[ad_1]
Information: TBS
“>
Information: TBS
After suffering months of power cuts caused by rising global fuel prices and the dollar crisis, Bangladesh is set to add more than 1,400 megawatts of coal-fired power from December, according to the Bangladesh Power Development Board (BPDB).
Addition to the grid will come from Rampal 1,320 MW newly-built and India Adani Group’s Godda 1,600MW coal power plant but both plants will provide half of their capacity at the beginning. Electricity from the Godda plant will be imported through the transboundary transmission line.
Due to the high cost of coal in the international market, the cost of electricity from both plants will be higher than expected.
Although Rampal per kilowatt hour (or one unit) was initially estimated at Tk7.7, now it will cost Tk14. Similarly, Godda power will cost Tk15 per unit instead of the original estimate of Tk8.71.
Currently, furnace oil-based electricity costs around Tk15 per unit.
Governments are turning to coal-based power to improve energy security and save costs.
The new addition coincides with the peak of load-shedding last summer when the government was forced to close diesel oil-based power plants to save dollars in the wake of a steep rise in the price of oil and liquid gas in the international market.
Sources said if the government refuses to take power from the Godda power plant when it is in full production, it will cost the state exchequer Tk300 crore in monthly capacity charges.
Similarly, the capacity payment for the Rampal plant at full capacity will be Tk250 crore.
A capacity charge is a penalty paid to plant owners for failing to purchase a portion of the available power.
BPDB sources said while Adani’s power supply and Rampal plant will start operations in December, it will also not be fully operational before March when demand for electricity – which drops during winter – rises again.
“Both plants will provide power from next year when we will have demand due to irrigation and summer. Then this electricity will have a positive effect on supply-demand management rather than a negative impact,” said Mohammad Hossain, director general. of the power cell of the policy formation wing in the Power Division.
Imran Karim, president of the Bangladesh Independent Power Producers Association (BIPPA), said commissioning large coal-based power plants would be a cost-saving option overall.
“If the spot price of LNG remains at $30 per MMBtu [one million British thermal units], the cost per unit of electricity generation will be Tk30. While the cost of generation per unit of coal and oil-based electric furnace is only Tk14kWh. Overall, coal-based power generation will be a cost-effective option for the country,” said Imran Karim.
BPDB this year has faced many financial challenges amid rising energy prices, resulting in it being unable to clear dues to private power companies.
BPDB owes around Tk20,000 crore to these power producers, the amount was collected over five months.
The decision to move to two new plants has also raised questions as to whether this will be a further burden on BPDB.
SK Aktar Hossain, member (Finance) at BPDB, said the drop in fuel prices and regular subsidy disbursements from the Finance Division helped the organization to normalize its funds.
“The recent increase in bulk prices will also be another support to meet the IPP [independent power producer] billing pressure even after the commissioning of a large coal-fired power plant,” he said.
Coal plants have become a hot button issue at a time of increased focus on the impact of climate change.
In a report in April, Global Energy Monitor said that even after scrapping 10.4 gigawatts (GW) of coal-fired power projects in 2021, ongoing projects will nearly quadruple Bangladesh’s 1.8GW of coal-fired electricity capacity.
“In Bangladesh, the combination of high coal prices and guaranteed purchase agreements put consumers and the Bangladesh Power Development Agency in a difficult situation,” Flora Champenois of Global Energy Monitor said at the time.
“False promises of easy and cheap coal turned out to be false, and the country’s dependence on coal became a drag on its economy.”
Electricity cost of Adani factory
Like other IPPs, the cost of electricity from PLTU Adani’s Godda will be determined based on the price of coal in the international market. The capacity charge will remain a fixed cost.
According to the New Castle index, high-quality thermal coal with a calorific value of 6322kCal/kg is currently priced at $350 per ton. Using this, the fuel cost will be around Tk17-18 per unit.
But Adani Godda’s power plant will use lower quality, cheaper coal at a cost of around Tk12 per unit, sources at BPDB said.
On the other hand, Adani Godda will receive Tk3.26 as capacity charge per unit, as per contract.
All in all, the production cost per unit of electricity from the Adani Godda power plant will exceed Tk15 kWh.
According to the contract signed in 2017, Adani Power is supposed to supply 1,496 MW of electricity for 25 years from December 2021.
Due to the pandemic, however, the completion of the project was postponed and rescheduled for December 2022.
Rampal factory to start production on a limited scale
The much-criticized Maitree Super 1320 MW Coal-fired Power Plant has started generating electricity on a trial basis from its location next to a World Heritage site in the Sundarban mangrove forest.
The plant is scheduled to start commercial operations in the last week of December, officials at BPDB said.
“Currently, we have received a limited amount of electricity from the Rampal plant as part of its test run. The first unit of the plant is likely to start commercial operations next month,” said BPDB’s spokesperson Shameem Hasan.
Last September, Prime Minister Sheikh Hasina and her Indian counterpart Narendra Modi jointly inaugurated Unit-1 of the 1320-megawatt Maitree Super Thermal Power Project at Bagerhat’s Rampal.
The plant is proposed by Bangladesh-India Friendship Power Company Limited (BIFPCL) as a joint venture between BPDB and Indian National Thermal Power Corporation Limited (NTPC).
The first unit of the plant is scheduled to start generating electricity from February 2021 and the second unit from August 2021.
Later, the dates were changed to March 2022 (Unit-I) and July 2022 (Unit-II).
In February 2022, the dates were extended to June 2022 and November 2022.
The announcement of the plant was met with heavy protests by environmentalists, who said the plant posed a threat not only to the Sundarbans but also to the greater south and south-west region.
IPPs have yet to receive their June bills for electricity generation
There are about 50 private power companies in the country today, many of which are still owed by BPDB.
According to the electricity purchase agreement with the private power plant, BPDB must pay the electricity bill to the producer within two months from the date of purchase.
But BPDB failed to do so since the volatility of fuel prices was seen in the global market after the Russia-Ukraine war broke out. The subsequent devaluation of the local currency against the dollar only served to exacerbate the situation.
Currently, BPDB owes five months’ worth of electricity bills – around Tk20,000 crore – to IPPs.
In that regard, Imran Karim said the arrears did not increase and did not decrease.
“But the government is trying to solve the problem next month,” he said.
[ad_2]
Source link
