Govt to allow three oil-fired quick rental power plants
Published : Tuesday, 21 September, 2021 at 12:00 AM Count : 635
The government is set to allow operation of three oil-fired quick rental power plants having a total generation capacity of around 300 megawatts (MW) by two years under the 'no electricity, no payment' system.
The Power Division is going to pick those three from the Bangladesh Power Development Board (BPDB)'s proposal where it (BPDB) sought extension of five oil-fired quick rental power plants having a total generation capacity of around 457 megawatts.
"We are considering three power plants plea amid acute gas crisis that slashed down power generation. The BPDB will purchase electricity from these plants under the 'no electricity, no payment' system, only when necessary, to meet the domestic demand," State Minister for Power, Energy and Mineral Resources Nasrul Hamid told The Daily
Observer on Monday.
The government has taken up the move after the much-talked-about 'Speedy Supply of Power and Energy (Special Provision) (Amendment) Bill 2021' by the Jatiya Sangsad a few days back.
However, Nasrul Hamid said the BPDB will not have to pay capacity payment to the power plant owners if it fails to buy electricity readily available to them.
Few months back, the Bangladesh Power Development Board (BPDB) sent a proposal to the Power Division seeking extension of five oil-fired quick rental power plants that included Summit Power's Madanganj 102 MW quick rental power plant, Orion's Meghnaghat 100 MW quick rental power plant, Dutch Bangla Power's Siddhirganj 100 MW quick rental power plant, Khulna Power Company's Khulna 115 MW quick rental power plant and Noapara 40 MW quick rental power plant.
These quick rental power plants came into operation in mid-2011 based on unsolicited offers under the Speedy Supply of Power and Energy (Special Provision) Act 2010 as the country was facing an acute electricity crisis at that time.
All these plants got an initial extension by five years in 2016. As many as 65 projects in the power and energy sector were approved under the law, according to the State Minister.
The Power Division also sent the proposal to the Bangladesh Energy Regulatory Commission (BERC) as there were some financial issues which needed to be settled through public hearing.
"In its electricity tariff hike order in March 2020, the BERC decided not to extend the tenures of oil-fired rental and quick rental power plants. The order was issued aiming to reduce the overall electricity generation cost as most of such plants charge higher electricity tariffs," a BERC senior official said.
It has been alleged that owners of these power plants have long been lobbying with the government to get the tenure of their power plants extended.
Bangladesh Power Development Board (BPDB), however, have incurred a loss of Tk 26,517.60 crore in the last eight years thanks to costly rental, quick rental and independent power plant projects (IPP) plants.
Recently the government stated that following the extension the rental power plants would remain 'standby'.
Currently, a total of 58 furnace oil-fired plants are operational in the country, having a cumulative electricity generation capacity of 5,712 MW, whereas the country's overall electricity generation capacity is 21,395 MW.
The number of total operational power plants is 143.