Govt to extend tenure of 4 costly rental plants again

Karaniganj 100MW power plant in Dhaka

The government is likely to extend tenure of four costly oil-based rental power projects having combined capacity to generate 300MW of electricity amid BPDB’s non-payment of $1.7 billion electricity bills.

The power plants already had a second time extension to continue for 10 years and the government now proposed another two-year extension.

The plants are: Katakhali 50MW in Rajshahi, Julda 100MW in Chattogram, Karaniganj 100MW in Dhaka and Anmura 50MW in Chapainababganj.

The state-owned Bangladesh Power Development Board (BPDB) operate these gas-based power plants.

These plants can currently produce only 5250MW of electricity against the capacity of 10,995MW due to the energy crisis.

However, Power Division officials said the natural gas crisis forced the government to think of extending the tenure of the plants for another time.

The Power Division already sent separate extension proposals to Cabinet Committee on Public Purchase.

According to the Power Division drafted proposals, the government has targeted to generate 40,000MW of electricity by 2030. The generation capacity has already reached 25,566MW.

The government moved to shut down rental and quick rental power projects gradually as some mega power projects came into generation, the proposal read.

A total of 13 rental power projects including diesel and gas-fired plants, having combined generation capacity 1018.5MW, have been closed after expiry of the tenure.

The government claimed that a total of 10 rental and quick rental projects having combined capacity of 670MW have got extended to find a reliable system and supply frequency to national grid.

According to the Power Division, the government may extend the tenure of Katakhali 50MW and will fix the tariff at 16.36 per unit including non-fuel part and fuel part for two years under no electricity no payment method.

The government will require Tk 567.40 crore for producing electricity from the plant considering 40 percent plant’s factor. It will expect to save Tk 38.06 crore from the government exchequer under its latest negotiation.

About the extension of Julda 100MW power plant, Power Division informed the Purchase Committee that they had completed tariff negotiation at Tk 16.3838 per unit.

The government will need Tk 1148.17 crore to purchase the electricity for the same period and can expect to save Tk 74.11 crore under the latest extension proposal.

Besides, the BPDB will need to pay Tk 16.193 per unit for Anmura 50MW power plant for a two-year extension.

The government will have to pay Tk 567.40 crore for it and hopes to save Tk 38.06 crore more under the latest negotiation than the previous one.

For Karaniganj 100MW power plant, the BPDB will require to pay Tk 16.4633 per unit. It will need to pay Tk 1153.75 crore for purchasing the electricity.

The Power Division said the government would able to save Tk 88.45 crore thanks to the latest negotiation.

According to the BPDB presentation placed before the Prime Minister’s Office (PMO), the natural gas supply to power plants has dropped to four-year low now as Bangladesh suspends import of around 250mmbtu Liquefied Natural Gas (LNG) from costly international market. But Prof M Shamsul Alam, an energy expert, said the natural gas supply shortfall is not only a problem for current crisis in power sector but also extension of the costly rental and quick rental power plants irrationally pushed the crisis.      “It’s a time to stop such extension and take necessary steps to shut costly power plants in private and public sector also,” he said.

The government will not need to follow any austerity measure if they only stop corruption in power sector, Prof Alam said.

In a letter to Power Secretary Md Habibur Rahman, Bangladesh Independent Power Producers Association (BIPPA) president Imran Karim, however, said the independent power producer companies have a collectively outstanding payment of $1.5-1.7 billion.

“Loss from dollar exchange rate fluctuations compounded with delay payment cycle have cut the project companies in a precarious financial position,” he said.     

Recently, Prime Minister’s energy adviser Dr Tawfie-e-Elahi Chowdhury said the power supply situation will improve in September as two coal-fired plants at Rampal and Banchkhali will come into operation.

Besides, Indian Adani power plant will also supply electricity to Bangladesh, he said.

Prof Shamsul Alam said there is no necessity of extending the tenure of costly power plants as the operation of three mega power plants helps to ensure a reliable power system and supply frequency to national grid.