View attachment 548246
This is a slide from a report given to the EU from Dr. Safdar Sohail Economic Minister GOP in 2015. Its shows economy of scale...if we increase Thar generation to 4000 MW, the price will decrease. Thar coal is the cheapest option for Pakistan over 10 year period, then Hydro power, then imported coal, then LNG, then wind/solar.
Many thanks for the info. However, this is only the fuel cost, one cannot ignore the cost of capital. Coal power plants are generally more expensive to build than gas-burning plants. A rule of thumb for gas fed power generation is that about $1-million per MW capital outlay is required. This would make a 660MW plant needing about $660-million to build.
Since power plant based upon imported fuel would not require investment in mining, therefore, mining capital should also be included in the cost of the project.
According to the report in the Tribune (quoted below), the total project cost is $2-billion including the mining. This translates into about $3-million per MW for a 660MW plant. When the interest on the capital is prorated to the power output, the total cost per KWhr would exceed imported fuel-based electricity. Nevertheless, substantial savings in Forex makes it more than worthwhile.
While one should not get carried away; I wholeheartedly support Thar coal based power generation.
Only part of the article
Quote
Thar coal may become uncompetitive if high cost trends continue
Financial cost plays an important role in project and product costs. About $1 billion of investment in coalmine is involved and an equal amount for the power plant, making it $2 billion.
Interest rate of Libor plus 4% has been allowed by the National Electric Power Regulatory Authority (Nepra) under project recourse guarantees and not sovereign guarantees. Under the China-Pakistan Economic Corridor (CPEC), sovereign loans for the transport sector have been given at 2%.
There is no reason Thar coalmine loan of $700 million should not be at the same rate. Libor at the time of loaning was 0.5% which has now gone beyond 2% and may cross 3% in the near future. This will greatly upset the tariff which will become unaffordable and unsustainable.
Unquote
For full article:
https://tribune.com.pk/story/1753023/2-thar-coal-may-become-uncompetitive-high-cost-trends-continue/