NEPRA's Recommendation for Gwadar Power Plant

Introduction:

The National Electric Power Regulatory Authority (NEPRA) has recently raised concerns over the proposed usage of imported coal in the 300-megawatt Gwadar coal-fired power plant. In a public hearing, NEPRA engaged in a heated discussion, questioning the decision to rely on imported coal instead of utilizing the plenty Thar coal available locally. The regulatory authority also expressed concerns about project delays, which have led to a significant increase in costs due to currency depreciation. This blog post explores NEPRA’s recommendations and the key factors contributing to the project delays and cost rise.

NEPRA’s Questioning of Imported Coal Usage:

NEPRA has raised important questions regarding the planned running of the Gwadar power plant on imported coal rather than utilizing the ample reserves of Thar coal available in the region. The regulatory authority has shown interest in understanding the rationale behind this decision and exploring alternatives to promote the use of local coal.

Project Delays and Responsibility:

NEPRA chairman highlighted the issue of project delays and sought accountability for the increased costs resulting from these delays. NEPRA raised the question of who is responsible for the prolonged execution of the coal-power project, which has caused a rise in expenses due to the depreciation of the Pakistani rupee against the US dollar.

Delays Caused by Government Policy:

During the hearing, it was revealed that the government’s policy of prohibiting imported coal-based power plants had contributed to the project’s delay. The project sponsor pointed out that the ban had hindered the operationalization of the Gwadar plant, causing further setbacks in project execution.

API4 Index and Indigenous Coal Consumption:

Discussions also revolved around the use of the API4 index for imported coal. An intervener suggested that the project sponsor should consider API3 coal, which would allow the plant to consume indigenous coal. However, the project sponsor argued that not importing API4 coal would necessitate higher volumes of lignite coal imports.

NEPRA’s Recommendation: Incorporating Local Coal Usage:

NEPRA emphasized the importance of not solely relying on imported coal for the Gwadar power plant. The regulatory authority suggested that the project sponsor should consider using around 20-30% of indigenous coal in the plant. Further highlights emphasized the necessity of laying a railway track for transporting Thar coal.

Conclusion:

In conclusion, NEPRA’s recent suggestions regarding the Gwadar power plant underscore the need for utilizing local coal resources and addressing project delays that have led to cost increases. By incorporating indigenous coal in the power plant’s operations, the project can benefit from cost efficiencies and promote energy security. NEPRA’s active involvement in this matter demonstrates its commitment to ensuring efficient and sustainable power generation in Pakistan. The project sponsor has been requested to provide due diligence on lignite coal usage and the cost of the railway track, leading to a formal decision. It remains crucial for all stakeholders to work together to address project challenges and facilitate the timely success of the Gwadar power plant for the benefit of the nation’s energy landscape.