Pakistan Plans Massive Shift to Coal-Fired Electricity to Save Forex Reserves

Pakistan intends to shift to domestic coal-fired electricity to reduce power generation costs and does not plan on building new gas-fired plants in the coming years, Energy Minister Khurram Dastgir told Reuters on Monday. “LNG is no longer part of the long-term plan,” said the energy minister, adding that “We have some of the world’s most efficient regasified LNG-based power plants. But we don’t have the gas to run them”. Pakistan’s plan to switch to coal to provide its citizens with reliable electricity highlights the difficulties in developing effective decarbonization strategies at a time when some developing countries are struggling to keep the lights on. Dastgir said the country plans to increase domestic coal-fired power capacity to 10 gigawatts (GW) in the medium term. The minister explained the intention is to reduce the value of the country’s fuel imports to protect it from geopolitical shocks. “It’s this question of not just being able to generate energy cheaply, but also with domestic sources, that is very important,” he added. In addition to coal-fired plants, Dastgir said developments are underway to expand Pakistan’s solar, hydro, and nuclear power contributions. In broader terms, it is a bit unclear how Pakistan will finance the proposed coal fleet, but Dastgir stated that the establishment of new plants will be dependent on “investor interest,” which he expects to increase soon. In recent years, prominent Chinese and Japanese financial institutions, which are among the largest financiers of coal units in developing countries, have backed out of bankrolling fossil-fuel projects amid pressure from activists and Western countries. But they can be convinced to reconsider if Pakistan has a serious proposition in place.