Govt relaxes rules for captive power plants

Shamim Jahangir

11 December, 2019 12:00 AM printer

Captive power plants producing up to 10 megawatts (MW) of electricity for industrial units will no longer require any approval from the Power Distribution Companies.

The Energy and Mineral Resources Division will issue an official order in this regard soon.

Industrial units are now required to obtain No Objection Certificate (NOC) from power distribution companies before operating any captive power plants.

The new order will set the threshold for the size of captive power plants allowed to be operated without any approval from the authorities. 

The move came as part of maintaining a balance in the efforts to discourage the supply of natural gas to captive power plants.

In a meeting last month, the Power Division favoured a notion for allowing captive power generation until uninterrupted power supply is ensured to industrial units.

“We suggest relaxing the conditions for captive power plants to get natural gas supply for producing electricity to run their industries until we can ensure uninterrupted power supply to industries,” Additional Power Division Secretary AKM Humayun Kabir said at a meeting of Bangladesh Energy and Power Research Council (BEPRC).

The previous order issued in August this year asked the industrialists to obtain NOC from power distribution companies for setting up any captive power station.

Currently, captive power plants are consuming around 480mmcfd of natural gas against the supply of around 3400mmcfd. Captive power plants have been producing around 3000MW of electricity. The combined power generation capacity of the captive power plants has increased to 21,000MW.

According to a recent survey, the electricity demand growth is 12.5 per cent for household users whereas it was only 9.9 per cent for industrial users since 2011, thanks to entrepreneurs who are not interested to use the grid electricity.

The power division wants to add the industrial users into grid electricity instead of captive power after ensuring uninterrupted and dedicated power supply to industrial units by 2021.

In a recent directive, the energy and mineral resources division said it will discourage gas connections to the captive power and encourage gas supply for industrial units in economic zones.

Besides, the government has approved the revised policy guideline allowing existing captive power producers to sell their surplus electricity to other users.