Our energy strategy (Part – II)


The first part of this article talked about Pakistan’s heavy dependence on gas-based electricity. Thar coal is a major energy source in the country. This proven technology can be liquefied to produce gas (SNG). There are over 125 coal gasification plants, 75% of which are in China.

The Asian giant has taken an interest in coal gasification proposals, and it is speculated that under severe circumstances, it could be persuaded to cooperate with Pakistan to build plants to convert coal into gas and diesel. Existing imported coal-fired power plants may need to be converted to Thar coal-fired power plants, at least 20 percent. Major industries, including the cement industry, also depend on imported coal. Tariffs on imported coal can make the local substitute even more attractive.

On climate change and the ‘net zero’ issue, in the medium term (after 2030) Pakistan could add carbon capture facilities to its coal plants to meet climate expectations and demands. The gasification of coal can be converted to produce what is called blue hydrogen, which is produced by fossil fuels like gas and coal, but with additional carbon capture. This is the path that many advanced countries like Japan and Australia are taking, in part for now. The difficult question is the timing and likely failure of energy assets and investments during and after the transition. It is highly likely that after making progress towards the goal of net zero by 2030, advanced countries could introduce a carbon tax or restrictive trade practices in the form of tariff and non-tariff barriers on countries that may not meet the imposed net target. zero target.

The Bangladesh Council for Scientific and Industrial Research (BCSIR) has installed a pilot hydrogen plant to produce hydrogen; another is on the way. The plant is based on the gasification of household waste with an output of 5.8 kilograms per day up to 29 kilograms. It cost the country an amount of 6 million dollars (540 million Bangladeshi taka). India plans to play a major role in the hydrogen sector by aiming to become the cheapest producer and exporter in the world. The country plans to meet 10% of the hydrogen needs of oil refineries by 2024 – and 25% over the next five years. Major Indian companies are planning to move into smaller hydrogen plants. Reliance Industries Limited wishes to install an electrolyser and a fuel cell manufacturing plant as well as a photovoltaic solar panel manufacturing unit.

The Indian Oil Corporation (IOC) has announced a green hydrogen plant at its refinery in Mathura, UP. The IOC wants to set up another facility in Kochin, Kerala, where hydrogen buses would run to the airport. India is also experimenting with mixing hydrogen in gas pipelines in one of its districts. Green hydrogen is quite expensive, and it also has supply and infrastructure issues. It costs $ 4 per kg ($ 34.8 per MMBtu) and more in the United States, based on the latter’s low gas prices. Gray hydrogen, based on cheap natural gas in the United States, is however available at $ 1.5 per kilogram ($ 13.05 per MMBtu). There were targets to lower the price of green hydrogen to $ 2 per kilogram by 2030. These targets, however, have been revised by the US Department of Energy to $ 1 per kg by the time. 2030.

This type of targeting seems to be successful at the price of solar photovoltaics. A Norwegian company “NEL” has announced that it will produce green hydrogen at $ 1.5 per kilogram from 2025. However, these are based on renewable energy inputs of 2 USc / kWh, which others countries might not be able to reach easily. The Glasgow conference softened its stance on coal under Indian and Chinese pressure. Pakistan could also reconsider its earlier announcement to stop building coal-fired power plants. Coal gasification must be pursued urgently due to LNG prices and availability issues which can recur on a cyclical basis.

Coal gasification could be easily converted to hydrogen production – if necessary, and carbon capture could be installed in the long run, thus avoiding the possibilities of stranded assets. There is, however, a big “if” to China’s readiness for such projects. Increasing Thar’s coal production is also needed to indigenize the coal needs of cement and other industrial sectors, which can lower the import bill by a billion dollars. Thar coal can be blended up to 20 percent in new imported coal-fired power plants. Solar, wind and hydrogen will remain sustainable and sustainable sources of energy. Green hydrogen is based on solar and wind power.

This means that we need to focus on developing solar and wind power. Electric vehicles will reduce some of the oil consumption of the transportation sector. The prices of solar and wind power have been falling for quite some time. Efforts should be made to bring existing local prices down to the same level as international prices of 2-3 USc per kWh.

There are other options like biogas and solar water heaters that can bridge the gap significantly – up to 20%. Community bio-CNG and biogas plants could be interesting options. Oil refineries can serve as initial markets for hydrogen as they would need this product for desulfurization. Fertilizer plants would be the next candidate for on-site hydrogen production. Karachi-based oil refineries should be chosen for such an endeavor. The domestic and industrial sectors would require a dedicated transmission and distribution infrastructure, although up to 10% of the hydrogen could be mixed with natural gas in the existing system. Municipal solid waste could be used in hydrogen production, thus improving the cost-effectiveness of hydrogen disposal and MSW.

It appears that hydrogen will not be relevant for the Pakistani market until 2030. However, it would be a critical part of Pakistan’s energy security in the medium to long term. All of the above would require research and development facilities and pilot scale hydrogen facilities to increase local know-how and local content when hydrogen is introduced into the system. Ultimately, international oil companies and others would handle hydrogen as they currently do with oil, relying on both local and imported production.

Energy transformation would require a lot of capital which is not provided by advanced countries. It’s almost half a century to 2070 and 29 years to 2050. Seen with a dim view, converting coal into renewable energy would be forced upon us by inevitable circumstances, and we would end up importing energy. hydrogen – as we import oil and gas today. But electricity cannot be imported. Saudi Arabia has already started making big investments in hydrogen. Our long-term infrastructure planning should keep an eye on these indicators.

Ended

The author is a former member of the Energy Planning Commission and author of “Pakistan’s Energy Issues: Success and Challenges”.

Email: [email protected]


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