Coal is presently world’s fastest growing fuel particularly in the developing countries. Coal’s importance can be judged from the fact that it provides 26 % of primary energy and 40 % of world electricity supply. Coal has gained special importance due to growing concerns for energy security prompted by the abnormal surge in world oil prices to over $120 per barrel of oil, mounting tensions of the western countries with Iran, interruptions in the international supply network of gas from Iran and Russia and ongoing stand off in the Arabian Gulf. Coal offers a solution which is still found in abundance locally in most parts of the world. World coal consumption is expected to increase by 74 % from 2004 to 2030. World trade of coal is expected to increase about 40 %, from 800 million tons in 2007 to 1122 million Tons in 2030. Coal share in world energy consumption is expected to increase to 28 % by 2030 but its share in power generation is expected to remain 41 % roughly at the current level. Coal as an indigenously available resource has a strategic importance and is world’s fastest growing fuel.
Today China is world’s largest producer as well as the biggest consumer of coal which accounts for 78% of its total energy requirement. Realizing importance of coal many countries in other parts of the world have switched over to coal to meet their energy needs. India, Indonesia, Germany, USA, Australia and UK are among those countries that have embarked upon new coal based power plants. USA is world’s second largest user of coal whose 60% requirements for energy are met with coal.
Usage of coal as a source of energy, in the developing countries, has been down played by powerful multinational oil companies and cartels who do not wish to see coal as a substitute of oil that they sell. Negative perceptions about the utility of coal have some how, adversely affected policies of the countries such as Pakistan. Coal as a fuel had been ranked low on the list of Pakistan’s development priorities primarily due to concerns about its quality and requirement for huge upfront capital. Apart from this, in the absence of a strong political will to promote coal based power projects, foreign investors have not been supported as much as they ought to be. Quite a few were forced to withdraw their initiatives after incurring heavy losses. As a result what we see today is that share of coal in Pakistan’s energy mix is about 5 % and in power generation even less than 1 %. Pakistan is one of the lucky countries which are blessed with vast deposits of coal. By increasing the share of coal in our energy mix we could have conserved more valuable gas, which is deplete able resource. Unfortunately, we have compromised our future by relying excessively on natural gas, and are now running the risk of energy security.
Pakistan’s major known coal reserves are located in the province of Sindh, specifically in Thar, estimated at 175.5 billion tons which account for the bulk of Pakistan’s total reserves, estimated at 185 billion tons. Other coal deposits of significance in Sind are located at Sonda (Jharruk) 5.5 billion tons and Lakhra (Dadu) 1.33 billion tons. Current estimated value of the Thar coal deposits is $ 8 trillion and if converted into energy its values comes to $ 25 trillion. It has the potential to generate 100,000 MW of electricity for 300 years. Pakistan is 6th largest coal rich country in the world and the aggregate energy potential of these resources is more than the combined energy potential of the resources that Saudi Arabia and Iran possess. Unfortunately there are factors, other than those mentioned above, that have not supported investor’s initiatives for the exploitation of Pakistan’s coal resource in the past. These are as follows:
Lack of necessary infrastructure (roads, water, life support systems, community services and communication network) to support project activity. Inconsistent government policy. Inaccessibility to national grid. Political uncertainty. Security concerns – Law and order situation. Tariff issues originating from uncertainties surrounding price instability of the capital equipment and other input costs as well as inherent risks associated with a typical coal mining and power generation venture. Uncertainties in the lead time required in the delivery of capital equipment. Mining is a provincial subject. Thus hostage to vested interests. Coordination with Federal and Provincial Government departments and ministries.
Consequently, Pakistan continues to rely considerably on imported coal to fulfill requirements for a range of industrial applications. Major industrial consumers are cement industry, brick kilns, power plants, chemicals and steel industry. Major suppliers are China, Indonesia and South Africa. In recognition of the growing importance of coal, it should be the cornerstone of our future energy policy. GoP is committed to increase substantially the share of coal in Pakistan’s current energy mix. Under the Vision 2030 strategic plan, Pakistan’s coal power generation is planned to be increased from present 200MW (which is about 1 % of total power generation) to 1060 MW by 2010 and to 19,910 MW by 2030. Also share of coal in the overall energy mix is planned to be increased from 5% to 19% by 2030 and to 50% by 2050. According to IEA estimates presently known reserves of crude oil with project demand will last 41 years, natural gas 67 years and coal 192 years. Given the relative importance of coal in relation to highly inflated prices in the international oil market, these targets are well justified. However, given the checkered history of the plans to exploit existing coal reserves in Pakistan, these targets appear to be over ambitious. GoP will have to bring about a drastic shift in the list of its development priorities and demonstrate its seriousness through a strong political will to make these goals look real. The exploitation of cheaply available indigenous coal would help Pakistan benefit in two ways. Firstly it would help achieve objective of self reliance and relieving burden of costly oil imports and secondly to generate power, as a least cost solution.
The Quality Issue: Unfortunately, utility of the coal deposits found at Thar had been viewed doubtful. Lignite coal has certain characteristics that makes it a low BTU fuel and difficult to extract and transport. It has high moisture content (almost 40 – 50%) and mineral matter (especially sodium). These can affect adversely the efficiency of the plant by causing severe slugging and fouling in conventional boilers and thus make operation costly. But SFBD technology designed to produce dry coal, now developed commercially, provides a solution to these problems. The other concern about the quality of locally available coal relates to the presence of high sulfur content which can be dealt with Circulating Fluidized Bed (CFB) technology. Also the Integrated Gasification and Combined Cycle (IGCC) technology is designed to make best use of high moisture lignite coal for power generation. Coal found in Pakistan has high sulphur content. Therefore for certain applications, Pakistan has to rely on imported coal. However local coal can be processed to produce clean coal by setting up sulphur washing plants at respective mine sites. Thus appropriate technologies are available to ensure desired utility of the available coal deposits in Pakistan.
Emissions and Environmental Concerns: While coal is going to be the fuel of next century, the issue of emissions control and pollution abatement shall have to be properly addressed in the context of climate change under Kyoto protocol. In the longer term one must also keep in mind that CO2 mitigation initiatives down the road may become mandatory for the countries like Pakistan. This may add to the cost of coal power generation as has happened in the developed world. The pollution abatement costs in the developed world have reached levels where projects have started yielding negative returns. One must keep in mind that a typical power coal plant generates 3 million tons of CO2 or 17 tons of carbon per megawatt and draws about 2.3 billion gallons of water per annum from nearby source while on land, whereas Sind is seriously deficient in the supply of water even for agriculture; produces mercury which not only renders water useless for human consumption but also for irrigation purpose as well.
The Writer is a Management Consultant
Source: Pakistan Observer,