Over Tk 1 trillion paid to power plants as capacity charge in 14 years

Eighty-two independent power plants (IPPs) and 32 rental power plants in the country have received over Tk 1 trillion as capacity charge in the past 14 years as of 30 June this year.

State minister for power, energy and mineral resources Nasrul Hamid disclosed this in response to a query during a question and answer session in parliament on Tuesday.

Gonoforum lawmaker Mokabbir Khan placed a question on how much the private power plants have so far been paid as capacity charge separately throughout the three terms of the Awami League government, which individuals and companies own these power plants, and what are the terms and conditions of the agreement between the government and the power plants owners.

In reply, state minister Nasrul Hamid revealed the details about the private power plants and capacity charge paid to them.

Analysis of the list presented by the state minister showed that 10 independent power plants have received the highest amount of payment in capacity charge. They are:

1. Bangladesh-China Power Company Limited (Tk 74.55 billion)

2. Meghna Power Limited (Tk 54.75 billion)

3. Rural Power Company Limited (Tk 40.04 billion)

4. Summit Meghnaghat Power Limited (Tk 36.44 billion)

5. Semcrop NWPC Limited (Tk 28.24 billion)

6. APR Energy (Tk 27.88 billion)

7. Summit Bibiana Power Company Limited (Tk 26.83 billion)

8. Haripur Power Limited (Tk 25.58 billion)

9. United Ashuganj Energy Limited (Tk 23.77 billion)

10. Bangla Track Power Unit-1 Limited (Tk 18.53 billion)

Nasrul Hamid said 32 power plants have been paid Tk 286.85 billion in rental payments throughout three terms of the government. The top ten power plants receiving rental payments are:

1. Aggreko International Projects (5 units) (Tk 64.11 billion)

2. Aggreko International Projects (Tk 23.41 billion)

3. KPCL (Khulna Power Company Limited) (Unit-2) (Tk 19.29 billion)

4. Summit Narayanganj Power Limited (Tk 15.69 billion)

5. Aggreko International Projects (85 MW) (Tk 15.58 billion)

6. Dutch Bangla Power and Associates Limited (Tk 15.30 billion)

7. Acorn Infrastructure Services Limited (Tk 14.84 billion)

8. Aggreko International Projects (95 MW) (Tk 14.39 billion)

9. Desh Energy Siddirganj (Tk 13.91 billion)

10. Max Power (Tk 13.06 billion)

State minister Nasrul Hamid also highlighted a list of terms and conditions from the agreements signed between the government and the private power plants receiving capacity charge.

These include ensuring 90 per cent of availability annually, or else capacity charge will be deducted; running annual dependable capacity test, and maintaining risk insurance during the power plant operation.

Whether in operation or not, as per the agreements, the public or private power plants receive rent, which is known as the capacity charge.

Bangladesh encouraged private sector investment in power production since the Awami League government came to power in 2009. The power generation capacity of the country now risen to about 23,500 megawatts of electricity against a domestic demand of less than 15,000 megawatts.

As a result, a portion of power plants receive capacity charge without even operating their plants, and the amount stands at Tk 200 billion annually. Payment of such capacity charge often draws backlash from different quarters.

M Shamsul Alam, vice president of the Consumers’ Association of Bangladesh (CAB), told Prothom Alo that capacity charge has been fixed without competition under the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010, better known as indemnity act, resulting in more profit for investors.

Since power plants has been paid capacity charge even when power plants were not in operation whereas power was not produced accordingly, this is another injustice, he said adding that people are paying higher power tariff now because of irrational capacity charge.

Replying to a query from ruling party lawmaker Habibur Rhaman, state minister Nasrul Hamid told parliament that the Bangladesh Rural Electrification Board (BREB) incurred a loss of Tk 25.63 billion in the 2022-23 fiscal while the Dhaka Electric Supply Company Limited (DESCO) faced Tk 2.27 billion in loss during this period and the Dhaka Power Distribution Company Limited (DPDC) incurred a loss of Tk 465.4 million in the first nine months of the 2022-23 fiscal.

In reply to another query from lawmaker Kazim Uddin Ahmed, Nasrul Hamid said 2,656 megawatts of electricity is being imported from neighbouring India under six different agreements.