Diesel-run power plants defy BERC order to fold

The state-owned Bangladesh Power Development Board (BPDB) has allegedly kept four of its most expensive diesel-fired power plants operational, defying directive from the energy regulator to close operations.

Bangladesh Energy Regulatory Commission (BERC) had set a June 2018 deadline for terminating the operations of such power plants.

The power plants are -- Bheramara 60 megawatt (MW), Barishal 40 MW, Rangpur 20 MW and Syedpur 20 MW power plants.

The four have a total electricity generation capacity of 140 megawatts (MW).

All these power plants were commissioned over 30 years ago.

The board has kept these old power plants running for a long, although their average electricity generation costs soared to around Tk 40 per unit (1 kilowatt-hour), which was around double the cost of new plants, a senior commission official told the FE.

Expenses for running these power plants amount to Tk 6.0 billion a year, he said.

Apart from shutting down the operations of these power plants, the commission also asked the board to take measures for better utilising manpower, currently involved with these power plants.

When contacted, a senior BPDB official said the 'coal scam' in the Barapukuria coalmine and the subsequent closures of electricity generation have forced the authorities to run these power plants operational.

He, however, expressed the hope that all these oil-fired power plants would face closure after the smooth operations of imported LNG (liquefied natural gas) and its re-gasification.

The country got the first re-gasified LNG supplied to consumers on August 18 with supplying around 75-100 million cubic feet per day (mmcfd) of LNG, which is only one-fifth of the capacity of the floating LNG terminal.

Re-gasified LNG supply to consumers would run smoothly from October next, said a senior official of the energy and mineral resources division under the ministry of power, energy and mineral resources (MPEMR).

Since 2009, officials said the government had to install a significant number of oil-fired rental-and quick-rental power plants under the private sector as an ad-hoc solution to a nagging countrywide electricity crisis.

The government also awarded private-sector sponsors several gas-fired power plants to be set up on a rental basis.

Most of these power plants were awarded on the basis of unsolicited offers under the Speedy Supply of Power and Energy (Special Provision) Act 2010, having the provision of immunity to those involved with the quick-fix remedies.

The government also allowed private entrepreneurs duty-free import of furnace oil to run their power plants with 9.0 per cent service charge along with import costs as incentives.

The power division also then had planned to retire the oil-fired rental-and quick-rental power plants after the expiry of their initial tenures and bring down the electricity tariffs as well, they said.

But instead of retiring 'expensive' oil-fired power plants, the government continued extending their tenures and installed more such plants with keeping the capacity-payment provision in the order intact, the official said.

Currently, the country has around half a century of operational oil-fired power plants, of which some three dozen having a total generation capacity of 2,567 megawatts (MW) are furnace oil-fired and the remaining nine with a total capacity of 846 MW are diesel-based plants.

When contacted, energy adviser of the Consumers Association of Bangladesh (CAB) Prof M Shamsul Alam said, "These power plants should have been closed much earlier as these were escalating the overall electricity generation costs, resulting in tariff hike."

The board, as their owner, should terminate operation of these power plants on its own, he added.

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