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Some power plants consume more fuel than others for generating the same amount of electricity, indicating an overall power management failure in stopping leakage of Bangladesh’s scanty supplies of imported fuels.

Inefficient imported fuel use also indicates waste of dollars, a portion of which is taken as loan as excessive spending surpassed its income through the back-breaking labour of millions of Bangladeshi migrants and readymade garment workers.

A Bangladesh Power Development Board analysis done recently showed that power plants using similar technology needed varying amounts of fuel to generate the same amount of electricity.

Defined as fuel cost, the money spent in supplying fuel needed to generate a unit of electricity, the BPDB analysis revealed that some power plants consumed up to 90 per cent more fuels than their peers.

Fuel costs, energy experts explained, may vary depending on many factors -- quality of fuel, its import and transportation cost, the dollar exchange rate, plant factor, and quality of machines.

‘All factors responsible for fuel overuse exist in Bangladesh, independently or in combination,’ said BD Rahmatullah, a former director general of the Power Cell.

‘Bangladesh’s corrupt political governments failed the power sector over a long time,’ he said.    

He recalled the inaugural ceremony of the 80MW gas-based Tongi power plant back in his Power Cell days in 2005. The plant malfunctioned in just 10 minutes after its engine was started.

The Tongi power plant, supposed to be in operation through 2030, often remains under maintenance and requires fuel worth Tk 5.47 for generating per kWh of electricity, the third highest fuel cost among the BPDB-owned gas-based power plants. The fuel cost is 47 per cent higher compared with the average cost of fuel in similar power plants.

Two years later in 2007, immediately after the introduction of rental power plants, Rahmatullah was transferred from his office as a punishment as he pushed for specifying machinery qualities to be used in upcoming rental power plants.

In the subsequent years, the Awami League started rewarding its loyalists with power projects without tender under the now-defunct indemnity law, he said, with the power sector investors choosing their machines.

‘Investors brought used machines from abroad as the quality control mechanism simply did not exist over the AL tenure,’ said Rahmatullah.

The absence of quality check has been best reflected in frequent shutdowns of power plants due to technical glitches. The first unit of 1,320MW coal-fired Rampal power plant, a Bangladesh-India joint venture, shut down eight times in the first nine months after it started operating in December 2022, five times for technical problems.

In January this year, the Rampal plant was available for only 18 per cent of the time, according to the BPDB. Rampal’s per-unit fuel cost is 28 per cent higher than a similar power plant, the BPDB analysis showed.

The oil-based Basila power plant, owned by former ruling Awami League lawmaker Aslamul Haque, did not generate any electricity for over three years after 2020, about three years after it came into operation. 

The Jamalpur 95MW oil-based power plant, owned by AL favourite Sikder Group, operated at only 1.8 per cent of its capacity during 2021-22.

Power plants are, according to their power purchase agreements, required to operate at an 85 per cent capacity should they want to claim capacity

charge.

BPDB’s generation in charge, Zahurul Islam, said that a globally accepted quality check mechanism should be in place to ensure an efficient operation of public power plants, including pre-inspection allowing BPDB experts to examine qualities of the machineries back in their production factories abroad.

‘Rigorous quality checks are ideally in place ending with the requirement for a test run of a power plant over a certain period of time,’ he said.

The BPDB currently does not have a director at its IPP Cell that looks after the operation of private power plants. Other high officials of the organisation refused to talk about the quality check issue of private power plants. 

The problem with frequent shutdowns and resumptions of power plants is that it requires extra fuel, energy experts

said.

Among gas-based power plants, the BPDB analysis showed, public power plants’ average fuel costs are about 20 per cent higher than that of independent power plants – Tk 3.49. The power plants in comparison are mostly combined-cycle power plants.

Some of the government power plants needing excessive fuel costs are as old as 30 years or up to 40. They are still in operation despite the requirement that they should have been shut down much ago. The per-unit fuel cost of the Sylhet 20MW power plant, set up in 1986 with a gas turbine, is Tk 6.26.

Among the gas-fuelled private plants on rent, the average fuel cost is Tk 6.81. Set up with reciprocating in engine in 2013, the Sylhet 25MW power plant, owned by the United Group, requires fuel worth Tk 6.41 for a unit of electricity. The per-unit fuel cost of the 33.5MW Bhola power plant, established in 2009 and owned by Venture Energy, is Tk 7.48 a unit.

Gas accounts for 43 per cent of Bangladesh’s current installed power generation capacity of 27,645MW. A fourth of the gas consumed in Bangladesh is imported as liquefied natural gas.

‘Power plants efficiency falls as they age leading to increased fuel consumption,’ said Shafiqul Alam, lead energy analyst, Institute for Energy Economics and Financial Analysis.

‘Less than the optimum use could also result in higher fuel costs,’ he said.

Fuel shortages due to the dollar crisis force Bangladesh to keep many of its plants underuse. Overcapacity is also an obstacle to ensuring the optimum use of power plants.

As with gas, the average per-unit fuel cost of the oil-based public power plants is higher than that of private power plants, except for two rental power plants. The PDB-owned power plants’ average fuel cost is Tk 19.28, higher than the per-unit fuel cost of Tk18.61 with independent power plants.

Of the 40 oil-based IPPs, the per-unit fuel cost of eight power plants is above Tk 20 – three of the plants being owned by the Summit Group, two by the Confidence Group and one by the United Group.

Oil-based power plants account for 21 per cent of the installed power generation capacity. Relying completely on import, the oil-based power plants often account for a third of power generation during peak hours.

‘Saving fuel cost is essential to reducing the power sector spending, particularly amidst the ongoing economic crisis,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development.

Among the coal-fired power plants, accounting for 20 per cent of the installed power generation capacity, the average fuel cost per unit is Tk 7.02.

Each of the BPDB-owned first two units of the Barapukuria power plant, set up in 2006, consumes fuel worth Tk 12.30, 75 per cent higher than the average and over 100 per cent than the lowest fuel cost incurred by the 1,200MW Matarbari power plant. The third unit of Barapukuria, set up in 2017, needs fuel worth Tk 9.26 for a unit of power production. The high Barapukuria fuel cost results from the lack of maintenance and high domestic coal cost, which is 77 pc higher than imported coal in some cases.

In a stark contrast, revealed the BPDB analysis, the fuel cost in import of 250MW coal power from NVVN Coal Power in West Bengal, which started in 2013, is Tk 2.49. The Indian National Thermal Power Corporation has been supplying coal power since 2013 with a fuel cost of Tk 5.35.

The second highest fuel cost among coal power plants is associated with the Adani Group, with Tk 8.01 spent on generating a unit of electricity. The high Adani fuel cost is the result of an unequal power deal allowing Adani to manipulate coal price. Adani’s excessive coal transportation cost is also responsible for the high fuel cost.

Besides, power plants often use substandard coal in place of what they are paid for, leading to reduced output and increased fuel cost, energy experts also said.