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Government of Pakistan
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Ministry of Investment & Board of Investment
ENERGY
Government of Pakistan
Ministry of Investment & Board of Investment
CONTENTS
CONTENTS
The Pakistan Water and Power Development Authority (WAPDA) launched a 25 year
comprehensive integrated program “Water Resources and Hydro Power Development Vision
2025 program” in 2001. This program aims at the development of water storage projects as
well as harnessing the Hydro-Power potential in the Country. The Bunji Hydro Power Project is
purely a Hydro-Power Project and is included in this program.
Earlier, the GoP had engaged Montreal Engineering Company to prepare an inventory and
ranking study of the potential storage and Hydro-Power Generation sites along the upper
reaches of Indus river, Jehlum above Mangla and the Swat and Chitral basins. According to
the study submitted by Montreal Engineering in 1984, Bunji Hydro-Power Project was ranked
3rd in economic merit after Basha and Dasu on Indus river.
INTRODUCTION
According to this pre-feasibility study, the dam is to be located near Bunji Village about 83 Km
from Gilgit. The Power house will be an underground structure. The coordinates of the dam
and the Power house are:
An auxiliary power house has also been proposed just downstream of the proposed dam
which will generate 58MW/h.
Engineering provisions have been kept in the design to take care of the various factors relating
to the fault zone passing near by. Drilling at the proposed dam site shows that solid hard rocks
of granitic gneiss, amphibolites and diorite type exist in abundance. Good quality sand and
gravel for aggregate is also available in huge quantity near the power house area. According
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to the pre-feasibility study, the life of Bunji Dam will be 110 years.
TRANSMISSION LINE
The transmission line for the Bunji Project has been proposed through Kunhar Valley. The
consultants have evaluated all three 500KVAC, 765KVAC and +(-)500KV HVDC systems. The
consultants have rejected the 500 KVAC on technical grounds. The other two options are
technically and economically viable.
COST ESTIMATES
The civil and E&M cost has been estimated at US$ 2096.5 million. Transmission line cost has
been worked out as US$ 840 million. Interest during construction (IDC) US$ 889.936 million.
Therefore, the total project cost has been estimated at US$ 3826.387 million. These estimates
are based on present international market prices with an escalation factor of 10% and
interest rate of 10%.
ECONOMIC ANALYSIS
Economic analysis of the project included a selection between options and project sizing
including dam height optimization. Project cost, without IDC but with transmission up to load
centers at Lahore and Faisalabad, has been estimated to be US$ 3826 million.
Economic analysis of the proposed Bunji Hydro Power Project has been undertaken on the
basis of benefits estimated using long run marginal cost (LRMC) and thermal equivalent basis
and on consumer surplus basis. The analysis based on all three methods is as follows:
4
NEXT STEP(S)
A detailed techno economic study needs to be commissioned earliest to validate the findings
of the pre-feasibility study prepared by Bunji Hydro Power Consultants.
5
6
COAL MINING AND METHANE
GASIFICATION FROM THAR COAL
INTRODUCTION
Methane and Coal are formed together during coalification, a process in which plant biomass
is converted by biological and geological forces into Coal. Methane is stored in coal seams
and the surrounding strata and released during coal mining. Coal Mine Methane (CMM) has
been used on a local basis for decades in many parts of the world, but the commercial scale
development of this resource in the USA and elsewhere during the 1990s has contributed to
greater interest in development of this resource in China, Russia, Europe and India. The
recovery and utilization of methane from both active and abandoned coal mines had
increased in recent years. Pakistan with large reserves of coal can also exploit this resource to
economic benefit in view of the increase in natural gas prices.
Coal Mine Methane (CMM) is like natural gas and as such it is regarded environment friendly.
The Thar Coalfield (TC) is located in the south-eastern part of Sindh. The TC, with a resource
potential of 182 billion tons of coal covers an area of 9000 sq km in the Tharparkar desert.
Due to high cost of imported energy, government has decided to enhance the share of coal in
the over all energy mix from 5 percent to 19 percent by 2030. Energy Security Action Plan
(ESAP) has set a target of generating 20,000 MW power from coal by 2030 and 50 percent
by 2050. The total national coal production from operational coal mines increased by 6.5
percent from 4.6 millions ton in 2005-06 to 4.9 million ton in 2006-07. Over 80 percent of
coal was consumed by the brick kiln industry thus reducing the supply available for power
generation. Approximately 80 percent of cement industry has also switched over to
indigenous coal from furnace oil that has saved considerable foreign exchange being spent on
the import of furnace oil. The conversion of cement industry from furnace oil to coal has
generated a demand for 2.5 - 3.0 million tons coal per annum.
To ascertain commercial viability of mining coal from Thar, German consultant M/s Rheinbraun
Engineering has completed a mining feasibility on a specific block in Thar coalfield. The same
block has been assigned to an international firm for commissioning of integrated coal mining
and 1000 MW power generation project. Moreover, a local group has been assigned a block
in Thar coalfield for conducting feasibility study for integrated coal mining and commissioning
two 250 MW coal fired power-generating plants. Government has also decided to establish
a coal mining company for harnessing Thar coal resource, including gasification.
It is, therefore, desireable that the fast track development is planned by seeking FDI in setting
up an integrated coal mining and gasification project at THAR without wasting further time.
Already, half-hearted and lethargic efforts in development of this valuable resource have put
Pakistan far behind other coal producing countries of the world. There are countries in the
world whose economies have thrived primarily on coal and its products such as USA, UK,
Germany, etc. There is no reason why Pakistan can also not utilize coal as important an energy
source as nuclear or hydle energy.
7
PROPOSED PROJECT
The recovered gas can be used as a clean energy source or chemical feed stock. In the
conventional way of utilization, the ventilation gas is often used as a part of the boiler feed air
containing methane at a very low concentration. On the other hand, the methane rich, say 50 -
90% methane by volume, can be used for gas turbine, internal combustion engine or as co-
firing fuel to the boilers and fuel for cogeneration system is rather popular case. Measures will
have to be taken to abate / mitigate the GHG emissions by undertaking EIA.
Considering the great potential of Thar Coal, it is proposed to be an integrated plant with
multifaceted activities which would necessarily include infrastructure, Civic amenities and
support systems. The total investment of the project is estimated to be US $ 100 million having
an IRR of 18%
8
800 MW (2 X 400 MW)
POWER PLANT BASED ON THAR COAL
INTRODUCTION
The resource potential of coal in the country is estimated at 226.5 billion tones in the sub-
bituminous-lignite range. This large potential for coal in the country remains inadequately
tapped because of a poor institutional framework for coal development and lack of
experience in large scale mechanized mining operations and mining management.
Private firms, with little exposure to modern technology and modern management techniques,
have hitherto carried out the bulk of the coal mining operations. These private firms together
with the Coal Mining Authorities of the four provinces have developed a number of coal mines
in Baluchistan, Sindh and Punjab. The average annual production from these mines has been
about 3.5 million tones.
Recently, the Thar Coal Development Authority, Government of Sindh, has been actively
involved in exploiting the 175.5 billion tones of lignite deposits spread over 9000 square
kilometers of the Tharparkar Desert in Sindh Province. The investigations carried out east of
Islamkot and in the Chachro region of Thar indicate that the deposits are of mainly Lignite 'B'
category. Although these lignite deposits have a low heating value (about 6300 BTU/lb), they
are low in ash and sulfur and can therefore be used for electric power generation. It is
understood that presently both a Chinese firm and an American firm have been assigned by
the Thar Coal Development Authority to prepare Feasibility Studies for the development of
coal mines in Thar with a view to constructing a 400 MW Power Generation Plant each at the
mouth of one of these mines. If the results of the Feasibility Studies come out positive, the total
installed generating capacity based on Thar coal could increase to 1000 MW from these two
plants.
NEED ASSESSMENT
The phenomenal growth in the demand for electricity in the 1960s triggered by the signing of
the Indus Basin Treaty between India and Pakistan raised the installed capacity of power
plants in Pakistan from a meager 422 MW in 1960 to 1323 MW in 1970, a growth rate of
around 15% per annum. Thereafter, growth remained steady at around 8% to 8.5% per
annum. More recently, the electricity demand has tapered down to a steady growth rate of
around 6% per annum.
In 2004, the total installed power generation capacity in Pakistan stood at 19,552 MW (see
table below). This includes the capacity of the power stations under the WAPDA, KESC, the
Independent Power Producers (IPPs) and the Pakistan Atomic Energy Commission (PAEC).
About 600 MW generating capacity of captive power plants of large industrial units in the
country are not included in this figure.
Two major decisions taken by the Government of Pakistan at the end of the last millennium are
shaping the power generation profile of Pakistan. The first was the induction of the private
sector in the field of power generation. As a result already about 33% of power plants in the
country are under the ownership of private power producers and with the privatization drive
9
now being launched by the Government a number of power plants now in the public sector,
would also be sold to private parties.
The second major decision taken by the government is to rely heavily on domestic hydel
resources and fuels for power generation. This means that the majority of the thermal power
plants now operating in the country would be using domestically produced natural gas instead
of imported oil. Therefore, most power plants set up in the country in the near future would
either be hydel or they will use domestic natural gas, coal or nuclear fuel.
Fuel Used in Power Plants - Thermal Power Plants based on natural gas or oil account for 64.7%
of the total installed power generation capacity of 19552 MW; hydroelectric power plants
contribute 33.0% while the two nuclear power plants contribute the remaining 2.3%.
There is presently only one power plant in the country, which uses coal as fuel. This is the 150 MW
Lakhra Power Plant in Lower Sindh, which employs Fluidized Bed technology. As a result of the
present policy of the Government of encouraging the use of locally available fuels and
energy resources for production of electricity, oil based Thermal Power Plants are switching
over to use of natural gas as fuel. Also for all thermal power plants to be set up in the country in
the near future, the preferred fuel is indigenous natural gas and indigenous coal.
Demand & Supply of Power - Because of scarcity of financial resources, the power generating
capacity in the country in the three decades before the mid-1990s was not able to
adequately cater to the growing demand for electricity. As a result there was slow expansion
of electricity distribution networks, a large number of villages remained un-electrified and
even a number of prospective urban electricity consumers had to go through a long waiting
period before an electricity connection was provided to them. Table below indicates the
increase in the total installed capacity in Pakistan in the period 1991-2004, but this capacity
represents the suppressed electricity demand in the country.
10
Power Plant Based on Coal - At present there is only one coal-based power plant in the country.
This Plant is located at Lakhra in Sindh and employs the Fluidized Bed technology to generate
150 MW electric power through three units of 50 MW each. Plans are now underway for
another Coal Mining and Thermal Power Project of 450 MW capacity, based on coal form
Lakhra Region. However, it would be feasible that a bigger unit i.e. 800 MW (2 x 400 MW)
may be set up using Thar Coal.
PROPOSED PROJECT
The objective of the project is to set up 2x400 MW (800 MW) power plants based on Thar
coal. The scope of the Project is envisaged as under:
?
Arrangement of infrastructure at Thar (it is assumed that separate project is
developed for the development of coal mines at Thar).
?
Arrangement of investment from foreign parties who would bring in equipment,
machinery and technology for this coal based thermal plant.
?
Arrangement for training of manpower on coal related technologies.
?
Interact with WAPDA and KESC for power purchase agreements.
?
Handling all environmental issues, especially emission control guidelines.
The Thermal Plant will be located near the coal mines site at a suitable site at Thar.
TECHNICAL EVALUATION
The power plant project would include site specific items e.g. site preparation, foundations,
circulating water system, ash disposal facilities, access road and make up water line and those
which are non-site specific e.g. boiler, turbines, instruments and controls etc.
Special measures will have to be taken for pollution control, especially emission control and
ash management.
Residential colony for engineers, staff and workers will have to be developed alongwith all
supporting facilities such as clinics, hospital, schools, colleges, etc. All repair and maintenance
11
workshops and facilities will need to be developed because of the plant location.
The investment for the Thermal Plant is estimated to be US $ 1.2 billion with an IRR of 18% to
20%.
12
REFUSED DERIVED FUEL (RDF) PLANTS
IN MAJOR CITIES OF PAKISTAN
INTRODUCTION
Taking into account various energy growth factors in Pakistan, Medium Term Development
Framework (MTDF) has estimated the power demand, which is assumed to grow at ACGR of
7.9% from 15,500 MW in 2005 to 21,500 MW in 2010. MTDF has also worked out the
projections of power generation plan for the MTDF and beyond as illustrated in the table
below. The table also gives the RE projection upto 2030:
The above table targets a steady growth in RE power generation in Pakistan with cumulative
RE as 9700 MW in 2030. Alternative Energy Development Board (AEDB) would facilitate AE
projects ensuring at least 5% of total national power generation capacity to be met through
these resources including RDF technology.
PROPOSED PROJECT
The project which is based on RDF technology is also known WASTE TO ENERGY PLANT
(WTEP). The project would include 10 plants in selected major cities of Pakistan e.g. Karachi,
Hyderabad, Sukkur, Multan, Lahore, Faisalabad, Gujrat, Sialkot, Peshawar and Quetta. The
plants will use the Municipal Solid Waste (MSW) of these cities and suitable technologies will
be adopted as per the quality of the municipal solid waste, if need be.
The proposed RDF plants anywhere would, in broad terms, use the technology in which
incombustible materials such as dirt, glass, metals, and very wet organics are removed to
increase fuel value of MSW and make RDF more consistent in size than raw MSW. The normal
sequence of RDF preparation is shredding, air classifying / screening, magnetic separation,
and sometimes eddy current separation for non-fenous recovery compacting and bracketing.
13
As said earlier, variation of process may be made as per quality of MSW.
The project will be set up in technical collaboration with reputable international firms for
obtaining technology and plant and machinery.
It is estimated that the investment in each Project will be US$ 10 to 15 million depending on the
size of the plant with IRR of 25% to 30%.
14
COAL MINING AND METHANE
GASIFICATION FROM THAR COAL
INTRODUCTION
Methane and Coal are formed together during coalification, a process in which plant biomass
is converted by biological and geological forces into Coal. Methane is stored in coal seams
and the surrounding strata and released during coal mining. Coal Mine Methane (CMM) has
been used on a local basis for decades in many parts of the world, but the commercial scale
development of this resource in the USA and elsewhere during the 1990s has contributed to
greater interest in development of this resource in China, Russia, Europe and India. The
recovery and utilization of methane from both active and abandoned coal mines had
increased in recent years. Pakistan with large reserves of coal can also exploit this resource to
economic benefit in view of the increase in natural gas prices.
Coal Mine Methane (CMM) is like natural gas and as such it is regarded environment friendly.
The Thar Coalfield (TC) is located in the south-eastern part of Sindh. The TC, with a resource
potential of 182 billion tons of coal covers an area of 9000 sq km in the Tharparkar desert.
Due to high cost of imported energy, government has decided to enhance the share of coal in
the over all energy mix from 5 percent to 19 percent by 2030. Energy Security Action Plan
(ESAP) has set a target of generating 20,000 MW power from coal by 2030 and 50 percent
by 2050. The total national coal production from operational coalmines increased by 6.5
percent from 4.6 millions ton in 2005-06 to 4.9 million ton in 2006-07. Over 80 percent of
coal was consumed by the brick kiln industry thus reducing the supply available for power
generation. Approximately 80 percent of cement industry has also switched over to
indigenous coal from furnace oil that has saved considerable foreign exchange being spent on
the import of furnace oil. The conversion of cement industry from furnace oil to coal has
generated a demand for 2.5 - 3.0 million tons coal per annum.
To ascertain commercial viability of mining coal from Thar, German consultant M/s Rheinbraun
Engineering has completed a mining feasibility on a specific block in Thar coalfield. The same
block has been assigned to an international firm for commissioning of integrated coal mining
and 1000 MW power generation project. Moreover, a local group has been assigned a block
in Thar coalfield for conducting feasibility study for integrated coal mining and commissioning
two 250 MW coal fired power-generating plants. Government has also decided to establish
a coal mining company for harnessing Thar coal resource, including gasification.
It is, therefore, desireable that the fast track development is planned by seeking FDI in setting
up an integrated coal mining and gasification project at THAR without wasting further time.
There are countries in the world whose economies have thrived primarily on coal and its
products such as USA, UK, Germany, etc. There is no reasos why Pakistan can also not utilise
coal as important an energy source as nuclear or hydle energy.
15
PROPOSED PROJECT
The recovered gas can be used as a clean energy source or chemical feed stock. In the
conventional way of utilization, the ventilation gas is often used as a part of the boiler feed air
containing methane at a very low concentration. On the other hand, the methane rich, say 50 -
90% methane by volume, can be used for gas turbine, internal combustion engine or as co-
firing fuel to the boilers and fuel for cogeneration system is rather popular case. Measures will
have to be taken to abate / mitigate the GHG emissions by undertaking EIA.
Considering the great potential of Thar Coal, it is proposed to be an integrated plant with
multifaceted activities which would necessarily include infrastructure, Civic amenities and
support systems. The total investment of the project is estimated to be US $ 100 million having
an IRR of 18%.
16
Government of Pakistan
Ministry of Investment & Board of Investment
Head Office
Ministry of Investment & Board of Investment
Attaturk Avenue, G-5/1, Islamabad.
Tel: (92-51) 9204339, 9207031, Fax: (92-51) 9207030,9218325
Email:mail@pakboi.gov.pk