Conversion of imported coal-fired power plant to Thar coal: KE initiates techno-commercial study

ISLAMABAD: K-Electric (KE) has initiated techno-commercial study for conversion of 660 MW Jamshoro power plant from imported coal to 100 percent Thar coal with the assistance of a consortium of four international consultants, well informed sources told Business Recorder.

In a letter to Managing Director PPIB, KE’s Chief Strategy Officer, Shahab Qader Khan, referred to Power Division’s letter of June 7, 2024 where the initiation of the synchronization and the commissioning activities of the project were mentioned.

He said K Electric has been diligently pursuing all the activities needed to carry out the conversion of the project to 100% Thar coal, since the last one and half years. This is evident from the fact that KE provided its Expression of Interest (EoI) to carry out the conversion of the

project to 100 % Thar

coal through its letter of June 26, 2023.

The EoI contained the details of the business case that was developed by KE in consultation with the concerned stakeholders’, which recommended that the immediate conversion of the project to 100% Thar coal should be carried out, after postponing imported coal commissioning activities.

According to KE’s Chief Strategy Officer, it was unequivocally mentioned in the business case that the conversion will ultimately result in substantial foreign exchange and Tariff Differential Subsidy (TDS) savings for the Government of Pakistan (GoP). This along with other benefits, is expected to translate into an overall benefit of over $ 2 billion, to the economy of Pakistan, realized through the life of the Project.

He further claimed that the same idea was pursued by KE during its submission of Indicative Generation plan (IGP,) on September 3, 2023, which was submitted based upon the directives issued by the Prime Minister’s Office (PMO). Later, it was approved by the due diligence committee members in November 2023. In parallel to all these developments targeted towards the conversion of the project to local JPCL, it placed an order for the procurement of 200,000 ton imported coal needed for commissioning of the project on imported coal. Later, KE maintained continuous engagement with JPCL and other stakeholders, and requested that the Non-disclosure Agreement (NDA) should be executed which is necessary for the availability of the requisite documentation, needed for the initiation of due diligence

purposes.

“KE is fully cognizant of the gravity of the matter and is therefore willing to extend all its support needed for the swift execution of the PPA between KE and JPCL. Keeping in view, all the engagements and referenced letter of Power Division, KE shared an initial draft of PPA with the CEO of JPCL on June 7, 2024, via email. Subsequently, KE’s team along with the senior management initiated the first round of discussions on PPA, with the JPCL, GHCL and CPPA-G senior leadership. After conducting thorough deliberations on the matter at hand KE also shared a list of major considerations for the PPA, which are required to be addressed, to enable the successful execution of the transaction,” he continued.

The power utility company further noted that it has initiated the requisite technical studies for carrying out the conversion of the Project. In this regard, KE on its own has also initiated a techno-commercial study with assistance of a consortium of four international consultants i.e., LEAG, MIBRAG Consulting International GmbH, Aremtech, led by Dornier power and Heat GmbH, having g a rich history of designing, construction and operations of lignite power plants such as 2 x 800 MW Schwarze Pumpe, 1x 907 MW Boxberg and others. This study will involve the evaluation of the proposed technology for carrying out the drying of Thar coal, prior to its utilization in the existing plant boiler.

The proposal including the Terms of Reference (ToR) along with the profile of Dornier power and Heat GmbH for the study has also been shared with Power Division. Secondly, to ensure the compliance of international best practices, KE is also evaluating the possibility of initiating an evaluation of the proposed EPC modifications, required to be conducted within the power plant. The proposal of the study including the ToRs shared by the consortium led by Dornier power and Heat GmbH have also been sent to Power Division. Accordingly, Power Division has been requested to review and provide feedback on the draft proposal.

Furthermore, KE is also engaged with Hagler Bailly Pakistan for the upgradation of the Environmental and Social Impact Assessment (ESIA) study of the project which will be shared with the Power Division once it is received, he maintained.

Copyright Business Recorder, 2024