Bangladesh govt procures electricity from Banskhali Coal Power Plants

The Bangladesh government is preparing to purchase 500 MW of electricity from the under-construction Banskhali Coal Power Plant starting from June 13. The plant is owned by the Bangladeshi conglomerate S Alam Group, SEPCO III Electric Power Construction Corporation, and HTG Development Group from China. This project is part of China's Belt and Road Initiative (BRI).

To address the ongoing power crisis, the government will also purchase approximately 400 MW of electricity from the second unit of the Adani Power Plant, which is currently in the testing phase, before the end of this month.

Furthermore, the Power Cell Director General, Mohammad Hossain, stated that an additional 5 per cent or 400 MW of electricity will be obtained from liquefied fuel-based power plants starting the following week. This increase aims to support industrial, commercial, and residential consumers across the country.

Regarding the Banskhali Coal Power Plant, a senior official from the Bangladesh Power Development Board (BPDB) mentioned that although the commercial operation date (COD) for the plant has not been finalised, the government urgently requires power and is expected to receive around 500 MW of electricity soon. The official also mentioned that the payment for the electricity will be based on a "no electricity, no payment" policy. Currently, 200 MW of electricity is being received from this plant.

The Power Purchasing Agreement (PPA) initially projected the COD for the Banskhali plant to be on November 16, 2019, but due to construction delays, the sponsors incurred a penalty of Tk 2.00 billion (US$24 million) on July 12, 2020. They were subsequently granted a two-year extension, allowing them to complete the project by December 2022.

In addition to the Banskhali plant, the second unit of the Adani Power Plant is expected to supply around 400 MW to 500 MW of electricity from the last week of June 2023. If all goes as planned, this additional capacity, along with other power generation projects, will contribute approximately 1,500 MW to the national grid, alleviating the current power shortage.

Officials from the Bangladesh Power Development Board (BPDB) have projected the country's highest power demand to reach 14,500 MW, while the highest power generation capacity is expected to be 12,677 MW, resulting in a shortage of approximately 1,741 MW.

Despite the recent reduction in temperature due to rain, excessive load shedding persists across the country, with power supply remaining low. Rural areas experience more frequent power cuts compared to urban areas, especially in the capital city of Dhaka and other major cities. Some rural areas report power outages lasting over 12 hours per day.

The Godda Power Plant in India, established by the Adani Group, was designed to exclusively supply electricity to Bangladesh with its 1,600 MW capacity coal-fired power plant. The first 800 MW unit began commercial operation in March, while the second unit is currently undergoing testing and generates between 50 MW and 100 MW daily.

Currently, only 49 out of 153 power plants are operating at full capacity, with 53 of the remaining 104 plants shut down for maintenance, rehabilitation, or due to fuel shortages (gas or coal) caused by a dollar crisis. These 53 plants have a combined capacity of 4,930 MW. Among the remaining 51 plants, which have the capacity to produce 7,855 MW, only 3,568 MW is being generated due to fuel shortages.