Chinese firm bows out of coal-based power project

[Dr Gupta]

ISLAMABAD: A major Chinese firm has bowed out of a Punjab-based 330MW coal-based power project that was scheduled to start electricity production by end-2017.

The $590 million mine-mouth project was a key component of the high profile $46 billion China-Pakistan Economic Corridor (CPEC) launched last year by President Xi Jinping and Prime Minister Nawaz Sharif. A letter of interest (LoI) was issued to develop the project on local coal at Pind Daden Khan in Punjab’s Salt Range.

Sources told Dawn that China Machinery Engineering Corporation (CMEC) lost interest in the project because of issues relating to feasibility of producing enough energy for running a 330MW project and a tariff allowed by the National Electric Power Regulatory Authority (Nepra) that was lower than its expectations.

The company which is also a key contractor in the $4 billion 969MW Neelum-Jhelum Hydropower Project in Azad Jammu & Kashmir had been lobbying for 11.67 to 12.4 cents per unit tariff that was far higher than upfront tariffs for projects on Thar coal and imported coal. Nepra allowed a 30-year levelised tariff of 8.55 cents per unit.

Sami Rafi Siddiqui, spokesman for the Private Power and Infrastructure Board — the one-window organisation for private power projects — confirmed that the project was not moving. He said the PPIB had encashed $300,000 performance guarantee of the project sponsor for its failure to deliver on LoI conditions. He declined to give further details at this stage.

The government’s power policy required submission by the sponsor of a performance guarantee of $1,000 per megawatt for fulfillment of LoI conditions and $5,000 per MW performance guarantee for letter of support conditions. The guarantees are confiscated by the government in case of sponsor’s failure.

The project envisaged power generation along with coalmining project in the area of Choa Saden Shah with an average production of about 6,000 tons of local coal per day. The CMEC had promised to introduce semi-mechanised mining technique for the first time in the region with an investment of $200 million.

Published in Dawn, May 18th, 2016

 

[Dr Gupta]

This rate seems really high, it looks like China are using CPEC for pure business purposes and not offering concessionary rate like Japan did with India

How much of the $46bn MoU will actually transpire on the ground?

 

[C130]

is Thar coal really that important to Pakistan??


just buy more GE 9HA turbines, and make deals with Qatar and Iran for LNG.

https://www.liverostrum.com/ge-brin...y-duty-9ha-gas-turbine-to-bhikki/1009248.html

 

[Perpendicular]

Didn't expected this from China, pakistanis should stick to the tariffS that are in their interest. Don't repeat the history, if you have learned any lesson from your over dependence on US.

 

[Dr Gupta]

Chinese are shrewd business people they won't offer a free lunch if they offer a loan or a investment they will make sure they have a return of profit

 

[Laozi]

Pakistani Policy makers do have an alternative, which may be more rewarding in future

http://www.sciencealert.com/india-says-the-cost-of-solar-power-is-now-cheaper-than-coal

B Balaji/Flickr
India says the cost of solar power is now cheaper than coal
The moment we've been waiting for.


PETER DOCKRILL
20 APR 2016
world's first 100 percent solar-powered airport and what is slated to become theworld's largest solar power station.

One of the consequences of all this ongoing investment in infrastructure is that the cost of providing solar power in India is becoming increasingly affordable – to the point where the country's energy minister, Piyush Goyal, now says that solar power is a more cost-effective option than the old fossil-fuel staple, coal.


"I think a new coal plant would give you costlier power than a solar plant," Goyal told the mediaat apress conference in India on Monday. "Of course there are challenges of 24/7 power. We accept all of that – but we have been able to come up with a solar-based long term vision that is not subsidy based."

That vision is part a national plan for to generate more than100 gigawatts of solar power by 2022– an ambitious target that's about 20 times beyond the current level solar provides in India.

But what could help make it happen is the falling price of solar power. This year, solar energy prices in the countrydropped to around parity with coal for the first time ever, hitting 4.34 rupees (about 6 US cents) a kilowatt-hour (kWh), while coal tariffs range usually range in between 3–5 rupees/kWh (about 5–8 US cents).

And if the price keeps falling at a similar rate, it will soon drop significantly below coal, with some saying that by 2020, solar could be as much as 10 percent cheaper than coal power.

If that does happen, it would be a major turning point in a country where access to electricity is still not universal. Inconsistencies in the country's power grid mean many of India's cities are subject to blackouts and brownouts, and up to a quarter of the population – some 300 million people –have no access to electricity.

Cheaper electricity sourced from the expansion of solar plants across the country could help make for a better, more reliable grid, and one that's less harmful to Indians and the environment at large.

"There are reasons to push solar beyond its low price – it's a much healthier option in a country that is home to 13 of the world's 20 most polluted cities," explains Huizhong Wu at CNN Money. "The environmental benefits of solar will be even more pronounced if its rise comes at the expense of coal, which currently makes up 60 percent of India's energy production. India's coal has a high ash content, and it releases toxins and metals into the air when burned."

Let's hope this momentum behind solar keeps up in India, and that reliance on coal can be reduced as soon as possible. It's the only way to go.

http://www.sciencealert.com/india-says-the-cost-of-solar-power-is-now-cheaper-than-coal

 

[AsifIjaz]

@C130 : Its not just the electricity that will be produced at Thar... you will literally lift one of the most impoverished community of Pakistan.
FYI, Thar field is about 25-30 minutes drive from Islam Kot, a small town near Mithi. I am aware that currently

1- local population has been employed on various sections of this project (Driver, mess workers, cleaners, runners etc)
2- A 3/4 star hotel is going to be started soon. This is being built by the same company that has previously rented out it newly built rooms / houses to Engro for residence.
3- Telenor has agreed to expand its operations there. They have agreed to place a Cow Station near the camp side (or what ever its called, its basically a small mazda truck or Shehzore with a cellular network related equipment). Soon they will be installing fresh cell sites in that area. Ufone is also under discussion to install Repeater or a BTS/RBS there. ( i have no idea what these abbreviations mean)
4- Engro is renowned for community work (Health, education, technical training institutes, competition based scholarships etc) around ALL its plants, be it Daharki, Ghotki, Sahiwal or Muridke. I will just give one example here. To date Engro has provided "free" treatment to over and above 60 thousand cases of snake bite at its base plant at Daharki.
5- Over last 6 months the prices of Rilli (traditional bed covers), sindhi caps and Ajrak have risen substantially at Mithi.

Hence, please understand whereas i agree that RLNG based plants can be made anywhere around Karachi or Hub or anywhere around the country but if not for the sake of energy security (in case RLNG prices go up as it is tied to crude oil or the price of imported coal goes up) then for the sake of the social, medical and mental uplift of the local community around Mithi, Badin and adjoining areas of Hyderabad districts this project is extremely vital.

 

[hussain0216]

This is just business

Pakistan is diversifying its energy sources from coal plants, to LNG from Qatar snd solar and wind farms to new nuclear power stations

Combined they will give Pakistan the power to push the nation ahead

 

[Dr Gupta]

This is just business

Pakistan is diversifying its energy sources from coal plants, to LNG from Qatar snd solar and wind farms to new nuclear power stations

Combined they will give Pakistan the power to push the nation ahead

I heard Sind has vast deposits of Coal why not utilise it?

 

[Dr Gupta]

That will ultimately enhance Pakistan's bottom line for foreign exchange this year at least by $300,000.

Their FR is increasing but this year they have debt servicing to pay hence why they can't even afford 8 F-16's

 

[Dr Gupta]

If you compare that Japan is giving us a soft loan for 1% interest rate for the Bullet train and see what Chinese charge it shows they are not giving it on a friendly rate but pure business.

But are not the same Chinese providing you the nuclear plants also. Or you do have some other options too.

Well they are not being given it, the Chinese are providing them a loan of $6.5bn and will bring their own engineers (who will get paid)

 

[hussain0216]

I heard Sind has vast deposits of Coal why not utilise it?

Gradually they will, but investment has to be made to get things started

Once various projects come online and get completed it will be like a dam bursting

At the moment Pakistans growth is just below the 5%, as the power situation improves we will hit 6% & 7% growth very quickly

Once that happens Pakistan will be able to utilise its resources

Their FR is increasing but this year they have debt servicing to pay hence why they can't even afford 8 F-16's

We can afford the F 16s easily, we dont want them at full price

A jet which would increase our reliance on a fairweather USA makes no sense at full price, at subsidised price its too good a offer to turn down

 

[Dr Gupta]

NS has not focused on the Far East and ASEAN bloc for me this is a huge trading block which Pakistan should tap into

http://thediplomat.com/2016/04/pakistan-falls-behind-in-east-asia/

SAARC is the least integrated area compared to the EU, ASEAN we are pathetic

 

[Kal Muah]

NS has not focused on the Far East and ASEAN bloc for me this is a huge trading block which Pakistan should tap into

http://thediplomat.com/2016/04/pakistan-falls-behind-in-east-asia/

SAARC is the least integrated area compared to the EU, ASEAN we are pathetic

With pakistan in the SAARC, its next to impossible to form EU like situation

 

[Dr Gupta]

With pakistan in the SAARC, its next to impossible to form EU like situation

Maybe the tide is turning there too, many I know in Karachi just want a better life and stop all this conflict but some vested interests are preventing ties getting close. We all know what happened when NS met Modi in Lahore and soon after boom attack

Same with the Parliament attack we were close to signing a agreement on 'K' than boom attack