Power plants with higher heat rates now a headache

Shamsul Huda Higher heat rates at many power plants are causing losses to the nation, as these plants consume subsidised fuel in excess to generate power. Currently 84 power plants are generating electricity across the country. Of them, the heat rates are higher at old state-run power plants and at a number of independent power plants (IPPs) because of their use of less sophisticated machinery and equipment, according to sources. The heat rate is a yardstick used for comparing a power plant's fuel consumption level with its power generation. The low heat rate of a plant means it generates electricity by consuming less fuel while the high heat rate indicates it consumes a higher level of fuel. According to a source in the Power Cell under the Power Division, the Ministry of Power, Energy and Mineral Resources, heat rates at the state-run old power plants are higher. He said: "The situation is even far worse in many independent power plants (IPP) and some rental power plants due to their use of less sophisticated and reconditioned machinery and equipment." According to a source in the Bangladesh Power Development Board (BPDB), heat rates vary depending on use of fuel. But a low heat rate generally means a plant is using more sophisticated technology to generate power by consuming a low amount of fuel. He said in last five years 57 power plants had been commissioned with investments from private parties and due to wrong calculation and lack of experience many plants were facing trouble and some even became loss projects. Mohammad Hossain, Director General (DG) of the Power Cell, said the government monitoring was there to ensure the power plants were maintaining the declared heat rates. He said: "We've commissioned IPPs with investments from private parties under certain terms and conditions providing for maintaining a particular heat rate as per our requirement." He said: "If a plant fails to maintain that particular heat rate and consumes more fuel, it will inflict loss on it." According to the Power Cell DG, Bangladesh Petroleum Corporation (BPC) sells fuel to the power plants. "Though the use of fuel in excess does not inflict any loss on the government, still it is a national loss as the petroleum prices are subsidised," he said. He also said: "Some rental power plants' heat rates are higher than they are supposed to maintain and we are also penalising them in the event of breach of any contract. But it is difficult to realise penalty money from the errant power plants." To elaborate, he said owners of such errant rental power plants went to court against the penalty saying that their heat rates were higher because of the BPC's supply of lower quality fuel. He also said: "There is a stay order from the court and so we cannot realise the penalty money." Another source in the Power Cell said heat rates at many IPPs were high and the government was frequently telling them to maintain the required level of heat rate as per the contracts signed with the government. When asked about quality of the BPC fuel, an official of it said they were importing oil by maintaining the international standard specification and so there was no problem. Other IPPs, rental power plants and also the government were using the BPC oil, but they were finding no problem with the quality, he added. He said: "We do not have better laboratories to test the oil specification. But as per the standard specification, the imported oil is good enough for use for different purposes including power generation." The BPC source said the high heat rates at a number of rental power plants might be because of the plants' defective and reconditioned machinery and equipment. He also said many private power plants were outsourcing cheaper and reconditioned engines, boilers, turbines and other equipment and machinery leading to their increased heat rates. Currently out of the 84 power plants generating electricity, 46 plants are IPPs and the remaining 38 are run under the BPDB. According to the Power Cell DG, small power plants producing power ranging from 30 to 40 megawatts consume more fuel than the big power plants. The DG said: "It is the government's credit they are still running 30-year-old power plants to meet the demand for power in the country. If we use combined cycle power plants instead of the old power plants, it will be possible to more than double the generation by using the same amount of fuel." According to a source in the BPDB, the state-run old power plants are making heavy losses, as they consume huge fuel. He said, if monitored properly, the government could lower the heat rates and speed up private investments in generating electricity.