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Sep 27, 20236 min read

Dhaka North 42.5 MW WTE Power Plant

Current Status: Preparation

Aminbazar 42.5 MW WTE Power Plant, also known as Dhaka North Waste-to-Energy Power Plant, is a proposed incineration power plant to be situated in Aminbazar area under Savar Upazila in Dhaka District of Bangladesh (Coordinates: 23.7894, 90.3278). It is sponsored by China Machinery Engineering Corporation (CMEC), a subsidiary of China National Machinery Industry Corporation (Sinomach), as a private Independent Power Producer (IPP) for 25 years (TBS 2021).


Capacity

The power plant will be constructed with an installed (gross) capacity of 42.5 MW.


Context

In 2012, the Power Division signed a Memorandum of Understanding (MOU) with Management Environment Finance, an Italian company, to set up a WTE power plant in Dhaka (Bangla Tribune 2021). The Local Government Division (LGD) under the Ministry of Local Government, Rural Development and Co-operatives (MOLGRDCO) also signed an agreement with the company to set up a WTE power plant with a capacity of 48 MW which will increase to 100 MW gradually. The project was shelved after the company declared itself bankrupt (Shitu 2017).


After failing the initiative, Dhaka North City Corporation (DNCC), Dhaka South City Corporation (DSCC), Dhaka Power Distribution Company Limited (DPDC), and Dhaka Electric Power Supply Company Limited (DESCO) took a plan in 2015 to form Waste Power Generation Company Limited (WPGC) to run the project (Shitu 2016). The plan was scrapped due to a lack of coordination between the agencies.


Meanwhile, the Prime Minister directed the authorities to plan a waste-to-power plant project in 2015. Following the directions, the Power Division took some initiatives to conduct a study on WTE in Bangladesh. LGRD Ministry proceeded with the initiative and formed a working group in June 2019 for formulating a guideline for the waste of the power project. In July 2019, the working group submitted a report with a guideline (Hasan 2019).


According to the guideline, DNCC called an Expression of Interest (EOI) and received 17 proposals in April 2020. It shortlisted four proposals and sent them to the Local Government Division for further procedure. Finally, the ministerial committee led by the Power Division selected CMEC’s proposal (Mamun 2020).

The Cabinet Committee on Government Purchase (CCGP) approved the project on 12 November 2020 under the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 bypassing the competitive process (Hasan 2021). The Power Division, DNCC, and CMEC signed a tripartite agreement on December 1, 2021, to install the power plant (FE 2021).


Subsequently, BPDB signed a PPA with CMEC on December 21, 2021. According to the PPA, the sponsor will complete financial closure within nine months after signing the PPA, and construction works would be completed within 24 months following the date of financial closure (TBS 2021).


Land Acquisition

DNCC is committed to providing 30 acres of land to set up a power plant and dump the collected waste. DNCC had already acquired 80 acres of land beside the Aminbazar Sanitary Landfill at a cost of BDT 786 crore (USD 92.5 million when USD 1=BDT 85) (TBS 2021). But as per a report published on 4 th 2021, the land acquisition process was not completed due to a shortage of resources. DNCC required BDT 600 crore (USD 70.59 million), but it had an allocation of only BDT 37 crore (USD 4.39 million when USD 1=BDT 84.2161) (Saadat 2021).


Finance

The estimated budget of the project is around USD 300 million (BDT 2,550 crore), which would be arranged by the sponsor company. Any name of the potential External Credit Agency (ECA) finance has not been disclosed to date.


Sponsor

The power plant is sponsored by WTE Power Plant North Dhaka Private Limited, a Special Purpose Vehicle (SPV) of the CMEC. CMEC is a subsidiary of China National Machinery Industry Corporation (Sinomach), which is a state-owned enterprise (SOE) in China.


Contractors

CMEC is appointed as the Engineering, Procurement, and Construction (EPC) contractor of the Project. Suppliers of incineration technology and equipment are yet to be disclosed.


Fuel Supply

DNCC is responsible for supplying at least 3,000 tonnes of solid waste per day to use as fuel for the power plant. The city corporation produces 3,500 tonnes of solid waste, of which only 700 tonnes are combustible (Mamun 2021). In that case, DNCC will have to pay BDT 3,000 (USD 35.29) per day as a penalty if it fails to supply an agreed amount of solid waste (Saadat 2021). The city corporation will not get any benefit from the solid waste, although it costs USD 20-25 per ton in many countries (Mamun 2020). However, the city corporations will receive rent for the plots used by the power producer.


Power Generation

According to the PPA, the expected Commercial Operation Date (COD) of the power plant is scheduled for December 2024 (BPDB 2022). The power plant may generate 309.01 million units (GWh) of electricity annually at a rate of 83% plant load factor (PLF) if it runs at its full capacity. According to the PPA signed with CMEC, BPDB will buy generated electricity from the power plant at a rate of USD 0.2178 (BDT 18.295) per unit (kilowatt-hour) for 25 years from COD (Chowdhury 2020). BPDB will pay at least BDT 15,325.43 crore (USD 1.80 billion) to evacuate electricity in the period of operation (Hasan 2021).


Environment

According to Section 12 of the Bangladesh Environment Protection Act 1995, Environmental Impact Assessment (EIA) is mandatory for any industry (MOLJPA 1995). The polluting industries, such as power plants, have to go through an Initial Environmental Examination (IEE) and EIA as directed in the Environmental Conservation Rules 2017 (MOEFCC 1997). But, to date, no IEE or EIA report has been conducted for the power plant. The unorganized disposal of waste from the capital city has been polluting the air, water, and lands of the adjacent area in the worst way possible. The leachate drains off waste materials that can contaminate the soil. As a result, the cultivable land gets destroyed. The site gets more polluted by hawks, crows, and rodents. The nearby water bodies also get polluted by the waste. The gas emitted from rotten garbage causes air pollution (Devnath 2020)


Carbon Footprint

WTE technology is known as renewable but not clean. The life cycle climate change impact (LCCCI) of electricity from WTE facilities ranges from 664 gm to 951 gm per kWh (Pfadt-Trilling et al. 2021). According to the estimation, the greenhouse gas (GHG) emissions from the power plant could be 205.18-293.87 kilo-tonnes per year and 5.13-7.35 million tonnes during its operation period.


Criticism

Energy expert and former adviser to the Caretaker Government, Professor Mohammad Tamim, mentioned that the electricity from this power plant is very expensive, which is totally beyond the capacity of Bangladeshi citizens. Energy activist professor Anu Muhammad criticized the ambiguous process of selecting the sponsor company (Chowdhury 2020).


According to the media report, the project was taken on without any environmental and economic feasibility studies. The solid waste of Dhaka contains more liquid, from which producing massive heat is almost impossible. The calorific value of waste might be 1000-1500 to generate electricity. However, the solid waste from Dhaka contains only 600 kilocalories (Rahman 2022).

 

Reference

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