Pakistan Plans to Convert Coal-Fired Power Plants to Domestic Thar Lignite

[RiazHaq]

Pakistan Plans to Convert Coal-Fired Power Plants to Domestic Thar Lignite

With a new 330 MW mine-mouth coal-fired power plant in Tharparkar, Pakistan has now reached 990 MW of power fueled by the local lignite. Tha...

www.southasiainvestor.com

With a new 330 MW mine-mouth coal-fired power plant in Tharparkar, Pakistan has now reached 990 MW of power fueled by the local lignite. Thar coal production is being expanded and plans are in place to convert three more coal fired plants to burn domestic lignite as soon as a rail link is completed to transport the fuel to the rest of the country. It is worth noting that Pakistan contributes less than 1% of the global greenhouse-gas emissions. Using the higher polluting domestic Thar lignite is crucial to Pakistan's desperate need for cheap energy to spur industrialization for economic growth without running into recurring balance of payments crises.

Pakistan Electric Power Generation Fuel MiX. Source: Arif Habib

Last year, hydroelectric dams contributed 37,689 GWH of electricity or 27.6% of the total power generated, making hydropower the biggest contributor to power generated in the country. It was followed by coal (20%), LNG (19%) and nuclear (11.4%). Nuclear power plants generated 15,540 GWH of electricity in 2021, a jump of 66% over 2020. Overall, Pakistan's power plants produced 136,572 GWH of power in 2021, an increase of 10.6% over 2020, indicating robust economic recovery amid the COVID19 pandemic.

Lucky power plant in Karachi has been designed to use Thar Lignite Coal when it is available in sufficient quantity. Until that time, it will operate on imported lignite coal. Domestic lignite production is being expanded in a bid to replace costly fossil fuel imports that are depleting Pakistan's foreign exchange reserves and exacerbating circular debt in the power sector, according to Nikkei Asia.
SECMC (Sindh Engro Coal Mining Company) has commissioned a study for converting the China-Pakistan Economic Corridor coal plants in Hub, Jamshoro and Sahiwal to indigenous lignite. A 105km long Thar Rail project is being planned to connect Thar coal fields with Main Line (ML-1) at the New Chhor Halt Station to transport lignite to the power plants in the rest of the country. The transportation of lignite by trucks to Karachi and Kallar Kahar shows its movement by road and rail is feasible and safe despite higher moisture.

Pakistan Electric Power Generation. Source: Arif Habib

Cost Per Unit of Electricity in Pakistan. Source: Arif Habib

Nuclear offers the lowest cost of fuel for electricity (one rupee per KWH) while furnace oil is the most expensive (Rs. 22.2 per KWH).

Construction of 1,100 MW nuclear power reactor K2 unit in Karachi was completed by China National Nuclear Corporation in 2019, according to media reports. Another similar reactor unit K3 is now in operation. It will add another 1,100 MW of nuclear power to the grid in 2022. Chinese Hualong One reactors being installed in Pakistan are based on improved Westinghouse AP1000 design which is far safer than Chernobyl and Fukushima plants.
The biggest and most important source of low-carbon energy in Pakistan is its hydroelectric power plants, followed by nuclear power. Pakistan ranked third in the world by adding nearly 2,500 MW of hydropower in 2018, according to Hydropower Status Report 2019. China added the most capacity with the installation of 8,540 megawatts, followed by Brazil (3,866 MW), Pakistan (2,487 MW), Turkey (1,085 MW), Angola (668 MW), Tajikistan (605 MW), Ecuador (556 MW), India (535 MW), Norway (419 MW) and Canada (401 MW).

New Installed Hydroelectric Power Capacity in 2018. Source: Hydroworld.com

Hydropower now makes up about 28% of the total installed capacity of 33,836 MW as of February, 2019. WAPDA reports contributing 25.63 billion units of hydroelectricity to the national grid during the year, “despite the fact that water flows in 2018 remained historically low.” This contribution “greatly helped the country in meeting electricity needs and lowering the electricity tariff for the consumers.”

Pakistan's Current Account Balance vs International Oil Prices. Source: Arif Habib

Recent history shows that Pakistan's current account deficits vary with international oil prices. Pakistan's trade deficits balloon with rising imported energy prices. One of the keys to managing external account balances lies in reducing the country's dependence on foreign oil and gas.

Pakistan Power Generation Fuel Mix. Source: Third Pole

It is true that Pakistan has relied on imported fossil fuels to generate electricity. The cost of these expensive imported fuels like furnace oil mainly used by independent power producers (IPPs) has been and continues to be a major contributor to the "exaggerated external demand driven by its rentier economy" referred to by Atif Mian in a recent tweet. However, Pakistan has recently been adding hydro, nuclear and indigenous coal-fired power plants to gradually reduce dependence on imported fossil fuels.
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Pakistan Plans to Convert Coal-Fired Power Plants to Domestic Thar Lignite

With a new 330 MW mine-mouth coal-fired power plant in Tharparkar, Pakistan has now reached 990 MW of power fueled by the local lignite. Tha...

www.southasiainvestor.com

 

[SoulSpokesman]

@RiazHaq

Good move, Brofessor sb. However, I hope the engineers are careful about it. Plants are designed for a particular type of foil, any change in fuel mix much beyond that can cause boiler damage and reduce life of the plant.

Regards

 

[RiazHaq]

@RiazHaq

Good move, Brofessor sb. However, I hope the engineers are careful about it. Plants are designed for a particular type of foil, any change in fuel mix much beyond that can cause boiler damage and reduce life of the plant.

Regards

Some of these plants, like Lucky's in Karachi, are designed to burn lignite coal. Right now Lucky is being fueled by imported lignite because of two problems:

1. Lignite production is just enough to meet the fuel requirements for the mine-mouth plants in Thar.

2. The rail-link needed for transport has not been built yet.

As the Thar lignite production increases and rail transport is built, it will be possible to use domestic lignite to fuel these plants.

 

[SoulSpokesman]

@RiazHaq

Brofessor sb,

Thanks.

Some of these plants. like Lucky's in Karachi, are designed to burn lignite coal.

If the plant is designed ab initio to burn lignite that's absolutely fine. I will be concerned if people try to convert a plan which was meant to run on coal, esp higher grades, into lignite.

As the Thar lignite production increases and rail transport is built, it will be possible to use domestic lignite to fuel these plants.

Let's hope it happens quickly. Good thing is that in Pakistan such projects dont get unduly delayed like they are sadly in India.

Regards

 

[RiazHaq]

#US wood pellets export booming. #UkraineWar has cut off the supply of compressed-wood pellets from #Russia, #Belarus and #Ukraine to the #power plants in Western #Europe that burn them instead of #coal to reduce #carbon emissions. #energy https://www.wsj.com/articles/wood-p...ental-concerns-11659915622?st=99q5dmoc947co2l via @WSJ

https://twitter.com/x/status/1556688169524899852

The wood-pellet market is on fire.

War has cut off the supply of compressed-wood pellets from Russia, Belarus and Ukraine to the power plants in Western Europe that burn them instead of coal. That has put a premium on pellets from North America, especially the U.S. South.

U.S. export volume, which has climbed steadily over the past decade, is running ahead of last year, when a record of more than 7.4 million metric tons of U.S. wood pellets were sold abroad, according to the Foreign Agricultural Service. The average price before insurance and shipping costs has risen to nearly $170 a metric ton, from around $140 last year.

Prices for on-the-spot deliveries, which can be scarce in a business that runs mostly on long-term supply deals, have jumped to almost twice that, analysts and pellet executives say.

The big winner has been Enviva Inc., EVA 5.69%▲ a Bethesda, Md., company that accounts for the bulk of U.S. wood-pellet exports, and its largest shareholder, New York energy investment firm Riverstone Holdings LLC, AP4 0.00%▲ which has a 42% stake.

Enviva’s shares have returned 114%, including price change and dividends, since just before the pandemic lockdowns, better than twice the S&P 500’s 46% total return over that span.

Enviva is building several new pellet plants in the Southern Pine Belt with the aim of doubling production capacity over the next five years. It buys branches, bark, understory brush, sawdust, spindly or diseased logs and other waste wood from landowners and sawmills and processes the fiber into pellets that are about the circumference of a piece of chalk.

The company’s output flows from ports along the Atlantic and the northern Gulf of Mexico to European utilities and through the Panama Canal to Asia. Japan is a big importer, and Enviva has set up a sales outpost in Taiwan ahead of a big state-owned coal plant’s conversion to pellets.

The company on Thursday said it signed five-, 10- and 15-year supply contracts with new customers in Germany. One will burn Enviva’s pellets to produce heat used in a manufacturing process and another is replacing lignite coal and natural gas, which have surged in price even more than pellets. An existing customer elsewhere in Europe agreed to pay a higher price in exchange for more guaranteed volume.

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Analysts say changes in government policies are one of the biggest threats to Enviva and others in the pellet business. The European Parliament’s environmental committee in May voted to stop encouraging the burning of woody biomass by eliminating its eligibility for renewable-power subsidies and changing how emissions are counted, but the full parliament would need to sign on to change the rules.

“Particularly amid the war and resulting natural-gas supply crisis, this seems like the worst possible time to change policy on bioenergy,” Raymond James analysts wrote to clients last week. “We doubt that the committee will get its way, at least anytime soon.”

Enviva’s Mr. Keppler said he doesn’t believe Europe’s demand for pellets will slow, given the alternatives. “Europe used to have a natural-gas transition strategy away from coal,” he said. “Today, it’s nothing but risk.”

 

[RiazHaq]

Pakistan’s Thar desert lignite coal boom gathers pace with SECMC mine hitting 10 Mt & SSRL mine starting up

https://im-mining.com/2021/12/31/pa...-secmc-mine-hitting-10-mt-ssrl-mine-starting/

On December 17, 2021, Sindh Engro Coal Mining Company (SECMC) announced that it had successfully achieved the 10 Mt of coal production milestone. SECMC, one of the largest public-private partnerships in the energy sector in Pakistan, commenced commercial operations in July 2019 with an annual production capacity of 3.8 Mt. Over the past 2.5 years, SECMC has begun to transform the energy landscape of Pakistan by facilitating production of electricity using indigenous coal reserves. The coal feeds a 660MW coal fired power plant and the overall project is classed as a is classed as a China-Pakistan Economic Corridor (CPEC) priority implementation project.

SECMC is one of two main lignite coal mining operators in the country, and is located in in Block II of the Tharparkar (Thar) area in Sindh province of Pakistan. It is a joint venture between the Government of Sindh (GoS), Engro Energy Ltd (formerly Engro Powergen Limited) and its partners namely Thal Ltd (House of Habib), Habib Bank Ltd (HBL), Hub Power Company (HUBCO); and China Machinery Engineering Corporation (CMEC). The world class Huolinhe Open Pit Coal Mine in Inner Mongolia, China, a subsidiary of China’s State Power Investment Corporation, has also joined the SECMC board as strategic investor with preference shares’ subscription.

The other main mine in the country which is just going into production is operated by Sino Sindh Resources Ltd (SSRL) which is located in Block I of the same Thar region; it is also a CPEC project and is owned by Chinese group Shanghai Electric Power Company Ltd. It comprises a 7.8 Mt/y open-pit coal mine and installation of a 1,320MW coal-fired power plant (2 x 660MW). Mining work was set to be completed by end 2021 and the first unit of the power plant is due to start working from 2022 while the entire project is scheduled to be completed by 2023. SSRL has a large mining fleet comprised of 55 t MT86D Chinese wide body trucks from LGMG to be loaded by 28 Liebherr R 9100B hydraulic mining excavators, the largest single mine fleet of this model in the world.

The SECMC mine uses a large fleet of 130 Chinese 60 t TONLY TL875 wide body trucks for coal haulage which are loaded by 18 hydraulic excavators, mainly Komatsu PC1250 units. The record production has resulted in the generation of over 10,000 GwHs of electricity, contributing to the national grid. Besides, the company’s record production of coal and generation of electricity using Thar’s local reserves has benefitted the national economy by saving $210 million through import substitution during the same period.

During the course of operations, SECMC has maintained a good safety record following international and world-class benchmarks – a feat that has earned international acknowledgements from organisations such as the British Safety Council. SECMC has also adopted the United Nation’s Sustainable Development Goals (SDG) framework to deploy high-impact interventions prioritising education, health, economic growth and women empowerment amongst other areas.

SECMC has also contributed to uplifting the local community by generating employment opportunities for the local population and creating other economic avenues for the community. It is pertinent to mention that 80% of the employees in SECMC are locals from Sindh where the project has provided significant socio-economic benefit to the local Thari population.

“The 10 Mt coal production mark is a commendable achievement considering the constant fluctuation and vulnerability in international coal prices,” said Chief Executive Officer SECMC – Amir Iqbal. He added that Thar coal is the best resource to help the national economy in terms of easing out the pressure on the Current Account Deficit and also indigenise the current energy mix which is heavily reliant on imported fuels. Currently, the second phase of the SECMC mine is already under development which will increase SECMC’s production to 7.6 Mt per annum with a cumulative power generation of 1,320MW.

Talking about the subsequent phase III expansion project, Iqbal said that the estimated investment for phase III expansion is to be approximately $100 million which will enable Thar Block-II to achieve a sustainable supply of 12.2 Mt of coal annually over the next 30 years. SECMC is expected to complete this expansion by June 2023 and with this expansion coal price of SECMC mine is to be reduced to under $30/t – making it the cheapest fuel source in the country ensuring economic stability and energy security for the country. In addition, phase III expansion will also enable Pakistan to save $420 million per annum on the account of import substitution whilst also leading to a reduction of PKR74 billion in circular debt on an annual basis.

 

[FuturePAF]

Some of these plants, like Lucky's in Karachi, are designed to burn lignite coal. Right now Lucky is being fueled by imported lignite because of two problems:

1. Lignite production is just enough to meet the fuel requirements for the mine-mouth plants in Thar.

2. The rail-link needed for transport has not been built yet.

As the Thar lignite production increases and rail transport is built, it will be possible to use domestic lignite to fuel these plants.

That rail line should be a priority, especially if it can be extended to Nagarparkar, which can be build up as a military strong point (due to the mountain range there, on the border with India.

The rail line should be standard gauge and not the same gauge as India so it can’t be taken in any war scenario.

Should relations one day improve with India, it would be the closest point with India’s dedicated western freight rail corridors, and could be a way to trans-ship cargo on a proposed Karachi-Gwadar-Iran Rail line to earn transit trade, and fund the line.

 

[RiazHaq]

In the fiscal year 2019-2020, four coal-fired CPEC power plants generated 19 percent of Pakistan’s electricity. The 4.62 GW of coal-fired generation funded by CPEC includes the 1,320 MW Huaneng Shandong Ruyi-Sahiwal Coal Power Plant, the 1,320 MW Port Qasim Coal Fired Power Plant, the 1,320 MW HubCo Coal Fired Power Plant, and the 660 MW Engro Thar Coal Power Plant, all of which began supplying electricity to the national grid between 2017 and 2019. Construction on the Thal Nova, Thar Energy (HubCo), and Shanghai Electric (SSRL Thar Coal Block I) power plants to increase 1,980 MW of capacity is currently underway.

Is there a solution to Pakistan’s energy puzzle? | The Express Tribune

Countries around Asia weigh up the costs and benefits of nuclear power over coal and LNG

tribune.com.pk

 

[Samlee]

Pakistan should start adding 10% biomass made from agricultural waste converted into pellets.This should also save money

 

[hydrabadi_arab]

Imported LNG/Coal power plants for a country without any export increase was huge mistake by nawaz ganja and company. Chinese worked along because their investment was secured by establishment backing.

July power generation figures shows coal and LNG plants are not working at full capacity, but we have to pay capacity charges anyway. This chart include thar coal plants so imported coal is even more down YOY.

Fuel cost