The government thinks that coal-based power generation is the best source of energy in the wake of fast depleting gas reserves.
The National Electric Power Regulatory Authority (NEPRA) said efforts must be made to change the energy mix towards cheaper fuels.
“With the depleting natural gas reserves in the country and relatively longer lead time for the construction of hydroelectric power projects, coal power plants are considered the best option in the short- and medium-term planning,” reads a Nepra’s decision pertaining to the generation licence application of Siddiqsons Energy.
NEPRA awarded a generation licence to Siddiqsons Energy Limited for 350-megawatt coal-based thermal facility at Port Qasim with a cost of approximately $600 million.
The project is expected to be commissioned by December 31, 2018, while the company is required to provide a certificate on bi-annual basis, confirming that the operation of its generation facility is in line with the environment standards as prescribed by the relevant competent authorities.
NEPRA said electricity is a fundamental element for the economic growth of any country. The electricity consumption per capita has a strong correlation to the social development and economic indices.
“Increasing electricity consumption per capita can directly stimulate faster economic growth and indirectly achieve enhanced social development,” the authority said.
“In short, the economic growth of any country is directly linked with the availability of safe, secure, reliable and cheaper supply of electricity.”
The authority said for sustainable development, all types of electric power generation resources, including coal (imported/indigenous), hydel, wind, solar and others must be tapped and developed on priority basis both in public and private sectors.
The existing energy mix of the country is heavily skewed towards the costlier thermal generation facilities operating on furnace oil.
“The import of expensive furnace oil results in depletion of the precious foreign exchange reserves of the country, affecting the macro and microeconomic stability,” read the ruling.
“An increase in the consumer end tariff results in higher inflation but it also affects the competitiveness of the local industry with its foreign peers.”
It further said it is vital that indigenous and imported coal projects are given priority for power generation and their development is encouraged to reduce the demand-supply gap and to achieve sustainable development.
