Govt can get 300mw power from 200 CPPs

The Power Ministry has failed to achieve its target to add 50 MW electricity by June to the national grid from the captive power producers (CPP).

According to official sources, after various moves, the Power Ministry got only 7 MW electricity from the captive power producers for the national grid. The Rural Electrification Board (REB) struck deals with two private companies to get this electricity. Industry insiders blamed the Power Ministry's non-lucrative tariff offer as well as irrational gas price for the failure to get the captive electricity.

They, however, believe that when the country is experiencing its worst power crisis, the caretaker government can easily get 200-300 MW ready electricity from the CPP if the tariff is made lucrative and gas price reduced in line with the price applicable to other producers like PDB and IPP.

Sources said there is about 200 captive power plants, having about 1,300 MW in country. The industrial entrepreneurs set up these plants to run their own industries when power supply is unavailable from the national grid. Most of these captive power plants were set by the large industry-operators in sectors like textiles, pharmaceuticals and steel mills.

But when their industries remain closed during the non-working hours, the captive plants remain idle although they have vast potential to serve the national grid.

Amid such a situation, the government moved to bring the captive electricity to the national grid to mitigate the nagging power crisis.

The Power Ministry set a target to arrange at least 50 MW electricity from the CPP to the national grid by June this year. The government also adopted a Captive Power Purchase Policy to buy electricity from their producers. But when the government asked the captive producers, the move failed to get a good response as the government's tariff-offer was not lucrative to the captive plant operators.

The Power Ministry set the maximum tariff at Tk 2.12 per unit (kilowatt/hour) to buy electricity from the CPP plants. But the CPPs thought the tariff offer is not lucrative as the government is presently buying electricity from different independent power producers' (IPP) at much higher rates of between Tk 3.60 and Tk 5.50 per unit.

Besides, they said, the gas price offered to captive producers is also not favourable. Because, the government is supplying gas to the PDB and IPP plants at a lower rate of Tk 2.61 per cubic metre while the captive plants are offered gas at Tk 3.73 per cubic metre. The industry insiders believe that if the government reduce the gas price and increase the power tariff for the captive power, about 300 MW of electricity might come from captive plants within next 9-10 months.

Some top officials of the Dhaka Electric Supply Authority (DESA), who have visited some potential CPP plants in Dhaka, Narayanganj and Chittagong, also hold similar opinions.

Sources said that after the visits, the DESA officials, being convinced by the present infrastructure and the production potential of the CPP plants, recommended the Power Ministry to examine the existing constraints and possibility of captive power purchase. A PDB official said purchase of captive power could be a good option to minimise power crisis within shortest possible time, as the infrastructure is ready to feed the national grid. Secondly, the captive electricity could be brought in the national grid without tendering process, which is the main reason for delay in setting up a power plant.