Sharier Khan, The Daily Star, June 9, 2009
In view of the gloomy gas supply scenario, the Power Development Board (PDB) for the first time shifted its focus from gas-fired plants and proposed for six coal-fired power projects -- five of them very large -- totalling 2,625 megawatt to be installed by 2013-2015, sources say.
In addition, PDB in its proposal to the power ministry recommended setting up of three more 100MW duel-fuel power plants by 2013.
At the same time, PDB sees a power crisis of 1,467MW by this December and recommends setting up of 10 small non-gas rental power projects of 400MW capacity for one-year term to ease the crisis throughout 2010.
The proposal says of the six coal-fired plants, five would be 500MW in capacity each. These would be set up on the basis of partnership between the public and private sectors or as independent power projects (IPP) like the Meghnaghat plant, having 25 years of contract for each.
The PDB incurs loss from purchasing power from rental and liquid fuel-based private power plants, as their tariffs are higher than PDB's selling price.
PDB's loss is higher for rental power projects. The PDB proposes that the government allocate it subsidy to cover up the losses.
If the ministry in principle approves these projects, PDB would take steps to determine technical and financial feasibility, location selection, fuel types and types of contracts for rental, IPP and public-private partnership.
The five large coal-fired plants will be located in Khulna, Chittagong, Meghnaghat-3, Meghnaghat-4 and Maowa. The first two plants could be commissioned by 2013 and the rest in 2015.
The coal could be imported or locally produced. Sources say coal has been chosen as the main alternative source of power, as the other options like imported oil or liquefied natural gas (LNG) are costlier.
On an average, coal-fired power costs US 5-6 cents per kilowatt hour, nuclear power also costs the same, gas 6-7 cents, wind 8 cents and solar 10-15 cents globally.
Besides, PDB could undertake a 125mw coal power project at the cost of $190 million at Katakhali in Rajshahi. The PDB may also take up three 100MW duel-fuel (having the capacity to use both gas and oil) projects, each costing $160 million in Faridpur, Hathazari and Dohazari.
On the one-year rental power projects, PDB recommends heavy fuel-fired plants in Thakurgaon of 20MW capacity, Khulna barge-mounted 50MW capacity and Noapara 50MW capacity.
The remaining rental plants would be fired by liquid fuel. They are 50MW Ashuganj, 40MW Bheramara, 40MW Barisal, 50MW Katakhali, 50MW Cox's Bazar and 50MW Shikalbaha.
The government had bitter experience with rental power projects, none of which could launch operation in time and some of which could not launch operation at all.
PDB sources say this negative experience was caused by selection of wrong contractors during the caretaker government.
"The upcoming power crisis demands that the government take quick measures to minimise the crisis. If awarded to competent contractors, rental plants can be a very effective solution, though it will be costlier than conventional plants," said an official.
As per the Power System Master Plan (PSMP) update 2006, the power demand in December this year should be 6,066MW, while the installed capacity should be 7,313MW.
But the power projects under implementation would add 811MW by December, leaving a power crisis of 1,467MW.
Presently the official capacity of PDB is around 5,000MW, while it can practically generate less than 4,000MW.
The PSMP update also says the demand will shoot up to 8,364MW in 2013, while the installed capacity should be 9,979MW.
"Presently the government has taken up various power projects which will bring 3,200MW power by 2014. The flaw in this plan is that these projects are not enough. We project that there will still be a power crisis of 2,000MW. This is why we are preparing a proposal," said a top PDB source.
The parliamentary standing committee on power had earlier reviewed the power projects under implementation and felt that they were not enough to address the country's problems.
The committee asked PDB to work on the plan and send it to the power ministry, sources say.
"The standing committee told PDB that it would strongly recommend the new power projects," a PDB official added.