Some 11 proposals including extension of four rental power plants and import of 200,000 metric tons of rice from Myanmar received the nod of the Cabinet Committee on Government Purchase (CCGP) on Wednesday. Agriculture Minister Mohammad Abdur Razzaque presided over the meeting due to non-availability of Finance Minister AHM Mustafa Kamal. According official sources, rental plants are 100 MW Julda, Chattagram, plant of Acorn Infrastructure Services Ltd, 50 MW Katakhali, Rajshahi power plant of Northern Power Solutions Ltd, 100 MW Keraniganj plant of PowerPac Mutiara Keraniganj Power Plant Ltd and 50 MW Amnura, Chapainababganj plant of Sinha Power Generation Company Ltd.      Read: Nasrul to businesses: Stop talking about rental power plants They said the four HFO-based power plants received the approval for two year extension of their contracts under which the state-owned Bangladesh Power Development Board (BPDB) will purchase electricity for next two years. “But contracts will be extended under a new term and condition—No Power, No Payment—basis. The operators will not get any capacity payment as per new condition”, said a senior official at the Power Division. He also informed that as a result of the new condition, the new tariff will be applicable in purchasing electricity. “The sponsors of the rental plants will get only fuel cost plus a minimum operation and maintenance expense”, he added. The CCGP approved a Food Ministry’s approval to import 200,000 MT of while rice (Atop) from Myanmar under a G-to-G contract. The entire consignment will cost a total of $90.1 million while each ton will cost $465.50, said a top official of the Food Ministry. The Cabinet committee also approved proposals on import of a total of 115,000 metric tons of fertilisers. Read: Despite 40 pc surplus capacity, BPDB buys 6 pc of electricity from pricier rental power plants Of these, 50,000 MT of MOP fertiliser from Canadian Commercial Corporation, 40,000 MT of DAP fertiliser from Maadeen of Saudi Arabia and 25,000 MT of TSP fertiliser from GCT of Tunisia will be imported by the Bangladesh Agriculture Development Corporation (BADC) of the Agriculture Ministry.       However, the price of the fertiliser was not learnt as there was no briefing from the Cabinet Division about the outcomes of the CCGP meeting.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid has urged the businesspeople to stop commenting on rental power plants as he ruled out any reduction in power tariff. “They (businesses) should talk about uninterrupted and quality power supply at affordable price…from which kind of plants they are getting electricity should not be their subject”, he told reporters while addressing a “Meet the Press” on Tuesday. Also read: Despite 40 pc surplus capacity, BPDB buys 6 pc of electricity from pricier rental power plants He also said there is no possibility that the electricity tariff will decrease. It may rise, but will remain within affordability. Nasrul noted that Bangladesh will not buy crude oil from Russia as the fuel’s specification will not match with the country’s own requirements. He mentioned that many countries are facing difficulties in keeping their price lower amid the global situation after the Russia-Ukraine war. “You should not think that you would get electricity at the same price that you were getting 13 years back. You should not expect that”, he said responding to a question about the government’s assurance that the power tariff will gradually be cut down within 4-5 years after a temporary rise due to costly rental and quick rental power plants.       Forum for Energy Reporters Bangladesh (FERB) and Bangladesh Power Development Board (BPDB) jointly organised the event titled: “BPDB’s 50th Anniversary: Achievements and Challenges” at Biduyt Bhaban in the city.  BPDB chairman Mahbubur Rahman and FERB chairman Shamim Jahangir also addressed the function while it was moderated by FERB executive director Rishan Nasrullah.  Reacting to the FBCCI’s demand for shutting down the rental and quick rental power plants, Nasrul said “If fabric merchants talk about power plants from which we should get electricity, it’s not fair.” “If your problem is about uninterrupted power supply, then it’s okay”, he said. “You should not advise about the dos and don’ts….You should talk about whether the power supply situation has improved or not”, he added. Defending the BPDB’s moves about raising power tariff, the state minister said the income of the people has increased too. “Now the people’s thoughts should be about the quality supply of electricity,” he said. He, however, said the current challenge of the Power Division is to ensure uninterrupted power supply. But it is unlikely that the uninterrupted power supply will be ensured before the next 5-6 years as it involves huge cost. Also read:Despite surplus electricity, contracts of 10 rental power plants extended in four months “If we go for ensuring uninterrupted power supply, the entire power distribution and transmission line have to go underground…all substation will go underground which are very costly projects”, he said adding that only Uttara Area will need Tk 14,000 crore to take the system underground. He said the government has to think about the return from such a huge investment. He said many countries are offering Bangladesh to buy their petroleum products and Bangladesh has no crisis regarding the petroleum fuel as it has long import term agreements with different countries like Saudi Arabia and UAE.

Though Bangladesh has over a 40 per cent surplus above its generation capacity of more than 25,000 MW of power, the state-run power agency has continued to purchase six per cent of electricity from the pricier rental and quick rental plants. This has been revealed in documents state-run Bangladesh Power Development Board (BPDB) has placed to the Bangladesh Energy Regulatory Commission (BERC) during the recent public hearing on its proposal to hugely hike the power rates despite protests from businesspeople which call the move as suicidal to the economy. Also read: Any rise in power, gas tariff to be suicidal: FBCCI According to the documents the government has to buy about 1,200 MW of electricity from rental and quick rental power plants spending Tk 4,564 crore in the current fiscal year, while BPDB’s revenue deficit is Tk 30,252 crore. To offset the revenue deficit, the BPDB moved a proposal to the energy watchdog body to raise electricity tariff to Tk 8.58 per unit at bulk level from the existing Tk 5.17. The BPDB official data shows the country’s total generation capacity is 25,235 MW of which grid-connected generation is 22,348 MW upto April this year while the remaining 2887 is captive generation, mainly produced by industry owners, exclusively for running their own industries. The country’s highest generation was recorded 14,782 MW on April 16 meaning that the surplus capacity is 10,453 MW (about 41 per cent). Of the 22,348 MW, some 50.3 per cent (11,240 MW) is being generated by public sector entities while the remaining 49.7 per cent (11,108) MW is coming from the private sector. The BPDB documents reveal the government has to spend a total of Tk 71,878 crore in the FY2021-22 for total power production, of which Tk 44,434 crore will be spent for purchasing electricity from the private sector. Of this amount, Tk 37,963 crore will be required to purchase electricity from the independent power producer (IPP) and small IPP plants in the private sector which produce 38 per cent (8,807 MW) of the total generation. The documents show the government has to spend Tk 1907.8 crore for buying power from rental and quick rental power plants which are 6 per cent (6,013 MW) of the total generation. The data also shows the government will need to spend Tk 4,564 crore to import about 10 per cent of electricity (1160 MW) from India. As per the BPDB documents, currently there are three types of rental power plants—15 years rental (169 MW), 3/5 years rental (255 MW) and No Electricity, No Payment rental power plants. It is mentionable that despite surplus electricity generation over demand, the government in the last four to five months extended the contracts of a total of 10 rental power plants. Of these, some five rental power plants got extension on March 23 in the Cabinet Committee on Public Purchase while four rental power plants got the approval on January 5 this year and one got approval on December 29 last year. Although the deals were extended on a “No Electricity, No Payment” basis, an allocation of Tk 6,564.08 crore was approved by the CCPP to pay the owners of the rental power plants for their operations. State Minister for Power, Energy and Mineral Resources Nasrul Hamid, however, defended the extension of the rental power plants’ contracts saying that the deals were made for “emergency necessity” to tackle the current situation. Also read: BERC’s TEC commends a 57.83pc hike in bulk power tariff rejecting BPDB’s 65.57pc “As there is a gas shortage, we have to run liquid-fuel based rental and quick rental power plants on full capacity to meet the demands," he told UNB. He also said these plants don’t oblige the government to make 'capacity payment' - i.e. payment for unused electricity that was the case with some earlier contracts. “As a result, the cost of electricity from these extended rental power plants came down by 30-40 per cent from the original cost," Nasrul said. The government documents show that of the approved five plants in March this year, three belong to Summit Group, one belongs to Dutch-Bangla Group and one to Orion Group. It was learnt that the government has to purchase electricity from the plants at Tk 16.40 per unit under the extended deals. Advisor of the Consumers Association of Bangladesh (CAB) and energy expert Dr M Shamsul Alam expressed resentment about the repeated approval of the rental power plants saying that there is no logical basis for the extension. He said the government should have taken consumers’ opinion through public hearing at Bangladesh Energy Regulatory Commission before the approval. He also said, “No approval is made for the interest of the consumers. Rather, all the approvals were given only to serve the interest of certain vested quarters." At a press conference on Saturday the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) said raising power and gas prices will be suicidal to economy recovering from pandemic shocks.

Despite surplus electricity generation over supply, the government in the last four months extended the contracts of a total of 10 rental power plants. Official documents of the Cabinet Committee on Public Purchase (CCPP) reveal the latest approval came on March 23 this year for extension of deals for 5 rental power plants. Earlier 4 rental power plants got the approval for contracts extension on January 5 this year and one got approval for extension on December 29 last year. Although the deals were extended on “No Electricity, No Payment” basis, an allocation of Tk 6,564.08 crore was approved by the CCPP to pay the owners of the rental power plants for their operations. Also read:Power flow set up from Payra plant to Rampal sub-station As per the BPDB statistics, the current total electricity generation capacity now stands at 25,514 MW while the supply is about 14,000 MW meaning that the country has an installed surplus capacity of 11,500 MW. State Minister for Power, Energy and Mineral Resources Nasrul Hamid, however, defended the extension of the rental power plants’ contracts saying that the deals were extended for “emergency necessity” to tackle the current situation. “As there is a gas shortage, we have to run liquid-fuel based rental and quick rental power plants on full capacity to meet the demands," he told UNB. He also said these plants don’t oblige the government to make 'capacity payment' - i.e. payment for unused electricity, that was the case with some earlier contracts. “As a result, the cost of electricity from these extended rental power plants came down by 30-40 percent from the original cost," Nasrul Hamid said. The government documents show that of the approved 5 plants in March this year, three belong to Summit Group, one belongs to Dutch-Bangla Group and one to Orion Group. As per the approval the Bangladesh Power Development Board (BPDB) will pay Tk 459.98 crore to Summit Group for purchase of electricity from its 40 MW furnace oil–based plant of the Khulna Power Plant, Tk 1295.42 crore to its Khulna Power Company Unit-II Ltd’s 115 MW Goalpara plant, and Tk 1157.52 crore to its Summit Narayanganj Power Limited’s 102 MW Madanganj plant.