The international prices of oil, gas and coal have depleted substantially due to the Covid-19 pandemic as all these are somehow linked. It will not be worth taking risks with a particular primary fuel as Bangladesh is gradually becoming dependent on imported primary fuel.
Engr. A.M. Khurshedul Alam, Chief Executive Officer, North-West Power Generation Company Limited (NWPGCL), said this in response to a suggestion for generating power in future mostly on imported Liquefied Natural Gas (LNG) instead of coal.
He expressed the opinion in an exclusive interview with Energy & Power Editor Mollah Amzad Hossain.
The country’s power generation capacity now is much higher than the demand. There are allegations that the generation cost is increasing for payment of capacity charges to idle generators. Your company also have some liquid fuel-based plants. What are your views about such allegations?
The present installed capacity of grid-connected power is 20,000-21,000 MW. If you exclude the capacity of the old-aged less efficient generation plants, the capacity will shrink by at least 2,000 MW. You have to consider that all the power plants are subject to some scheduled and unscheduled maintenance for about 10% time of a year. Hence the reserve margin is not more than 30%. Such situation exists in many countries of the world. In addition, some spinning reserve in the plant capacity is also required for maintaining frequency of the grid through FGMO (Free Governor Mode Operation). For ensuring supply security of the power system, such reserve margin is essential.
Our liquid fuel-based power plants are in the North Western region of Bangladesh where there is no supply of natural gas. Of this, only the engine-based 100 MW Modhumoti is exclusively reliant on liquid fuel. Other plants have been made dual-fuel based, making 5% additional investment. All these are running on gas excepting the Khulna power plant. We could have displaced the liquid fuel in power generation if we can ensure adequate supply of natural gas or regasified LNG.
The availability of LNG in gas grid has increased gas supply capacity for power generation. NWPGCL has some dual-fuel plants. Will you run these by gas in future?
The supply of natural gas in power generation has been increased in the recent years due to inclusion of LNG. Of course, credit goes to the government, Energy Division and Petrobangla. However, the demand of gas has also been increased by this time and there is still shortage of gas supply in power sector. Hence, BPDB can’t fully discard liquid fuel-based power plants from the system yet. One out of four power plants in our Sirajganj power generation hub is not in operation for non-availability of gas. Our Khulna 225 MW Combined Cycle Power Plant has also dual-fuel provision and we can switch to gas operation as soon as we receive gas in Khulna. Petrobangla pledged to supply gas to this power plant within Mujib Borsho which is a very good news for us. The generation cost from this power plant would reduce significantly if we can run the plant on natural gas.
You have finalized the works for engaging construction contractor for 800 MW LNG-based power plant in Khulna. How the fuel will be supplied for this? Will LNG come from India or Petrobangla would supply gas through pipeline?
The Asian Development Bank (ADB) has agreed to finance for this plant based on Petrobangla’s assurance for gas supply. Now the onus is on Petrobangla on how the gas will be supplied. The construction activities have been started. The COVID-19 pandemic of course has slowed down the project. It is expected that this plant will come into operation by 2022.
You have formed a joint venture company for a 3,600 MW LNG-based power plant at Payra. The joint venture is in operation after extensive reviews and brainstorming. Will you create LNG supply infrastructure for this or Petrobangla would supply LNG for this?
This project is still in development phase and undergoing some techno-commercial studies. The entire works will be executed through two companies. One will be a power generation company and the other will be LNG supply company. The shareholders of the project will own both companies. Excelerate Energy L.P., a renowned US-based LNG company which is also successfully operating FSRU in Bangladesh, is in the process of accession to the consortium for the project with NWPCGL, Siemens and CMC.
Feasibility study for the power plant part has already been completed. Feasibility study for LNG supply is now in progress. Financial adviser for the project has been selected. Works is going on for engagement of legal adviser and tax adviser. EIA study of the project is also in progress and we expect to submit EIA report for the power block to the Department of Environment (DOE) for approval by September 2020.
NWPGCL is now the forerunner of imported coal-based power generation. Starting later, the first 660 MW unit of your 1,320 MW capacity power plant is already in commercial operation. The other unit is almost ready. What are your feelings?
We are really overwhelmed by the fact that the first ever ultra-super critical technology using modern power plant has come into operation in Bangladesh. It has been possible due to having a great leader. Honorable Prime Minister Sheikh Hasina herself is in charge of the Ministry of Power, Energy & Mineral Resources. Her visionary leadership and fortitude made it possible to set up such a state-of-the-Art technology using power plant at a far-flung neglected region. The entire credit for implementing such a project in the shortest possible time goes to her. We have only acted following her directives. Our continued commitment emanates from patriotism and ideology of the great liberation war of 1971.
Constraints of transmission grid for evacuating the power have delayed the commercial operation of the first 660 MW unit. The synchronization of the second unit would be completed shortly. But due to constraints of transmission line, the entire power cannot be evacuated. Upon request of PGCB, we have started working on 400/132 kV grid substation at Payra. Once it is completed, about 65-70% power from our 1,320 MW capacity plant can be evacuated to the power grid. On the other hand, the construction works of Gopalganj to Aminbazar 400 kV power transmission line is also advancing. Payra power plant cannot start operation in full capacity till the works of 400 kV power transmission line all the way up to Aminbazar is completed. Hopefully by end of 2021, the nation will get full benefits of the power plant.
According to the plan, NWPGCL and CMC are to start works of the second 1,320 MW Payra power plant. What is the status of it now? When the physical construction would start?
During the construction of the first 1,320 MW plant of phase-1, we carried out some preparatory works of phase-2 as per the plan. These include land development, water treatment and water intake related activities. A 320-meter wide jetty for receiving imported coal is also built. We will extend it by another 208-meter in the second stage. Test pilling works are already done. The EPC contractor will complete 20% of the works using its own fund as per contract before the financial closure of the project. These works are in progress now. Exim Bank of China, which pledged to finance the project, could not work for three months during the COVID-19 pandemic. They have resumed work recently. We are expecting financial closure for the phase-2 project within a year.
For the shallow draft at the port, coal for the 660 MW capacity unit is now being transported in 50% filled coal carrier from Indonesia. What is the cost of transportation per tonne now? When the transshipment infrastructure would be ready?
The present transportation cost of coal is US$17-18 per tonne. The transshipment infrastructure at Andaman was supposed to be ready by the end of 2021. But we advised the transporter to delay a bit till we are ready to generate and evacuate 1,320 MW from Payra. Otherwise, it will not be financially viable.
Do you have any plan for Joint Venture development of coalmine and setting up of mine mouth coal power plant? What kind of preparation you will take if you have such plan?
We have a plan for setting up mine-mouth power plant using our own coal. But no formal activities have been launched yet. But we have a plan for setting up a tripartite Joint Venture among Petrobangla, NWPGCL and an experienced coal-fired power generation company. The thoughts are about exploiting coal of Petrobangla-owned Dighipara coal field. Petrobangla is carrying out feasibility study for it.
Subject to the green signal of Power Division, we are considering for submitting a formal proposal to Petrobangla.
The generation capacity is now the widely discussed issue. Some experts are now advising for not adding new generation capacity. They are also suggesting for not adding any more imported coal based power plants in addition to those under construction. They are suggesting for LNG based new power generation. What are your views?
I have a bit different opinion. We shouldn’t stop development activities in the power sector. All the existing power plants have definitive life expectancy (about 20-25 years) after which the plants need to be retired. PSMP-2016 addressed the issue and incorporated a retirement plan for the power plant. Secondly, expensive liquid fuel-based generation are to be replaced with highly efficient and cost-effective generation units. On the other hand, the demand of electricity is also growing annually with the economic development. The government is also developing multiple economic zones which will augment the demand significantly in near future. Hence, stopping power plant development would result in a boomerang at some point.
With regards to fuel selection for power generation, I don’t support the idea of reliance on a single fuel. Our fuel mix is tending towards imported fuel. Mono fuel dependency would make energy security vulnerable. Rather, we would opt for a sustainable fuel mix by optimizing generation cost, energy security and environmental impacts. We must decide a fuel mix through reviewing PSMP from time to time. Sudden changes must not be arbitrarily made.
NWPGCL has formed a JV company for renewable power generation apart from fossil fuel-based power. When the planned solar and wind power plants will come into operation?
Works of grid-connected renewable power plants in Bangladesh is not progressing admirably at all. A few investors could not proceed even after signing agreements with the government. Even in this situation NWPGCL for its commitment to power sector has started working on renewable power generation by forming a Bangladesh–China JV (Private) power company with CMC China. We are expecting to register the company by August 2020. We will get FDI for different projects by then.
We are expecting that a 60 MW solar power plant can be brought into operation at Sujanagar, Pabna by the JV company by end 2021. The government has already allotted non-farming land for this plant. We have already started fencing works of the project site. Our 50 MW capacity wind power plant will be located at Payra. It is expected to put into operation by 2022. Although we are starting with Solar and Wind initially, eventually we will explore all options of renewable energy.
All through his life time, Bangabandhu attached highest priority to achieving energy security for realizing his Sonar Bangla Vision. He envisioned for ensuring affordable power supply to all exploiting own primary fuel resources. What are your views about this?
Only visionary leaders can dream and realize it. Bangabandhu was one of the very few ones. Returning to his land of dream after the independence, he launched mission for achieving the energy security for laying the basic foundation for economic development. He engaged experienced and competent manpower for all the companies of energy and power. He attached highest priority to the use of own gas instead of imported fuel. With the expectation of discovering oil, he launched exploration campaign in the Bay of Bengal. He bought discovered gas resources from foreign company at a nominal cost. The gas of those fields he took over is still the backbone of the energy and power sector. The energy sector is still standing on the foundation laid by Bangabandhu. Honorable Prime Minister Sheikh Hasina is now expanding and further developing it.
What are your future plans with NWPGCL?
NWPGCL is a state-owned enterprise. Public welfare is the vision of the government. As we are working on ensuring affordable and quality power supply to all, our aims and challenges are becoming more and more efficient at our works and establish ourselves as a center of excellence in the power generation of Bangladesh.
