Coal-fired power plants: 5 to be kept, 16 may be cancelled

Coal-fired power plants are being criticised at home and abroad due to the harm these cause to the environment. The government too is now considering moving away from such power plants. The ministry for power, energy and ministerial resources is thinking of dropping the plans for all coal-fired power plants, only keeping the five plants which are already underway.

Power division sources have said that the government has approved of 21 coal-fired power plants, of which 5 are being implemented. These can produce a total of 23,236 MW of electricity. If the government only keeps 5 of the plants in consideration, then 16 will be dropped. Of these, 11 are ventures of state-owned companies as well as joint ventures of government and foreign companies. The remaining five are of local private companies.

The government is moving away from coal-fired power plants basically for three reasons. Firstly, there are various problems concerning the construction of power plants that run on imported coal. It is difficult to get funding for coal-fired power plants. Secondly, the power production target is higher than the demand, and so there are questions about the necessity of setting up so many new plants. Thirdly, construction of most of the coal-fired power plants has not begun on time.

The power division will shortly submit a proposal to the prime minister for the cancellation of coal-fired power plants.

State minister for power, energy and mineral resources, Nasrul Hamid, speaking to Prothom Alo on 23 October over mobile phone, said, even though it is less expensive to use coal in power production, construction hasn’t even begun on many of the plants which have been approved. And so recommendations will be made to the prime minister to cancel these plants.

When asked why construction on these plants had not begun, the state minister said it takes around Tk 85 billion (Tk 8,500 crore) to construct a 1000 MW coal-fired power plant. Those setting up the plant must have at least 30 per cent of this. Many of the entrepreneurs do not have such funds and have not managed to arrange bank loans for the purpose. There are several other matters too, including the transportation of coal.

The five coal-fired power plants which the government is keeping in its plans include the 2,640 MW power plant being set up in Payra as a joint venture of the North-West Power Generation Company and China’s CMC. Also being retained in the plans are the four-unit 4,800 MW plant of the Coal Power General Company Bangladesh Ltd (CPGCBL) in Matarbari, Maheshkhali and the 1,320 MW plant being constructed under Bangladesh-India joint ownership in Rampal, Bagerhat.

There is also the 307 MW plant being set up by the private company ISO Tech in Amtoli, Barguna and the 1,224 MW plant being set up by the S Alam company in Banshkhali, Chattogram.

The production capacity of these power plants is 10,291 MW.

Emphasis on setting up coal-fired power plants in the country was made from 2010. In that year, the government drew up a 20-year Master Plan for the power sector under funding of the Japanese development agency JICA (Japan International Cooperation Agency). In the plan, half of the power to be produced was by coal-fired plants. The Master Plan was changed in 2016. It was said that 60,000 MW of electricity would be produced in the country by the year 2041, of which 35 per cent would come from coal-powered plants.

The estimate given in the Master Plan was incorrect. It was seen that the demand for power was actually much less that the production capacity. For example, the present generation capacity in the country is 20,283 MW, but on 21 October the peak demand was around 10,000 MW. The government is having to pay huge subsidy while the power plants sit idle.

According to Bangladesh Energy Regulatory Commission (BERC), the power division over the past six years has spent around Tk 620 billion (Tk 62,000 crore) in just rent for these plants.

Professor M Tamim, special assistant (energy) to the former caretaker government’s chief advisor, told Prothom Alo there is no visible progress on any of the coal-fired power plants other than the ones at Rampal and Payra. It would be good if the government shut down all these plants other that these two. It is after all very difficult to run such plants on imported coal.

The plants which are seeing no progress will be on the list recommended for cancellation, said sources in the ministry. These include a plant taken up in Payra, Patuakhali, as a joint venture of the Rural Power Company and China’s NORINCO. A total of 916 acres of land had been acquired to set up the 1,320 MW plant. But no progress has been made on it.

Acquisition of 930 acres of land in Patuakhali is underway for the 1,320MW power plant of Ashuganj Power Station (APS). However, no contract has been signed for this plant. A feasibility study is being conducted for a 1,200 MW super thermal power plant in North Bengal.

The government had been considering a coal-fired power plant hub, comprising nine coal-fired plants, in Maheskhali, Cox’s Bazar. The ministry now feels that eight of these are no longer required. The plants to be cancelled here may include one of CPGCBL and Singapore’s Sembcorp, one of CPGCBL and Japan’s Sumitomo, and four joint ventures of Bangladesh Power Development Board (BPDB) with various foreign companies.

The government gave three private companies of the country permission to set up seven coal-fired power plants. However, hardly any progress has been made on these. Two senior officials of the power division, on condition of anonymity, told Prothom Alo that some of the companies now want to turn to power plants with Liquefied Natural Gas (LNG) rather than coal. The government, however, hasn’t displayed any positive signs in this regard as yet.

Energy expert M Shamsul Alam said that the number of power plants being constructed at present is adequate to meet the demands of the future. But there is no need to set up LNG-based power plants instead of coal-fired ones. LNG costs may be low at present but this may shoot up in future.

* This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Ayesha Kabir