Gwadar project: NEPRA sets tariff for 300MW coal-power plant

Published: December 21, 2018
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Representational image of a coal plant. PHOTO: REUTERS

Representational image of a coal plant. PHOTO: REUTERS

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has allowed a Chinese company to collect a tariff of Rs6.96 per unit for its 300-megawatt coal-fired power plant in Gwadar, setting aside concerns of Balochistan’s energy department.

CIHC Pak Power Company Limited (CPPCL) is setting up the coal-fired power plant.

According to the petitioner, keeping in view the strategic importance of Gwadar to the China-Pakistan Economic Corridor (CPEC) and the anticipated rapid growth, the CPEC Joint Cooperation Committee (JCC) had decided in its sixth meeting, held in Beijing in December 2016, that a 300MW imported coal-fired power project must be developed on a fast track in Gwadar.

The JCC nominated China Communications Construction Company (CCCC), a subsidiary of China Communications Construction Group (CCCG), for undertaking the project.

According to the petitioner, in the seventh JCC meeting held on November 21, 2017, it was decided that the project would be undertaken by CCCC Industrial Investment Holding Company Limited (CIHC). The sponsors incorporated CIHC Pak Power Company Limited (CPPCL) as the special purpose company to develop the project.

The project is proposed to have two units of 150MW consisting of two super high-pressure boilers, two steam turbines and two generators. The boilers will be sub-critical and will be ignited with the help of pulverised coal imported from South Africa or other sources through Gwadar Port. From the port, the coal will be sent via trucks to coal yards inside the complex. The project will draw water from the Arabian Sea for cooling and other industrial and domestic uses as the site has no other water resources.

The project sponsors had estimated the project cost at $542.36 million and levelised tariff at 8.91 cents per unit.

The Energy Department, Government of Balochistan expressed reservations about the project, saying Pakistan was a signatory of the Paris Agreement on Climate Change, which called for reducing carbon emissions in its member states. The establishment of the 300MW coal-fired power plant, it said, seemed to be deviation from that commitment.

The Balochistan Energy Department pointed out that Gwadar was a new port city, which required sustainable modern clean energy resources to meet its energy needs. Some national/international companies had offered a better option as compared to coal-fired power plants like hybrid solutions of liquefied natural gas (LNG), solar and wind technologies, it said.

Unfortunately, it regretted, the proposed LNG terminal in Gwadar was scrapped by the federal government despite spending a heavy amount on its feasibility study.

It further said project sponsors had not considered the super-critical technology, instead they had planned to deploy sub-critical technology whose adoption in new projects across the country had been suspended considering the associated environmental hazards. Unlike other independent power producers (IPPs) including CPEC projects such as Hubco which had agreed to allocate 3% shareholding to the government of Balochistan, “CIHC has not offered any such provision,” it said.

The Balochistan Environment Protection Agency (BEPA) has also communicated various types of concerns to the project company and due to no response from the sponsors, no-objection certificate has still not been granted by the authority concerned.

Published in The Express Tribune, December 21st, 2018.

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