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Bangladesh shifts focus from oil-based power plants to using coal, renewables

Thursday, 23 February 2012 | 00:00
Bangladesh will not commission any more oil-based power plants, as fuel costs have increased making power generation costly, and instead focus on using coal and renewable energy for power in the long term, Bangladesh Power Development Board Chairman ASM Alamgir Kabir said Wednesday.
Amid fast-depleting natural gas resources, Bangladesh had launched a drive to increase the number of oil-based power plants in the country from mid-2010, commissioning nearly 36 new oil-based power plants to be built by 2012, Platts has reported earlier.
But this was a short-term policy to alleviate the immediate electricity shortage the country was facing, Kabir said.
"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 been already commissioned -- around 15 more plants are set to come up by end of 2012 -- will continue operations until they complete their tenures. The plants have different tenures -- three years, five years and 15 years -- depending on their contracts.
The country currently has 19 new, privately owned oil-fired power plants, with a combined capacity of around 1,800 MW. Of these, nine use 0.25% sulfur gasoil and the rest 180 CST fuel oil with 3.5% sulfur content, Kabir said. By mid-2012 nine more oil-based power plants -- both private and state-owned -- are set to come online, with a total capacity of 630 MW, and six more will come up by year end, he added.
To run the new oil-fired power plants, Bangladesh has had to increase oil product imports. Sate-run Bangladesh Petroleum Corp., the main importer of country's oil products, projected that it will require around Taka 460 billion ($5.6 billion) in fiscal 2011-2012 (July-June), up 53% from the previous fiscal year, to import 6.50 million mt of oil products.
BPC estimates that around 2 million mt of oil products -- 1.2 million mt of fuel oil and 800,000 mt of gasoil -- will be required only to run the private oil-fired power plants in 2012. The state-owned plants receive their supply directly from BPC.
If oil prices come down significantly, the country may issue contracts to build the oil-fired plants again, said Kabir.
Bangladeshs overall electricity generation is now hovering around 5,000-MW against the demand for over 6,500-MW.
Source: Platts
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