayun, a renowned academic says, "Pakistan has fallen into a vicious circle of crisis upon crisis, and not because it lacks the means. Geographically speaking, our country has been blessed by countless natural resources. The rivers that come down from the North make the building of dams perfectly feasible, and the amount of coal present in the country along with alternative energy can make Pakistan an exporter of energy if properly utilised. For that, our policies need to be more focused, and energies channeled in the right direction, rather in politicising every aspect of developmental projects."

We are engulfed in this crisis not due to the reason that the country has no ability to generate its power, or the excuse that it lacks natural resources for the said purpose. In fact, according to PEPCO, the current installed capacity for electricity is over 17,000 MW while electricity generation hovers at around 12,000 MW only. The myopia in policy planning is seen at all fronts, whether it is conventional energy or alternative.

For the past seven years, due to various reasons, Pakistan's economy witnessed a consistent growth. As a result, energy requirements of the country increased drastically. While the power generation capacity was still more than the requirement in 2007, the power plants were generating at a sub-optimal level. Even now, the total capacity of electricity generation is more than the demand, but due to line losses, circular debt forcing power plants to produce at less than half of their capacity, and fluctuating oil prices, the output is considerably less than the installed capacity, and even less than the demand. As a result, frequent power outages become an obstacle for economic activity in the country, commercial centers are shut down and people lose their jobs, leading to a vicious circle of unemployment, hunger, and poverty.

Solution lies within Pakistan
If we analyse the energy mix in Pakistan we find it extremely imbalanced due to exceedingly high dependence on gas and imported oil, which costs a substantial amount of foreign exchange to the national exchequer. Fluctuations in oil prices have a considerable impact on the power generation capacity of Pakistan. The question that comes to the mind of an average citizen is, after three years of promises, why has the government been unable to guarantee electricity, and what needs to be done?

The answer lies within Pakistan. If we exploit the natural reserves of coal available in the Thar region of Sindh, it will generate employment, save valuable foreign exchange, and become a sustainable, reliable and less expensive indigenous fuel. The contribution to economy, which is projected to be in billions of dollars, the generation of energy to an unprecedented scale, up to 100,000 MW per year for the next 200 years, and the creation of over 200,000 jobs in the arid region of Thar, are the major outcomes of this deserted desert, and yet we crave for rental power plants.

However, drowned in the worst flood in recent memory, ripped apart by a sectarian violence of reprehensible degree, and societal mob crimes of heart-wrenching proportions, Pakistan has been left in a fix. The government, as well as the nation has been politicised, and so is every project that fails to see the light of day because of political concerns of one party or another. Whether it is Kalabagh or Thar Coal reserves, we have latent opportunities piling up each day.

"Deepening economic woes and instability in the economy not only hinder ongoing developmental strategies, but put a halt on future prospects of developing or initiating any major project. Plans to start work on Thar Coal reserves have been in the pipeline since decades in the past, but various economical and political reasons have managed to make it a secondary concern," said Dr. Younus Jafri, Advisor, Economic Planning Commission.

Even though, various feasibility studies have been conducted for the extraction of Thar coal reserves, which are the fifth largest in the world, actual ground work has not yet started. And now, with the recent devastation caused by the flood in Pakistan, it seems the go-ahead of coal extraction in Thar will have to wait even further.
It was decided by the government, in a workshop organised by the Geological Survey of Pakistan in 2005, to enhance the share of coal in the energy mix to five per cent, to 18 per cent by 2018, and further to 25 per cent by 2020. Perhaps, a realisation did occur, but there are many a slip between the cup and lip, and so as it happened, nothing materialsed when transferring work from paper to ground.

Currently, Pakistan is losing over a billion dollars each year due to no electricity. Power-outages have crippled the economy and the everyday life of urban residents and even more so of the rural areas of Pakistan, where electricity provision has been as low as four hours per day. According to PEPCO, the projected demand in the next 20 years would increase tenfold, at 113,695 MW; the supply and demand gap will increase drastically if proper measures are not taken in time.

The current power crisis came to the forefront in late 2007, and since then it has turned to be a great challenge, not only for the developing economy of Pakistan, but the whole nation itself. While the government is looking towards rental power plants as a short-term solution, it has only a vague idea of securing the energy requirements of Pakistan in the long run. There have been negotiations with foreign countries to provide assistance; as a result, China has planned to build two more nuclear reactors in the country, while Turkey funded a wind farm next to the 700 kilometer coastal belt of Pakistan. Although, nuclear and wind energy is being harnessed, its contribution is almost negligible in the energy sector of Pakistan.

Moreover, there has been government backing to a single solar energy project, which is planned for domestic usage, but has a considerably higher cost than the other alternatives available. Even though these alternatives, including solar power, are not a part of the energy mix of Pakistan currently, they can be utilised to a greater degree in the future.

In the process of deciphering this crisis, one has to look at the policies that serve as the foundations of the country's modus operandi. Lack of proper planning and inept policies are the reason for the extreme imbalance prevalent in our energy mix – not to forget that we are actually importing 2.5 million tons of coal per annum for our needs.