Are CPEC IPPs about to shift from imported to Thar Coal? 

ISLAMABAD: Power Minister Sardar Awais Ahmad Khan Laghari has formed a four-member committee to oversee the conversion of three CPEC-developed Independent Power Producers (IPPs) from imported coal to Thar coal, with a formal notification issued by the Power Division.

According to a copy of the power division’s notification seen by Profit, this four-member committee will be led by the Additional Secretary of the Power Division. The other members include Ali Nawaz, Director General (Thermal) at the Private Power and Infrastructure Board (PPIB), Shamsuddin Shaikh from the private sector, and Shahab Qadir, Chief Strategy Officer (CSO) at K-Electric.

Imported coal vs Thar coal

It is a simple problem. Pakistan relies heavily on imported fuel sources such as reliquefied natural gas (RLNG) to produce electricity. Whenever there is an international crisis, such as the Russia-Ukraine war, Pakistan’s energy sector is rocked by the ripple effect. There is a simple solution. Cheaper fuel — something like coal perhaps. And the source is right there too. Spread over more than 9000 km2, the Thar coal fields are one of the largest deposits of lignite coal in the world — with an estimated 175 billion tons of coal that according to some could solve Pakistan’s energy woes for, not decades, but centuries to come.

The question is, if this rich natural resource is available, why has it not been utilized more than it is currently? Discovered in the early 1990s by the Geological Survey of Pakistan (GSP), only a few years ago Thar Coal only accounted for around 660MW of Pakistan’s energy mix. Over the past few years, this has gone up to over 2600MW. 

In short, Thar Coal offers a cheap, alternative, local source of energy that can be used to produce electricity and help Pakistan escape its topsy-turvy reliance on international markets to maintain its energy supply.