Bangladesh currently has 16 such plants with a combined capacity of 1,109MW
Amid repeated calls for immediately shutting down the rental and quick rental power plants to lessen the expenditure from growing capacity charges, the government has finally decided to close them.
The development was confirmed on Thursday as a report revealed that the government decided to shut down all the existing rental and quick rental power plants within three years.
The report was tabled at a meeting of the Parliamentary Standing Committee on the Ministry of Power, Energy and Mineral Resources.
“There are 16 such plants currently, with a combined capacity of 1,109MW. Those will be gradually shut down by 2024,” the report reads.
Of them, seven plants are run by gas and together can generate 352MW of electricity, while the rest are furnace oil-fired, having a 757MW production capacity together.
The contract for six rentals and as many quick rental plants have already expired. With a 280MW power generation capacity, four of the plants are gas-run, while two others having a 156MW combined capacity are furnace oil-operated. The rest are diesel-fired, with a 397MW capacity apiece. Altogether their capacity stands at 833MW.
As the electricity supply has been normal after some of the large plants started operation, the rental and quick rental ones are being shut down, the report suggests.
In line with the initiative, the government is not going to extend the contract deadline for the furnace oil-fired plants.
“But in order to maintain the system frequency and due to being a little cheaper, the tenure of some of the gas-run plants can be increased on a ‘no power, no payment’ basis,” it reads.
Meanwhile, the Parliament Secretariat in a media release also attested to the development.
“A discussion was held regarding the normalcy in power supply in the country, following the construction of large power plants,” the statement said.
“Hence, the committee has recommended retiring the rental and quick rental power plants at the earliest, without extending their deadline.”
The panel also recommended the Power, Energy and Mineral Resources Ministry to implement the impending coal-fired power plant projects within the stipulated time and visit all power plants.
The committee’s chairman, Md Shahiduzzaman Sarker, presided over the meeting attended, among others, by its members Md Abu Zahir, SM Jaglul Hayder, Md Aslam Hossain Saudagar and Nargis Rahman.
In February last year, State Minister for Power, Energy and Mineral Resources Nasrul Hamid informed the House that the government had provided Tk52,260 crore in subsidies for the power sector in 10 years.
Nasrul said the average cost of generating per unit of electricity for both public and private sectors is Tk13-14 (furnace oil based), Tk25-30 (diesel based) and Tk2.5-3 (gas-based).
However, he said, the cost of per unit supply of electricity at the bulk level of the Power Development Board is Tk5.82 and its average sales price at the bulk level is Tk4.80.
What else does the report say?
The Awami League-led government in 2009, considering the acute shortage of and growing demand for power, had taken measures for the plants on separate terms: three, five and 16 years.
Electricity supply increased due to the installation of the plants, giving a boost to the country’s economic activities, the report reads, adding that the move ultimately played a major role in the socio-economic development in Bangladesh.
Had the plans not been initiated, there could have been a decline in sector-wise and domestic production, and export volume, according to the report.
The absence of the rental and quick rental power plants might have adversely affected the major indices of the country’s overall economy, thus, hampering employment opportunities and poverty-reduction measures.
The tenure of a number of the rental and quick rental power plants - mostly run by liquid fuel - was raised in the past as the coal-fired plants falling under the government’s long-term plan failed to go into operation on time.