BPDB Trapped by Expensive Rental Power Plants: Rental and Quick Power Plants must be phased out as soon as possible

Author: Hasan Mehedi

Abstract: The Government of Bangladesh has extended the PPA period of RPP and QRPPs up to two and a half times more than their recommended safe operating lifetime. These old and outdated rentals will create an additional burden of BDT 2,726 crore (USD 317 million) annually, with BDT 594 crore coming from capacity charges. As a result of the Russian war on Ukraine, oil prices rose significantly to $140 per barrel on March 7. Prior to this price increase, it was estimated that the cost of electricity would increase at least 17% and 67% for DFG and HFO based power plants respectively due to their higher cost of fuel and additional capacity charges. With soaring oil prices resulting from the Russian war on Ukraine, these costs are now projected to be much higher. Obsolete Rental power plants have sought further extension of their PPA period which will create a double negative impact on the Bangladesh economy and environment.

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