PUNJAB COAL MINING COMPANY FORMED TO OVERCOME POWER CRISIS

KANWAL SALEEM
May 25 - 31, 2009

In another initiative, Pakistan Muslim League-Nawaz led Punjab government has formed Punjab Coal Mining Company, to accomplish the goal of Chief Minister Punjab Muhammad Shahbaz Sharif to set up coal-based power generation plants in the province by utilizing indigenous coal reserves to overcome the current crisis of power shortage.

Punjab Coal Mining Company (PCMC), a private public partnership venture in Punjab, has been formed with the aim to ensure supply of coal to power generation plants on sustainable basis. The company is headed by leading industrialist of the country, Mian Muhammad Mansha. The Board of Directors of the company consists of Nadeem Babar of Orient Power Company, Alman Aslam, Zaheer Khan of Noon Group and provincial secretaries of Mines and Minerals, Finance and Commerce & Investment departments.

In the first meeting of the Punjab Coal Mining Company, held with Mian Muhammad Mansha in the chair, it was decided to run the company on modern corporate basis with the aim to modernize coal mining sector and to increase production of coal to meet the demand of potential coal based power generation plants in the province.

The chairman assured the board of directors that the company will be made profitable and it would be a role model of private public partnership ventures in Punjab.

Moreover, on the initiative of Chief Minister Punjab, Muhammad Shahbaz Sharif a team of Trade Development Agency USA has reached Lahore to assist Mines and Minerals Department in techno economic study of coal deposits in Punjab.

The visiting USTDA team held a meeting with the officials of Mines and Minerals Department Punjab. American delegation visit was a major step in materializing the plan of setting up of indigenous coal based power generation plants in Punjab.

It may be mentioned that Punjab plans to set up four 50 MW coal-power plants one each at Lahore, Faisalabad, Multan and Sialkot industrial estates and one 100-300 MW coal-based power plant at mine mouth in Kalar Kahar district Chakwal or Pidhrar of Khushab districts. Punjab has anticipated coal reserves of upto 235 million MT. These reserves are located in the Salt Range covering Chakwal, Jhelum, Khushab and Mianwali districts. Potential foreign and domestic investors in coal-based power generation plant require third party evaluation of coal deposits in Punjab in order to make it a bankable document. Therefore, techno economic study of coal deposits in Punjab is essential to attract foreign investment in power generation.

Experts believe that installation cost of wind power for each megawatt of electricity is $2.2 million against $1.2 million of Independent Power Producers (IPPs) and $.67 million of public sector. The availability factor of wind power is 20 percent of its generation capacity against 80 percent of thermal generation internationally.

"The air changes its speed eight times a minute and this constant change in wind intensity lowers the availability factor down by 1/4th, internationally," said the power experts, adding: "Out of a generation capacity of 10,000 MW, the availability factor of thermal would be 8000 MW against 1500 2000 MW of windmill."

Therefore, reliance on wind power is shaky and it simply supplements a strong base load everywhere in the world, experts say. However, they still advocated for exploring all possible facets of power generation despite high installation cost and low availability factor of wind energy.

It may be mentioned that Pakistan is facing a 4000-megawatt energy shortage causing the closure of many industrial companies, hampering the agricultural sector, and leading to frequent power outages throughout the country.

It may be noted that the wind power in Pakistan has the potential to generate 31,500 megawatts. The coastal areas, like Balochistan, Sindh and the Pothohar region are the most viable places to build wind turbines. The Pakistani government has already set a goal of generating 5,000 megawatts of wind power by 2019 and created an Alternative Energy Fund to help develop renewable-energy technology.

It is worth mentioning here that the government in 2003 had established the Alternate Energy Development Board (AEDB) to promote renewable energy projects. AEDB has reportedly issued a number of land leases/letters of intent to local and foreign private investors. However, Except one wind power plant sponsored by Zorlu Enerji Group of Turkey, the rest are presumably still in the process of completing the financing package. The Prime Minister has inaugurated phase one of the Zorlu Wind Energy projects, comprising wind power machines capable of generating 6MW at Jhimpir on April 19, 2009. In all, the Zorlu project is of 50MW capacity and more wind power machines are expected to be added in due course.