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Sep 27, 20238 min read

Banshkhali 1320 MW (SSPL) Coal Power Plant

Updated: Oct 15, 2023

Current Status: Operation


Banshkhali Coal Power Plant, also known as Chattogram 2X612 MW Coal-fired Power Plant or Gondamara Coal-fired Power Plant, is an Ultra-supercritical (USC) thermal power plant situated in Gondamara under Banshkhali Upazila in Chattogram District of Bangladesh (Location: 21.9762, 91.8897). It is sponsored by SS Power Limited, a Joint Venture Company (JVC) of S. Alam Group, SEPCO-III, and HTG Development Group Company Limited (HTG), as a private Independent Power Producer (IPP) for 25 years. As per the latest schedule, the power plant is to start commercial operation in December 2022 and retire in December 2052. Banshkhali power plant starts feeding the national grid on trial providing 120 MW of electricity on the first day on 24 May, 2023. The project is expected to be commissioned in December 2023.


Capacity

The installed (gross) and derated (net) capacity of the power plant is 1320 MW and 1224 MW respectively.


Context

On October 31, 2013, the Bangladesh Power Development Board (BPDB), a government-owned organization, issued a letter of intent (LOI) to a collaborative enterprise involving the S Alam Group and two companies from China (Financial Express, 2018). On December 19, 2013, S Alam Group, a rapidly growing local company, partnered with China's SEPCOIII Electric Power Construction Corporation. The objective was clear: establish a 1,320-megawatt coal-fired power plant in Chittagong. Within two months, a dedicated company was decided to be formed, entrusted with initiating the $1.8 billion project. A subsequent agreement with the state-run Power Development Board mandated the joint venture to complete construction within 45 months. Electricity from the plant was set at Tk 6 per kilowatt-hour, with coal likely sourced from Indonesia. The deal marked a significant step towards enhancing the region's energy landscape (Daily Star, 2013).


A letter issued by Banshkhali Upazila land office on November 15, 2015, confirmed S Alam Group's purchase of 660.40 acres for setting up "Genesis Textile and Apparels Limited" and "S. Alam Vegetable Oil Ltd." Despite the land office's claim of 150 households in the area, interviews with locals indicated over 7,000 households and community establishments, contrasting the official count. Furthermore, the letter revealed S Alam Group's original intent to acquire 5,032.14 acres for coal-based thermal power plants, with the Land Office approving 3,000 acres, dismissing its fertility for rice and salt farming (Daily Star, 2016). On February 16, 2016, the government of Bangladesh approved the deal and set a price to purchase electricity from the group at a rate of BDT 6.61 per unit.


The group started to acquire 600 acres of land for this plant (Daily Star, 2016). Many fatalities have been seen in this regard (Dhaka Tribune, 2017; Daily Sun, 2021). Banshkhali powerplant starts feeding the national grid on trial providing 120 MW of electricity on the first day on 24 May, 2023 while The first unit, with a production capacity of 660 MW, can operate at total capacity depending on the availability of coal, while the commissioning of the second unit is currently ongoing (bdnews24, 2023). The power plant consistently supplies 300 to 500 MW of electricity to the grid. After a successful trial run, it temporarily shut down on June 8 for commissioning and to start production of the second unit (AsianAge, 2023). It has stopped production due to a lack of coal, two weeks after starting electricity generation on a trial basis (Financial Express, 2023).


A report said that the power plant's official inauguration would be after Eid-ul-Azha (2023). The plant aimed to restart electricity production by June 20, 2023, to alleviate the power shortage. Coal supply was secured, with a shipment arriving by June 18, 2023, and another by the month-end, totaling around seven lakh tonnes as part of the project loan (AsianAge, 2023). Post-completion of the construction, the project is expected to be commissioned in December 2023 (Power Technology, 2023).


Land acquisition

In a letter from the Banshkhali Upazila land office on November 15, 2015, a clear statement was made that S Alam Group had acquired 660.40 acres of land for the establishment of "Genesis Textile and Apparels Limited" and "S. Alam Vegetable Oil Ltd." The local land office's approval was grounded in a reported count of only 150 households in the designated area. However, subsequent interviews with local residents revealed a significantly different picture. More than 7,000 households, along with various community facilities such as mosques, schools, bazaars, and health clinics, painted a contrasting reality. This portrayal aligned more closely with observations across the three unions in the region. The letter also disclosed S Alam Group's original ambition of possessing 5,032.14 acres for constructing two 1,320 MW coal-based thermal power plants. Out of this, 1,728.97 acres were designated as Khas land and 3,303 acres were private holdings. Despite this, the Land Office greenlit the acquisition of 3,000 acres, labeling the land as "barren." This classification stood in contradiction to firsthand observations of fertile land engaged in rice and salt farming (Daily Star, 2016).


Finance

Two Chinese firms – SEPCO-III Electric Power and HTG – are financing US$1.75 billion of the plants' estimated $2.4 billion cost (Peninsula, 2016). This is happening via a US$1.739 billion loan from the Exim Bank of China (Market Forces, 2019). 70% of the project’s cost is financed through a $1.8 billion loan from a consortium of Chinese banks including the Bank of China (lead arranger), the Export-Import Bank of China (export credit agency), China Construction Bank, China Development Bank, among others (CREA, 2021).


Sponsors

The sponsors of the powerplant are S. Alam Group consisting of 70.00%, Shandong Electric Power Construction Corporation III 20.00%, and HTG Development Group consisting of 10.00%. (GEM, 2023).


Contractors

The power plant project involves SEPCOIII as the main EPC Contractor, supported by S.A. Enterprise. Zan Zejan manages building construction, while Adiba Enterprise contributes to civil engineering. NSN Consortium handles land development, and HEPTEC oversees operation and maintenance. Deloitte guides financial aspects, Sinosure provides insurance, and Marsh India offers advisory support. This collaboration of stakeholders, including PowerChina, highlights a comprehensive and capable approach to project realization (bdnews24; BWGED).


Fuel Supply

As per reports, the SS Power 1 power plant is set to operate using imported coal, primarily sourced from Indonesia. However, if the need arises, coal could also be procured from Australia (Business Standard, 2022). A non-binding Memorandum of Understanding (MoU), accompanied by term sheets, has been executed with three prominent international coal suppliers: Glencore, Bayan, and APG. These suppliers possess coal mines situated in diverse locations including Indonesia, Australia, South Africa, Russia, and Colombia. The objective of these agreements is to establish a comprehensive coal supply arrangement, covering 100% of the required coal for the project (independent, 2016).


Power Generation

The installed (gross) and derated (net) capacity of the power plant is 1320 MW and 1224 MW respectively. The power plant will produce electricity through two units, each having a capacity of 660 MW (gross) and 612 MW (net). To distribute the generated electricity from Banshkhali to Madunaghat in Chattogram, a transmission line comprising 198 power line poles has been erected (Business Standard, 2022).


Environment

One report said that the Center for Environmental and Geographic Information Services (CEGIS) had concluded the study on Environmental and Social Impact Assessment. The corresponding report was delivered to the Department of Environment (DoE) on August 18, 2015, awaiting endorsement. Nonetheless, the DoE had not yet provided its approval for the EIA report (independent, 2016). Another report said that there was no Environmental Impact Assessment (EIA), public consultation, and no environmental clearance until 2016 (Daily Star, 2016). The Environmental Impact Assessment (EIA) for Unit 1 (660 MW) of a project by CREA contains multiple instances of false information, unlawful omissions, and errors concerning air quality. The EIA wrongly claims that air quality in Banshkhali complies with Bangladeshi standards, despite evidence to the contrary. The health impacts of air pollution and mercury emissions are not addressed, and flawed air quality modeling underestimates pollution levels. Emissions data inconsistencies and a failure to model worst-case emissions are evident. The project aims for weak emissions standards, potentially below legal levels in China, and the flawed EIA supports this. The absence of oversight by Bangladeshi authorities and disregard for EIA guidelines are concerning. The lack of public access to the EIA raises transparency issues. Another assessment by CREA suggests that similar coal power projects could cause 30,000 pollution-related deaths over 30 years, with 7.4 million inhabitants at risk of dangerous mercury deposition. These figures highlight the severity of the omissions in the EIA. Air quality monitoring carried out in the vicinity of the plant shows that every single measurement exceeded the Bangladesh standard for both annual average PM2.5 and PM10 (CREA, 2021). In these circumstances, the powerplant should be closed with immediate effect.


Criticism

In July 2020, the S. Alam Group, one of the country's foremost business conglomerates, paid a penalty of Tk. 2.0 billion to the government to maintain its agreement to construct a 1,224 megawatt (MW) coal-fired power plant (Financial Express, 2020). Over ten fatalities have occurred due to conflicts tied to the proposition, impacting over 10,000 individuals who lost homes and agricultural land in 2016. On March 23, 2016, a multitude of 30,000 people rallied, demanding the project's relocation and the restoration of their land. On April 3, 2016, authorities arrested seven village residents for allegedly obstructing the company's operations, and as a reaction, again on April 4, 2016, residents formed the "Boshot Bhita Rokkha Committee" under which around 15,000 individuals gathered in protest. Following police gunfire towards protesters, four individuals were killed. Approximately 100 people sustained injuries. Police stated that the shootings took place as protesters assaulted them during the "prohibited" demonstration. Allegedly, a paramilitary group paid by the company initiated the violence, leading to police involvement (Daily Star, 2016; Peninsula, 2016). A demonstration on February 1, 2017, opposing the S Alam power station, led to one death and injuries to approximately a dozen. The police reportedly attacked protesters chanting slogans.(Reuters, 2017; EJAtlas, 2017). On April 17, 2021, police killed five workers protesting for fair wages. The confrontation escalated, resulting in clashes with the police that harmed around 20 others, including residents. Additional deaths occurred when two workers succumbed to gunshot injuries sustained during the April 17 clash, raising the total death toll to seven (bdnews24, 2021; Business Standard, 2021). Furthermore, In June 2022, two individuals sustained injuries due to an explosion at the site. Banshkhali Upazila Health Complex Residential Doctor Arman Chowdhury described the incident as a "chemical blast." (Business Standard, 2022).


References


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