Fuel costs halt Bangladesh’s oil-based generation drive

• 12 years ago (2012-02-24)
• Junior Isles

Africa 306 Asia 860 Australasia 51 Biomass 8 Climate change 20 Coal 282 Cogeneration 1 Concentrating solar 5 Cyber security 8 Decarbonisation 1 Decentralised energy 5 Demand side management 2 Demand side response 2 Digitalisation 10 Distributed energy 10 Distribution 113 Electric vehicles EVs 4 Emissions 61 Energy management 1 Equipment 2 Europe 1069 Gas 379 Gas engine plant 62 Gas fuel 2 Horizon 2 Hydroelectric 17 Hydrogen 56 Hydropower 116 Latin America 77 Maintenance 3 Marine 1 Metering 2 microgrid 5 Middle East 317 North America 1004 Nuclear 643 Offshore wind 119 Oil 18 Operations 4 Policy 8 Regulations 3 Renewables 758 smart grid 2 Solar 250 Storage 41 substation 8 Tepco 2 Tidal 2 Toshiba 4 Transmission 181 US Senate Washington 4 Wind 241

---

Bangladesh has decided it will not commission any additional oil-based power plants, as fuel costs have increased to uneconomic levels. Instead it will focus on coal and renewable generation for the long term, Alamgir Kabir, Bangladesh Power Development Board Chairman ASM, has said.

In the wake of depleting gas reserves, Bangladesh had recently launched a drive to increase oil-based power generation from mid-2010, commissioning around 36 new oil-based power plants to be built by 2012. But this short-term policy to alleviate the immediate electricity shortage has now been abandoned, as indicated by Kabir’s remarks

"We have no plans to commission more oil-fired power plants at least for now," he said. "We have now moved to generate electricity by less expensive coal, natural gas or dual-fuel, under long-term planning," he added.

The oil-fired power plants that have already been commissioned will continue operating until they complete their various three, five and 15-year tenures; including 15 more plants due for completion by the end of 2012.

Bangladesh currently has 19 new, privately owned oil-fired power plants, with a combined capacity of around 1800 MW.

To run the new oil-fired power plants, Bangladesh has had to greatly increase oil imports. State-run Bangladesh Petroleum Corp., the main importer of the country's oil products, projected that it will require around $5.6 billion in fiscal 2011-2012 to import 6.5 million mt of oil products, a cost increase of 53 per cent from the previous fiscal year.

However, if oil prices come down significantly Bangaldesh may issue contracts to build new oil-fired plants again, Kabir confirmed.

Bangladesh’s overall electricity generation is now averaging around 5000 MW, against a power demand of over 6500 MW.