It was on March 22, 2012 when the Power Division of the government at a seminar unveiled a mega plan for increasing power generation in the country. Presenting the keynote paper, the then Chairman of Bangladesh Power Development Board Engr. ASM Alamgir Kabir spoke about the government’s target to achieving 20,000 MW power generation capacity by 2017. Of the capacity, 24% or 4,938 MW would be generated from coal. In five years starting from 2014, the generation from coal would be increasedby 21%. It was told that whatever has been achieved following the Power Sector Master Plan (PSMP) 2010 would not be enough for meeting the rising power demand. Hence the mega plan is being put forward with short, medium and long term action plans. It was told that immediately after formation of the new government in 2009, actions were underway from 2010 for increasing the generation following the PSMP 2010. The essence of that mega plan was achieving 40,000 MW generation capacity by 2030 of which 50% or 20,000 MW would be generated from coal. Local coal would contribute 30% and imported coal the remaining 20%.
Road shows were staged in different countries for attracting investment in the power and energy sector. The first such road shows were held in London in December 2009. Alamgir Kabir in his presentation there had claimed that the power tariff will be needed to be increased for the contingency power generation. The then bulk tariff required increasing from Tk 2.37 to over Tk4.00/kwh. By 2016, it might go beyond Tk6.00. But, he said,after the availability of power from new coal fired power plants the tariff would again come down below Tk4.00/kwh. But the reality is that since 2009 the power tariff remains always on the increase. Now the power generation cost is Tk 5.50/kwh. It is lower than Tk 0.77/Kwh from the previous financial year. But the bulk tariff has increased. It is now Tk4.90/Kwh.
As in August 2017, the power system mega dream ended unrealised. The installed generation capacity is now 13,555 MW, including 660 MW import from India. The contribution of coal is less than 2%. Despite major failure, the guardians of power and energy sector are now up beating that “we will not stay behind though we failed once”. Bangladesh with its own capability would start coal power generation from 2019 and start feeding the national power grid. Payra Power Plant project of China-Bangladesh joint venture would anchor the mega march. The much talked about and widely debated Rampal Power Plant would start generation from 2020.
As of now, there are three positive developments could be mentioned in cases of coal power generation projects and associated infrastructure development. Some 19% progress has so far been made in top priority 1,320 MW Payra power project. On the other hand, Indian EPC contractor Bharat Heavy Electrical Limited (BHEL) has started preparation for Rampal Power Plant, following the loan agreement with Indian Exim Bank for the Bangladesh-India Moitree Power plant. On July 27 this year,an agreement was signed with Japanese Sumitomo Corporation for 1,200 MW imported coal based power plant at Matarbari and associated coal port.
Payra 1,320 MW Power Plant
North West Power Generation Company Ltd (NWPGCL) is the implementing agency of the China - Bangladesh joint venture power project at Payra. Project office claimed 19% progress so far. But financial closure could not be done yet. It is expected that an agreement would be concluded with the Chinese EXIM Bank in a month or two. As an innovative approach, the EPC contractor has pledged to execute 15% of the work with its own investment. This facilitated starting and advancement of works. Engr. A.M. Khurshedul Alam, Managing Director of NWPGCL, informed that the first 660 MW unit of Payra power plant would come into commercial operation in April 2019 and the second in August the same year. But about coal supply for the plant, he did not have a definitive response. Memorandum of understanding (MoU) has been signed with Australian and Indonesian companies for coal purchase. But coal receiving in Bangladesh is a great challenge. Before Payra coal port becomes operational, coal to the power plant jetty would be transhipped through lighterage vessels from mother vessel coal carriers to be anchored in the deep sea. But in the turbulent open sea, transhipment would not be possible for more than seven months a year. Italian company Logmarine Advisors has been engaged to study the modality for coal transportation and uploading to plant terminal. They have identified 10 logistic companies having capabilitiesof doing that. Kurshedul Alam mentioned about engaging one from the intended companies. Payra port facilities would be used as soon as it becomes operational.
Rampal Power Plant Debate and Coal Transportation
Bangladesh India Friendship Power Company Limited (BIFPCL), a joint venture company of state-owned Indian company NTPC and BPDB of Bangladesh, was formed during the Awami League led government tenure 2009-2013 as a milestone for Bangladesh endeavouring big in large power plant construction. The works of 1,320 MW imported coal based power project is rolling on in the face of strong protests and movements of local and foreign environmental groups and activists. The EPC contractor for the plant BHEL, India has started working on the project. It is expected that the first unit of the plant would start generation in October 2020. The second unit would take another five months. Coal transportation has become a great challenge for this plant. Even if Matarbari coal port becomes partially operational before Rampal is ready, coal cannot be transported at economic cost. Transhipment from mother vessels anchored at Akram point in the deep waters cannot be done for more than seven months a year. Consequently, Mongla port adjacent Herbaria point is being considered as a safer option.
Mongla Port Authority has signed an agreement for dredging of the Poshur channel to an all-time availability of 5.5-meter draft from Herbaria to Rampal power plant jetty. Harbaria would have 8.5 meter draft during high tide. But dredging would be required from Swatch of No Ground to Harbaria. Rampal Project office considers that carrying coal using 40,000 tonnes capacity Handymax carriers would be possible to Harbaria. Ujjwal Bhattacharya, Managing Director of BIFCL confirmed this when contacted. He said that they would use Payraport facilities when that becomes operational. But till then, coal can be transported under the aforementioned arrangement at economic cost.
He mentioned that PWC, a consulting company studied on coal sourcing and transportation. Of the 14 countries they suggested as possible source, we have selected Australia, Indonesia and South Africa as the potential supply source. But whether Harbaria or Payra would be the port of coal receipt?Low velocity carriers fitted with modern navigation facilities would be used for coal transhipment. This will ensure environment-friendly and safe coal transportation through Poshur channel. The contractor would be engaged for delivering coal direct to the plant’s coal terminal.
Project officials confirmed that it will be possible reaching coal to the plant at economic cost despite major challenges. But challenges would be considerably eased when Payra port would come into operation.
Matarbari Multipurpose Project
Setting aside Rooppur Nuclear Power project, the US$4 billion Matarbari Multipurpose project is the single largest power project in Bangladesh. The project envisages implementation of two units of 1,200 MW each coal power plants, associated infrastructure and a coal port, including port channel development. Around 80,000 tonnes capacity coal carriers would be able to reach this port. An agreement has been signed with Sumitomo Corporation for these works. As per the agreement, the first unit of 600 MW capacity along with port facility would start operation within 2,385 days of signing the contract. The second unit would come within 180 days of the first unit that is sometime in 2024, this plant would start operation. Engr. Abul Kasem MD, Coal Power Generation Company of Bangladesh Limited (CPGCBL) expressed optimism that enabling coal supply for 2,400 MW of power generation can be made ready by 2020. But Mining and Environment expert Dr. Mushfiqur Raman differed with MD, CPGCBL stating that it would not be possible making coal port ready with all necessary facilities in only two and a half years. What is the purpose of making port ready before power plants are ready for taking coal? According to him coal port may not be ready before 2022.
The project officials informed that a 7 KM long channel of 18-meter-deep and 250 meters wide would need to be developed. Initial capital dredging and regular maintenance dredging would be essential. This port cannot be fully operational before 2025. On the other hand, if the port development is delayed for any reason, power plants cannot come into operation even if they are ready.
Matarbari CCT
Around 35% of the targeted 57,000 MW i.e. 20,000 MW of power generationprescribed under the PSMP 2016,now awaiting the government’s approval, would come from coal. Maximum 1% may come from local coal. Ex-Chittagong study of JICA estimated 80 million tonnes of annual coal demand in 2040. Of this, 70 million tonnes would be required for power generation only. The government documents show 10 million tonnes production from own sources. The study suggests 70 million tonnes coming from import. By 2040, the capacity of Matarbari transhipment terminal (CTT) would be 40 million tonnes. A CCT with an annual capacity of 14 million tonnes would start operation in 2029 under PPP.
Under the current plan, the combined capacity of all coal power plants in 2041 would be 15,000 MW if all these are implemented. Taking this into consideration, the Matarbari coal port will be transformed into CTT under PPP. Conveyor belts would bring coal from the CTT to all power plants in Matarbari and Maheshkhali. The Pekua and Chittagong based coal power plants can carry coal by barge. There has been no mentionable progress of this initiative though Sumitomo Corporation completed feasibility with JICA assistance.
Dr. Mushfiqur termed the CCT plan a good initiative. He said that implementation of the CCT must start without delay if we are serious about all coal power plants coming on time. In its absence, generation from all power plants at Matarbari and Maheshkhali may not start even if their construction is completed.
As per the JICAs Ex-Chittagong study estimated $10 billion investments for CCT till 2040. But no PPP has been successful in Bangladesh so far. There would be huge challenge for a multipurpose project development under PPP. Investment would have huge risk if power plants construction and CCT development do not proceed hands in hand.
Payra Coal Port
Another energy hub is going to be developed in the southern region of Bangladesh, encircling Payra port and adjoining areas. NWPGCL is constructing a 1,320 MW capacity imported coal based power plant there. Preliminary works of a second 1,320 MW coal based power plant has also started. Rural Power Company Limited (RPCL) has also acquired land there for setting up another 1,320 MW power plant there with Chinese JV. Besides this beyond the knowledge of BPDB, Coastal Coal Power Company Limited has signed a MoU with Payra Port Authority for coal supply for a 1,320 MW power plant there.
Payera port authority sources informed that Petrobangla started feasibility study for a land based LNG terminal outside the area of main port channel of Ramnabad. Bangladesh Petroleum Corporation is planning to set up a refinery by the side of that area. The port authority has started working for a coal port on 500 acres of land beside the coal power plant. Commodore Md Saidur Rahman, a member of the port authority, informed that works of coal port construction has progressed appreciably. They are in discussion with four organizations of India, China, Netherlands and England. Agreements will be signed with them for port construction. He expects to start operation soon at limited capacity.
He claimed that Ramnabad Channel has 18-meter draft. A few kilometer dredging at the mouth of the channel can provide access to ships of 80,000 tonnes capacity. But many have expressed concerns whether this port can come into operation before 2020. But Payra Port Authority and Rampal Power Plant management observed that the sooner port comes into operation the lesser would be risks and challenges for coal transportation.
Conclusion
Around 35% of the power generation target under the proposed PSMP 2016 would come from coal. Thegovernment in the public private sector has either already signed contracts or the contracts conclusion are at the final stage for about 24,000 MW power generation. But it is not clear yet about the coal import and transportation arrangements for these. There are plans for 70,000 tonnes of coal import through Matarbari and Payra ports. About $16-20 billion investment may be required for these. Another $40 billion investment is required for 20,000 MW of power plants construction. In the next 22 years, around $60 billion or annually $3 billion investment would be required.
What will happen to this massive investment if Bangladesh is made to gradually move away from coal power generation after 2030 in changed world order due to fuel price in global market and global strategy of emission control. In a recent discussion, State Minister for Energy, Power and Mineral Resources Nasrul Hamid assured that the government will stick to its present planning for coal power. In 5 years of time, we have lowered our coal powered generation target from 50% to 35%. Who can say whether we won’t switch to other option in future?
But Bangladesh needs huge investment for implementing the planned power generation by 2030. In Bengal delta, about 2.5 million tonnes of sediments are carried every year by the river system. Consequently, investment in the coastal areas for developing port facilities in consideration of shallow draft of the coast and stability of the land mass is very risky. It will be a great risk if Bangladesh has to move away from coal power generation after 2030.
It is unknown to anyone that Bangladesh lacks competent manpower for proper policy guidelines, projects development and operation. Will coal still remain an affordable fuel after absorbing huge investments required for developing import instructors, especially the capital dredging for deepening the port channels and annual dredging for maintaining the navigability.Neither there has been any strong plea for reviewing these plans nor the government taken any initiative for assessment of the plans.
A comprehensive assessment and techno-economic feasibility study is essential before committing billions of dollars in investment in imported coal based power generation. Otherwise, Bangladesh may land in a severe investment crisis in the future.
Cover Interview
Fuel Supply Infrastructure Major Challenge, But We Will Overcome
Engr. Khaled Mahmood
Chairman, Power Development Board
Our geographical location creates huge challenge for setting up fuel import infrastructures. Coal import infrastructure is no different. There is no denial that we have fallen behind a bit. But we are working on it. Contracts have been already concluded with the selected contractors for Matarbaricoal port developer and power plant. This coal port is expected to come into operation in 2021.This port would handle coal transportation for 1200 MW Matarbari and SembCorp power plants. But 8 large power plants each having 1320 MW capacity would be constructed in 8 blocks at Maheshkhali and one in Pekua. Initiative has been launched for constructing a coal transhipment terminal there for managing coal supply for these plants. Coal would need not to be transported to the power plants via 7-8 KM long conveyor belts from here.
I believe the first power plant in Maheshkhali would come into operation in 2022. The coal transhipment terminal would also come into operation at that time. There cannot be any semblance of doubt that setting up coal import infrastructure is a huge challenge for Bangladesh. But the planned way of approach that we have made would assist in successfully overcoming those challenges in supplying coal as per requirement for each plant. We have taken all these planned actions for implementing coal based large power plants as prescribed in the Power System Master Plan. The works for coal sourcing, transportation and setting up of import infrastructures are also proceeding in coordinated manner.
Generation Not toSuffer Despite Coal Supply Challenge
Engr. A.M Khurshidul Alam
Managing Director
North Western Power Generation Company Limited
The coast near the power plant being set up at Payra does not have enough draft for the large coal-carrying vessels. Consequently, imported coal needs to be transhipped to the plant jetty until Payra port starts operation. Mother vessels would anchor in the deep sea about 70 KM away from the plant and lighter vessels would tranship the coal. But under no circumstance coal can be carried from the deep sea for more than 7 months a year like that. But power plants would require coal round the year for operation. Coal transportation and supply would remain a great challenge until Payra port becomes fully operational.We are working on it. But we can assure that commercial operation of Payra power plant will not be affected due to coal supply.
Italian organization Log Marine Survey has done feasibility for coal sourcing and supply for us. We are working on that report. Ten global logistic organization have been short listed for this. We will finalize the tender after preliminary discussions with them and select the company for coal supply. Power plant will provide all technical support for coal supply prior to commencement of commercial operation of the Payra port. We are expecting that the temporary difficulties of coal transportation would be solved when coal port would start operation in 2022.
It could be mentioned here that the first unit of the 2X 660 MW plant would come into operation in April 2019 and the second in October of the same year. Another such plant would be constructed there later. Work has been already started for that.
Supplying Coal at Economic Price a Major Challenge
Ujjwal Kanti Bhattacharya
Managing Director,
Bangladesh India Friendship Power Company Limited
Reaching coal to power plants from global market at economic price in Bangladesh especially for Rampal Power Plant (RPP) is a great challenge. But that does not mean that this is the only challenge. Getting land for the plant and investment are also equally challenging. But the last two are required for only once. Coal supply is required for the life time of the power plant. The major challenge is the absence of a coal port in Bangladesh until now. The river ports are also not yet ready for transhipment. Initiative has been launched for enhancing navigability of the river channels for transportation of coal to RPP coal terminal. Modern technology driven environment friendly initiative has also been taken for coal transportation. Lower speed and GPS Radars would be mandatory for the barges carrying coal. This will greatly minimise the possibility of any untoward happening during transportation.
BPDB carried out a feasibility study on coal sourcing and transportation for RPP. That included study on Mongla Port, Navigation and source(s) of coal among others. There has been mention about fairway boya for lighterage. But it is not possible doing lighterage in the turbulent deep sea for more than 5 months using the fairway boya. Bringing coal from Matarbari coal port if that starts operation before RPP would not also be an economic option. It will be feasible bringing coal from Payra port. But RPP would come into operation earlier.
BIFCL has also conducted a study for coal sourcing. Indonesia, Australia and South Africa have been mentioned as the source of coal in that study. We are planning to bring coal to Habaria on the outer edge of Mangla port which has 8-meter draft during high tide. Coal carriers up to 50,000 tonnes can be brought there. For transporting coal from there to RPP terminal would require 6-meter draft of Poshur Channel. Mongla Port Authority has signed a contract with a dredging company for that. This work would make 14 KM river channel ready for coal transportation. An ERA has already been done for that.
We are going to tender for coal supply. The responsibility of the successful supplier would be transporting coal from source to the RPP coal terminal. I believe supplying coal is a huge challenge. But we are also ready and are capable of meeting the challenge.
