RENTAL POWER CONTRACT EXTENSION
Govt starts negotiationManjurul Ahsan
The government has formally initiated negotiation with short-term power producers for the extension of its power purchase agreements with the companies, officials said.
The negotiation committee headed by power division secretary Monwar Islam on Monday offered five entrepreneurs for supplying electricity for an extended period.
The plants have a combined generation capacity of 247MW of power.
The committee offered the entrepreneurs to submit fresh proposals either on the basis of ‘no electricity no payment’ with current tariff or at a lower tariff than the existing one, the officials said.
The entrepreneurs, however, demanded a higher tariff for the supply of electricity on condition of no electricity no payment.
According to the current contracts, the state-run Power Development Board pays for a rental power plant’s capacity even if it does not buy electricity from it.
The five rental power producers are RZ Power for its 47MW diesel-fired plant at Thakurgaon, Precision Energy Ltd for its 55MW gas-fired plant at Ashuganj, Energies Power Corporation for its 55MW furnace oil-fired plant Shikalbaha in Chittagong, DPA Power Generation Company for its 50MW diesel-fired plant at Pagla in Narayanganj and Khulna Power Company Ltd for its 40MW plant in Khulna.
The three-year contract periods for power supply from three plants have already expired and DPA’s 50MW and Precision’s 55MW will expire soon, the officials said.
They said that the government had no options right now but to renew the contracts to maintain steady supply of electricity until 2020.
In 2012, the government extended the contracts with six gas-fired rental plants for one year and a half on the same ground.
A number of officials said that the government needed to extend its dependence on short-term rental power plants further as it
failed to replace them by long-term and low-cost plants in the last four years and a half.
Installation of a number of low-cost power plants with a capacity to generate about 5,000MW by 2017 became uncertain due to fund crunch, unavailability of gas and coal and half-hearted efforts by the authorities, experts said.
The oil-fired rental plants are supplying about 20 per cent of the total electricity during summer, according to Power Development Board.
A power division team, headed by power division’s additional secretary Md Mofazzel Hossain, worked out a power demand and supply scenario till 2020 which showed the need for extension of the contracts with the rental power producers.
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