Coal shortage: Production at Rampal power plant halted

The authorities have suspended production at the Rampal power station because of a shortage of coal - only 29 days after the first unit of the plant went into commercial electricity generation.  

The production of power was halted at 9am on Saturday, Bangladesh-India Friendship Power Company Ltd (BIFPCL) Deputy General Manager Anwarul Azim said.

The plant could not import coal as it was struggling to get a hand on dollars to pay the import bills, he added.

He also said that a ship loaded with coal is ready in Indonesia for Rampal Power Plant. If the letter of credit is confirmed, the ship will leave for Bangladesh.

According to sources at Rampal Power Plant, Bangladesh Bank is delaying the approval of opening the Letter of Credit (LC) for coal import due to the dollar shortage. 

BIFPCL has written to the Power Department and Bangladesh Power Development Board (BPDB) in this regard. On January 10 and 11, the senior officials of the power plant held several rounds of meetings with various levels of officials of Bangladesh Bank. But there was no solution.

As a result, on the morning of January 14, the stockpile of coal ran out and the power plant had to stop production. The plant cannot be commissioned until coal is available.

BIFPCL owes $17 million to the Bangladesh Power Development Board (BPDB), Rampal Power Plant sources said. Meanwhile BPDB requested them to continue the centre due to which the centre was kept operational for so long with the emergency stockpile of coal.

Md Rukon Uddin, director (acting) of Coal Power Generation of BPDB, said that due to the dollar shortage, the payment of coal cannot be made. Bangladesh Bank is now not allowing to give loans except for very essential products.

He said that there will be no shortage in supply even if the Rapmal power station is closed due to the low demand for electricity at present. This is because the production is now more than the demand.

“We are not able to pay the amount due to BIFPCL due to non-receipt of subsidy money. Not only this company, the private power plants are stuck with five months' arrears. But I hope this crisis will be over soon,” he added.

Sources in the power department said that according to the contract, Rampal's electricity has to be purchased by BPDB. Even if the power plant is shut down, as per the agreement, BPDB will have to pay the capacity cost or capacity charge of the plant.

On December 2022, the coal-fired Rampal Power Plant in Bagerhat started commercial production, adding 660MW of electricity to the national grid produced from its first unit.