Poor response forces govt to review captive power policy

FE Team | Published: June 30, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

M Azizur Rahman
The government, desperately trying to ease power supply shortfall, is reviewing its Captive Power Policy (CPP) against the backdrop of poor response from small power producers in the private sector on the sale of electricity to public distribution companies.
A seven-member committee, headed by Director General of Power Cell, has already been constituted by the Power Division to recommend necessary changes towards softening of the existing provision to entice the entrepreneurs to sale electricity, a senior power division told the FE.
The committee members include Siraj Uddowla from the Dhaka Electric Supply Authority (DESA), Mostafa Kamal from Power Development Board (PDB), Nazrul Islam from Rural Electrification Board (REB), Shahjahan Mia from Dhaka Electric Supply Company Ltd (DESCO) and Abdul Mannan from the Power Cell.
The committee will submit its recommendations soon so that the state-owned power distribution companies can reinitiate negotiations with the captive power plant owners on purchase of electricity.
Sources said after adopting the CPP in the Council of Advisers' meeting in February last the Power Division had set a target to get around 50 megawatt (MW) from the captive power owners into the national grid.
But a lukewarm response from the captive power unit owners to sell electricity under the terms and conditions of the CPP had depressed the power division initiative.
The government could, so far, sign separate agreements with two captive power entrepreneurs to purchase around seven megawatts (MW) of electricity during peak hours.
The Meghna Energy Ltd was to supply electricity of around four MW, and the Ms S Alam Power Plant Ltd (SAPP) three MW during peak hours to the state-owned REB under the agreements.
Private captive power plant owners say irrational tariff offer coupled with higher gas price is responsible for the failure of the government plan to augment the country's electricity generation through purchase of electricity from the captive power units.
One captive plant owner said currently, the PDB and the Independent Power Producers (IPPs) are purchasing gas at Tk 2.61 per cubic metre, while the gas rate for the captive power plant is Tk 3.73 per cubic metre.
If the government provides gas at the uniform rate the captive power plant owners will be able to supply electricity far below the IPP rate, he added.
The captive power units currently generate over 1,300 MW of electricity for their industrial purposes.
A favourable captive power policy can bring at least 200 MW from the captive power units within six months as the necessary infrastructure like land and gas connections are already there, said sources.