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Rental plants likely to be extended for 2 years

Power Division sits today with the rental sponsors for tariff negotiation

  • Shamim Jahangir
  • 21 September, 2021 12:00 AM
  • Print news

The government is likely to extend the tenure of five rental power plants for another two years having combined capacity to generate 457MW of electricity under Speedy Supply of Power and Energy (Special Provision) (Amendment) Act.

Power Division is scheduled to sit with the sponsors today at Biddut Bhaban.

It will be the first move of the Power Division after a bill for the extension of the “Speedy Supply of Power and Energy (Special Provision) (Amendment) Act, 2010” was passed in Jatiya Sangsad last week.

According to the Power Division, Prime Minister Sheikh Hasina has already allowed a summery extension of the five power projects for two years.

The government has a target to generate 40,000MW of electricity by 2030 under short, mid and long terms plan.

“We have already reached to install capacity to generate 25,227MW of electricity including captive power plants,” according to a power division official.

He said the government has already discontinued 13 rental and quick rental power projects having combined capacity to generate 1001MW of electricity.

The government plans to not extend the rental and quick rental power projects.             

 “But the government will require to extend few power projects for stable grid frequency, strengthening grid reliability. The tariff of these power projects is comparatively lower,” said the official requesting not to be named.

Power Division plans to purchase the electricity from five power projects under “no electricity no payment and without any guaranteed off-take” approach, he said justifying the move.

The five power projects are: 102MW Summit Narayanganj(Madan) Power Ltd, 100MW Orion Power Meghnaghat Ltd, 40MW Khulna Power Plant, 115MW KPCL Unit-2 and 100MW Dutch Bangla (Siddhirganj) Power Ltd.

The tenures of the rental power plants have expired on different times between March 30, 2021 and July 20, 2021.

Power Division officials said the extension of five plants is subject to the agreement on the tariff offered to them on the basis of “no electricity no payment.”

They said the extension tariff of these plants may be of same structure.  Officials said102MW Summit Narayanganj (Madan) Power Ltd, 100MW Orion Power Meghnaghat Ltd and100MW Dutch Bangla (Siddhirganj) Power plant supplied electricity to greater Dhaka and adjacent areas of the load centre.  If the government will not extend tenures,the costly diesel-based plants will come to generate power, the officials said.

Besides, 40MW Khulna Power Plant, 115MW KPCL Unit-2 will be able to meet irrigation demand of greater Khulna, they also said.  The extension of the power plants will also help to meet reserved capacity till 2023.

The rental power projects have sought extension for 10 years each, according to the Power Division.  

In February 2020, Bangladesh Energy Regulatory Commission ordered to not extend the liquid fuel-based rental and quick rental power projects.

The Power Division sought no objection certificate (NOC) on June 17, 2021 from BERC to extend the tenure of these power projects, which is now in pending, official sources said.

The government has so far singed 65 power projects under Special Power Act. Of them, 50 power projects have so far been implemented.

According to BIDS report, the rental and quick rental power projects have additionally contributed from Tk 233.12 billion to Tk1211.68 billion in fiscal year 2011-12.

The country’s GDP would have sharply dropped, if the projects had not been implemented at that time, the report observed.