The government is likely to extend the contract with Venture Energy Resources Limited, a privately sector power producer based in Bhola, to buy power for two more years.
For the 2-year extension, the government has to spend a total of 147.95 crore taka.
According to sources, a proposal to extend the term with Venture Energy’s 34.50 MW gas-fired rental power plant in Bhola for two more years and to approve tariffs for the extended period will be presented at the Cabinet Committee on Public Procurement meeting Wednesday.
The government has set a target of generating 24,000 MW of electricity in Bangladesh by 2021 and 40,000 MW by 2030 as per the Power System Master Plan (PSMP)-2016.
A three-year agreement was signed with Venture Energy Resources Limited on January 17, 2008 to set up a 34.50 MW gas-fired rental power plant in Bhola on an emergency basis.
The date of commercial operation of the power plant was 12 July 2009. The term of the power plant expired on July 11, 2012.
Subsequently, with the approval of the appropriate authority, the term of the contract was extended 3 times for 6 years. That term ended on July 11, 2019.
The power plant has been kept operational on the recommendation of the Bangladesh Power Development Board (BBDB) considering the demand for power in the Bhola region.
In addition, gas supply was provided to the Department of Energy and Mineral Resources in August 2019 in response to Bangladesh Power Development Board recommendation to continue gas supply to the power plant, according to a power division paper.
Venture Energy applied to the government on March 2, 2019 to renew their contract for 5 more years through negotiation and mutual agreement.
If there is no mutual agreement as per the agreement, the agreement will be cancelled.
In this case, it has been recommended to the purchasing committee to approve the application of the entrepreneurial company.
According to sources, in order to alleviate the power shortage in Bangladesh, the “Rapid Increase in Power and Energy Supply Act, 2018” has been enacted.
Under the Act, a processing committee of the power department was formed to procure power on an emergency basis by contacting the power generating companies with a view to setting up power plants.
The Department of Power constitutes a Technical Committee to examine the plans and proposals adopted by the Processing Committee constituted under the Act.
According to sources, the overall demand for electricity in the Bhola region is about 75 MW at present.
Of this, the demand of Bhola Sadar, Banglabazar and Paranganj in Bhola District including the partial demand of Patuakhali is about 35 MW, which was supplied by the 34.50 MW gas power plant set up by Venture Energy Resources Limited.
In the meantime, Power Grid Company of Bangladesh Ltd (PGCB) has invited tenders for installation of a 230/33 KV 120/140 MVA transformer at Bhola to supply power from the national grid as per the demand of Bhola region.
If this is introduced, it will be possible to supply electricity to the entire Bhola region from the national grid without the Bhola 34.50 MW rental power plant.
Until then, the Bhola 34.50 MW power plant needs to be kept operational, they said.
It is to be noted that the 34.50 MW power plant is included in the retirement schedule of 2021.
Meanwhile, it is learned that the installation of PGCB's transformer is expected to be completed by June 2021.
In view of this situation, the proposal to purchase power from Venture Energy Resources Limited for two more years may be approved.
However, sources in the Ministry of Energy and Mineral Resources said that the government would save around 8 crore taka as it is possible to buy electricity at a lower price than the contract price.
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