Despite the government taking up short-term projects to reduce power outage next summer, the proposed 17 liquid fuel-fired power plants will apparently fail to contribute to the national grid due to slow progress in their construction.
The power plants-- 12 furnace oil-based and the rest diesel-based—are being erected under both public and private initiatives.
The Power Division is supervising the power plants projects, all expensive, on a fast-track basis with an aim to generate 2,468MW combined to help curb load-shedding from February to May.
In 2017, Bangladesh experienced on an average six to eight hours of power cuts a day during summer, raising eyebrows about the government’s initiatives for electricity generation and its success in providing electricity as pledged.
The daily demand for electricity was 12,000MW throughout the year, whereas the power generation amounted to just a little over 8,000MW.
Projects at snail’s pace
A Power Division official, preferring anonymity, said: “We are worried as most of the fast-track projects are not progressing satisfactorily to generate power between February and May.”
The situation could lead to a failure in achieving the targeted power generation, he stated.
Only three out of 12 private sector power plant projects are in the fast-track mode to meet the deadline, according to the PDB official.
Land acquisition complexities, delay in importing required machinery, incomplete agreement for the projects and failure in assigning appropriate construction firms for some of the plants would lead to the missed deadline, he said.
“If these plants fail to start operation within the deadline as per their contracts, the private plant entrepreneurs have to pay US$200 in fines against each MW power every day,” he also said.
For the government plants, their performance will be recorded in the company performance category, he stated.
Local consortium of Summit Corporation Ltd and Summit Power Ltd’s 300MW furnace oil-based power plant project in Gazipur and Bangla Trac Power Ltd’s 100MW diesel-based plant in Jessore and 200 MW diesel-based plant in Comilla are being constructed at the expected pace.
On the contrary, the projects of the international company APR Energy Ltd’s 300 MW diesel-based plant in Pangaon, Keraniganj and Aggreko International Projects Ltd’s 100 MW plant at Aowrahati, Keranigonj and another 100 MW plant at Brahmangaon, Keranigonj are hardly advancing.
M Rejaul Karim Robin, general manager of INFRADEV Associates Limited, a local partner of Aggreko International Projects Ltd, said production in their plants would be delayed for a month owing to delayed shipment of machineries needed.
However, other relevant activities including earth filling at the project site have been completed, he added.
Rokib Mahmud, head of corporate affairs of Bangla Trac Power Limited, said their production in two plants would be delayed for ten days while the company would pay the fine as per their agreement.
Power generation to start in 6-9 months
The plants being established through deals under the Speedy Supply of Power and Energy (Special Provision) Act 2010 are basically rental power plants.
The law is generally applied to purchases that are of immediate need and enjoys various immunities, including avoiding government tenders.
Though the government plans to implement the projects on the fast-track basis at high tariff, power sector experts have doubts about timely implementation the projects.
As per contracts, the diesel-based power plants would have to commence generation with six months and the furnace-oil based plants will have to start generation within nine months.
The five diesel-fired plants are under the private sector, from which the Power Development Board (PDB) will purchase electricity at a flat tariff of 25 US cents (equivalent to Tk21) per kilowatt hour (each unit) for the next five years.
Meanwhile, the PDB will purchase electricity from the rest plants, all furnace oil-fired, also under the private sector, for 10.6 US cents (equivalent to Tk 8.33) per unit for the next 15 years.
The prices of electricity generated by the rest five furnace oil-fired state-owned power plants have not been set as yet.
At present, PDB buys each unit of electricity at less than Tk2 from gas-based plants, and at Tk5.50 from coal-based plants, whereas per unit cost of electricity from a plant run on diesel or furnace oil is Tk8.50-Tk13.
Dedicated team to monitor fast-track projects
The government has formed a team to monitor and visit the proposed plants regularly and coordinate with local administration and entrepreneurs for timely implementation of them.
Power Division Additional Secretary Md Mahbubul Alam will lead the eight-member team as the convener, with Deputy Secretary (Development) Mohammad Nazmul Abedin appointed as its member secretary.
“We are monitoring the progress of the plants as the government plans to ensure better power supply. The entrepreneurs have already been instructed to come into production in due time,” Deputy Secretary Nazmul said.
If they fail to ensure their production on time, they would definitely be fined in accordance with the agreement, he warned, however, expressing his hope that the diesel-based plants will start operation very soon.
Power plants location and capacity
Of the five diesel-fired power plants, Bangla Trac will set up a 100 MW plant at Noapara of Jessore and 200 MW plant at Daudkandi of Comilla. APR Energy Ltd will establish a 300 MW plant at Keraniganj of Dhaka while two projects of 100 MW each in Karanigonj have been awarded to the Aggreko International Projects LTD.
Seven of the rest are furnace oil-fired plants. Consortium of Summit Corporation Ltd and Summit Power Limited will set up a 300 MW based plant at Kadda of Gazipur. Orion Power Rupsha Ltd will erect a 105 MW plant at Labonchhara of Khulna while Confidence Power Holdings Ltd will install a 113 MW plant in Bogra, Desh Energy Ltd a 200 MW plant in Chandpur, United Enterprises & Company Ltd a 200MW plant at Muktaghachha upazila in Mymensingh, Acorn Infrastructure Ltd a 100 MW plant at Julda of Chittagong and Midland East Power Ltd a 150 MW plant at Ashuganj of Brahamanbaria.
The rest five plants belong to the state-run companies--Ashuganj Power Station Company Ltd, Rural Power Company Limited, BPDB-RPCL Powergen Ltd, Electricity Generation Company of Bangladesh Limited and North-West Power Generation Company Limited— each with a 100 MW capacity.
But, the project officials are yet to appoint any Engineering, Procurement and Construction (EPC) contractors for their plants.