ISLAMABAD: The government has decided to construct three more coal and LNG-based power plants of 880 megawatts (MW) in collaboration with the private sector.
The projects including two coal-fired plants of 330MW each in Thar would be set up through private investment at a cost of around $800 million.
The decision was made at a meeting chaired by Federal Minister of Water and Power Khawaja Mohammad Asif, an official told the Daily Times.
The official said that the government was working to produce 2500 MW of electricity from coal-based power projects in Thar involving private and public investment.
“Thar coal can be highly instrumental in injecting a large chunk of electricity into the system through cheap electricity generation sources,” he said adding that the district’s 175 billion tons of reserves were attracting a large number of domestic and foreign investors who were keen in setting up power plants.
The upfront tariff regime offered a rate of 8.178 US cents per unit for plants of about 350MW capacity based on local coal and foreign financing and 85 per cent plant factor. The plants having 60 pc plant factor, foreign funding and local coal promise 9.969 cents per unit tariff for 30 years.
Similarly, power plants of around 350MW generation capacity with local financing and coal, and 85 pc plant factor could avail an upfront tariff of about 9.259 cents per unit for 30 years. Similar specifications of plant with 60 pc plant factor are entitled to 11.25 cents per unit as upfront tariff.
The Engro Powergen has now started construction activities on the 660MW power projects.
Due to the Chinese monopoly over financing for coal projects, bids may be provided at higher rates. This was the reason behind the National Electric Power Regulatory Authority (NEPRA) to increase the rate of return from 17 per cent to 22 per cent for Engro coal mining projects in Thar, which is funded by China.
At present, Pakistan and China are already working on inter-connecting the electricity grid, which suggests that Beijing could set up more coal power plants in Pakistan to meet its energy needs. They are set to develop over 10,000-megawattss plants including coal projects.
A spokesperson for the water and power authority told the Daily Times that “we are working in different coal based power projects in Thar to eliminate load shedding”.