Bangladesh to pay Tk 2,035cr to buy power from wind plant

PBC News:  A Chinese-Bangladeshi consortium will sign an agreement on Sunday with Bangladesh Power Development Board (BPDB) to set up a 55MW wind power plant on build-own-operate basis at Mongla in Bagerhat.

As per the proposed deal, state-owned BPDB will purchase electricity from the independent power producer (IPP) plant for over the period of 20 years.

Earlier, in December 2020, the Cabinet Committee on Government Purchase approved the proposal of a Chinese-Bangladeshi consortium to set up the power plant on build-own-operate basis, UNB reports.

As per the proposal of the Consortium of Envision Energy, (Jiangsu) Co. Ltd., China, SQ Trading and Engineering, Bangladesh and Envision Renewable Energy Limited, Hong Kong will develop the plant under a new special project vehicle (SPV) company Mongla Green Power Ltd.

The project cost is expected to be around $96.597m.

State-owned BPDB will purchase electricity from the plant at a levelized tariff of 13.20 Cents, equivalent to Tk13 per kilowatt hour (each unit).

According to BPDB officials, the government will pay a total of more than Tk2035.12 crore for the entire contract period against its purchase of electricity from the maiden private wind power project.

The Chinese-Bangladeshi consortium was the lone bidder to participate in the tender process invited for the project, said a BPDB official.

According to the Sustainable and Renewable Energy Development Authority (Sreda), only three small wind energy plants, having a total capacity of 2.9MW, have been installed by the Bangladesh Power Development Board (BPDB) so far against its target of setting up wind power projects having total capacity of 1152MW by 2020.

Earlier, BPDB signed a contract in March, 2015 to award a 60MW wind power project to US-DK Green Energy (BD), a joint venture between Taylor Engineering Group of USA, ph-consulting group of Denmark and Multiplex Green Energy of Bangladesh, to set up the plant at Kurushkul, southeast of Moheshkhali River in Cox’s Bazar.

But the sponsor failed to implement the project in the last 5 years.

The Mongla 55MW wind power project is one of the three similar projects undertaken by the BPDB in recent years. The other two projects were planned for Chandpur and Inani beach in Cox’s Bazar.

But its move failed to attract participation of wide-range bidders.

“Only a single bidder — Chinese firm Envision Energy — participated in the tender process for two locations and finally emerged qualified for only one location, Mongla. Again, the government re-tendered for the remaining two locations — Inani beach and Chandpur, ”said a BPDB official.

The bid submission timeline was extended to December 31, said Md Zahir Ahmed, a senior official of the Bangladesh Power Development Board, which floated the tender. Earlier BPDB invited bids for a 100MW offshore wind power project but could not find takers.

Officials at Sreda and BPDB said a number of studies were conducted in collaboration with international donor agencies to assess the wind energy potentials across the country.

The latest one was conducted by National Renewable Energy Laboratory (NREL), with financial support of the US Agency for International Development (USAID), which identified nine locations, having wind energy potentials across the country.

The locations, having average wind speed between 5-6 metre per second at a height of over 60-80 metre, are Lalpur of Natore in Rajshahi, Chandpur, Sitakundu and Parkay Beach in Chittagong, Gouripur in Mymensingh, Madhupur Tea Estate in Habigonj, Dacop in Khulna near Mongla port, Inani Beach in Cox’s Bazar and Badarganj in Rangpur.

The NREL, in its report submitted to the Power Division, also mentioned that the country has a potential of 30,000MW of wind energy as there are 20,000 square kilometre of areas where wind speed is 5.75-7.75 metre per second.

Experts in the renewable energy industry blamed the implementing agency’s failure to present location-specific data and information on wind energy in a credible way before potential investors.