Home ›› 24 Feb 2023 ›› Front
United Power Generation & Distribution Company has sought value-added tax (VAT) exemption at both production and consumer ends to ensure uninterrupted power supply to export processing zones (EPZs).
Besides, the steam produced during power generation is later used to produce more power, which may save forex reserves by reducing dependency on liquefied natural gas (LNG) imports and ensuring maximum utilisation of natural gas, it said.
The company’s Managing Director Moinuddin Hasan Rashid sent a letter in this regard to National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem.
The letter said, “There is currently 15 per cent VAT at the production end and 5 per cent at the consumer end. If the government gives VAT exemption as part of policy support for environmental protection and the maximum utilisation of natural gas, industries will be motivated to use this steam.”
The power company is seeking the facility for producing steam in the co-generation method from the exhaust gas of power plants. This steam is directly supplied to the export-oriented industries in EPZs, the letter said.
It said United Power is supplying power to the industries inside Dhaka EPZ and Chattogram EPZ by setting up two power plants in the zones under an agreement with Bangladesh Export Processing Zones Authority.
The power plants are supplying electricity to Bangladesh Rural Electrification Board and Bangladesh Power Development Board through the national grid in the evening when demand falls in EPZs but rises elsewhere in the country, the letter said.
It also said United Power is experimentally supplying steam to the industries inside EPZs from the two power plants. The steam is produced from water using the co-generation method without releasing the heat of exhaust gas of power plants into the air.
Aiming to increase the efficiency of power plants, ensure maximum utilisation of gas, and reduce environmental temperature and pollution, United Power is producing steam in this method, it added.
Gas steam boilers are powered by natural gas, which is more efficient than standard boilers. The fuel for gas boilers is piped into them from an outside source that is connected directly to the boilers and the steam can be used for industrial purposes.
In contrast, electricity is generally produced by combusting air with natural gas in power plants and finally the exhaust gas mixes with the air at a certain height through the silencer and chimney, the letter said.
Production costs at the industries using this steam fall as they do not need to use natural gas or diesel to generate steam, which enables them to compete in the global market amid the ongoing crisis, it said.
“Besides, as the industries do not need to use imported LNG or fuel oil for steam generation, the country is saving forex reserves and environmental pollution has reduced,” the letter said.
“In 2019, the then NBR chairman directed to consider the matter in the budget with high importance,” it added.
