Bangladesh set to shut down 51 power plants by 2025

Originally posted in The Financial Express on 22 March 2022

The Bangladesh Power Development Board (BPDB) has lined up a total of 51 power plants, having a total generation capacity of about 3990 MW, for retirement by 2025.

According to an official document of the BPDB, the state-owned principal organisation in the power sector, the retirement schedule includes 15 plants from the public sector and 36 from the private sector.

The document-Annual Report 2021 of BPDB-reveals that of the 51 power plants, some 12 plants with a total capacity of 1154 MW will be put on retirement in 2021-22, 14 power plants having a total capacity of 890 MW in 2022-23, 22 power plants of total 1,770 MW capacity in 2023-24, and three plants, having 167 MW capacity, are going to be retired in 2024-25 fiscal year.

The BPDB data shows that among the 12 power plants (1145 MW) retiring in 2021-22, half are from the public sector(659 MW) and the remaining half (495MW) from the private sector.

In 2022-23, of the 14 retiring plants of 890 MW, three plants (190 MW) are in the public sector, while 11 plants (700 MW) are from the private sector.

As per a UNB report, in 2023-24, of the 22 retiring plants of a total 1770 MW, four are from the public sector having 561 MW while 18 are from the private sector having a capacity of 1209 MW.

Only three plants, having a total capacity of 176 MW, will be retiring in 2024-25 of which two, having 125 MW, are from the public sector and only one, having 51 MW, is from the private sector.

The BPDP data also shows that of the total 51 plants, 33 are gas-fired and the remaining 18 plants are liquid fuel-fired.

About the schedule of the retirement, a senior official of the BPDB said that most of the listed plants of the public sector, installed in 1987-97, are aged 25-35 years.

“These plants have already lost their actual capacity and became very inefficient in terms of production cost”, said an official adding that the private sector plants which are going to retire are mostly rental and quick rental.

State Minister for Power, Energy and Mineral Resources Nasrul Hamd in a recent webinar said that the government will gradually send the costly rental, quick rental and inefficient liquid-fuel fired plants to retirement.

Currently, the country’s installed generation capacity is about 25,514 MW while the available generation is about 13,000 MW which shows a huge surplus capacity remained unutilised.

Many economists and energy experts are critical of such huge surplus capacity as the government has to pay heavily for the capacity of private sector plants even if the power is not purchased.

BPDB chairman Delwar Hossain recently also admitted that they have to count a loss of Tk 160 billion for buying electricity at a higher rate and selling it to the public at a lower rate.

To cover up the loss, the BPDP recently submitted a proposal to the Bangladesh Energy Regulatory Commission (BERC). But the energy regulator is yet to respond to the BPDB appeal, said a member of the BERC.