New power plants, needed or not

The present power generation capacity in the country is nearly 19,000 MW, but only 8000 MW to 12,000 MW is being generated this summer as that is adequate to meet the demand. Given this situation, around half the power plants remain idle, and yet certain businessmen close to the government are still being given approval for setting up one power plant after the other. These deals are being made under the Speedy Power Supply Act (Special Provision), without requiring any tender or bidding.

On the other hand, a certain amount of the 19,000 MW of electricity cannot be generated due to inadequate capacity of the transmission and distribution lines. As a result, there is often power outage in various places around the country.

The power sector master plan is also not been followed in providing approval to new power plants. According to this plan, by 2031 the power generation capacity in the country will stand at 37,000 MW, though the demand will be 29,000 MW. Over 20 to 25 percent of the power plants will be idle. This prompted the power division’s power cell in March to recommend that no further approval be given for new power plants.

The government recently approved two large power plants to be run on imported Liquefied Natural Gas (LNG). This deal for one of the plants has been given to Unique Meghnaghat Power Ltd, owned by the chairman of Padma Bank (former Farmers Bank) Nafis Sharafat. The plant will have a generation capacity of 584 MW. A power purchase agreement (PPA) was signed between the Power Development Board (PDB) and Unique Meghnaghat Power Ltd on 24 July.

The other power plant deal went to Anlima Textile Ltd, owned by Chattogram businessman Mahmudul Hoque. No PPA has been signed with PDB for this 450 MW plant as yet.

Concerning whether there was any need for new power plants at the moment, PDB chairman Khalid Mahmud told Prothom Alo, approval is being given to power plants which will come under the mid-term of the power master plan by 2025-2026. All of these are based on LNG.

Deals for the mid-term power plants according to the master plan have already been signed from 2011 to 2017. And the construction phase for the short-term power plants was completed in 2013-14. Even so, the government approved of 10 power plants run on fuel oil towards the end of 2017 on condition that these will start generating power within a year. The installed generation capacity of these plants was 1768 MW, with production costs ranging from Tk 14 to Tk 25 per unit.

Other than a 100 MW power plant among these, all were under private ownership. These did not come under the power master plan. The power cell has said that given the existing demand, no further power plants are required.

Director general of the power cell Mohammed Hossain told Prothom Alo over phone, “The investors are desperate to get approval for new power plants, though there is no need for new ones outside the master plan. We have told the government that approval should not be given for new power plants.”

Industries use less PDB power

PDB has not seen any significant increase in subscribers from the industrial sector. Even though the industrial units use more electricity, they industry owners generate around 3500 MW of their own, that is, captive power. The government recently approved another 800 MW of captive power for the industrial sector.

The power cell DG Mohammed Hossain said, public sector electricity is costly and not uninterrupted. “We are thinking of how to make this suitable for the industrial sector since the government has enough electricity. Big investment is needed in power transmission,” he said, adding that businessmen should come forward to invest in the transmission system.

M Tamim Hossain, who had been special energy adviser to the chief adviser of a former caretaker government, told Prothom Alo, “The government has a power master plan, but is approving of one power plant after the other outside of this master plan. Is there really any need for more power plants run on costly imported LNG? There is no coordination between the state minister for power, the power secretary and the energy adviser of this government. No consideration is being given to whether the country will be able to bear the expenses of such costly power. This is not acceptable.”

* This report appeared in the print edition of Prothom Alo and has been rewritten in English by Ayesha Kabir