Two proposed coal-fired power projects with a combined generation capacity of about 700MW and to sell major portion of the electricity directly to consumers for the first time in the country have recently been sent to the cabinet committee on economic affairs for its approval.
Mahboob Sarwar-E-Kainat, the director general of the power cell, the government’s planning and coordination wing for the power sector, told New Age that the cell would complete all formalities before the firms started installing the plants.
According to the proposal, Chittagong Power Company Limited will install a 150MW plant at Mirsarai and Beximco Power Company Limited a 540MW plant at Boalkhali in Chittagong.
The Power Development Board will buy 10 per cent of the electricity generated from the CPCL plant for Tk 4.51 a kilowatt-hour (unit) and 40 per cent from the BPCL plant for Tk 4.97 a unit.
The Bangladesh Energy Regulatory Commission has set benchmark prices for electricity and according to the Policy Guidelines for Enhancement of Private Participation in the Power Sector, the power board is bound to buy up to 30 per cent of the power generated from the plants.
But differing on the policy guideline, the prime minister on March 6 approved the proposal for selling 40 per cent of the BPCL power to the power board as the company sought for the protection of its investment.
Asked whether the government would increase the limit of the PDB power purchase from such merchant power plants, Mahboob said that the prime minister had approved a particular proposal.
The firms, however, will need to sign power sales and purchase agreements with the power board before they installed the plants.
They will also need to sign agreements with the Power Grid Company of Bangladesh on wheeling charges for which the state-run grid company would carry electricity to distribution areas of merchant companies, a Power Division official said.
He said that the power cell would send a proposal to the Bangladesh Energy Regulatory Commission on wheeling charges.
The Power Grid Company will not be able to sign any deal with the firms as the commission was yet to set the benchmark tariff for carrying power.
In a response to the advertisement circulated in May 2011, 13 firms, with plans to set up 14 power plants with a total capacity of about 2,000MW, contacted the Power Grid Company.
Later, only Chittagong Power Company Ltd and Beximco Power Company Ltd, remained in the race.
Amid severe power crisis and increasing losses caused by subsidy, the government in 2010 amended the policy guidelines for merchant power plants by increasing the power board’s purchase limit from 20 per cent to 30 per cent to popularise merchant power ventures and planned to buy 4,000MW of power from such plants by 2015.
A private firm usually can generate power only for selling it to the power board.