Asia Pacific / Science & Health

Huge Pakistan mine shows the power of coal

by Adam Majendie and Faseeh Mangi

Bloomberg

In the flat scrubland of Pakistan’s scorching Thar Desert, hundreds of workers have been toiling for two years in the vast open pit of the Sindh Engro Coal Mining Co. Taking three-hour breaks during the hottest part of the day and living in a makeshift village of shipping containers, they are digging for fuel to sustain a $3.5 billion power project. So far they have scraped away about 500 feet (150 meters) of Aeolian sand, dirt and coal to create a hole a mile (1.6 km) wide.

Far to the north, in the Cholistan Desert, lie the skeletal beginnings of a solar farm that is supposed to expand to eight times the size of New York’s Central Park. It is the largest solar project in Pakistan, where the government has recently announced an ambitious plan to generate 60 percent of its power from renewable sources in about a decade.

If these grand developments in the desert suggest that coal and solar are in a close-run contest, they are not. Before 2016, Pakistan had a single coal-fired plant. It now has nine, supplying 15 percent of the nation’s electricity, with another four under construction. Solar power provides about 1 percent of energy needs and is getting a tiny sliver of investment compared with what is going into coal. Solar and other renewables may someday eliminate Pakistan’s dependence on coal, but that day is probably decades away.

And that is fine as far as Akhtar Mohammad is concerned. “Coal is good. It’s cheap,” he said at his roadside kiosk in Port Qasim on the outskirts of Karachi, where air pollution is “among the most severe in the world,” according to the nongovernmental Pakistan Air Quality Initiative. “There is a lot of smoke and bad air already. We need electricity — any fuel, it doesn’t matter.”

Mohammad’s pragmatism sums up the planet’s quandary. “Coal is the absolute No. 1 cause of carbon emissions globally and the leading driver of climate change,” said Tim Buckley, Sydney-based director of energy finance studies at the Institute for Energy Economics & Financial Analysis.

But though wealthy nations may be able to afford to wean themselves off coal, which is one of the biggest contributors of greenhouse gases, in countries where electricity is scarce, unreliable or unaffordable, local politics often takes precedence over economics: Coal remains the cheap fallback.

Dozens of coal plants in Asia

Especially in Asia, dozens of coal plants have come on line in recent years or are in the planning stages — with a normal lifetime of almost half a century. In South and Southeast Asia, coal burning is expected to increase about 3.5 percent a year for the next two decades, according to the International Energy Agency. Globally, the IEA predicts, coal demand won’t peak until 2040. And that may be optimistic. Forecasts often assume governments will choose the cheapest option based on optimum efficiency while factoring in environmental constraints and the falling cost of solar and wind power.

Coal consumption won’t decline as significantly as people think, says Shirley Zhang, Wood Mackenzie Ltd.’s principal Asia-Pacific coal analyst. On the one hand, annual global sea-borne coal trade probably peaked last year at 980 million tons. On the other hand, from now until 2040, it will decline by only 20 million tons, she says. Despite the rise of renewables, the roll call of governments adding coal-fired plants includes four of the world’s five most populous nations: China, India, Indonesia and Pakistan.

In 2018, when global carbon emissions rose 2.9 percent — the biggest jump in seven years — China, India and the U.S. accounted for two-thirds of the increase, according to BP PLC’s 2019 Statistical Review of World Energy. As developed nations retired coal plants producing 17 gigawatts of power, consumption and production of coal advanced in Asia at the fastest rate in five years.

Pakistan’s many problems

Which brings us back to Pakistan. On paper, it could be one of Asia’s top economies. Twice the size of California, Pakistan is home to more than 200 million people, most of them in the fertile valleys of the Indus River and its tributaries that run down the center of the country. But it is hobbled by corruption, political turmoil, terrorism and poverty. In July, shortly after the country got its 22nd bailout from the International Monetary Fund, the central bank raised its base rate to an eight-year high of 13.25 percent amid soaring inflation.

Add to Pakistan’s woes a crippling shortage of energy. Although the government has made progress in tackling the power deficit, blackouts are a way of life. Tens of millions of people aren’t connected to the grid. In 2015 inefficiencies in the power sector cost the economy $18 billion — 6.5 percent of gross domestic product. When it comes to power, says James Stevenson, Sydney-based senior director for global coal research at IHS Markit Ltd., “It’s having it or not that matters, not where it comes from. Governments wanting to be elected want people to have electricity. That’s why coal has momentum.”

The workers digging in the mine in the Thar are Pakistani and Chinese. China will provide financing — from 50 percent to 90 percent of total costs — for $60 billion in projects to upgrade Pakistan’s transport and energy infrastructure, making the South Asian country a standout partner of Beijing’s Belt and Road initiative. Of the 10 biggest Belt and Road power projects, eight are in Pakistan, and five of those are coal-fired.

China’s rich-poor quandary

China is a vivid example of the rich-poor quandary when it comes to weaning the world off coal. Like many developing nations, it has taken measures to curb climate change, shutting some of its most-polluting steel mills and power plants and relying increasingly on alternative sources. It added more renewable energy last year than all of the 36 member countries of the Organisation for Economic Co-operation and Development combined, according to the BP report.

But at the same time, China is the world’s largest producer and user of coal. It is helping to pay for and build power plants in at least a dozen countries, and though many are solar, wind, natural gas and hydro projects, the bulk of the Chinese investment is in coal.

It is not as if Pakistan doesn’t have alternatives to coal. The country’s current natural gas fields are dwindling, but the IEA estimates its shale reserves could contain more than 9 billion barrels of recoverable oil and 105 trillion cubic feet (3 billion cubic meters) of gas, enough to meet the nation’s needs for decades. It has five nuclear reactors, fed with locally mined uranium, and plans to build two more with Chinese help.

Pakistan is also a regional leader in hydropower. About 29 percent of its electricity comes from harnessing water, including the massive 4.9-GW Tarbela Dam on the Indus River, the largest earth-and-rock-filled dam in the world. Such big structures have come under increasing criticism from environmentalists because of their impact on local ecosystems and populations, but Pakistan plans to build more.

Meanwhile, Pakistan is pursuing renewable options that require less startup capital. The government of Prime Minister Imran Khan has set a 2030 target to generate 30 percent of the nation’s energy from large hydro plants and another 30 percent from other renewable sources that currently supply only about 4 percent, including arrays of wind turbines springing up along the coast in Jhimpir.

In contrast to the stuttering start of Pakistan’s renewable ambitions, the view of the future from the Thar coal mine is one of confidence. “Coal plants that are getting shut down have outlived their useful life,” said Ahsan Zafar Syed, chief executive officer of Engro Energy Ltd., the Pakistani company leading the project. “As I speak, there are 26 countries in the world where coal power plants are being constructed. They are everywhere.”

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