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    • Dec 17, 2023
    • 4 min read

Katakhali 50 MW (Northern) HFO Power Plant

Current Status: Operation


Katakhali 50 MW Furnace Oil Power Plant, also known as Katakhali Rental Power Plant, is a reciprocating engine-based power plant situated in Katakhali under Poba Upazila in Rajshahi District of Bangladesh (Location: 24.3682, 88.6771). It is operated by Northern Power Solution Limited (NPSL), a Special Purpose Vehicle (SPV) of ENA Group, as a Quick Rental Power Plant (QRPP) for five years. The sponsor declared its Commercial Operation Date (COD) on 22 May 2012, and, as per schedule, the power plant was to retire on 21 May 2017 but According to the new agreement, the power plant will retire on 7 September 2024.


Capacity

The installed (gross) and derated (net) capacity of the power plant is 53.40 MW and 50 MW, respectively.


Context

To alleviate the nation's power crisis, the government has approved seven development projects, including a significant project to create 10 peaking power plants. The projects, totaling Tk 13,822 crore, were approved by the National Economic Council's Executive Committee (ECNEC) (Unb, 2010a). State-run Power Development Board and the NPSL signed a deal for installing the heavy fuel oil-fired plant on July 27, 2010 under the government's quick rental scheme. The plant was scheduled to be in operation from April 23, 2011. But installation of equipment was not completed when it has been inaugurated for test run on November 24, 2012. After one and a half months of test operation, power generation at the plant was suspended on January 11, 2013 for technical failures in one of the six units.


According to PPA, the power plant was scheduled to retire on 21 May 2017. But, on 5 July 2017, the Cabinet Committee on Government Purchase (CCGP) extended the PPA for another 5-year period even after the completion of a profitable tenure of 5 years (Janakantha, 2017). On 11 March 2021, the Ministry of Power, Energy, and Mineral Resources (MOPEMR) informed the parliament that it would not extend the tenure of any rental or quick rental power plant (DT, 2021). However, the government decided to renew contracts for four expensive private power plants, including the Katakhali 50 MW plant, in September 2022, with the condition of not receiving capacity charges which is contradictory to the decision made by MOPEMR. The contract will cost BDT 567.40 crore, saving BDT 38.06 crore from the government exchequer. According to the new agreement, the power plant will retire on 7 September 2024 (Daily Star, 2022).


Land acquisition 

The power plant is situated at Katakhali under Poba Upazila in Rajshahi district occupying an area of 5.55 acres (Google Earth)


Financier

Northern Power Solution Limited (NPSL) Raising funds from the country's capital market, the firm has set up the plant at Katakhali, on the outskirts of Rajshahi city, at a cost of BDT 330 crore (Ali, 2012).


Sponsors

It is sponsored by Northern Power Solution Limited (NPSL), a Special Purpose Vehicle (SPV) of ENA Group, as a Quick Rental Power Plant (QRPP) for five years. 


Contractors

CRRC Ziyang Co. Ltd. undertook the EPC construction and LTSA (Long Term Service Agreement) services for two years in 2010. after the successful completion of the project, the company delivered the power plant to the owner in 2012.  


Fuel Supply

Heavy fuel oil is used as the fuel of the power plant. According to a source Power Development Board (PDB) will buy power from the plant at BDT 7.78 per unit. However, the board will deduct BDT 5 every unit as it is providing fuel for the plant (Ali, 2012).


Power Generation

The scheduled Commercial Operation Date (COD) of the power plant was 31 May 2011 (BPDB, 2010).  The power plant has 6 diesel engines (model: MAN 18V32/40) each of the engine capacity is 8.9 MW (IEEE PUST, 2018).  The plant can generate 50 MW of electricity which produced 66340 MW with a 15.1% plant load factor (PLF)  in FY 2021-2022.


Capacity Charge

BPDB had to pay the sponsor a total of BDT 667.59 crore capacity charge from the commercial operation (COD). The total power generation of this power plant was 1338.90 gWh and the per unit cost was 16.56 BDT until FY 2021-2022.



Environment

Heavy fuel oil (HFO), also known as bunker fuel or residual fuel oil, is a significant contributor to global greenhouse gas emissions due to its high sulfur content, greenhouse gas emissions, and potential for oil spills. Burning HFO releases carbon dioxide, a major greenhouse gas, into the atmosphere, primarily due to its use in large industrial processes and marine transportation. It also produces sulfur dioxide, a major air pollutant, which can cause acid rain, respiratory problems, and damage to vegetation. HFO combustion also produces particulate matter, which contributes to air pollution and has adverse health effects. It also generates nitrogen oxides, which contribute to smog formation and have harmful effects on human health and the environment. HFO spills pose a risk to marine ecosystems, and incomplete combustion can produce black carbon, which can accelerate glacier melting and contribute to global warming. To date, no EIA report is found for this power plant.


Criticism

Engineer from Power Development Board, said commercial production at the plant has not been possible because of a delay in import of equipment for the faulty unit. It is claimed in a source that NPSL was trying to avoid fines by not going into commercial operation with full capacity. NPSL has already been counting fine for liquidated damages of USD $25,000 per day since it failed to go into production within the scheduled time on April 23, 2011. The NPSL filed a writ petition with the High Court, challenging the PDB's claim of the liquidated damages. But the court rejected the petition (Ali, 2012).


References

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