Banshkhali thermal plant output hindered by grid substation limitations

Though equipped with the capacity to produce 1,320 megawatts of electricity, the country's largest coal-fired private power station in Chattogram's Banshkhali is currently supplying just one-third of its capacity to the national grid, owing to grid substation constraints, according to officials.

A visit to the SS Power Plant, owned by S Alam Group, on 11 February reveals that it is currently supplying 451 MW of power to the national grid despite the readiness of the transmission line to carry electricity from this facility to the grid.

A grid substation receives electricity from a power plant, lowers the voltage with a step-down transformer, and transmits it to the distribution substation or the nearest grid. Low capacity means it cannot handle much electricity efficiently, often due to outdated infrastructure, inadequate equipment or limited resources.

The supply situation is expected to improve by next April as the Power Grid Company of Bangladesh, the state-owned power distributor, is working to upgrade substation capacities, according to authorities of the thermal plant, which started commercial operation in September last year.

While the plant authorities anticipate boosting supply by April, it may take longer.

Sources at the Power Grid Company told TBS that a project to increase the capacity of Chattogram's Madunaghat and Narayanganj's Meghnaghat substations, which carry electricity from the SS plant, is underway. A 400 KV transformer will be installed in Madunaghat by May and another one by September. Upon completion, this project will facilitate the transmission of electricity not only from Banshkhali but also from all power plants set up in Matarbari.

ASM Alamgir Kabir, director of SS Power Plant and former chairman of Bangladesh Power Development Board, told TBS, "The power generation cost per unit at a coal-fired plant is Tk10-12 per unit, which rises to Tk25 at a diesel-run plant. Our plant can generate about 880 million units of electricity per month, which means the government will save over Tk1,144 crore per month, purchasing power from us."

The director also noted that the firm intends to procure coal from the spot market in case imports are hindered by the dollar crisis, particularly with summer approaching and the country's power demand expected to surge.

The government is encountering difficulties in settling the bills of the electricity and energy sectors. The Power Development Board owes approximately Tk44,000 crore to entrepreneurs in the power and energy sectors.

When asked about the outstanding amount owed by the government to SS Power Plant, the Chief Financial Officer, Md Ebadat Hossain Bhuiyan, stated, "Currently, approximately Tk2500 crore is outstanding. The Power Development Board is gradually settling the dues."

In 2016, Prime Minister Sheikh Hasina and Chinese President Xi Jinping jointly inaugurated the construction of the power plant. Seven years later, on 14 January 2023, the plant began the experimental power supply to the national grid.

According to plant authorities, coal for the power plant is sourced from Indonesia, with a daily requirement of 11,735 tonnes for two units, amounting to 4,283,534 tonnes annually.

Officials further mentioned that coal procurement is done at international prices, subject to fluctuations. If prices decrease globally, the plant benefits, while increases incur higher costs. Two Indonesian coal companies have been contracted under a 15-year agreement.

As per SS Power Plant, approximately $2.6 billion, equivalent to over Tk28,000 crore, has been invested in the power plant's construction. S Alam Group owns 70% of the project, with the remaining 30% owned by Chinese companies Sepco 3 and HTG. Foreign investment for the project was $2.0 billion or roughly Tk22,000 crore.

This private entity has set a goal to recoup this expenditure over the next 10 to 12 years.

While coal-fired plants lower power generation costs, they have environmental consequences. Environmentalists caution that carbon dioxide emissions resulting from coal combustion contribute to over 60% of the intensified greenhouse effect on Earth.

Plant authorities said two advanced Flue Gas Desulphurisation (FGD) systems have been installed at the plant for quite some time. This measure allows the prevention of 99.87% of carbon emissions.