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Oil-fired fast-track power projects slow as summer nears

M Azizur Rahman | March 28, 2018 00:00:00


Slow execution of 'fast-track' oil-fired power plant projects and failure to implement mid-term power plants might cause load-shedding during the upcoming summer too despite starting import of expensive LNG (liquefied natural gas).

None of the diesel-fired power plants that were awarded to the private sector bypassing tender under the fast-track programme is yet to start generating electricity, although these were scheduled to start coming online from this month.

The execution process of the furnace oil-fired power plants under the fast-track programme is also too slow to meet their deadline for coming online by May.

The government awarded 10 oil-fired power plant projects under fast-track programme having the tenures of 15 years each on the basis of unsolicited offers under the Speedy Supply of Power and Energy (Special Provision) Act 2010 to ensure electricity generation of around 1,768 megawatts (MW) in the quickest possible time.

The law has a provision of immunity to those involved with the quick-fix remedies.

The privately-owned power plant sponsors were also allowed duty-free import of furnace oil to run their power plants along with 9.0 per cent service charge on import costs as incentive, said a senior official of Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR).

Inadequate monitoring by the government high-ups and insufficient infrastructure continued to delay the execution of mid-term power plant projects especially several big coal-fired power plant ones, the official said.

Experts have questioned the policy on adopting the fast-track programme to implement the oil-fired power plant projects just only one month ahead of starting import of LNG.

LNG is all set to enter the country's energy market from April 25 with commercial operation to start from May 01, a senior Petrobangla official told the FE.

"And with import of LNG, several gas-fired power plants could start generating electricity," said the official.

Currently, Petrobangla can supply around 938 million cubic feet per day (mmcfd) of natural gas to generate electricity against a total demand for 1,915 mmcfd, which is hampering electricity generation of around 1,377 MW.

The government has planned to start purchasing around 500 million cubic feet per day (mmcfd) equivalent to LNG from Qatari RasGas and re-gasify it to US-based Excelerate Energy's FSRU (floating, storage, re-gasification unit) from May.

Now the country's overall average electricity generation is around 9,400 MW against an installed capacity of around 16,000 MW.

The government is, however, eyeing generation of around 12,000 MW of electricity, up by 26.31 per cent, from the current supply during the summer.

When contacted, chairman of state-run Bangladesh Power Development Board (BPDB) Md Khaled Mahmood expressed the hope that there would be no load shedding. The fast-track oil-fired power plants would come online soon, he hoped.

The country has already generated the highest 10,084 megawatts of electricity on March 19, he said.

"The government is pursuing the way of making hefty money by a section of 'unscrupulous' power entrepreneurs by relying heavily on rental-and quick-rental power plants for electricity generation," energy adviser of the Consumers' Association of Bangladesh (CAB) Prof M Shamsul Alam told the FE Sunday.

He questioned the government's intention to resolve the electricity crisis for long, saying that continued dependence on expensive oil-fired power plants with capacity-payment provisions went the way of dishonest businesspeople.

"A powerful syndicate is active in the country to keep it continuing," Mr Alam alleged.

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