Prime Minister Shahid Khaqan Abbasi last Saturday inaugurated Pakistan's first coal, clinker and cement terminal at Port Qasim Karachi, established in the private sector by Marine Group who is reported to have invested around US$ 250 million - largely under financing by IFC of the USA. The terminal has a capacity to handle 12 million tons of coal per annum with an average discharge rate of over 30,000 tons per day. The sponsor, under a 30-year BOT agreement with Port Qasim Authority, has built its own jetty with two unloader cranes for coal and one for cement and clinker.
In fact, country's first coal terminal complex with berth, unloaders and coal transportation belt was indeed established at Port Qasim in around 1982 by Pakistan Steel Mills for receipt of its coal supply at Port Qasim and its transportation to the mills through a 4.5km conveyor belt. This seamless system comprising two coal unloaders to unload coal from the ship at berth and its transportation to steel mill by a conveyor belt is a fully automated system - then supplied and installed by a consortium of German and French companies.
While a dedicated coal terminal is the key requirement to feed the newly installed coal-based power plants around the country, its transportation from port to power plants remains a humongous challenge considering the limited capacity of Pakistan Railways. This segment, too, requires a substantial investment. The question is whether coal is the right choice for Pakistan and if all this investment made and much more required to be made would pay back. The answer is: coal is a fuel of the past in the wake of emerging environment-friendly newer fuels where technology has gone up and prices have come down and there is an exponential improvement on these counts.
In the wake of the Paris agreement of December 2015, a number of governments are implementing a phase-out and cutback of coal-fired power plants. In some countries, this change is just dramatic.
As per the statistics of 2014, coal was a fuel of choice across the globe and formed a considerable component of the fuel mix. In China, coal's share was 70 percent of its total power generation and the same was true for India. In Europe, Germany topped the list with a coal share of 45 percent of its total generation.
The global trend is to move out of coal and similar Co2 emitting fuels and that too, on a fast track. This phenomenon is driven by two factors. Firstly, some years back the impacts of Co2 emissions on health and environment were perceived merely as a possible threat. Now it is a reality with its impact evident on ground in the shape of pollution beyond safe limits, smog, disease and freak weather conditions. Secondly, due to extensive research and development in the renewable and clean energy the cost of equipment and technology has considerably come down while the quality has significantly improved.
Global clean energy investment jumped 40% year-on-year, in the third quarter of 2017. Its figures show that the world invested $66.9 billion in clean energy in the third quarter of this year as per the following country segmentations. Some of the countries are now nearly totally on renewable energy, notably the Scandinavians while others are catching up.
Pakistan's focus on renewable energy has been minimal and erratic. The Alternate Energy Development Board (AEDB) established by the government around a decade back to promote and facilitate renewable energy in Pakistan ended up in a fiasco. The wind energy projects initiated by the private sector in the wind corridor of Jhimpir, Sindh struggled a long time for the settlement of tariff and the availability of grid for the evacuation of power. The delivery of power from the 1000MW Jinnah solar plant installed last year is not clear.
It is projected that around 1235MW of wind energy will be available to the national grid by 2018 from 24 wind power projects on ground. This could be a good beginning for Pakistan to secure for itself a place on the map of environment-friendly power generating countries.
Option for coal-based power plants at a time when the world is moving out of it for better technology and more cost-effective solutions is not understandable. In immediate short-term, coal could be offering a cost advantage as against imported fuel oil in case of Pakistan, but in short-, medium- and long-terms, the winner is the renewable energy. Even the nuclear energy is no longer an energy of preference and many countries, notably those in Europe, have opted to move out of it for security and environment issues.
Today, the cost of maintaining environment and its sensitivity is phenomenal in settled and emerging markets. All required measures are being taken to manage it. Renewable energy for power generation, electric cars and transportation systems for mobility, organic feed for agriculture are some of the steps being taken to manage environment.
With availability of natural resources like mighty rivers, all the year-round sun and wind, Pakistan is therefore required to exploit the available resources and potential in an effective and meaningful manner.
(The writer is former President of Overseas Investors Chamber of Commerce and Industry)
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