Power Sector of Bangladesh

[CaPtAiN_pLaNeT]

WB plans to lend extra $220m for Siddhirganj power plant

WB plans to lend extra $220m for Siddhirganj power plant


FHM Humayan Kabir

The World Bank plans to lend an extra US$220 million for the redesigned 450 megawatt Siddhirganj power plant after it holds negotiations with the Bangladeshi officials later this month.

The development lender and the government's economic relations division (ERD) would hold talks on January 23 and the two sides are expected to sign a deal for the additional loan in February, officials said Saturday.

The extra funding would take the World Bank's total loan to the project to $570 million, with nearly $200m being set aside for laying gas pipeline and power transmission line.

Bangladesh officials said clinching of the additional fund means construction of the key power project, whose fate appeared doomed last year, can now start later this year and generation is likely by 2013.

A World Bank spokesperson told the FE that the WB has agreed to fund the newly structured Siddhirganj project, expected to be completed within 30 months from the date of work order to a contractor.

Considering the severe power generation shortfall in the country the government and the World Bank agreed on a better and faster solution for the project, she said.

ERD officials said the upcoming negotiations would iron out differences with the Washington-based lender, which had earlier refused to fund the project due to selection of a controversial contractor in 2010.

"At last, the World Bank has agreed to bank-roll the Siddhirganj power plant," a delighted ERD official told the FE. "We hope the upcoming talks can secure a deal."

He said the government had restructured the Siddhirganj power plant, boosting its capacity to 450 mw from the initially designed 300mw, at the behest of the Washington-based lender.

"We redesigned the plant in line with the demand placed by the Bank. We have also set the terms and conditions in a way so that they can meet the World Bank's stringent funding criteria," he said.

The Siddhirganj Power Plant, originally planned in 2007, faced a major blow in early 2010 after the World Bank objected to the government's selection of a disputed contractor and flouting of its procurement guidelines.

The Bank had initially committed to providing $350 million for the plant, to be set up 20 kilometres north-east of Dhaka, and its related gas supply pipeline and power transmission grid.

At one stage, the government planned to built the plant with its own fund. But it changed mind last month when the WB proposed that the government enhance the plant's generation capacity, scrapping the original plan.

The power division has already invited fresh tender for the restructured project, an official said, adding electricity to be generated from the plant would be supplied to the capital Dhaka.

 

[CaPtAiN_pLaNeT]

PDB Proposes Bulk Electricity Tariff Hike

Thursday, 01.06.2011, 01:16pm (GMT)

Dhaka: The Power Development Board (PDB) has proposed the Bangladesh Energy
Regulatory Commission (BERC) to increase the bulk electricity tariff.
The proposal said the tariff should be raised by 25.3 percent for 2010-11 fiscal
and 2011-12 fiscal years and 25.8 percent for 2012-13 fiscal.
According to sources, if the proposal is accepted by BERC, the government will
have to incur a loss of Tk 73.50 billion loss.
Last year BERC increased 16 percent tariff at bulk level to
minimize the gap between the production and supply cost of
electricity to its bulk consumers.
After getting the proposal, the commission has said that stakeholders can submit
their observations on the proposed rate hike by January 16 and it will hold a
mass hearing on January 27 on the issue.
Any organization or individual can put their opinion by post
or through website to the commission by this time.
In its proposal PDB has said the tariff hike will help increase power
generation, reduce load shedding, expedite the country's development, reduce
power wastage, enhance customer service and reduce government subsidy to the
sector.
According to the proposal paper, PDB is incurring a loss of 14.43 per cent per
unit of electricity and it will increase day by day when all the diesel and
furnace oil fired plants will come into operation.
It needed Taka 6000 crore to meet the huge subsidy of fuel price.
The official system loss of the agency is 14.45 percent.
PDB is the single power buyer and it buys from IPP, RPCL, rental power plants,
EGCB and Ashuganj Power Station. It sells in bulk quantity to several companies,
including DPDC, Desco and REB.

 

[CaPtAiN_pLaNeT]

Bangladesh Govt. to Popularise LPG

Tuesday, 01.11.2011, 06:18pm (GMT)

Dhaka: The government will encourage consumption of liquefied petroleum gas (LPG) instead of piped natural gas to ease the mounting gas crisis across the country.

According to sources the energy ministry has already asked the LPG firms to increase their import of LPG to meet the gross mismatch between the demand for, supply of, piped gas, especially in households for cooking and light engineering workshops.

The government decision to encourage LPG use has come at a time when gas crisis turned acute and the urban residents are struggling for cooking due to insufficient gas supplies and drastic fall in gas pressure.

Officials said the government is also actively considering reduction of duties and taxes on import of LPG and LPG cylinders to boost import and expand its use to ease the mounting gas crisis.

The import duty on LPG is around nine per cent, which includes five per cent customs duty, three per cent AIT and one per cent PSI charge.

Currently the country consumes around 100,000 tonnes of LPG every year, mostly by the urban people in district towns and light engineering workshops.

The state-owned LPG producer supplies 20 per cent of the market need and private players import the remaining 80 per cent.

LPG marketing in Bangladesh was pioneered by state-owned Bangladesh Petroleum Corporation (BPC) in the late 1970s, but with the increasing demand in the mid-1990s the government allowed LPG imports and permitted private entrepreneurs to invest in LPG import, storage and bottling facilities.

BPC's subsidiary, Eastern Refinery Ltd and natural gas fractionation plant at Kailashtila in Sylhet are the source of indigenous availability of LPG in Bangladesh from where the combined output is around 20,000 tonnes per annum.

A number of private firms are now engaged in marketing of LPG in Bangladesh that include Totalgaz, Bashundhara, Kleenheat, Jamuna Spacetech and BOC.

 

[CaPtAiN_pLaNeT]

PM seeks Bhutanese help in hydro power

PM seeks Bhutanese help in hydro power | Bangladesh | bdnews24.com


Tue, Jan 11th, 2011 8:17 pm BdST

Dial 2000 from your GP mobile for latest news
Dhaka, Jan 11 (bdnews24.com)—A day after foreign minister's discussion, prime minister Sheikh Hasina on Tuesday requested her Bhutanese counterpart Jigme Y Thinley to involvee Bangladesh in its future hydro electricity projects.

During the official talks at her office, the prime minister also thanked Bhutan for generating hydro power not affecting the natural flow of the biggest river Brahmaputra, which originates in China and passes through Bhutan and India before entering Bangladesh.

Foreign minister Dipu Moni on Monday met Thinley at Hotel Sonargaon and discussed the possibility of importing power from Bhutan.

"Shortage of electricity in Bangladesh is seriously affecting our development initiatives. Our government is sparing no efforts to augment power generation to meet the country's growing demand," Hasina said during the talks.

She said Bangladesh's development efforts were being "stymied" by power shortage while Bhutan had huge untapped potentials of hydropower.

"I would request you to consider Bangladesh in your future projects either as an investment partner, or on equity sharing, or as a direct purchaser of power," said the prime minister.

Experts say, landlocked and mountainous Bhutan has the potential to generate up to 45,000 mega watts of hydropower. Indian companies have already invested to produce up to 15,000 mega watts.

Bhutanese economic affairs ministry sources say Thimphu has been in discussion on implementation of hydropower projects with Austrian companies.

Bhutan's economic affairs secretary during the SAARC summit in Thimphu told bdnews24.com that his country would not hurry in exploiting full potentials of hydroelectricity.

Bangladesh has been experiencing severe power shortage over the decades as the country produces just about 4,000MW of electricity against the daily demand of up to 7,000MW.

Diplomatic observers say Thimpu may have to consult New Delhi before making an agreement with Dhaka as India separates Bhutan from Bangladesh, which must construct distribution lines over the Indian territories to import power from the landlocked country.

"While Bhutan is emerging as an important producer of hydro-power, I am happy that the hydro-projects on the rivers are not affecting the natural flow of water, most of which flow into the river Brahmaputra in Bangladesh," said Hasina.

She said the mighty river had recently been prone to frequent flooding and this calamity warranted regular exchange of hydrological data on the river and regular meeting of the water experts of the two countries.

 

[CaPtAiN_pLaNeT]

Wednesday, January 12, 2011
Front Page
Govt eyes 2,000MW more power this year
Sharier Khan

Govt eyes 2,000MW more power this year

While the government scored a record of signing dozens of deals for generating around 3,000 megawatt power last year, this year it aims at making another record: adding more than 2000MW electricity to the national grid.

If successful, this would increase Bangladesh's power generation capacity by nearly 50 percent. While this would significantly reduce the ongoing power crisis, there would still be some shortfall.

Chairman of the Power Development Board (PDB) Alamgir Kabir told The Daily Star that if all goes well, the level of load shedding would be strikingly low by the end of this year.

Plus, this additional power generation would not put any pressure on the natural gas supply as most of the new power plants will operate on fuel oil, he said.

Gas has been the main source of power generation till now, and its crisis has affected power generation.

On the negative side-- the country's oil import cost is expected to shoot up significantly. When all of these new oil-based power plants would launch operation, these are expected to consume 1.9 million tonnes of diesel and heavy fuel oil a yearthus almost doubling the country's petroleum import cost, according to an estimate of the PDB.

In addition, there had been questions of how the Bangladesh Petroleum Corporation (BPC) would be able to store and transport so much petroleum overnight through rail and river systems.

The PDB itself has funded a Tk 27 crore project for the Bangladesh Inland Water Transport Authority to dredge the rivers in Gopalganj and Daudkandi where poor navigability would jeopardize year-round transportation of petroleum. The other river routes will not dredging for now.

The PDB invested another TK 50 crore with the Bangladesh Railway to for upgrading some rail tracks and tank wagons that would carry the additional petroleum.

Seventy percent of the additional fuel would be transported through the river routes and the rest through the rail system.

Meanwhile the BPC is increasing its storage capacity. The BPC would also turn to the private sector to store the additional oil at times, sources said.

About half of these new power deals signed last year are rental power projects. These are short term solution with contract period not exceeding five years. The government chose these as a quick solution to minimize load shedding in the upcoming lean seasonwhen power demands will shoot high for the purpose of irrigation.

Of these rental power projects, a few have already launched operationswhile several have failed to meet deadlines.

“But we are expecting that by April, most of the rental power projects would be able to launch their operations. These will reduce the load shedding during that period,” the PDB chairman added.

By September next, the PDB expects to have several hundred megawatts of base load power generation.

By next year, the government aims at achieving zero load shedding.

 

[tunielooney]

Just wondering if Bangladesh have this kind of solar power, sunpowerportcom in their country. And if they know how to build it. I want to build one there.

 

[integra]

Just wondering if Bangladesh have this kind of solar power, sunpowerportcom in their country. And if they know how to build it. I want to build one there.

Well you can send your proposal to this guys(If you are serious that is)


RahimAfrooz Renewable energy
Grameen Power

 

[CaPtAiN_pLaNeT]

Cost of Siddhirganj power plant doubles due to delay

Cost of Siddhirganj power plant doubles due to delay


FHM Humayan Kabir

The cost of the 240-megawatt Siddhirganj power plant has nearly doubled than its original budget due to the state agencies failure to implement the project in time, officials said Wednesday.

The plant had a budget outlay of 6.85 billion taka when it was okayed by the country's highest project approval body, ECNEC, in 2004 but would now cost 12.07 billion taka due to holdup in implementation.

Officials said the cost of the key power generation scheme, meant to supply electricity to energy-starved Dhaka, has escalated by 5.22 billion taka because of soaring prices of equipment, fees and overhead expenses.

State-owned power producer -- Electric Generation Company of Bangladesh (EGCB)-has now sought an additional 736.8 million taka and one year of extra time to complete the remaining tasks of the plant, they said.

"We have sent a proposal seeking the extra funding. It will take total project cost to 12.07 billion taka. The project is revised as we need more equipment and time to complete the scheme," EGCB's acting Managing Director Shantiram Rai said.

He said aside from soaring equipment price, currency fluctuations i.e devaluation of taka against dollar in the past six years, rising cost of some project elements are the major reasons for the delay.

Foot-dragging over appointment of consultant, tender evaluation and processing, and higher price quoted by the contractor against the official estimation are other reasons for price escalation, Mr. Rai said.

A senior official said the latest cost hike was being reviewed by the planning ministry. "If it is proved valid, we will forward the proposal of time extension and cost hike before the ECNEC," he said.

EGCB took up the 240 mw peaking power plant in 2004 in a bid to start generation by June 2006. Of the initial cost of 6.85 billion taka, the Asian Development Bank has committed to lend 7.91 billion taka.

After three years of bidding delay, the state-owned power generation firm appointed Indian company, Bharat Heavy Electrical Ltd. (BHEL), for setting up the project in two parts with each generating 120mw.

The India state-owned company was given 17 months to build the plant at Siddhirganj outside Dhaka, but has since failed to meet the government deadline, a power division official said.

Due to delay in project implementation and cost escalation, the ECNEC first revised the project in May 2007, raising its budget to 11.33 billion taka, and set June 2009 as the new deadline.

In June 2010, the planning ministry extended the cut-off date again at the behest of the EGCB.

Though BHEL has already built two 120mw capacity power units at the location, the project tripped late last year, just days after it started electricity generation on test-run basis.

"BHEL has said it needs five more months i.e. until June to restart the unit. The contractor will replace a new generator there," Mr. Rai said.

Rai said the EGCB would take actions for the holdup. "Since the contractor has missed the deadline we will penalise it for the delay because it piled up our cost burden."

Former power secretary turned economics professor Fouzul Kabir said lack of competence and supervision capacity of the government agencies are the key reasons for delay in implementing power projects in Bangladesh.

"Besides, some very influential persons or groups within the government and out of the government put pressure on the authorities when they consider actions against the contractors," he said.

"Eventually, it affects the country's economy," he added.

 

[CaPtAiN_pLaNeT]

Move for fresh power tariff hike worries businesses



Move for fresh power tariff hike worries businesses

Shahiduzzaman Khan

Electricity is dubbed as the engine of growth for any country as it helps rapid industrialisation, accelerates the pace of socio-economic development and reduces poverty. Like any other developing country around the globe, electricity demand has been rising sharply in Bangladesh as the country's economy has been growing at an average rate of 6.0 per cent a year since 2003 outpacing the energy supply.

The country is now reeling under an acute electricity crisis coupled with low voltage and frequent load-shedding resulting in slowing down business activity, fall of industrial output and ultimate sufferings of the people. Country's overall electricity generation is now hovering around 3,700 megawatts against the demand for over 6,000 mw. Against this backdrop, the government is again contemplating to raise power tariff by more than 25 per cent on annual basis.

Country's business leaders expressed mounting concern over the government's decision to increase electricity tariff which, they said, might jeopardise the country's industrial growth. A sudden and significant increase of electricity tariff would be detrimental to industry as well as the consumers, they pointed out.

At a discussion meeting organised by the Metropolitan Chamber of Commerce and Industry (MCCI) in the city last week, the businessmen said that cost increases should be reasonable, appropriate and within the context of the state of economy. It must take into account the impact on the economy, inflation and employment. A steep increase in tariff would provide greater incentives for theft and pilferage, they added.

Bangladesh Energy Regulatory Commission (BERC) is now scrutinising a power tariff hike proposal placed by state-owned Power Development Board (PDB) to raise bulk electricity tariff by 25 per cent annually with retrospective effect from July 2010 until 2013. PDB proposed that the bulk electricity tariff would be increased twice a year by 12 percent each time in every six months. As proposed the average bulk tariff will be increased to Tk 2.65 per unit (1 kilowatt-hour) from July 1, 2010, Tk 2.97 from January 1, 2011, Tk 3.33 from July 1, 2011, Tk 3.72 from January 1, 2012, Tk 4.17 from July 1, 2012 and Tk 4.68 per unit from January 1, 2013. Current average bulk tariff rate is Tk 2.37 per unit. BERC enhanced the latest bulk tariff rate by 16 percent in October 2008.

However, the commission has called for a public hearing on January 19, 2011 to hear the arguments and opinions of the stakeholders in the power sector, including consumer rights groups before giving verdict. When a public hearing on power tariff like was held last year, most of the participants were opposed to the proposed hike. They wanted drastic reforms in the sector first, before considering any proposal for giving approval to a hike for power tariff.

Power sector experts have suggested that the BERC should also look into the outcome of the previous tariff hike before considering further hike in electricity tariff. The commission should set standardised benchmark like systems loss, efficiency level of power plants of the state-owned entities before enhancing power tariff. They were critical over the wide variation systems loss of the state-owned power entities pointing out the systems loss of Dhaka Electric Supply Company (DESCO) at 9.0 per cent, while that of West Zone Power Distribution Company at 22 per cent. The distribution costs of the state-owned power entities also vary from Tk 0.50 per unit to Tk 1.26 per unit due to wide gap in efficiency level of such entities, they added.

The government claimed that the decision to hike power tariff was taken to contain mounting subsidy as the cost of electricity generation is skyrocketing with the installation of high-cost rental power plants to be run by diesel and furnace-oil. It has allowed building power plants by local and foreign firms on unsolicited proposals avoiding tendering process in an unusual move to face the country's worst-ever power crisis. The government has also passed the Speedy Supply of Power and Energy (Special Provision) Bill -- 2010 offering blanket immunity to the personnel involved with electricity generation for two years.

Despite all these moves, inadequate steps from the government high-ups coupled with insufficient supplies of natural gas, the main fuel for the country's power generation, have been delaying installation of much-needed power plants. Year's of apathy from the donor agencies in funding necessary power plants also aggravated the country's overall electricity crisis. Nagging electrify crisis all over Bangladesh has recently become an issue of concern of the government as the power sector is deemed by critics as among the worst performing sectors of the government. Expensive diesel and furnace-oil run rental power plant, which was nil until 2008, has already accounted for over one-third of the country's total power plants with the operation of 14 plants out of 40 operational plants. A good number of gas-fired and oil-based power plants have been kept shut making room for operation high-cost private sector owned fuel-run power plants.

Besides, the absence of any policy over rental power plants and their diversified tenure ranging from three years to 15 years might trouble the regulators in future. The multilateral donor agency, World Bank, has also expressed its concern over the government's higher expenditure to buy electricity from rental power plants and import necessary fuel. The burden may restrict the country's economic growth in the range between 6.1 per cent and 6.3 per cent, said the Washington-based donor agency in its latest economic outlook.

While the pilferage problem was hardly addressed, subsequent governments did not adjust power tariff in line with investment costs, pushing the PDB to a perpetual loss-making situation. Analysts believe a tariff hike should be undertaken only after exhausting all other options for increasing power revenue. These options, as there is enough reason to believe so, have not been explored to their entirety. The price of one megawatt of electricity lost due to PDB's inefficiency is estimated at Tk 200 million. A section of people is being largely benefited due to rampant corruption in the PDB, the entire power sector as a whole suffers immensely.

Past experiences suggest that when power tariff is raised, prices of essential consumer goods tend to make another jump. These are all inter-related matters. Consequent upon any power tariff hike, the prices of foodstuffs tend to go up again in local markets, because the prices of farm inputs also go up. The general consumers and the industries of all sorts will continue to suffer from higher tariff, notwithstanding load shedding and low voltage. The authorities concerned do, first of all, need to ensure adequate electricity generation to satisfy the consumers.

Electricity is a fundamental right of the citizens. It is a critical input for development of any nation. At times, power tariff-hike may be necessary to ensure stable and sustainable supply. And the government can also choose to do so, as and when necessary, provided it is for public welfare. However, the move for effecting a fresh hike to power tariff has now come at a time when the entire power sector remains chronically inefficient due to years of neglect. Without improving the situation in power sector it will not be a rational choice to force the citizens to pay for a service that they seldom get.

szkhan@dhaka.net

 

[CaPtAiN_pLaNeT]

Dhaka signs deal with Doha to import LNG

Dhaka signs deal with Doha to import LNG


FE Report

Bangladesh has signed a deal with Qatar Sunday to import liquefied natural gas in an effort to meet shortages at home, officials said.

The deal in Qatari capital of Doha paves the way for Bangladesh's emerging as the newest LNG importer. Dhaka will initially import four million tonnes of LNG per year.

The agreement was signed by Bangladesh'e energy secretary Mohammad Mejbahuddin and Minister of State for Energy and Industrial Affairs of Qatar Dr. Mohammed Saleh Al-Sada.

"The door is now open for Bangladesh to import Liquefied Natural Gas from Qatar," Dr. Mohammed Saleh Al-Sada said after the signing of the memorandum of undertstanding.

"Qatar is a major LNG producing country in the world and is happy to co-operate with Bangladesh in energy sector." he said, according to a statement by Bangladesh embassy in Doha..

It was not clear when the import would actually happen as the country needs a deep sea terminal for the ocean-faring tankers to disembark LNG to Bangladesh.

The government has already invited bids to construct the terminal at a cost of over 10 billion taka. Work is expected to resume later this year and finish by 2012.

Industry has demanded a fast-track import of LNG to meet growing shortages in the country, especially in the greater Chittagong region -- home to dozens of heavy industries.

The government has suspended gas connections to new industrial plants since 2008 after the supply from the country's gasfields fell short of demand.

The shortfall has now reached 500 million cubic feet (mmcf) -- or 25 per cent of the country's total supply.

The cost of LNG will outstrip domestic gas prices two-three times. Still the private sector is keen to buy LNG to boost business expansion.

Joint venture fertiliser producer, KAFCO, top Chittagong-based conglomerates like Abul Khaer, PHP, S Alam and TK have also expressed their interest to buy LNG from the government.

Officials said prior to signing the MOU a bilateral meeting was held in Qatar Petroleum Doha between Bangladesh and Qatar.

 

[bd_4_ever]

.....wrong post.....