Dhaka, jan 1 (UNB) – As the government has cancelled the 200 MW Teknaf Solar Park project following SunEdison’s failure to implement it as per the schedule, the executing agency has now moved the international arbitration challenging the government’s decision.
Sources at the Power Division said the US firm had been assigned with the task to implement the 200 MW grid-tied solar park project, country’s first-ever large-scale renewable energy project, which was scheduled to end by July 2018.
“But SunEdison couldn’t make any substantial progress in its implementation. That’s why the government issued it a ‘notice of intent’ to terminate the agreement in April last,” Mohammad Alauddin, a joint secretary at the Power Division, told UNB.
In reply, the US company sent a ‘notice of dispute’ as well as a legal notice in July to settle the issue as per 19 (b) of the Power Purchase Agreement (PPA) through the arbitration process, said officials of state-owned Power Development Board (PDB).
The PDB also responded to the notices and now the issue remains pending with the international arbitration, they said.
The PDB was supposed to purchase electricity at 17 US cents (equivalent to Tk 13.26) per unit or kilowatt-hour from the solar park.
The government had estimated that it would buy approximately 6482.4 million units of electricity from the company over a 20-year period at an estimated cost of Tk 8,595.66 crore.
The US firm had obtained the project on an unsolicited basis with much higher tariff compared to other similar projects, but it couldn't prove its efficiency, a top Power Division official told UNB, requesting anonymity.
SunEdison had been struggling with the project since it received the Cabinet Purchase Committee's approval on October 1, 2015.
Officials said the company became bankrupt in the USA in 2016 which plunged it into big financial crisis and even it failed to purchase required land in Teknaf of Cox's Bazar for the project. Some local firms came in the rescue of the US firm arranging 700 acres of land for the project, they noted.
As per the deal, the US firm was supposed to set up the park as an independent power producer (IPP) investing about $300 million.
Officials said private solar plants have been part of the government's plan to generate 24,000MW of electricity by 2021, of which a certain portion will come from renewable energy.
The said special emphasis was laid on power production from non-conventional sources like solar photovoltaic and wind.
The government has aimed to increase the total solar power production to 2,000MW by 2020.
But the total solar power production in Bangladesh has not crossed 300 MW yet.