Current Status: Operation
Source: Summit Power
Nawapara 40 MW Furnace Oil Power Plant, also known as Khan Jahan Ali Rental Power Plant or KPCL-III, is a reciprocating engine-based power plant situated on the bank of Bhairab River in Nawapara under Abhaynagar Upazila in Jashore District of Bangladesh (Location: 23.0247, 89.4053). It is sponsored by Khulna Power Company Limited (KPCL), a Joint Venture Company (JVC) of Summit Group and United Group, as a Quick Rental power Plant (QRPP) for five years. The sponsor declared its Commercial Operation Date (COD) on 29 May 2011, and, as per the schedule, the power plant was to retire on 28 May 2016. But the phase-out date is rescheduled to 28 May 2024 after 13 years of operation.
Capacity
The installed (gross) and net capacity of the power plant are 44.50 MW and 40 MW, respectively.
Context
Khulna Power Company Ltd (KPCL), the first private company in Bangladesh, was established as a private limited company in October 1997. On October 13, 1998, the company began its first commercial operation with Unit I, which has a 110 MW capacity. On July 25, 2010, KPCL Unit III, formerly referred to as Khan Jahan Ali Power Company Ltd. (KJAPCL), engaged in a contractual agreement with the Bangladesh Power Development Board (BPDB). This agreement pertained to the provision of electricity on a rental basis, with an initial period of 5 years and the possibility of renewal for an additional 5 years (United Group).
The power purchase agreement for KPC Unit III, a 40 MW plant, expired on May 29, 2021. The Bangladesh Power Development Board instructed KPCL to shut them down by June 1, 2021 (BI 2021) after the Ministry of Power, Energy, and Mineral Resources (MOPEMR) said in March 2021 that it would not extend the lease of any rental or rapid rental power plants (DT 2021).
The sponsor applied for an extension of the Power Purchase Agreement (PPA) to the Ministry of Power, Energy, and Mineral Resources (MOPEMR) even after the completion of 5 additional years of operation (Rahman 2022). According to the recommendation of MOPEMR, the Cabinet Committee on Government Purchase (CCGP) extended the period of the Power Purchase Agreement (PPA) for another two years on 23 March 2022 under the “No Electricity No Pay” (NENP) policy (FE 2022a). Under the new agreement, BPDB will purchase electricity from the power plant at a rate of BDT 16.40 per kWh. As a result, it has to pay BDT 4.60 billion to KPCL in the period (FE 2022b).
Land Acquisition
The power plant is situated in Nawapara, Jessore. The entire KPCL area covers around 2.90 acres of land according to an estimation from Google Earth.
Finance
The power plant was financed by Standard Chartered Bank, Mauritius (United Group).
Sponsors
It is sponsored by Khulna Power Company Limited (KPCL), a Joint Venture Company (JVC) of Summit Group and United Group, as a Quick Rental Power Plant (QRPP).
Contractors
The Engineering, Procurement, and Construction (EPC) contractor of the power plant was Neptune Commercial Limited (NCL) which is a subsidiary of United Group of Bangladesh.
Fuel Supply
The plant utilizes Heavy Fuel Oil (HFO) as its primary fuel, supplied by Summit Asia Pacific Pte. Ltd. and United Energy Trading Pte Ltd under the Fuel Supply Agreement (KPCL, 2020).
Power Generation
With a total generating capacity of 115 MW, the power plant uses five (5) Wärtsilä Finland 20V32 engines, each of capacity 8.9 MW (KPCL, 2020). The plant can generate 40 MW of electricity which produced 29,900 MW with a 3.4% plant load factor (PLF) in FY 2021-2022. The estimated cost for BPDB to get electricity from the power plant for the upcoming year will be BDT 60.86 crore (USD 5.5 million, 1 USD = BDT 110.78 according to 26 September 2023).
Capacity charge
BPDB had to pay the sponsor a total of BDT 601.48 crore capacity charge from the power plant's Commercial Operation Date (COD). The total power generation of this power plant was 1776.79 gWh and the per unit cost was BDT 13.51 until FY 2021-2022. BPDB had to pay BDT 601.48 crore for capacity charges from its commercial operation date to FY 2021-2022.
Environment
Heavy fuel oil (HFO)-based power plants have significant environmental impacts, including greenhouse gas emissions such as sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter (PM). According to Section 12 of the Bangladesh Environment Protection Act 1995, Environmental Impact Assessment (EIA) is obligatory for any industry (MOLJPA 1995). Polluting industries, such as power plants, must undergo an Initial Environmental Examination (IEE) and EIA as directed in the Environmental Conservation Rules 2017 (MOEFCC 1997). But, to date, an IEE or EIA report has yet to be conducted for the power plant.
References
United Group. “Power KPCL III”. Accessed date: 8 November 2023
BI (2021). “KPCL to shut down two power plants”. Business Insider, 23 May 2021
Dhaka Tribune (2021). “Government to shut down rental, quick rental power plants by 2024”.The Dhaka Tribune. 11 March 2021.
Rahman, M. A. (2022). "Five quick rental power plants await two-year extension". The Financial Express (FE): 9 March 2022
FE (2022a). “Tenure of five rental power plants extended by two years”. The Financial Express (FE): 24 March 2022
FE (2022b). “Contracts of 10 rental power plants extended in four months”. The Financial Express (FE): 11 April 2022
KPCL (2020). “Annual Report, 2019-2020”. Khulna Power Company Limited.
MOEFCC (1997). ‘The Environmental Conservation Rules’. Ministry of Environment, Forest and Climate Change (MOEFCC): 27 August 1997
MOLJPA (1995). ‘Bangladesh Environment Conservation Act 1995’. Legislative and Parliamentary Affairs Division, Ministry of Law, Justice and Parliamentary Affairs (MOLJPA): 16 February 1995.
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