Thar Energy Limited (TEL) power plant finally started commercial operations at the start of October, marking its inclusion in the national grid as the government tries to get rid of the expensive imported fuels to produce electricity according to the indicative generation capacity expansion plan (IGCEP).??
Part of the China Pakistan Economic Corridor (CPEC) energy projects, TEL is jointly owned by Fauji Fertiliser Company (FFC), HUBCO, and China Machinery Engineering Corporation (CMEC).?
Sources said that it is the second power plant commissioned during the course of the year which will consume coal from Thar. However, currently, the Sindh Engro Coal Mining Company (SECMC) is expanding the mine which will yield a greater per annum output, the purpose to use domestic coal increases as the expansion will further decrease the cost through economies of scale.?
So far, there are three power plants configured to use local coal, having a combined capacity of 1,650MW. These plants are Thar Engro Coal Power Project (660MW), Lucky Electric Power Company (660MW), and Thar Energy Limited (330MW) are considered to be critical for the grid. Though the Lucky plant, located at Karachis Port Qasim, is currently using a blend of imported and domestic lignite coal, the effect on the overall forex savings is still noteworthy.?
It is to be mentioned that the price of coal was $200-250 per tonne before the Russia-Ukraine war, but now it is priced at $400-450 per tonne looking at figures over the last?month, an immense increase of around 80 percent. Consequently, it directly affects the bottom line of electricity costs paid by consumers.?
Meanwhile, sources said that The current generation fuel cost of Rs 9-10 per unit will drop to under Rs 5 a unit by the end of next year as the SECMC increases its coal production.
Pakistan has a constrained economic system because of the import-heavy nature of the economy which causes the reserves to run out of USD reserves every time an attempt to increase GDP growth is made.