Coal resources for cheap power generation

Lahore: Caretaker federal minister for Water and Power, Tariq Hameed, has underlined the need for broadening energy mix and capitalising coal resources for cheap power generation.

Addressing the signing ceremony of Power Purchase Agreement for the 350MW coal-fired Lakhra Power Plant between Associated Lakhra Energy Limited (ALEL) and National Transmission and Dispatch Company Limited here on Saturday he said this is for the first time that we are leasing out a power plant to the private sector.

He hoped the project will be completed and brought to the highest international standards within 2008. Managing Director PEPCO Munawar Ahmad said while 74 percent of China's, 55 percent of India's and 22 percent of America's energy mix were coal-based, in Pakistan coal-based power generation represented less than 0.5 percent of the energy mix.

'We went terribly wrong in planning and implementing coal-based power projects, and coal-fired project are much needed by Pakistan,' he said. 'Pakistan has the second largest reserves of coal in the world that are 'enough to last us 500 years.'

The Water and Power Development Authority (Wapda) set up the Lakhra Power Plant in 1996 and is Pakistan's only coal-fired Power Plant. The plant is currently producing about 30MW of power from Lakhra coal. The ALEL revived the project through a competitive bidding process and has undertaken to rehabilitate the plant and ramp up production to 102MW in nine months.

The ALEL has leased the plant for 20 years. ALEL Chairman Iqbal Ahmed said coal-based power generation was essential for Pakistan to ensure quick and affordable electricity.

'The successful rehabilitation of the Lakhra Power Plant will encourage local and foreign investors to look to coal for power generations,' he said. ALEL Project Director Razi Ahmed said his company would spend US $25 million on rehabilitation of current Lakhra Plant, adding another 150MW of coal-fired generation capacity in Lakhra by 2009.