Power generation: Coal contribution falls further
Consumption declining since peaking in fiscal 2008.
KARACHI:
Thermal energy contributed 68 per cent towards electricity generation in fiscal 2010 while most of it was derived through oil, 56 per cent, and gas, 44 per cent.
Coal continues to be a minor contributor despite being a cheaper alternative to oil and abundant reserves present in the country, said BMA Capital analyst Muhammad Ali Taufiq.
Coal contributed only 0.2 per cent towards total thermal electricity generation in fiscal 2010, according to Pakistan Energy Yearbook 2010. This contribution has fallen over the last five years by 7 per cent on an average basis.
Consumption of coal, on the other hand, has experienced an inverted “U” pattern by touching its peak during fiscal 2008 at 10 million tons and then declining to 8.1mn tons during fiscal 2010.
Energy consumption increased by 3.8 per cent in fiscal 2010, according to the report.
Latest coal consumption figure suggests that the cement sector alone consumes 56 per cent of the commodity followed by brick kiln industry with 37 per cent while the power sector only consumes 1.5 per cent.
Therefore, any changes in prices of coal going forward are expected to impact cement and brick-kiln industry the most, said Taufiq in a research note.
Greater reliance of the power sector on oil and gas as a source of thermal energy would be most resilient to changes in coal prices. Coal prices have significantly increased over the last six months in the wake of floods in Australia. As a result, cement industry of Pakistan also had to increase prices of the end product as a measure to maintain margins. As coal shipments from Australia normalise, we expect coal prices to exhibit stability over the next 6 months.
Untapped resource
The total coal reserves in the country stand at around 186 billion tons, the report said.
Measured and indicated reserves stand at 3.5 billion tons and 16.7 billion tons respectively of which 97 per cent reserves lie in the province of Sindh in the area of Thar. Despite a sharp increase in mineable reserves of coal, production of coal in the country has fallen by 18 per cent on a yearly basis in the last three years.
Published in The Express Tribune, April 7th, 2011.
Thermal energy contributed 68 per cent towards electricity generation in fiscal 2010 while most of it was derived through oil, 56 per cent, and gas, 44 per cent.
Coal continues to be a minor contributor despite being a cheaper alternative to oil and abundant reserves present in the country, said BMA Capital analyst Muhammad Ali Taufiq.
Coal contributed only 0.2 per cent towards total thermal electricity generation in fiscal 2010, according to Pakistan Energy Yearbook 2010. This contribution has fallen over the last five years by 7 per cent on an average basis.
Consumption of coal, on the other hand, has experienced an inverted “U” pattern by touching its peak during fiscal 2008 at 10 million tons and then declining to 8.1mn tons during fiscal 2010.
Energy consumption increased by 3.8 per cent in fiscal 2010, according to the report.
Latest coal consumption figure suggests that the cement sector alone consumes 56 per cent of the commodity followed by brick kiln industry with 37 per cent while the power sector only consumes 1.5 per cent.
Therefore, any changes in prices of coal going forward are expected to impact cement and brick-kiln industry the most, said Taufiq in a research note.
Greater reliance of the power sector on oil and gas as a source of thermal energy would be most resilient to changes in coal prices. Coal prices have significantly increased over the last six months in the wake of floods in Australia. As a result, cement industry of Pakistan also had to increase prices of the end product as a measure to maintain margins. As coal shipments from Australia normalise, we expect coal prices to exhibit stability over the next 6 months.
Untapped resource
The total coal reserves in the country stand at around 186 billion tons, the report said.
Measured and indicated reserves stand at 3.5 billion tons and 16.7 billion tons respectively of which 97 per cent reserves lie in the province of Sindh in the area of Thar. Despite a sharp increase in mineable reserves of coal, production of coal in the country has fallen by 18 per cent on a yearly basis in the last three years.
Published in The Express Tribune, April 7th, 2011.