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Insufficient demand and transmission bottlenecks are plaguing the 1,320MW Thermal Power Plant in Payra, forcing the government to pay Tk 130 crore every month as “capacity payment”.
Delay in laying high-priority transmission line that would take electricity from Payra power plant to Dhaka across the Padma River is also draining public money.
Bangladesh’s power generation capacity quintupled from 4,942MW in 2009 to 25,235MW over the past decade. With four more plants coming into operation and yet another going for expansion, 879MW is expected to be added to the national grid this year.
US-based Institute for Energy Economics Financial Analysis in a report last year said that only 43 per cent of the total power plants in Bangladesh were used in 2018-19 while the remaining 57 per cent remained idle. The government’s capacity payment for this period was Tk 9,000 crore.
Official and unofficial figures show Bangladesh hardly utilises half of its installed power capacity, but each year the government makes a hefty payment to power plants as “capacity payment” – the commitment to purchase power generated at plants at an agreed-upon rate.
The government still has to pay the plant for its generation (capacity) even if it is unable to buy electricity from it.
Owned by Bangladesh-China Power Company Ltd (BCPCL), the first unit of Payra power plant—Bangladesh’s first and largest one running on imported coal—went into commercial operation on May 14 last year. The second unit started production on December 8, 2020.
The combined production from the two units, each having capacity of 660MW, was 580MW on September 17, which means only 44 per cent of the total capacity was used, according to Power Division data.
Helal Shah Abdul Mawla, the project director of Payra Thermal Power Plant, said they were unable to run the plant at its full capacity as the transmission line to supply power had not been laid out yet.
“We are unable to contribute to the national grid and run at full capacity due to a lack of transmission line. The existence of the whole power plant itself is at stake,” Helal told The Business Post, adding that the existing transmission facility allows the power plant to transmit a maximum of 620MW.
He said the coal-based power plant is a base load power plant and was built to operate over a long period of time without any interruption.
“But that is not the case here. If we can’t run such base load plant at its full capacity, the machineries needed to generate power depreciate quickly,” he said.
When asked about the capacity payment paid to the plant by the government, Helal said, “No power plant actually wants capacity payment. It does not matter whether we get Tk 130 crore or Tk 150 crore per month. Every power plant wants to generate power to its full capacity and get paid for the electricity that it supplies.”
When contacted, Golam Kibria, the managing director of state-run Power Grid Company of Bangladesh Ltd (PGCBL), acknowledged that his company has yet to complete necessary electricity transmission lines to transmit electricity from the Payra plant.
Evacuation of electricity from the Payra power plant requires the completion of transmission projects that include construction of 160km 400kv double circuit line from Payra plant to Gopalganj, 164.4km Aminbazar-Mawa-Gopalganj-Mongla 400kv double circuit line and 9.4km river-crossing line close to the Padma Bridge.
However the 9.4km river-crossing line has not been progressing at an expected pace, which is creating an obstacle for evacuation of entire electricity from the Payra power plant, the PGCB official said.
According to a Planning Commission report, the construction works of seven river crossing towers of Padma Bridge are under construction but the project is progressing at a very slow pace.
Also, although the Aminbazar-Mawa-Gopalganj-Mongla 400kv transmission line project is scheduled to be completed by December 2021, the progress of work on the river crossing tower might impede the project, said the report.
It observed that if the foundation works of the towers under construction are not completed, it will not be possible to fully start the transmission line from Mongla to Aminbazar.
Kibria told The Business Post that his company plans to start the tower installation and other works as soon as it receives the sites from the Padma Bridge Authority.
“The tower installation and other works may take up to December next year,” he said adding that the PGCB would try its best to do the job as early as possible.
Criticising the lack of coordination between different power agencies, energy expert Professor M Shamsul Alam told The Business Post that the responsibility for this failure lies with all the organisations in this sector including the power department.
“The government now needs to pay the capacity charge as it lacks proper coordination. Hundreds of crores of taka are being drained out because of this,” said Prof Shamsul who acts as the energy advisor of the Consumer Association of Bangladesh (CAB).
Shamsul said if the construction of the transmission line was completed in a timely manner along with the construction of the power plant, then the power plant “would not have to sit idle”.
