‘Govt must explore cheaper, efficient power sources’

Our Correspondent
Sunday, Apr 09, 2023

KARACHI: As the prices of electricity continue to increase, the government must explore cheaper and more efficient energy resources.

“In these uncertain times, it becomes imperative for the government to increase the share of cheaper power generation that is more economical for consumers,” said Syed Saifullah Kazmi, head of investment banking at Intermarket Securities Limited.

Consumers have been finding it difficult to pay the ever-increasing bills of electricity generated from expensive imported fuels. Recently, the government has approved a significant increase in electricity prices for residential consumers, farmers, and exporters, he said.

This increase ranges from Rs3.3 to Rs15.52 per unit, and a debt servicing surcharge of Rs3.39 per unit has also been imposed. As a result, domestic consumers will face a net additional increase of Rs7 per unit, with the existing Rs32.7 per unit, budgets would stretch to the snapping point.

Kazmi said that using Thar Coal as a primary energy resource can not only decrease the cost of power generation, but also increase industrial output, benefitting both consumers and the national economy.

During FY 2021-2022, the per-unit cost of energy generated from local Thar coal remained around Rs7 to 9/kWh. In comparison, power generation from plants running on imported coal costs around Rs 35/kWh.

The production output of the mine from 3.8 MTPA to 7.6 MTPA allows for an additional 660MW of power generation to the national grid. It could significantly help counter the energy crisis.

Moreover, the phase III expansion of Thar Block II will further reduce coal prices, making it one of the cheapest sources of fuel.

Additionally, the expansion could save the country’s foreign exchange reserves approximately $2.5 billion while reducing more than Rs100 billion in circular debt annually.

Kazmi added that the government must act pragmatically and focus on cheaper power production and its evacuation in the best interest of consumers and the economy.

“We have Thar coal as the best option available in this regard. All we need to do is implement practical cheap power generation systems,” he said.

Overall, utilising Thar Coal as a primary energy resource can significantly reduce the cost of power generation, increasing the overall affordability for consumers.

“It can also promote industrial growth, helping to further strengthen Pakistan’s economy,” he concluded.