The electricity of Indian Adani Group’s Jharkhand power plant will cost Tk 22 per unit as import to Bangladesh is expected to start from March this year, according to a Power Division media statement issued on Tuesday (January 03, 2023).
State Minister for Power, Energy and Mineral Resources Nasrul Hamid visited the Jharkhand power plant on Tuesday.
Power secretary Habibur Rahman and BPDB chairman Mahbubur Rahman accompanied the state minister during the visit.
During the visit, Nasrul told reporters that Bangladesh will receive the electricity from March this year for which a dedicated transmission line has been installed.
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“Power import from the Adani’s Jharkhand plant will be possible from March”, a Power Division media statement quoted him as saying.
“Initially we’ll get about 750 MW from the plant. We need more electricity to meet our demands in the coming summer”, it said.
Adani's Jharkhand coal-fired power plant will have a total of 1,600 MW capacity from two units, each having 800 MW.
“We’re looking for alternative sources of energy. We’ve been working giving priority on uninterrupted power supply at affordable prices”, Nasrul said.
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The Adani Group, very close to Indian Prime Minister Narendra Modi, set up the 1600 MW power plant in India’s eastern state of Jharkhand under a deal signed on November 5 in 2017 to export its entire electricity to Bangladesh.
Power Grid Company of Bangladesh (PGCB) constructed two substations at Chapainawabganj and Bogura in Bangladesh and also a transmission line to import the electricity.
Meanwhile, officials of the BPDB are concerned about the tariff of the imported electricity from the Jharkhand plant as its cost will be almost double of the electricity to be generated from locally installed Payra power plant, a joint venture of Bangladesh and China.
They said Bangladesh will incur a huge financial loss to the tune of about Tk 700 crore per month, once it starts importing electricity from the Adani 1,600 MW thermal power plant in Godda, Jharkhand state - due to the ‘flawed’ deal the government signed with the private Indian company.
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“Including the cost of coal and its transportation, we have to pay Tk 2,100 crore per month to import 1,600 MW from Adani's plant at a 75 percent plant factor considering the existing rates of coal in the international market," a top official of the state-owned BPDB told UNB.
If some rules and provisions observed in other similar deals (from the private sector, coal-fired) had been maintained here, the cost could have been kept down to Tk 1400 crore per month. The country has to count a loss of about Tk 700 crore per month, working out to Tk 8400 crore annually for the flaws in the deal, he added.
Over the project’s life cycle of 25 years, the loss in terms of the increased cost and hidden components in the tariff Bangladesh will ultimately incur Tk 2.10 lakh crore - a third of the national budget - considering the current coal price, the senior official noted.
The BPDB official said the lack of a provision for discounts in the purchase of the coal that will be used to fuel the plant is an oversight, considering such a provision was made mandatory in other deals that Bangladesh signed with independent power producers (IPP), where the price of coal to be purchased was kept as “pass-through”.
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Explaining the matter, he said Adani will purchase the coal for its power plant as primary fuel and Bangladesh will pay the price of the coal.
Normally, the coal price is calculated on the basis of the Newcastle Price Index, and if any company purchases coal at a higher quantity with higher calorific value, then it gets upto 55 percent discount on the bulk value.
This was the provision kept in the power purchase deal from the 1320 MW Payra power plant, a joint venture project of Bangladesh and China, where BPDB is benefiting from the discount in the price of coal.
“But BPDB will not get any discount in coal price which ultimately pushes up the electricity tariff from the Adani plant by at least 50 percent,” said the official who has been involved in handling the project from BPDB.
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As a result, if the price of electricity from Bangladesh's Payra Power Plant is calculated at Tk 12-13 per unit including the cost of coal, the price of per unit electricity from Adani plant will be about double at Tk 20-22 per unit, he added.