<article><p class="lead">Pakistan's imported coal-fired generation fell to a five-year low in November, as high seaborne coal prices deterred imports and the country's switch to domestic coal generation intensified.</p><p>Coal-fired generation, comprising both plants that run on imported coal and domestic lignite, slumped to just 975GWh in November, down by 29.3pc on the year and the lowest since late 2017, when only one major Pakistani coal-fired plant had been built.</p><p>Fuel oil generation and imported LNG generation also slumped in November, as high import costs deterred buying appetite across all imported energy sources in Pakistan. Firm nuclear and domestic gas-fired generation took up some of the slack in the energy mix in November (<i>see chart</i>).</p><p>Imported coal for power generation in Pakistan is typically sourced from South Africa, with buyers often opting for NAR 5,500–6,000 kcal/kg supply. But tight fundamentals globally for high-calorific value (CV) coals have resulted in the <i>Argus</i> assessment for fob Richards Bay NAR 5,700 kcal/kg product averaging $253.83/t so far this year, up from $114.24/t in 2021 and $59.91/t in 2020.</p><p>As a result, Pakistan's seaborne thermal coal imports could fall to just 9.5mn t this year, down from 16mn t in 2021, shipping data show. The share of Indonesian coal in the mix has risen to 41pc this year from 13pc in 2021, with the combined share of South African and Mozambique imports falling to 52pc from 69pc.</p><h3>Sahiwal, Qasim, Hubco generation slumps</h3><p class="lead">Aggregate electricity generation from Pakistan's three coal-fired plants that run on imported product — Huaneng Shandong Ruyi Energy's 1.3GW Sahiwal plant, Port Qasim Electric Power's 1.3GW Port Qasim plant and China Hub Power's 1.2GW Hubco plant — fell to just 353GWh in November, the lowest since May 2017, when only the Sahiwal plant was operational.</p><p>Neither the Sahiwal nor the China Hubco imported coal-fired plants generated any electricity last month, with the Port Qasim plant the only imported coal unit running, Central Power Purchasing Authority data show.</p><p>Pakistan's power generation from its lignite-fired plants, which run on domestic coal or overland imports from Afghanistan, totalled a combined 623GWh in November (<i>see chart</i>).</p><h3>Afghan coal hearing</h3><p class="lead">Energy regulator Nepra held a hearing on 5 December surrounding guidelines for the spot procurement of Afghan coal. The guidelines mean independent power plant operators should first check whether sufficient domestic coal of the required specification for their plants is available, and that no Afghan coal lower than NAR 5,400 kcal/kg should be purchased. The regulator also said the Afghan coal should be imported in Pakistan rupees, with a minimum volume of 5,000t (two train loads) and that the imported price should be lower than imported coal from other origins.</p><p>Pakistan's coal imports from Afghanistan totalled 2.2mn t over January-July, compared with 580,000t over the same period in 2021, customs data show.</p><h3>Thar, Lucky start-ups</h3><p class="lead">Domestic coal-based generation has been bolstered by the start-up of two new plants in 2022, adding to the 660MW Engro PowerGen Thar plant, which has been operating since May 2019.</p><p>Commercial operations at the 330MW lignite-fired Thar Energy plant began on 1 October. According to Hubco power, a joint-developer of the plant, variable fuel costs for the plant would be around Rs3/kWh, compared with Rs28-30/kWh for fuel oil, imported LNG and imported coal.</p><p>The Thar Energy plant's start-up followed the commencement of commercial operations at utility Lucky Electric Power's 660MW supercritical coal-fired plant in Karachi on 21 March 2022, which is designed to burn a wide range of coal from many sources.</p><p>Looking ahead to the first half of 2023, domestic-coal based generation <a href="https://direct.argusmedia.com/newsandanalysis/article/2173778">could rise further</a>, with two new projects nearing completion.</p><p>The 330MW ThalNova lignite-fired plant, also developed by Hubco with some other partners, is expected to begin commercial operations in the first quarter of 2023.</p><p>The first stage of the Jamshoro supercritical coal-fired power plant project, involving the start-up of a 660MW coal-fired plant, is under construction and expected to come on line in the near future.</p><p>The fate of the 300MW Gwadar coal-fired project in Balochistan, which was due to run on imported coal, is unclear. Nepra postponed a scheduled 1 December hearing about the future of the project, but no new date has been issued.</p><p class="bylines">By Alex Thackrah</p><p><div class="picture"><div><span class="pic_title">YoY change in Pakistan Nov power generation</span> <span class="units">GWh</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/12/21/yoychangeinpakpowergen21122022054733.jpg"></div><p><div class="picture"><div><span class="pic_title">Pakistan coal imports from Afghanistan</span> <span class="units">t</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/12/21/pakafghantrade21122022054849.jpg"></div><p><div class="picture"><div><span class="pic_title">South Africa vs Indonesian fob prices</span> <span class="units">$/t</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/12/21/rbvsindoprices21122022054831.jpg"></div><p><div class="picture"><div><span class="pic_title">Pakistan coal-fired generation</span> <span class="units">TWh</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/12/21/pakcoalgen21122022054659.jpg"></div></article>
