360 MW Haripur unlikely to get extension despite low cost electricity: Sources

Haripur 360 MW combined cycle power plant (CCPP), which generates electricity at lowest cost, is unlikely to get extension after completion of its 22-year initial contract period.

According to official sources, the power plant, established by leading US company AES Corporation in 2001, completed its successful operational period in November 2023. Since then, the government has not taken electricity from the plant.   

The AES Corporation developed two large base-load power plants—Haripur 360 MW CCPP in 2001 and Meghbaghat 450 MW CCPP in 2002—with the highest efficiency, but lowest cost.  

As per the power purchase agreement (PPA), state-owned Bangladesh Power Development Board (BPDB) had been purchasing electricity from the two first generation independent power producer (IPP) plants.

BPDB officials said that initially, Haripur‍‍`s power tariff was Tk.1.56 per unit, which is the lowest not only in Bangladesh, but also in the world.

According to a World Bank document publicly disclosed on June 24, 2014 which compared the power generation cost of different IPPS, shows that when the Khulna Power Company Limited was selling electricity to the BPDB at Tk 16.03 per unit in 1998, NEPC at Tk 20.20 per unit in 1999, Haripur was selling it at Tk 1.56 per unit and Meghbaghat was selling power at Tk 2.33 per unit.

Currently, the average generation cost is over Tk 10 per unit. Through a gazette notification issued on March 1, the government set the retail tariff of electricity at Tk 8.95.

Officials said, until last year BPDB was buying electricity from the plant at Tk 3.32 per unit which was the lowest among all other private power plants.

But in November 2023, the PPA expired and BPDB suspended purchasing electricity from the plant.

The BPDB’s such move surprised many as it was unlikely on the part of the government that it unilaterally stopped buying electricity from the most efficient and lowest cost power when it continued purchase of electricity from high cost plants belonging to Summit Group and other plants.

“Actually, there was no strong lobby on behalf of the Haripur plant to pursue the government to renew its contract with the BPDB. That’s why the country will be deprived of the low cost electricity,” a top official of the BPDB told UNB requesting anonymity.

He, however, said the government can offer the owner-company of the Haripur plant to buy it and operate under the BPDB management.

Sources said the USA-based AES Corporation developed the Haripur and Meghnaghat power plants, after a number of changes into their ownership. Now Malaysian Pendekar Energy Limited owns and operates the two plants.         

In 2003, AES sold the plants to the UK company CDC Globeleq, which sold the plants to Malaysia-based Pendekar Group in 2007.

Official sources said the government had to pay Tk 50-55 crore a month to purchase electricity from the Haripur power plant for its 360 MW electricity.

“But from November 2022, the operator of the plant has not been receiving any bills from the BPDB for which it lost interest to continue its operation”, said another source.

He also mentioned that BPDB is also not interested to extend its operation as it has  contractual obligation to buy electricity from newly established plants like Summit Group’s Meghnaghat Plant, Unique Group’s Meghnaghat plant and also some coal –fired power plants which electricity cost is between Tk 6.50 to Tk 30 per unit.