Home ›› 05 Aug 2022 ›› Front
The government plans to build 10 more gas-fired power plants around the country in the next eight years even though at the moment it is unable to import the required liquefied natural gas (LNG) due to a lack of funds.
Most of the high efficient power plants are sitting idle due to a gas shortage caused by the authority’s inability to import LNG and the dwindling domestic gas production.
However, the Power Division plans to build these 10 new LNG-based power plants with a total capacity of generating 11,282 megawatts (MW) of electricity and start production between 2025 and 2030.
That leads to a bit of conundrum as energy experts and officials concerned say the construction of two Floating Storage Re-gasification Units (FSRU) and one land-based terminal at Moheshkhali of Cox’s Bazar and Patuakhali’s Payra, which were supposed to boost LNG imports, have stalled and they cannot be built before 2030.
Even if the power plants are built somehow, they said, it will not be possible to make them operational on time if the authorities only depend on LNG import and Bangladesh Power Development Board (BPDB) will have to bear the huge burden of rising capacity charges.
According to BPDB, Haripur 250 MW LNG-fired power plant will start production in June 2025, while a 225 MW one in Ghorashal and a 400 MW one in Mymensingh in June 2026. Another 550 MW plant in Gajaria and a 550 MW one in Siddhirganj will come into production in 2027.
In 2030, a 550 MW plant in Feni and another 550 MW in Bheramara are also supposed to become operational.
Besides, three other power plants with a total capacity of 5,387 MW are already under construction as part of joint investments. One is of 2,400 MW generation capacity in Payra (2025-2027), and the other two are of 2,400 MW (2027-2028) and 587 MW (June 2028) capacities in Moheshkhali. Power Division says these three will be high-capacity combined cycle power plants (CCPP).
Gas demands to only rise
According to BPDB, Bangladesh now has 57 gas-fired power plants with a generation capacity of 11,026 MW. Their average daily gas demand is 2,236 million cubic feet per day (MMcf/d) but they are getting only 976 MMcf/d.
Due to this, power generation has faced severe disruption in recent times and the country has been forced to go for planned load shedding daily.
BPDB says after the 10 new plants are built, the total gas-based power generation capacity will be 22,300 MW and the gas demand will increase to 4,500 MMcf/d.
State-run Petrobangla says the confirmed gas reserves of domestic sources are likely to bottom out by 2030. Afterwards, 80 per cent of gas will have to be imported to meet the demand around the country.
Questions have risen regarding the decision to build 10 new plants at a time when the government even has tempo rarily stopped buying 200 MMcf/d LNG from the spot market due to the recent price volatility.
A former managing director of Rupantarita Prakritik Gas Company Limited (RPGCL), requesting anonymity, told The Business Post that construction of three FSRUs by 2027 to boost LNG imports was fairly certain until recently. “But that is no longer possible since all companies building FSRUs have been booked head by other countries, specifically Germany and Italy, because of the Russia-Ukraine war.”
Building these new plants will only prolong the burden on the power sector since the land-based terminal in Matarbari of Cox’s Bazar, for LNG imported from India, will also not be built before 2030, he said.
Several Petrobangla officials also said that they are not interested in inking gas supply contracts for these power plants but the pressure on the state-owned company is building.
Suicidal and impossible?
The plan to build new gas-fired power plants at this time is suicidal, said a member of the Bangladesh Energy Regulatory Commission (BERC), pointing out the global energy scenario.
Qatar said it will not provide additional LNG before 2028. Even then, gas import from Qatar is not guaranteed because Germany, China and Italy are already active to take gas from the Gulf country’s North Field and Bangladesh will not be able to compete with them, said the official.
“I think the 10 new plants will not be built or operational by 2035. But by then, the planned FSRUs will be built and that will stabilise the gas import and power generation situations,” said former BPDB chairman Syed Abdul Mayeed.
According to Petrobangla, the plan to import LNG was decided in 2014 but it started in 2018 since FSRU implementation took more than five years.
Bangladesh now has two FSRUs at Moheshkhali with the capacity to import 1,000 MMcf/d LNG but they are bringing in 550 MMcf/d.
BPDB officials said the production cost of oil-fired power plants has increased due to the recent gas shortage.
The average electricity generation cost in FY2019-20 was Tk 2.13 and it increased to Tk 3.16 in FY2020-21. Production cost per unit will stand at Tk 4.24 in 2022 due to rising fuel prices and VAT withdrawal on imported coal.
If the wholesale price does not increase, there will be a loss of Tk 30,251 crore in 2022, says BPDB.
Power Division Secretary Habibur Rahman was unavailable for comments on these matters.
