Matabari power plant at what cost?

The Executive Committee of the National Economic Council (ECNEC) late last week approved the country's costliest ever development project. The project-a 1,200 megawatt (MW) ultra-supercritical coal-fired power plant---to be installed at Matabari Coast of Maheskhali Island would cost nearly Tk 360 billion. The Japan International Cooperation Agency (JICA) would bear most part of the cost of the projects.
The approval of the Matabari coal power plant sets in motion the likely entry of an array of similar coal-fired plants in the country's power sector in the next few years. Beside Matabari project, 18 more coal-fired power plant projects having a total 15,000 MW generation capacity are now in different stages of processing. In fact, the government has a plan to generate around 20,000 MW of electricity from coal-based plants by 2030.  
Given the prevailing power situation, the plan does raise hope among consumers in general and entrepreneurs in particular. At the moment, the availability of power at the consumers' end is far better than what was a couple of years back. Load-shedding was an order of the day then. This summer was more or less trouble-free. But the relative comfort has not been without a cost. The improvement in power generation was achieved through a very expensive route, the use of fuel-guzzling rental and quick-rental power plants. The power tariffs have been upped on several occasions during last five and a half years substantially to foot the hefty bills against power purchase from the private rental power plants that have nearly 1,900 MW generation capacity.
These rental power units in the private sector were supposed to be in existence for a period of three to four years as the grand-alliance government had a plan to put in place some large conventional power plants before the expiry of its five-year tenure. But the power ministry failed to materialise even one single large power plant either in public or private sectors. It is hard to say whether the failure was deliberate or otherwise. However, lots of allegations about financial irregularities involving the approval and operations of rental power plants have surfaced. The government has ignored all the criticism and allowed most rental power plants to continue operations on expiry of the initial contracts.
The government might have found it wise to renew the contracts of the rental power plants than scrapping the same since the level of dissatisfaction among power subscribers over frequent power outages would be far greater than what is usually created over the inflated power bills.
Though belatedly, the government is out to find a lasting solution to power problem. It has opted for imported coal as fuel for generating a substantial volume of electricity.
Natural gas would have been the most cost-effective fuel for generation of power. But that fuel is now hard to come by for generating an additional volume of power. The authorities are finding it really difficult to make available gas to the existing power plants. Some plants have been kept idle for short-supply of gas. The prospect of striking a large reserve of gas in onshore or offshore blocks also is not that bright.
However, the installation of a large number of coal-based power plants would necessitate the import of a large volume of coal. The projects in the pipeline are supposed to generate 15,000 MW of power. Usually 10 tonnes of coal are required to generate one MW of power daily. It means that the plans while in operation would need 150,000 tonnes of coal every day or nearly 55 million tonnes per year. At current market prices (Australian coal), the country would be required to spend more than US$3.8 billion annually on the import of coal for power generation. The price of coal in the international market is now at its lowest level since June 2012.
There is no denying that the dependence on fuels such as furnace oil and diesel for power generation would be far more expensive. However, all would depend on the future health of the country's foreign exchange reserve when all the coal-based power plants would be in operation.
It is rather an irony that the country having a reserve of high quality coal, which is enough to meet its requirements at least for 30 years, will have to spend such a large amount of foreign exchange on the import of the same.  Can a resource-starved country like Bangladesh afford this luxury? Should not this million-dollar question haunt the policymakers, experts and those who tend to stir up agitation on the streets?
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