THE decision to carry out the test burn of coal earlier than the scheduled date of March next year under the Underground Coal Gasification Project is good news. The need for converting coal into electricity to overcome the ever-aggravating power crisis has never been as urgent as it is today.
Dr Samar Mubarakmand, the nuclear scientist, who runs the UGC is also a member of the Planning Commission dealing with this project. The decision to revisit the test burn date was taken after he met President Zardari before his departure for China.
The scientist is engaged in Block 5 of Thar Coalfield to produce electricity from coal through gasification process, which after an initial test burn of three to five megawatts, will be scaled up to 100 megawatts. In February, Dr Mubarakmand had said at a seminar in Hyderabad that Thar coal deposits will take another three to four years to be put to use for producing power. But perhaps it may take less time now.
Coal deposits worth 175-185 billion tonnes of lignite were discovered by the Geological Survey of Pakistan (GSP) in Thar in 1992 and the good news was that these were so vast in quantity that they could guarantee self-sufficiency in energy for 200 years. But, sadly enough, they are still lying in deserts like a huge waste for various bureaucratic, economic and political reasons. Several bodies and committees were formed and dismissed, some blocks allocated to foreign firms and then cancelled. In recent years, one witnessed a prolonged power tussle between the Sindh government and the Centre over the control of Thar deposits. Finally, Sindh politicians won the battle but the coal remains to be mined.
Thar project has assumed urgency at a time when coal is losing its appeal as a cheaper energy source because of its major contribution to global warming. Now it is called ‘dirty fuel’. In most countries such as the US, China, Europe and India, coal has been and still is a great source of energy but they are now taking measures to cut down its share in their energy mix. Coal generates about half of all electricity in the US but by 2035, its share will get reduced to 44 per cent. Coal-fired generation will gradually change. The ultimate goal is elimination of coal-fired plants to do away with their gas emissions. Future belongs to coal gasification but it is a costly proposition.
However, Pakistan can still opt for coal-fired plants because it is not a big polluter and its contribution to gas emissions is hardly one per cent. The government has already taken an initiative by constituting a ministerial committee for coordination with key federal ministers in order to seek international financing in infrastructure development schemes. But seeking such investments can be problematic because of growing reluctance of western countries to promote coal-based projects.
Besides, international lending bodies are under pressure from environmental groups to refrain from funding such projects. The World Bank has been accused of “incoherence” in its energy policy. It invested record sums last year in coal power, the most carbon intensive form of energy, despite its international commitments to slash the carbon emissions.
The World Bank said in September that a total of $3.4bn – or a quarter of all funding for energy projects – was spent in the year to June 2010 helping to build new coal-fired power stations, including a controversial plant in South Africa. Over the same period the bank also spent $1bn on looking and drilling for oil and gas. The bank is seeking to gain control of the billions which will be channelled to developing countries to help them cope with global warming and, at the same time, it is still lending large sums to finance coal-fired plants.
Globally, the share of coal in power generation is 38 per cent, compared to 0.1 per cent in Pakistan. It is strange that while developed nations discourage power generation through coal in developing countries, none of them is willing to abandon its own coal plants. With newer methods of gasification of coal underground, the pollution can be lowered drastically. A chemical analysis of the Thar reserves shows that not only it is a good quality lignite, it has a lot of moisture in it, further benefiting the gasification process.
According to Sindh Chief Minister Syed Qaim Ali Shah, the completion of two initial bankable feasibility studies of Thar coal project is a significant headway. Together with these, the ‘landmark October 15 approval’ of fiscal incentive package by the federal cabinet’s Economic Coordination Committee would enable the ‘stakeholders to give impetus to the fast-track development of the coal deposits’.
Under the package, the investors would be exempted for 30 years from customs duties on import of coal mining and construction machinery at Thar, get exemption on withholding tax and other levies such as WWF, WPPF and federal excise duty. Sindh government is launching its first public-private venture with Sindh Engro Coal Mining Company and would soon start infrastructure development in Thar.
The Planning Commission has launched a project for the conversion of underground coal in Tharparkar into coal gas without bringing coal on the ground. Capital investment at the Underground Coal Gasification (UCG) based power generation system is about $1 per KWH for small plants of less than 100 MW and about $0.8 per KWH for larger plants of 500MW capacity. Several thousand megawatts energy is already being generated in several countries such as Russia, Central Asian States, Europe, Canada, Australia, China and South Africa from UCG system.
During the current fiscal year, an allocation of Rs8 billion had been made in Sindh for critical infrastructure projects relating to the project — Rs4 billion for water supply, Rs2 billion each for effluent disposal and laying of transmission lines — besides an allocation of Rs2 billion to fund management house for coal development to secure the equity required for the project.