Last month, less than a week after Prime Minister Nawaz Sharif inaugurated the first unit of the Chinese-funded Sahiwal power plant with much pomp and show, China operated the world’s largest floating solar power plant, which has been built over a flooded former coal-mining town. That the world’s biggest polluter is now on the frontline of a photovoltaic revolution is indeed good news.
But many see a contradiction in it. While China is decommissioning its country’s coal power plants in a bid to promote green energy transition, Chinese companies are investing heavily in coal power as part of the Belt and Road Initiative (BRI), thereby undermining global action to reduce carbon emissions.
To environmentalist Dr Hassan Abbas, it makes “perfect economic sense” for the Chinese to want to “salvage” whatever they can from the dying coal power technology. “The earlier they find a buyer for it, the better for them,” he says.
Climate finance specialist, Kashmala Kakakhel, explains that China may have committed to reducing its emissions per unit of GDP by 60-65 per cent from 2005 levels, by 2030, she points out it “never said it would refrain from transferring ‘dirty’ technologies to other countries”.
And, adds energy sector expert who is also the managing director of environmental consultancy firm Hagler Bailly Pakistan, Vaqar Zakaria, “China is not forcing it on anyone!”
In fact, he says, Pakistan may perhaps even be relieved that Chinese came around to finance the country’s coal development at just the right time after both Asian Development Bank and World Bank pulled out. Further, the prices quoted by Chinese are much lower than those by European and US suppliers.
Zakaria elaborates that China has the capacity available to supply as it phases out coal from its country.
About Sahiwal coal fired plant, he is of the opinion, “It should never have been there, and a number of plants on imported coal should also have been avoided”, since these do not help balance of payments. The three big power plants being set up at Port Qasim, Sahiwal and Hub are all based on imported coal.
But, Pakistan is not the only one to be wooed by China to set up coal power plants.
Dr Fahad Saeed, Pakistani scientific advisor at the Berlin-based climate science and policy institute, Climate Analytics, explains the rush of Chinese investment in Pakistan under the CPEC. “It is a continuation of the Chinese government’s ‘going out’ strategy in which Chinese enterprises have been encouraged to acquire assets and expand businesses overseas, leading to increased investments in overseas coal projects.”
According to the Global Environment Institute (GEI) review of China’s involvement in coal power projects, 65 countries are now participating in BRI. Saeed says, “Since 2001, China was involved in 240 coal power projects in several countries with a total generation capacity of 251 gigawatts.” The top five countries for Chinese involvement were India, Indonesia, Mongolia, Vietnam and Turkey.
By 2010, China began to look elsewhere as these countries began to put coal on the back burner due to change in policies barring foreign investment in domestic coal power projects. However, after 2013, BRI began to look up for coal investors but in 2016, after the Paris Agreement, there began an interest in renewables in earnest, said Saeed and India, Indonesia and Mongolia have all adopted policies that will ensure a much greater increase of renewables in their energy mixes.
If others, especially India is also investing in coal, why is Pakistan accepting an outdated and dirty technology junked by others?
“Pakistan, with a wretched economy due to terrorism, was desperately looking for Foreign Direct Investment, and was obliged by the Chinese plans to invest especially in power/energy sector,” says Saeed.
Or, “either we are stupid or we are corrupt, and most likely both!” thinks Dr Hassan Abbas, who has worked at some of the world’s largest open pit and underground coal mines in Australia and the US.
China is also leading the world in development and export of solar and other renewables. But experts fail to understand why Pakistan did not capitalise on the renewable potential in the CPEC deal.
Among the several possibilities, Saeed points a few. “Either Pakistan was ill-prepared to foresee dropping prices of renewables or it was so desperate for foreign investment, in addition to getting rid of its power crisis that it was not able to negotiate from the position of weakness and took what came its way.”
Globally there is a consensus that the world has to stay away from coal. It is neither a good option for energy nor jobs. Coal power plants are being shut both in Europe and the US. According to Global Coal Plant Tracker since the last two years, developing countries have retired the equivalent of 128 coal-fired generators. There has been a significant slowing down of coal plant construction in both China and India with 68 GW of construction now frozen at over 100 project sites. The Chinese government has put restrictions on further expansion in the coal industry and India was forced to do it because banks and other financiers were reluctant to fund such projects.
Britain, the first country to use coal for electricity when Thomas Edison opened the Holborn Viaduct power station in London in 1882, made history this April, when it supplied its consumers with 24-hour electricity free from coal. Britain plans to close down its coal power plants by 2025 in a bid to moving towards a low carbon economy.
Pakistan continues to pursue dirty energy. On the one hand is the day and night digging to remove the top soil and lay its hand over more than 175 billion tonnes of lignite coal found in 9,000 sq km on Pakistan side of Thar desert; and on the other, we see a beaming prime minister saying a prayer before inaugurating the first of the two Sahiwal coal power plant last month that has already started adding 660 mega watts of electricity to the national grid. The second unit of this plant will also be ready to spew some more carbon in the next two months.
With a total capacity of 1,320 megawatt, the project is touted as “clean” because of the supercritical coal fired power plant being set up there. But experts say there’s no such thing as clean coal. “The term is nothing more than a marketing gig or a hogwash to make coal not look as bad as it is,” says Dr Abbas.
It is also the first mega project under the China Pakistan Economic Corridor (CPEC), a flagship project of One Belt-One Road Initiative (OBOR). Once both the units get running, it will be generating over 90 billion kilowatts hour per year of power and meet the energy needs of nearly 10 million people. It was connected to the national grid on May 12.
The one in Gwadar and in Thar Block 1 will be inaugurated this year while construction of power plants at Hub, Thar Block II and Port Qasim are underway. The one to be built at Rahim Yar Khan is still at a pre-feasibility stage.
Hua Chunying from the Chinese foreign ministry said 11 out of the 17 priority energy projects jointly planned by China and Pakistan under the CPEC are under construction, and will be completed by 2019. They will produce 11,590 MW energy by 2023. Of these eight are coal powered projects and the rest are hydro, solar and wind.
Kakakhel, whose area of focus includes global nationally determined contributions says that while Pakistan was committed to contributing to the global solution on climate change, “the government was also responsible towards its citizens to close the energy gap that has constantly been widening due to poor planning by the governments in power since early 2000s, when barely any energy capacity was added to the national grid.”
The PML-N came to power in 2013 on the promise that it would resolve the country’s energy crisis before the end of its term. The government has added around 4,400 MW of capacity since taking over in 2013, and is ensuring that some of the energy projects under the CPEC get completed and contribute at least 8,000–10,000 MW to the electricity grid before the elections are held.
At present, electricity generation is 19,253 MW, however, the demand of electricity had jumped to close to 26,000MW. With mercury ranging from 40-52 centigrade huge swaths of the country experienced power outages for as much as 16 hours in some rural areas of the country.
But in its race against time, would it not have been more advantageous for the government to set up wind farms and solar parks, and resolve the electricity issue using newer technology?
“It makes perfect sense that we put in the latest and most sustainable technologies at hand and leapfrog the world with a much higher percentage of renewables. This percentage increase would not come from replacing the conventional units but by adding new ones altogether,” agrees Abbas, and adds that a small island Ta’u, in American Samoa, is making the switch from diesel generators to 100 per cent renewable energy. Even Hawaiian islands have set a target of 100 per cent renewable energy grid by 2045.
Zakaria, is particularly in favour of energy generated through solar. “Solar power prices have dropped and are now competitive with coal, even after accounting for supply in daytime only,” he says. He thinks Pakistan was well placed in terms of installing photovoltaic capacity in Cholistan, southern Khyber Pakhtunkhwa, Gilgit-Baltistan and Balochistan where plenty of non-agrarian land is available.
“The large hydropower plants that we are putting up can, for most part of the year, store water in the day and operate at night when solar is off, this will help in balancing the power supply,” he suggests.
“Much of Pakistan’s territory is arid or semi-arid, an ideal setting for harnessing solar energy with more than the necessary number of sunny days per year,” agrees Dr Fahad Saeed, continuing that it would be quicker to get a solar plant operational as it does not need inputs like fuel which needs to be imported.
In addition to providing clean energy, Saeed says energy can be produced and consumed at the same place, making it useful in remote areas that may lack the unwieldy transmission infrastructure.
But while everyone is crying hoarse over the use of coal and the destruction it is causing to the environment, Kakakhel says it was important to also look at electricity generation through the prism of economics and unless it made very good economic sense, Pakistan could not afford to switch to renewables. “Along with the per unit cost of production for each, the tariff that the government has to pay in order to ‘buy’ a unit, which is different, depending upon the source of production, must also be an important consideration.”
For now coal powered projects on an average cost US$ 1.4 million per MW produced, hydro US$ 2 million, wind US$ 2.2 million, and solar (one project only) US$ 1.2 million. The tariff that the National Electric Power Regulatory Authority (NEPRA) has set for each is the following: coal, 7.8 cents/MW, hydel 8.5 cents/MW and solar 15 cents/MW.
“This clearly shows that coal is a cheaper option under the CPEC, which in the current energy crisis is getting all the attention as there is a need for the current government to deliver on its energy promises,” she concludes.
In addition, both solar and wind have their good and bad days. Abbas insisted the “intermittency issue” has now been resolved to a large extent through a number of storage solutions like Tesla’s Giga-factory technology. He also pointed to the cost effective grid storage solutions which can be setup in months compared to conventional technologies which take years.
Further, he says, huge strides have been made in battery storage, both in terms of quality and cost and some of the solutions are applicable to Pakistan as well. “One of these is refilling of dams using solar pumps during the day and then releasing the dam to produce electricity at night. This model is being successfully applied in many parts of the world. But, laments Abbas, “conversations around cutting edge trends and technologies is missing in Pakistan, even among decision makers”.