Buying electricity from private captive plants may face setback
Monday, 22 October 2007
The Power Cell under the Ministry of Power will receive international tender by October 25 for setting up eight rental power plants to tackle power crisis in the next summer, reports UNB.The projects are 50 MW Shahjibazar plant, 50 MW Kumaregaon plant and 50 MW Fenchuganj plant in Sylhet, 50 MW Ashuganj plant, 20 MW Bogra plant, 30 MW Bhola plant, 40 MW Khulna plant and 20 MW Bheramara plant.
Of the plants, the 40 MW Khulna and 20 MW Bheramara projects will be liquid fuel-based ones while the rest will be gas-based ones. The total capacity of the plants will be about 310 MW.
As per terms and conditions of the projects, the bidders will have to install the plants within four months of signing of the contracts. The government will purchase electricity from the plants for the next three years.
The Power Cell, a reform implementation wing of the Power Ministry, will receive the tender as responsible body. Earlier, the Power Cell invited interested international bidders to submit Expression of Interests (EoIs).
A total of 17 international firms submitted EoIs to vie for the eight projects.
Three firms from the USA, two from the UK, and one each from Singapore, Ukraine, the UAE, India and Malaysia have submitted EoIs directly. Five local firms submitted their EoIs on behalf of their principals in India, Russia and Ukraine.
Later, the Power Cell issued Request for Proposal (RfP) letter to 17 firms asking them to submit their respective technical and financial offers.
The industry insiders are, however, critical of the rental power plant projects as they raised questions about the move. They said these rental power plants might be suicidal for the power sector and hamper the caretaker government's efforts to buy electricity from the captive power plants set up by local entrepreneurs.
They said the tariff of the proposed plants would be relatively higher than that of the land-based power plants.
In 1997, the then government installed three barge-mounted power plants to tackle the power crisis and their tariff was very high, even above Tk 5.30 per unit in some cases.
The Power Development Board (PDB) has to incur about Tk 13 billion a year for purchasing electricity at higher rates from those power plants. This loss will increase if more barge-mounted power plants are installed, they observed.
When the caretaker government has been trying to purchase electricity from the captive power plants installed by local entrepreneurs to serve their industries, the move to install rental power plants may discourage the captive power producers to sell their electricity to the national grid.
The power sector experts said the government could easily get more than 500 MW from the captive plants before the next summer if they allow them to extend their existing capacity by installing some new generation machines.
Earlier, the government had invited tender to install seven rental power plants. But the state-owned Petrobangla refused to supply gas to three of them because of shortage in gas production, forcing three of the plants to roll back.
However, the issue of gas supply to new plants still remains a big question.
Of the plants, the 40 MW Khulna and 20 MW Bheramara projects will be liquid fuel-based ones while the rest will be gas-based ones. The total capacity of the plants will be about 310 MW.
As per terms and conditions of the projects, the bidders will have to install the plants within four months of signing of the contracts. The government will purchase electricity from the plants for the next three years.
The Power Cell, a reform implementation wing of the Power Ministry, will receive the tender as responsible body. Earlier, the Power Cell invited interested international bidders to submit Expression of Interests (EoIs).
A total of 17 international firms submitted EoIs to vie for the eight projects.
Three firms from the USA, two from the UK, and one each from Singapore, Ukraine, the UAE, India and Malaysia have submitted EoIs directly. Five local firms submitted their EoIs on behalf of their principals in India, Russia and Ukraine.
Later, the Power Cell issued Request for Proposal (RfP) letter to 17 firms asking them to submit their respective technical and financial offers.
The industry insiders are, however, critical of the rental power plant projects as they raised questions about the move. They said these rental power plants might be suicidal for the power sector and hamper the caretaker government's efforts to buy electricity from the captive power plants set up by local entrepreneurs.
They said the tariff of the proposed plants would be relatively higher than that of the land-based power plants.
In 1997, the then government installed three barge-mounted power plants to tackle the power crisis and their tariff was very high, even above Tk 5.30 per unit in some cases.
The Power Development Board (PDB) has to incur about Tk 13 billion a year for purchasing electricity at higher rates from those power plants. This loss will increase if more barge-mounted power plants are installed, they observed.
When the caretaker government has been trying to purchase electricity from the captive power plants installed by local entrepreneurs to serve their industries, the move to install rental power plants may discourage the captive power producers to sell their electricity to the national grid.
The power sector experts said the government could easily get more than 500 MW from the captive plants before the next summer if they allow them to extend their existing capacity by installing some new generation machines.
Earlier, the government had invited tender to install seven rental power plants. But the state-owned Petrobangla refused to supply gas to three of them because of shortage in gas production, forcing three of the plants to roll back.
However, the issue of gas supply to new plants still remains a big question.