The Pakistani government last month unveiled new renewable generation targets, seemingly putting an end to the sanctioning of fresh coal-fired projects. And with most of the country's incremental coal-fired capacity prioritising domestic production, growth in coal imports could be limited in the years ahead.
"We have decided that we will not have any more power based on coal," prime minister Imran Khan said during an address to the Climate Ambition Summit in December. "We have already scrapped two coal power projects that were supposed to produce 2,600MW of energy and replaced this with hydroelectricity."
The focus for Pakistan's coal industry will be coal-to-gas or coal-to-liquids production, and "by 2030, 60pc of all energy produced in Pakistan will be clean energy through renewables", Khan said.
This commitment to boosting renewables generation will require a substantial build-out of Pakistan's hydro, wind and solar capacity, which currently makes up 27.5pc of installed power capacity, and covered 35.3pc of January-October's 108TWh of power output, according to government data.
The country has numerous renewables projects scheduled to connect to the grid in the mid-2020s, but over the next three years, domestic coal, imported coal and nuclear are expected to make up the bulk of the incremental capacity, according to a plan from the country's state-owned national transmission and dispatch firm NTDC released in April (see chart).
These projects, many of which have received significant Chinese investment as part of the China-Pakistan Economic Corridor, will expand Pakistan's total coal and lignite-fired capacity by around 85pc to 8.5GW by 2023. But the bulk of the projects that have already been fully permitted will ultimately burn domestically produced lignite, rather than seaborne coal.
Installed capacity running on seaborne coal could rise by around 828GW by the end of 2023 to 5.1GW, equivalent to an additional 1.5mn t/yr of NAR 5,700 kcal/kg coal burnt in 40pc-efficient plants at a load factor of 56pc.
Pakistan operates four major coal-fired plants, with around 4GW running on imported coal and 660MW of using domestic lignite.
Coal/lignite project pipeline
Around 2.6GW of domestic lignite-fired capacity is under construction and set to be added to the grid in 2021-23, although Covid-19 has delayed work on some of these projects. Hubco, the developer of the 330MW ThalNova and Thar Energy projects, said in a recent investor presentation that construction delays mean the commercial start-up of these plants is now expected in 2022.
Construction work is also under way on the Asian Development Bank-backed 660GW super-critical Jamshoro 5 plant in Sindh, with start-up planned for 2023. The unit is intended to run 80pc on imported coal and 20pc on domestic lignite, although local government has been lobbying for it to be converted to run 100pc on domestic supply.
As these projects are already under construction, they appear highly unlikely to be affected by Khan's announcement. And there are several other planned projects at an advanced stage that are unlikely to be cancelled.
On the imported coal front, the 300GW China-backed Gwadar plant in Balochistan is planned to come on line in 2022, with local press expecting the imminent signing of a power purchase agreement. Further out, the expansion of the Jamshoro plant to include a second 660MW unit is at the planning stage and provisionally due on line in 2025.
In any event, 2021 is unlikely to see a sharp rise in structural coal imports from the power sector, with new capacity not scheduled to be added until 2022 at the earliest. There should be additions of capacity that will run on imported coal in 2022-25, but government policy means any further growth is unlikely.
Outside of the power sector, Pakistan's coal imports have been driven by strong cement demand, with November receipts hitting a 28-month high. Argus' Seaborne Coal Outlook forecasts that Pakistan's coal imports will rise to 20mn t in 2021 from 14mn t in 2020.
*Please note that the start-up dates for some imported coal projects differ between the two charts in this article. This is because the IGCEP 2047 dates have been left as they were in the April update; the dates in the "Pakistan's incremental imported coal-fired capacity" chart are likely to be more accurate.
By Alex Thackrah
