Our energy strategy (Part – II)

The first part of this article looked at Pakistan’s heavy reliance on gas-based energy. Thar coal is an important source of energy in the country. This proven technology can be liquefied to form gas (SNG). There are more than 125 coal gasification plants, 75 percent of which are in China.

The Asian giant is interested in coal gasification proposals and it is believed that under severe circumstances it could be persuaded to work with Pakistan to build coal conversion plants to gas and diesel. It is possible that at least 20 percent of the existing imported coal-fired power plants will have to be converted to coal-fired power plants. Large industries, including the cement industry, also depend on imported coal. Tariffs on coal imports can make local replacement even more attractive.

With regard to climate change and the “net zero” problem, Pakistan could in the medium term (after 2030) expand its coal-fired power plants to include CO2 capture systems in order to meet climate expectations and requirements. Coal gasification can be converted into what is known as blue hydrogen, which is produced from fossil fuels such as gas and coal, but with additional carbon sequestration. This is the path that many advanced nations such as Japan and Australia are partially taking for the time being. The difficult topic is the timing and likely stranding of energy systems and investments during and after the changeover. It is very likely that, having made some progress towards the net zero target by 2030, the developed nations will introduce a carbon tax or trade-restricting practices in the form of tariff and non-tariff barriers to countries that may meet the net zero targets not reach. zero goals.

The Bangladesh Council of Scientific and Industrial Research (BCSIR) has installed a pilot hydrogen plant for the production of 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, which can be up to 29 kilograms. It cost the country $ 6 million (540 million Bangladeshi taka). India wants to play an important role in the hydrogen sector to be the cheapest producer and exporter in the world. By 2024, the country wants to meet 10 percent of the hydrogen needs of the oil refineries – and 25 percent in the next five years. Leading Indian companies plan to move into smaller hydrogen plants. Reliance Industries Limited plans to install an electrolyser and fuel cell manufacturing facility along with a PV module production unit.

Indian Oil Corporation (IOC) has announced a green hydrogen facility at its Mathura, UP refinery. The IOC wants to build another facility in Kochin, Kerala, in which hydrogen-powered buses run at the airport. India is also experimenting with adding hydrogen to natural gas pipelines in one of its districts. Green hydrogen is quite expensive and it also has some supply and infrastructure problems. It costs $ 4 per kg ($ 34.8 per MMBtu) and up in the US based on the latter’s low gas prices. However, gray hydrogen, based on cheap natural gas in the US, is available for $ 1.5 per kilogram ($ 13.05 per MMBtu). There were goals to bring the price of green hydrogen down to $ 2 per kilogram by 2030. However, these targets have been revised by the US Department of Energy to one dollar per kilogram by 2030.

This type of targeting appears to be successful regardless of PV prices. A Norwegian company “NEL” has announced that it will produce green hydrogen for 1.5 US dollars per kilogram as early as 2025. However, these are based on a renewable energy consumption of 2 USc / kWh, which other countries may not be able to easily achieve. The Glasgow conference softened its stance on coal under Indian and Chinese pressure. Pakistan could also review its earlier announcement that it would stop building coal-fired power plants. Coal gasification should urgently be promoted due to LNG prices and availability problems, which can recur cyclically.

Coal gasification could easily be switched to hydrogen production if needed, and in the long term carbon capture could be installed to avoid opportunities for stranded assets. However, there is a big “if” in China’s willingness to undertake such projects. The expansion of Thar coal production is also required to anchor the coal needs of the cement and other industrial sectors, which can reduce the import bill by a billion dollars. Up to 20 percent of thar coal can be mixed into new imported coal-fired power plants. Sun, wind and hydrogen remain long-lived and sustainable sources of energy. Green hydrogen is based on the sun and wind.

That means we need to focus on developing solar and wind power. Electric vehicles will reduce some of the oil used in the transport sector. The prices for solar and wind power have been falling for some time. Efforts should be made to bring existing local prices 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 fill the gap significantly – up to 20 percent. Bio-CNG and municipal biogas plants could be attractive options. Oil refineries can act as the first sales market for hydrogen, as they would need the raw material for desulphurisation. Fertilizer systems would be the next candidate for on-site hydrogen production. For such a venture, oil refineries based in Karachi should be selected. The household and industrial sectors would need dedicated transmission and distribution infrastructure, although up to 10 percent of the hydrogen can be mixed with natural gas in the existing system. Municipal waste could be used in hydrogen production, improving the economics of both hydrogen and municipal waste disposal.

It appears that hydrogen will not be market relevant in Pakistan until 2030. In the medium to long term, however, it would be an essential part of Pakistan’s energy security. All of this would require research and development as well as pilot scale hydrogen facilities to increase local know-how and content as hydrogen is introduced into the system. After all, international oil companies and others would handle hydrogen as they do oil now, using both local and imported productions.

The energy transition would require a lot of capital that is not provided by the industrialized nations. It is almost half a century to 2070 and 29 years to 2050. The conversion of coal to renewable energies would be forced upon us by inevitable circumstances in dire weather and we would end up importing hydrogen – like we import oil and gas today. But electricity cannot be imported. Saudi Arabia has already started making large investments in hydrogen. Our long-term infrastructure planning should keep these indicators in mind.

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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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