ISLAMABAD: China has disputed Prime Minister Shehbaz Sharif’s assertion that converting imported coal power plants to local coal could save $1.2 billion annually. Instead, Chinese officials have recommended prioritizing the phasing out of gas and furnace oil (FO) power plants, projecting savings of $3 billion per year.
These insights were shared during the 3rd Belt and Road Energy Ministerial Conference held in Qingdao on October 23-24, 2024. Pakistan’s Minister for Power, Sardar Awais Ahmad Khan Leghari, represented the country, attending the opening ceremony, a parallel forum, and four bilateral meetings, including discussions with Chinese Administrator Zhang and the Iranian Energy Minister.
In a bilateral meeting, Administrator Zhang shared findings from a study on Prime Minister Shehbaz’s proposals, including the conversion of three imported coal-fired power plants—Sahiwal, Hub, and Port Qasim—to Thar coal. He noted that the high costs of conversion would lead to increased electricity tariffs for consumers. Furthermore, global coal prices had declined, making the claimed savings of $1.2 billion unrealistic.
Zhang emphasized that Pakistan’s reliance on gas and FO plants costs over $3 billion annually. Phasing out these plants, rather than converting coal plants, would yield more substantial savings. On other matters, he suggested that Pakistan directly engage with Chinese financial institutions regarding debt re-profiling for CPEC energy projects.
To improve power sector efficiency, Zhang affirmed China’s readiness to collaborate under an MoU signed in June 2024, offering to send experts to Pakistan to study and address issues like line losses and tariff management. He also agreed to jointly explore the feasibility of converting power plants to local coal, as requested by Minister Leghari.
The discussions reflect a shift in focus towards sustainable and cost-effective energy reforms for Pakistan’s power sector.
Story by Mushtaq Ghumman
