A uniform pricing formula for electricity purchase is needed to guarantee foreign investors for setting up coal-fired power plants in the country. Some foreign and local firms prepared feasibility reports and confirmed coal deposits but were reluctant to start power generation due to unfair pricing formula for coal-fired power.
Official sources in Sindh Mine and Mineral Department told Business Recorder on Friday that the government should evolve a pricing formula for the purchase of electricity from coal-fired power plants as was done for wind-based power generation.
This was the only way the government could increase share of coal in country's energy mix to at least 19 percent by 2030 and 50 percent by 2050. Sources said that several foreign and local companies prepared feasibility reports in the past and confirmed coal deposits but they were reluctant to start power generation due to unfair pricing formula for coal fired power.
President General Pervez Musharraf and Prime Minister Shaukat Aziz realising the energy crisis in the coming years had opted for developing coal sites for power generation.
Sources said these initiatives were very encouraging and in the last seven years several foreign and local companies signed agreements and some of them completed feasibility reports. The tariff issue kept the companies away. Currently, about 2,900 MW coal power projects were under process initiated by Shenhua Group of China, Associated Group, Hassan Associates, CMC of China, Fateh Group, Dadabhoy Group and Energy Limited.
The government should also assure continued fuel (coal) supply to power plants, sources said and added that this was another obstacle in establishing power plants based on domestic coal. The Sindh possesses sufficient quantity of indigenous coal but if further coal required for power generation the government may import coal to feed power plants.
Recently, Abbas Ali Shah, Director General, Sindh Coal Authority said that only Thar coal deposits were sufficient to meet fuel requirements of the country for centuries and can generate about 100,000 Mega Watts (MW) of electricity.
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