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Extension of Rental Power Plants

Negotiations deferred as pvt cos seek higher tariff

  • Special Correspondent
  • 22 September, 2021 12:00 AM
  • Print news

Negotiations for extension with five rental and quick rental power projects are being delayed as the sponsors have sought unusual tariffs with an off-take guarantee, an official said. 

An off-take agreement is an agreement that a purchaser makes with a producer to buy a specific amount of future production.

The Power Division, however, said the electricity purchase can not be guaranteed as the Prime Minister has allowed extending the tenure of the plants based on ‘no electricity, no payment mode’.

The sponsors then proposed unusual tariffs and the Power Division said the tenure of the power plants can not be extended based on such high tariffs.

 “We have sought their proposal to extend the rental plants. But they are seeking additional tariffs for extensions. The Power Division will need to have another meeting with them. If they agree with our desired tariff, then these five plants will get the extension,” an official concerned said.      

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

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 plans.

“We have already reached the 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.

 “But the government will require to extend few power projects for stable grid frequency and strengthening grid reliability. The tariff of these power projects is expected to be 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.

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

The Power Division sought a no-objection certificate (NOC) on June 17 this year from BERC to extend the tenure of these power projects, which is now 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.