[🇧🇩] Energy Security of Bangladesh

[Saif]

Payra power plant halts production for tests of new facility

Production cost at new facility to be lower than that of Adani, other plants

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Payra power plant halts production for tests of new facility
Production cost at new facility to be lower than that of Adani, other plants

The Payra thermal power plant in Kalapara upazila of Patuakhali has halted production to conduct maintenance and facilitate the test commissioning of a neighbouring facility, according to officials of the 1,320-megawatt (MW) coal-fired power station.

They informed that the plant's first 660 MW unit was shut down for seven days from December 16 for the test commissioning of the nearby power plant run by RPCL- NORINCO International Power Limited (RNPL).

Meanwhile, the second unit was shuttered earlier on November 9 for three months for conducting major maintenance works, said Shah Abdul Mawla, project officer of the Payra power plant.

He said the newly-built RNPL power plant will begin production on a trial basis in January.

As such, power generation at the Payra power plant was halted to allow testing of the transmission lines of the new facility in Amtoli upazila of Barguna, he said.

The new plant is located on the banks of the Ramnabad river, just two kilometres north of the Payra power plant. Costing about $2.5 billion, its construction began in 2019 on some 950 acres of land.

The RNPL is a joint venture of Bangladesh's state-owned Rural Power Company Limited and China's state-owned Norinco International Cooperation Limited, with each having an equal stake.

To enable the test for commissioning the RNPL-run plant, the authorities of the Payra power plant allowed for their thermal power transmission lines to be kept shut, he added.

Selim Bhuiyan, managing director of the RNPL, said each unit of the two units of the new power station can produce up to 660 MW of electricity.

"But to begin operations, it is now necessary to conduct the test. For this, the Payra-Gopalganj 400 kV power transmission line will have to be shut down. Then, it will take up to 75 days for the commissioning," he added.

Bhuiyan also said they expect the new plant to begin contributing to the national grid on the first week of March and production at its second unit of equal capacity was expected to begin by the end of May.

Sources close to the project said the total installed capacity of the grid-based power plants in the country is about 27,740 MW.

Of this, the capacity of coal-based power plants is 5,683 MW. If the capacity of the RNPL-run plant is added, the total capacity of coal-based power plants would stand at 7,000 MW, they said.

Regarding coal stocks for the new power plant, Bhuiyan said when the plant starts generating electricity, 12,000 tonnes of coal would be required on an average per day for the two units.

An agreement has already been reached with Singaporean company Yantai to supply 1 million tonnes of coal.

Under that agreement, 1.28 lakh tonnes of coal have reached the new power plant. More coal will arrive in January. In this way, coal will be imported in phases according to demand.

He said in an attempt to minimise environmental damage, high-quality coal from Indonesia would be used in this new plant. It is a state-of-the-art power plant, where more electricity will be generated by burning less coal compared to conventional power plants.

Regarding the price of electricity, he said the production cost of this new plant will be lower than that of Adani, Rampal, Banshkhali and other thermal power plants.

Considering the current price of coal ($77), the price of electricity per unit can be around Tk 9.85 on an average.

Md Toufiq Islam, project director and chief engineer of the RNCL-run plant, said if everything goes well, the first unit would be fully operational by early March and the second unit by June.​

 

[Saif]

Govt won’t raise power tariff despite pressure from IMF: energy adviser

The energy adviser explained that while the IMF recommended a tariff hike to ease the subsidy burden in the power sector, the government emphasised the adverse effects such a move would have on citizens already grappling with high inflation

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Govt won’t raise power tariff despite pressure from IMF: energy adviser

The interim government will not increase power tariffs despite a recommendation from the International Monetary Fund (IMF), said Power and Energy Adviser Dr Fouzul Kabir Khan today.

"We will not raise power tariff despite IMF's suggestion," Fouzul told reporters after a meeting with an IMF delegation at the finance ministry.

The delegation, led by IMF Mission Chief to Bangladesh Chris Papageorgiou, held a meeting as part of the IMF's third review under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF). Finance Adviser Dr Salehuddin Ahmed and Fouzul were present during the discussions.

The energy adviser explained that while the IMF recommended a tariff hike to ease the subsidy burden in the power sector, the government emphasised the adverse effects such a move would have on citizens already grappling with high inflation.

The government is focusing on reducing subsidies by cutting production costs in the energy sector, the adviser said.

He also highlighted several reforms aimed at improving efficiency and transparency in the power sector.

The government has repealed the Speedy Increase of Power and Energy Supply (Special Provision) Act, 2010, and removed bureaucrats from the boards of directors in various power companies, he noted.​

 

[Saif]

Adani pressed by Bangladesh to reopen power deal

Bangladesh’s interim government has accused energy supplier Adani Power of breaching a multi-billion-dollar agreement by withholding tax benefits that a power plant central to the deal received from New Delhi, according to documents seen by Reuters.

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Adani pressed by Bangladesh to reopen power deal

A general view of the Adani Corporate House in Khodiyar village near Ahmedabad in India’s state of Gujarat on November 21, 2024. Photo: AFP/file

Bangladesh's interim government has accused energy supplier Adani Power of breaching a multi-billion-dollar agreement by withholding tax benefits that a power plant central to the deal received from New Delhi, according to documents seen by Reuters.

In 2017, the Indian company controlled by billionaire Gautam Adani signed an agreement with Bangladesh to provide power from its coal-fired plant in eastern India. Dhaka has said it hopes to renegotiate the deal, which was awarded by then-Prime Minister Sheikh Hasina without a tender process and costs Bangladesh far more than its other coal power deals, according to Bangladesh power agency documents and letters between the two parties reviewed by Reuters, as well as interviews with six Bangladesh officials.

Dhaka has been behind on payments to Adani Power since supply started in July 2023. It owes several hundred million dollars for energy that has already been supplied, though the two sides dispute the exact size of the bill.

Bangladesh's de facto power minister Muhammad Fouzul Kabir Khan told Reuters the country now had enough domestic capacity to cope without the Adani supply, though not all domestic power generators were operational.

Nobel peace prize laureate Muhammad Yunus took power in August after a student-led revolution ousted Hasina, who critics accuse of stifling democracy and mismanaging the economy. She ran Bangladesh for most of the last two decades and was a close ally of Indian Prime Minister Narendra Modi.

Reuters is reporting for the first time that the contract came with an additional implementation agreement that addressed the transfer of tax benefits. The news agency is also revealing details about Bangladesh's plan to reopen the 25-year deal, and that it hopes to use the fallout from US prosecutors' November indictment of Adani and seven other executives for their alleged role in a $265 million bribery scheme to press for a resolution.

Adani Power has not been accused of wrongdoing in Bangladesh. A company spokesperson said in response to Reuters' questions that it had upheld all contractual obligations and had no indication Dhaka was reviewing the contract. The company did not answer questions about the tax benefits and other issues raised by Bangladesh.

Adani Group has called the US allegations "baseless."

TAX EXEMPTIONS

Adani Power's Godda plant runs off imported coal and was built to serve Bangladesh.

The company said the Bangladesh deal helped further Indian foreign policy objectives and Delhi in 2019 declared the plant part of a special economic zone. It enjoys incentives such as exemptions on income tax and other levies.

The power supplier was required to inform Bangladesh swiftly of changes in the plant's tax status and to pass on the "benefit of a tax exemption" from India's government, according to the contract and implementation agreement signed on November 5, 2017 between Adani Power and the state-run Bangladesh Power Development Board (BPDB).

But Adani Power did not do so, according to letters sent by BPDB on September 17, 2024 and October 22, 2024 that urged it to remit the benefits.

The agreements and letters are not public but were seen by Reuters.

Two BPDB officials, who spoke on condition of anonymity because they were not authorised to talk to the media, said they did not receive responses.

BPDB estimates savings of roughly 0.35 cents per unit of power if the benefit was passed on, the officials said. The Godda plant supplied 8.16 billion units in the year to June 30, 2024, according to an undated Bangladesh government summary of power purchases seen by Reuters, suggesting potential savings of about $28.6 million.

Power minister Khan said the savings would be a key part of future discussions with Adani Power.

'NEGOTIATED HASTILY'

Bangladesh in November scrapped a 2010 law that allowed Hasina to award some energy deals without a competitive bidding process.

The absence of tenders is unusual, said Tim Buckley, director of Australia's Climate Energy Finance think-tank, adding that auctions ensure "the best price possible."

In September, Yunus's government appointed a panel of experts to examine major energy deals signed by Hasina. A Bangladesh court has separately ordered a probe of the Adani deal.

Another panel asked to study the economy said in a white paper submitted to Yunus on December 1 that the US charges against Adani meant Bangladesh should "scrutinise" the power deal, which it described as "negotiated hastily."

Hasina, who has not been seen in public since she fled to India, could not be reached. Her son and adviser Sajeeb Wazed told Reuters he was not aware of the Adani Power deal but that he was "sure there was no corruption."

"I can only assume the Indian government lobbied for this deal so it was made," he said in response to allegations of political interference.

Modi's office and other Indian officials did not respond to requests for comment.

HARDBALL

On October 31, Adani Power halved the power supply from Godda in response to the payment dispute with Bangladesh.

The company in a July 1 letter seen by Reuters also rejected a request from BPDB to extend a discount it had offered until May - resulting in savings of about $13 million for Bangladesh. It said it would not consider further discounts until payment was cleared.

Adani Power contends it is owed $900 million, while BPDB says arrears are about $650 million. Bangladesh suffers from a dollar shortage and BPBD officials told Reuters they haven't been able to obtain sufficient foreign currency for payment.

The halving of supply particularly angered Bangladesh, BPDB Chair Md Rezaul Karim said, because it came after Dhaka in October remitted $97 million to Adani Power - its highest monthly payment this year.

The dispute revolves around how power tariffs are calculated, with the 2017 agreement pricing off an average of two indices.

The unit cost of energy from Godda was 55 percent above the average of all Indian power sold to Dhaka, according to the summary of Bangladesh's power purchases.

Bangladesh is pressing for Adani Power to use other benchmarks that would lower the tariff after one of the indices was revised last year, said three BPDB sources.

Adani Power has rejected that, one of them said, adding the two sides were meeting soon.

The agreements stipulate that arbitration be carried out in Singapore, but Khan said Bangladesh's next move depended on the outcome of the court-ordered investigation.

"If it is proven that bribery or irregularities had happened, then we will have to follow the court order if any cancellation happens," he said.​

 

[Saif]

13 out of 18 Summit Group power plants operational

Of the 18 power plants operated by Summit Group, 13 remain operational while five are currently shut down, the company revealed in a statement. Summit Corporation Limited owns and operates a total of 18 power plants with a total capacity of 2,255 MW and also operates Bangladesh’s second Floa

thefinancialexpress.com.bd

13 out of 18 Summit Group power plants operational
FE ONLINE DESK
Published :
Dec 19, 2024 22:28
Updated :
Dec 19, 2024 22:28

Of the 18 power plants operated by Summit Group, 13 remain operational while five are currently shut down, the company revealed in a statement.

Summit Corporation Limited owns and operates a total of 18 power plants with a total capacity of 2,255 MW and also operates Bangladesh’s second Floating Storage and Regasification Unit (FSRU) with a capacity of 500 million standard cubic feet per day (mmcf/d), reports UNB.

Summit Power Limited (SPL), a publicly listed company, along with Summit Corporation Limited, owns 15 power plants with a total 976 MW installed capacity.

Presently, three Unit I Power Plants in Ashulia, Madhabdi and Chandina (a total of 33 MW) are in shutdown mode due to gas supply limitations, though these power plants have Power Purchase Agreement (PPA) till November 21, 2028 under “No Electricity, No Payment” basis without guaranteed off-take.

Meanwhile, Madanganj Power Plant (102 MW, HFO fired) located in Narayanganj is in shutdown mode as BPDB has not placed any electricity demand since mid-August 2024.

The Jangalia Power Plant (33 MW gas-fired) is in shutdown mode since initial expiry on June 24, 2024 of the Power Purchase Agreement (PPA) with BPDB. Furthermore, BPDB has not informed any step for renewal of PPA or resumption of operation.

The remaining 10 power plants of SPL with installed capacity of 808 MW are in operation.

Separately, three turbine power plants, Summit Meghnaghat Power Company Limited, Summit Meghnaghat II Power Company Limited, and Summit Bibiyana Power Company Limited with a total installed capacity of 1,279 MW are operational as well as the Floating Storage and Regasification Unit (FSRU).

Summit Power Limited (SPL) has requested a time extension till March 31, 2025 for providing year-end (on June 30, 2024) audited financial statements and declaring dividends.

SPL is expecting the Annual General Meeting (AGM) to be held between April and May 2025, said the Summit Group.​

 

[Saif]

Pathways to green energy

BANGLADESH stands at the forefront of the global fight against climate change. As one of the most climate-vulnerable countries in the world, it faces rising sea levels, increasing...

www.newagebd.net

Pathways to green energy
by Musharraf Tansen 22 December, 2024, 00:00

BANGLADESH stands at the forefront of the global fight against climate change. As one of the most climate-vulnerable countries in the world, it faces rising sea levels, increasing temperatures, erratic weather patterns and a higher frequency of natural disasters. These challenges threaten the country’s economy, ecosystems and the livelihoods of millions. To combat these threats, Bangladesh must embrace green energy as a cornerstone of its strategy. Transitioning to renewable energy offers a dual opportunity: mitigating the impacts of climate change and fostering sustainable development.

Climate crisis

BANGLADESH’S geographic and socio-economic conditions make it exceptionally vulnerable to climate change. With about one-third of the population living in coastal areas, rising sea levels pose an existential threat. Saltwater intrusion into arable land is already compromising agriculture, which employs 40 per cent of the labour force. Moreover, extreme weather events like cyclones and floods are increasing in intensity and frequency, displacing millions and exacerbating poverty. According to the Global Climate Risk Index, Bangladesh consistently ranks among the most affected countries by climate-induced disasters.

Bangladesh’s contribution to global greenhouse gas emissions is, however, negligible — less than 0.5 per cent. The paradox of being a victim of emissions largely caused by industrialised nations underscores the importance of developing a resilient and low-carbon energy infrastructure within the country.

Case for green energy

GREEN energy, derived from renewable sources such as solar, wind, hydropower and biomass, represents more than just a mitigation strategy; it is a comprehensive solution aligned with the Sustainable Development Goals. For Bangladesh, adopting green energy offers numerous benefits that span environmental, economic and social dimensions. Transitioning to renewable energy sources is critical for ensuring environmental sustainability. Unlike fossil fuels, renewable energy sources do not emit carbon dioxide or other harmful pollutants, making them a cleaner alternative. This is particularly crucial for Bangladesh, where air pollution poses a growing threat to public health and environmental well-being. By reducing greenhouse gas emissions, the country can make significant strides in combating climate change and protecting its natural resources.

In addition to environmental benefits, renewable energy strengthens energy security. Bangladesh currently relies heavily on imported fossil fuels, leaving its economy vulnerable to fluctuating global energy prices. Harnessing the country’s abundant renewable resources can decrease dependency on imports, ensuring a more stable and self-sufficient energy supply. Economic opportunities also abound in the renewable energy sector. Investments in green energy have the potential to create thousands of jobs in areas such as manufacturing, installation, maintenance, and research. Decentralising energy production through solar and wind systems can further empower rural communities, stimulate local economies, and foster inclusive development.

Improved access to energy is another compelling advantage of green energy. Technologies such as solar power are particularly suited to off-grid applications, addressing the needs of rural areas where extending the national grid is often impractical and expensive. Decentralised solar energy systems can provide affordable and reliable electricity, transforming lives by enabling better education, healthcare, and economic activities. By embracing renewable energy, Bangladesh can tackle pressing challenges while advancing toward a greener, more equitable, and prosperous future.

State of renewable energy

BANGLADESH has already made some progress in renewable energy, particularly in solar power. The Infrastructure Development Company Limited has installed over six million solar home systems across rural areas, benefiting more than 20 million people. The country has also launched initiatives to develop solar mini-grids, solar irrigation systems, and rooftop solar solutions.

Despite these successes, renewable energy constitutes only about 3 per cent of Bangladesh’s total energy mix. The government’s Power System Master Plan 2016 originally prioritised fossil fuels, particularly coal and natural gas, to meet growing energy demands. However, recognising the environmental and financial costs, the government needs to revisit its approach to emphasise renewables.

Challenges to scaling green energy

WHILE the potential for green energy in Bangladesh is immense, several challenges must be overcome to fully realise its benefits. Financial constraints are among the most significant barriers, as renewable energy projects demand substantial initial investments. For a developing country like Bangladesh, mobilising the necessary resources can be daunting, particularly in the absence of favourable financing mechanisms. The lack of incentives for private sector investment further compounds the issue, leaving many promising projects underfunded or stalled.

Policy and regulatory barriers also hinder the growth of green energy. Despite progressive measures such as the Renewable Energy Policy of 2008 and the goal to generate 10 per cent of electricity from renewables by 2030, the pace of implementation has been slow. Streamlining regulatory frameworks, reducing bureaucratic hurdles and introducing more robust incentives are essential steps to accelerate renewable energy adoption. Technological limitations pose additional challenges, particularly the intermittent nature of solar and wind energy, which requires advanced storage solutions and modernised grids for effective integration. Unfortunately, Bangladesh’s current energy infrastructure is not yet equipped to handle large-scale renewable energy deployment, necessitating significant upgrades.

Land availability is another critical issue in a densely populated country like Bangladesh, where space for large-scale solar and wind farms is scarce. Innovative solutions, such as installing floating solar panels on water bodies, could help address this constraint, but these technologies require additional research and investment. Public awareness and acceptance further complicate the transition to green energy. Many people remain unaware of the benefits of renewable energy or are sceptical of its feasibility. Comprehensive education campaigns and active stakeholder engagement are crucial to building public support and driving behavioural change. Addressing these challenges through coordinated efforts from the government, private sector, and civil society is essential for scaling up green energy and advancing toward a sustainable energy future in Bangladesh.

Pathways to green energy future

TO OVERCOME the challenges and unlock the potential of renewable energy, Bangladesh must adopt a comprehensive and multi-pronged strategy. Policy reforms and incentives are a crucial starting point. The government should revise its energy policies to place a stronger emphasis on renewables by introducing measures such as feed-in tariffs, tax breaks, and subsidies for renewable energy projects. These steps can create an attractive environment for private investment. Clear and consistent policies are essential to instil confidence among investors and developers, ensuring long-term commitment to the sector.

International collaboration offers another pathway to progress. Bangladesh can leverage support from organisations like the Green Climate Fund and enter bilateral agreements with renewable energy leaders such as Germany and Denmark. These partnerships can provide much-needed technical and financial assistance to finance and implement large-scale projects. At the same time, innovation and technology transfer will be vital in addressing the technological gaps. By investing in research and development and fostering collaborations with global technology leaders, Bangladesh can acquire and adapt advanced renewable energy technologies. Encouraging local innovations, such as solar-powered boats and community-based micro grids, will also play a key role in creating tailored solutions for the country’s unique challenges.

Capacity building is equally important to ensure the sustainability of the renewable energy sector. Developing a skilled workforce through training programmes and academic courses focused on renewable energy technologies and project management will help build local expertise. This will not only strengthen the sector but also create employment opportunities for thousands of Bangladeshis. Alongside this, community-centric approaches should be prioritised to foster local acceptance and ownership. Engaging communities in the planning and implementation of renewable energy projects ensures their sustainability. Community ownership models, such as cooperatives managing solar mini-grids, can enhance social equity and provide direct benefits to those involved.

Finally, private sector participation is indispensable for scaling renewable energy efforts. Public-private partnerships can mobilise the resources and expertise required for large-scale projects. The private sector’s ability to drive innovation, streamline processes, and manage risks makes it a valuable partner in achieving Bangladesh’s renewable energy goals. By combining these strategies, Bangladesh can chart a sustainable energy future, addressing its environmental challenges while promoting economic and social development.

Vision for future

IMAGINE a Bangladesh where solar panels glisten on rooftops, wind turbines spin along coastal areas, and rural communities thrive with access to clean and reliable energy. Renewable energy can power industries, schools, and hospitals, reducing carbon footprints while driving economic growth. The vision is not just aspirational; it is achievable with concerted efforts.

The energy transition in Bangladesh is shaped by political ambition and economic necessity but faces significant obstacles, including fossil fuel dependency, financial barriers and governance challenges. A balanced approach that integrates renewable energy development with equity and affordability considerations is essential for a successful transition. Green energy represents a transformative opportunity for Bangladesh to address the dual challenges of climate vulnerability and energy demand. By prioritising renewable energy, Bangladesh can reduce greenhouse gas emissions, enhance energy security and foster sustainable development. However, achieving this vision requires bold leadership, robust policies and collaboration across sectors. As a climate-vulnerable nation, Bangladesh has a moral imperative and a practical necessity to lead the transition to green energy. The time to act is now — for the sake of the environment, the economy and future generations.

Musharraf Tansen is a development analyst and former country representative of Malala Fund.​