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[URL unfurl="true"]https://thefinancialexpress.com.bd/economy/pressure-on-govt-to-allow-operation-risking-capacity-payment[/URL]Japan's JERA-acquired gas-fired Meghnaghat plantPressure on govt to allow operation, risking capacity paymentTwo others already on stand-by there for constraintsM AZIZUR RAHMANPublished :Mar 30, 2025 00:22Updated :Mar 30, 2025 00:22[ATTACH=full]16157[/ATTACH]Now pressure builds on the interim government to approve commercial operation date (COD) of a third large LNG-fired power plant at Meghnaghat although the current infrastructure lacks ability to keep it operational alongside already-approved two such plants.The past Awami League government had previously approved the two similar unsolicited power plants at the Meghnaghat site -- and under contracts that provide for the much-talked-about capacity payment from the exchequer even if no power is produced or purchased.After several failed attempts by the Meghnaghat 718-megawatt power-plant owner, Japanese energy-biggie JERA, to attain a COD, the Ministry of Economy, Trade and Industry of Japan recently wrote to adviser Muhammad Fouzul Kabir Khan of the Ministry of Power, Energy and Mineral Resources (MPEMR) to have the COD fixed at the earliest, said sources.They said the incumbent government is now obligated to approve the COD risking the state-run Bangladesh Power Development Board (BPDB) to count capacity-payment burdens although the power board subsequently won't be able to take electricity for supplying to consumers due to the country's perennial gas crisis and pipeline bottlenecks, market insiders said."It is the burden left by the previous authoritarian Awami League government that awarded numerous power plants under unsolicited deals without considering feasibility," a senior BPDB official told The Financial Express.Most of these power plants were awarded on the basis of unsolicited offers under the now-defunct Speedy Supply of Power and Energy (Special Provision) Act 2010 which had a provision of immunity to those involved with the quick-fix remedies.State corporation Petrobangla, which was 'made to commit' supplying natural gas to the gas-fired power plants, doesn't have sufficient gas to run the existing gas-fired power plants, says a senior Petrobangla official.Petrobangla is currently being able to supply only half of the volume of gas required for feeding the gas-guzzling power plants, to the tune of around 1,034 million cubic feet per day (mmcfd), against a total requirement of 2,420 mmcfd, according to official data as on March 24, 2025."JERA has already completed all necessary work and is awaiting the opportunity to conduct the final commissioning test, which requires about 10 days' gas supply. However, they have been on hold for more than two and a half months for the commissioning of the final test," the METI letter reads.The letter is signed jointly by Shirai Toshiyuki, director of international affairs division, agency for natural resources and energy of the MRTI, and Shimano Toshiyuki, director of South East Asia office of Trade Policy Bureau of the METI."Further delays in gas supply would incur additional cost for the project and undermine its effectiveness. This type of negative information can spread quickly among investors and dampen their sentiment towards Bangladesh," says the METI letter.JERA acquired the Meghnaghat 718-MW power plant from Indian conglomerate Reliance and carried out a test run of its power plant in late October but did not get sufficient natural gas to initiate operation.Since 2019, according to market insiders, the Japanese firm, JERA, has invested $1.0 billion in the project.The Japan Bank for International Cooperation, a Japanese private development bank like JICA, and the Asian Development Bank have investments in the 718-MW JERA Meghnaghat Power Limited.Japanese Mizuho Bank, SMBC, MUFG and Societe Generale-all backed by the Nippon Export and Investment Insurance-also invested in the project.The project has secured major equipment from General Electric (GE), and Samsung C&T Corporation built the power plant as engineering, procurement and construction (EPC) contractor.When contacted, Smitesh Vaidya, head of contracts & commercial at JERA Meghnaghat Power Ltd, said, "The power plant is just a few days away from achieving commercial operations, subject to uninterrupted gas supply."The project has been strongly supported by JERA as sponsor as well as by development- finance institutions, including the Asian Development Bank and the Japan Bank for International Cooperation."He adds: "We had requested support from the ministry and the BPDB to ensure the COD of the project by the end of December 2024."He assures that they look forward to making "a significant contribution to the Bangladesh power grid through the state-of-the-art technology, highly efficient turbines and competitive tariff".Although the project has yet to get COD due to inadequate gas supply, two adjacent gas-fired combined-cycle power plants (CCPPs) -- Summit's Meghnaghat 589-MW CCPP and Unique Meghnaghat 584-MW CCPP -- attained CODs during late April and late January respectively last year.But, due to gas scarcity and pipeline constraints, both these two power plants are kept idle, mounting a capacity burden on the BPDB.Sources said the BPDB inked a power-purchase agreement (PPA) in 2019 to buy electricity from the 718-MW plant for 22 years at a levelised tariff rate of 7.3123 US cents (Tk 5.84) per kWh.State-run Power Grid Company of Bangladesh (PGCB) could not construct six necessary substations, which is necessary for evacuating electricity from the three LNG-based power plants, located near Meghnaghat.The power substations are unlikely to be readied before August, said sources.Energy-expert Prof Mohammad Tamim accuses a vested-interest group of projecting inflated electricity demand on money-spinning motives."This resulted in the installation of power plants having more than required demand and entailing huge capacity payments," notes Mr Tamim, who was a former special assistant of a caretaker government.
[URL unfurl="true"]https://thefinancialexpress.com.bd/economy/pressure-on-govt-to-allow-operation-risking-capacity-payment[/URL]
Japan's JERA-acquired gas-fired Meghnaghat plant
Pressure on govt to allow operation, risking capacity payment
Two others already on stand-by there for constraints
M AZIZUR RAHMAN
Published :
Mar 30, 2025 00:22
Updated :
[ATTACH=full]16157[/ATTACH]
Now pressure builds on the interim government to approve commercial operation date (COD) of a third large LNG-fired power plant at Meghnaghat although the current infrastructure lacks ability to keep it operational alongside already-approved two such plants.
The past Awami League government had previously approved the two similar unsolicited power plants at the Meghnaghat site -- and under contracts that provide for the much-talked-about capacity payment from the exchequer even if no power is produced or purchased.
After several failed attempts by the Meghnaghat 718-megawatt power-plant owner, Japanese energy-biggie JERA, to attain a COD, the Ministry of Economy, Trade and Industry of Japan recently wrote to adviser Muhammad Fouzul Kabir Khan of the Ministry of Power, Energy and Mineral Resources (MPEMR) to have the COD fixed at the earliest, said sources.
They said the incumbent government is now obligated to approve the COD risking the state-run Bangladesh Power Development Board (BPDB) to count capacity-payment burdens although the power board subsequently won't be able to take electricity for supplying to consumers due to the country's perennial gas crisis and pipeline bottlenecks, market insiders said.
"It is the burden left by the previous authoritarian Awami League government that awarded numerous power plants under unsolicited deals without considering feasibility," a senior BPDB official told The Financial Express.
Most of these power plants were awarded on the basis of unsolicited offers under the now-defunct Speedy Supply of Power and Energy (Special Provision) Act 2010 which had a provision of immunity to those involved with the quick-fix remedies.
State corporation Petrobangla, which was 'made to commit' supplying natural gas to the gas-fired power plants, doesn't have sufficient gas to run the existing gas-fired power plants, says a senior Petrobangla official.
Petrobangla is currently being able to supply only half of the volume of gas required for feeding the gas-guzzling power plants, to the tune of around 1,034 million cubic feet per day (mmcfd), against a total requirement of 2,420 mmcfd, according to official data as on March 24, 2025.
"JERA has already completed all necessary work and is awaiting the opportunity to conduct the final commissioning test, which requires about 10 days' gas supply. However, they have been on hold for more than two and a half months for the commissioning of the final test," the METI letter reads.
The letter is signed jointly by Shirai Toshiyuki, director of international affairs division, agency for natural resources and energy of the MRTI, and Shimano Toshiyuki, director of South East Asia office of Trade Policy Bureau of the METI.
"Further delays in gas supply would incur additional cost for the project and undermine its effectiveness. This type of negative information can spread quickly among investors and dampen their sentiment towards Bangladesh," says the METI letter.
JERA acquired the Meghnaghat 718-MW power plant from Indian conglomerate Reliance and carried out a test run of its power plant in late October but did not get sufficient natural gas to initiate operation.
Since 2019, according to market insiders, the Japanese firm, JERA, has invested $1.0 billion in the project.
The Japan Bank for International Cooperation, a Japanese private development bank like JICA, and the Asian Development Bank have investments in the 718-MW JERA Meghnaghat Power Limited.
Japanese Mizuho Bank, SMBC, MUFG and Societe Generale-all backed by the Nippon Export and Investment Insurance-also invested in the project.
The project has secured major equipment from General Electric (GE), and Samsung C&T Corporation built the power plant as engineering, procurement and construction (EPC) contractor.
When contacted, Smitesh Vaidya, head of contracts & commercial at JERA Meghnaghat Power Ltd, said, "The power plant is just a few days away from achieving commercial operations, subject to uninterrupted gas supply.
"The project has been strongly supported by JERA as sponsor as well as by development- finance institutions, including the Asian Development Bank and the Japan Bank for International Cooperation."
He adds: "We had requested support from the ministry and the BPDB to ensure the COD of the project by the end of December 2024."
He assures that they look forward to making "a significant contribution to the Bangladesh power grid through the state-of-the-art technology, highly efficient turbines and competitive tariff".
Although the project has yet to get COD due to inadequate gas supply, two adjacent gas-fired combined-cycle power plants (CCPPs) -- Summit's Meghnaghat 589-MW CCPP and Unique Meghnaghat 584-MW CCPP -- attained CODs during late April and late January respectively last year.
But, due to gas scarcity and pipeline constraints, both these two power plants are kept idle, mounting a capacity burden on the BPDB.
Sources said the BPDB inked a power-purchase agreement (PPA) in 2019 to buy electricity from the 718-MW plant for 22 years at a levelised tariff rate of 7.3123 US cents (Tk 5.84) per kWh.
State-run Power Grid Company of Bangladesh (PGCB) could not construct six necessary substations, which is necessary for evacuating electricity from the three LNG-based power plants, located near Meghnaghat.
The power substations are unlikely to be readied before August, said sources.
Energy-expert Prof Mohammad Tamim accuses a vested-interest group of projecting inflated electricity demand on money-spinning motives.
"This resulted in the installation of power plants having more than required demand and entailing huge capacity payments," notes Mr Tamim, who was a former special assistant of a caretaker government.
