Payra power station (BCPCL)

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Payra power station (BCPCL), also known as the Kalapara power station or Patuakhali power station (BCPCL), is a 1,320-megawatt (MW) coal-fired power plant in Patuakhali, Bangladesh.

A 1,320 MW expansion (Phase II) was permitted in 2019.

There are three different proposals for coal-fired power stations in Patuakhali (পটুয়াখালী), by three sets of sponsors, all joint ventures between Bangladeshi and Chinese firms:


Location

The undated satellite photo below shows the power station in Kalapara, Patuakhali, on the Rabnabad river bank near Paira Bandar.

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Background

In 2015, the North-West Power Generation website described the Kalapara project as being set up in two phases. The first phase was referred to as the "Payra 1320 (2x660) MW Thermal Power Plant Project." The second phase was referred to as the "Barguna / Patuakhali 1320 (2x660) MW Ultra Supercritical Coal Based Thermal Power Plant Project (2nd Phase)." Patuakhali and Barguna are adjacent districts and Payra (Paira) is located in close proximity.[1][2][3]

Phase I

In March 2014, the state-owned North-West Power Generation Company (a subsidiary of Bangladesh Power Development Board) and CMC – China National Machinery Import & Export (Group) Corporation – signed a Memorandum of Understanding to build a 1,320 MW coal plant in Kalapara upazila of Patuakhali. The project was set to be located on the Rabnabad river bank near Paira Bandar. The estimated cost was $2 billion.[4]

In March 2016, an engineering, procurement, and construction (EPC) contract for the power station was signed. A consortium of China Energy Engineering Group Northeast No.3 Electric Power Construction Co. Ltd. (NEPC) and China National Energy Engineering and Construction Co. Ltd. (CECC), both Chinese state-owned enterprises, were awarded the contract.[5] Total value for the EPC contract was about US$1.56 billion.[6]

According to the website of Bangladesh's North-West Power Generation Co Ltd., construction on the project was underway in December 2017.[7]

Construction Delays

Unit 1 was planned to come online in April 2019, and unit 2 in October 2019.[8][9]

In March 2018, it was reported that 35% of work on the plant had been completed.[10] In May 2018, NWPGCL reported the project was 42% complete.[11] In October 2018, it was reported the plant was on track for commissioning in 2019.[12] In November 2018, the project was reported as 55% complete.[13]

As of April 2019, construction was 70% complete, which was significantly behind the company's original schedule. Builders blamed the delay on a "lack of coordination among stakeholders," and especially on delays in building the transmission line, completion of which had at that point been pushed back to August 2020.[14]

In May 2019, BCPCL announced that it would be signing a coal supply deal in June with Indonesian coal importer PT Bayan Resources. The company also announced that Unit 1 was scheduled to be completed in December 2019, and Unit 2 in June 2020.[15][16]

Planet satellite photos from January 2017 to November 2019 show construction progress.

According to BCPCL, unit 1 was completed in November 2019, but the transmission facilities were not ready yet. Due to this, the power station was now being planned for operation in 2020.[17] Test production at the plant began on January 13, 2020.[18]

In February 2020, the India-based Business Standard reported that commercial commissioning of the plant was experiencing delays due to the Coronavirus. According to the acting managing director of Bangladesh-China Power Company Limited: "We cannot do the post-test-run maintenance as some workers are stuck in China in the wake of the coronavirus epidemic."[19]

According to New Age of Bangladesh, the main issue facing the commissioning of the plant was the lack of adequate transmission: "In the test run, the first unit of the plant could never reach its full generation capacity because of low capacity transmission line," according to Payra project director Shah Abdul Moula.[20]

Units commissioned

In May 2020, Dhaka Tribune reported that Unit 1 started commercial operation.[21] The second unit reportedly started production on December 8, 2020.[22]

Limited operation

As of January 2021, the plant was operating at low capacity due to low demand and transmission bottlenecks.[23]

The coal plant also faced difficulties importing coal, according to plant owner Bangladesh-China Power Company Limited (BCPCL): "Payra 1320 MW Thermal Power Plant is situated on the west bank of the Rabnabad Channel. The channel length from BCPCL Jetty to the Payra Fairway is appx. 41 nautical miles (76 km/47 miles). Due to high rate of siltation, the channel has blockages at several points which have to be dredged intermittently in order to maintain navigability."[24]

In March 2021, the plant was only generating 1,000 MW on an experimental basis, burning through some 13,000 tonnes of coal a day, generating 180 tonnes of fly and bottom ash as byproducts.[22]

In December 2021, it was reported that half of the capacity of the 1,320 MW power station could not be used as transmission lines could not be built. The unused capacity of the plant cost the nation Tk 2,000 crore a year.[25][26]

2022: Full operation resumes

In March 2022, the idle unit (unit 2) resumed operation after a transmission line from Gopalganj–Khulna–Jashore was newly constructed, said Engr AM Khurshedul Alam, managing director of BCPCL. During the mothballed period, BPDB had to pay a penalty of Tk120 crore each month as capacity payment for keeping the unit idle. Electricity transmission from the plant could still not be channelled to Dhaka due to an incomplete transmission line.[27][28]

The project is sponsored by Bangladesh-China Power Company Limited (BCPCL), a 50:50 JV between China National Machinery Import and Export Corp and Bangladesh's North-West Power Generation Co Ltd, which was established on August 28, 2007 as a Public Limited Company under the Bangladesh Power Development Board.[8]

CMC, or China National Machinery Import & Export (Group) Corporation, was established in 1950, and in 1998 it became a subsidiary of China General Technology (Group) Holding Co. Ltd., a state-owned enterprise.[29] CMC established overseas subsidiaries in Pakistan, Bangladesh, Vietnam, Indonesia, Sri Lanka, Turkey, and Luxembourg.[30]

Financing

In June 2014 it was reported that Bangladesh's largest bilateral donor, Japan International Cooperation Agency (JICA), would bankroll the plant by partially providing nearly US$3.7 billion worth of loans in several tranches.[2]

However, in October 2014, it was reported that BCPCL would provide 30% of the funds for the project, and mobilize the other 70% from international sources. The project had an estimated cost of US$2 billion.[31]

In April 2016, BCPCL said it would invest $1.56 billion into the plant. It would fund 80% of the investment with Chinese bank loans.[8]

In October 2016, the government approved a US$1.9 billion loan from the Export-Import Bank of China for the project, maintaining a debt to equity ratio of 70:30. The equity investment from BCPCL on this ratio was US$815 million.[32] BCPCL's 2020 annual report refers to payments on debt insurance provided by China Export & Credit Insurance Corporation (Sinosure), suggesting that Sinosure provided coverage for the CHEXIM loan.[33]

Phase II

In August 2016, the Bangladesh-China Power Company Limited (BCPCL), a 50:50 JV between North-West Power Generation and China National Machinery Import and Export Corp, said a deal had been signed with an engineering, procurement, and construction (EPC) contractor for a 1,320 MW coal plant (Phase II), to be built near Payra.[34] The EPC contractor was later named as a consortium of China Energy Engineering Group Northeast No.3 Electric Power Construction Co. Ltd. (NEPC) and China National Energy Engineering and Construction Co. Ltd. (CECC), both Chinese state-owned enterprises.[33] North-West Power Generation is held by the Bangladesh Power Development Board.[35]

Permitting & Financing

As of 2017, BCPCL reported the co-feasibility study for Patuakhali (Phase II) was underway and land acquisition complete. The project was being funded by the Export-Import Bank of China (CHEXIM).[36] It is likely that BCPCL would provide equity financing for the project alongside debt funding from CHEXIM, and that Sinosure would provide insurance, similar to the financing agreement for Phase I.

The EPC contract of US$ 1.44 billion was signed May 16, 2019 with a consortium of CECC & NEPC, China. The total project cost was estimated at US$ 2.06 billion.[37]

The draft Environmental Impact Assessment (EIA) was submitted in January 2019.[38]

The EIA was approved on October 9, 2019.[39]

Construction

On February 6, 2020, the EPC contractor for the plant announced Force Majeure, citing Covid-19 as the reason. According to the project website, work is on halt and will resume "once the coronavirus situation is under control".[40]

The Power Purchase Agreement and Implementation Agreement was signed on January 7, 2021.[41] In January 2021, it was also reported that "construction works" near Phase I of the plant in operation were underway.[42]

As of October 2021, the "physical progress" for Phase II was reported as 20% complete. The "current status" on the company's website included the following:[43]

  • "Detail Design activities are ongoing."
  • "Procurement of Major Plant Equipment and Auxiliaries is in progress."
  • "Preparations are underway for piling work for the jetty extension."
  • "Power Purchase Agreement (PPA) and Implementation Agreement (IA) have been signed on 01/08/2021."


The status of concrete-pouring or foundation work was uncertain. It is unclear where the expansion is occurring: most of the changes visible at the site in Planet satellite imagery during 2021 appear related to coal ash waste ponds.

The update on activities through December 2021 listed the plant as 21% complete, including the following activities:[44]

  • "Land development work has been completed."
  • "Test piling done."
  • "Construction of Water Intake Forbei has been completed."
  • "Construction of water treatment plan has been completed."
  • "Construction of a coal dome for Phase-II has already been completed."
  • "Orders have been issued to purchase major equipment including boilers, steam turbines and generators."
  • "Detailed design preparations are underway."
  • "Pile drive has started for jetty extension."
  • "Work is underway to extend GIS."
  • "The piling work of Boiler-3 has started."


Planet satellite imagery shows the site as of January 2022.

The update on activities through June 2022 listed the plant as 22% complete, with many of the activities above still ongoing and the following additional updates:[45]

  • "Purchasing of PHC Pile is in the final stages."
  • "The piling work of the jetty has been completed."
  • "Jetty expansion work is underway."
  • "Land development work for GIS has been completed."


Planet satellite imagery shows the site as of May 2022.

Opposition

In November 2019, in a report titled "Choked by Coal: The Carbon Catastrophe in Bangladesh," Market Forces and various other organizations highlighted the corruption, malpractice, and violations of human rights that have occurred in relation to land acquisition and relocation processes for many projects in Bangladesh.[46]

A May 2020, analysis by the Center for Research on Energy and Clean Air (CREA) found that seven coal-fired power plants proposed in the area would constitute one of the largest air pollutant, mercury, and CO2 emissions hotspots in South Asia and the world.[47]

Project Details

  • Sponsor: Bangladesh-China Power Company Limited (BCPCL)
  • Parent company: China National Machinery Import and Export Corp and Bangladesh's North-West Power Generation Co Ltd. (owned by Bangladesh Power Development Board)
  • Location: Rabnabad river bank near Paira Bandar, Kalapara upazila (subdistrict), Dhankhali, Patuakhali district
  • Coordinates: 22.001974, 90.30821 (exact)
  • Status: Phase I: Operating; Phase II: Construction
  • Gross Capacity: Phase I: 1,320 MW (2 x 660 MW); Phase II: 1,320 MW (2 x 660 MW)
  • Type: Ultra-supercritical
  • Start year: Phase I: 2020 (unit 2 was mothballed from Dec 2020 to March 2022); Phase II: 2024[48][49]
  • Coal Type:
  • Coal Source: Phase I: Indonesia[22]; Phase II: Imported
  • Source of financing: Phase I: A US$1.9 billion loan from Export-Import Bank of China and US$820 million in equity from BCPCL; Phase II: Export-Import Bank of China (proposed)
  • Permits and applications: Phase I: EIA (Sept. 2015); Phase II: Environmental Clearance (Oct. 9, 2019)

Contact details

Website: http://www.bpdb.gov.bd/

Articles and resources

References

  1. "Future Plan," North-West Power Generation Company Limited, accessed September 2015
  2. 2.0 2.1 FHM Humayan Kabir, "1320mw coal-fired power plant to be set up in Patuakhali," Financial Express, June 29, 2014
  3. "Faster Rampal plant execution demanded," bdnews24.com, October 13, 2013
  4. "1,320MW coal-based power plant to be set up in Patuakhali," DhakaTribune, March 20, 2014
  5. "Annual Report 2018," Bangladesh-China Power Company (Pvt.) Limited, 2018, p. 9
  6. "Rampal, Payra coal-fired power plants: $3.5b credit deals finalised," New Age, September 22, 2016
  7. "Ongoing Projects," North-West Power Generation Company Limited, accessed December 2017
  8. 8.0 8.1 8.2 "Bangladesh-China JV to construct $1.56 bln power plant in southern Bangladesh," reuters, March 30, 2016
  9. Aminur Rahman Rasel, "Payra coal power plant to be commissioned in 2019," Dhaka Tribune, October 12, 2015
  10. "No progress in 19 power plants yet," The Bangladesh Post, March 9, 2018
  11. "Ongoing projects," NWPGCL, accessed June 2018
  12. "Payra power plant to begin generation in 2019," New Age, September 28, 2018
  13. "Ongoing projects," NWPGCL, updated November 2018
  14. "Payra 1,320-MW power plant project hits snag," Financial Express, April 4, 2019
  15. "Bangladesh set to ink deal with Indonesian co next month," Global Times, May 24, 2019
  16. "Payra power plant goes to operation in Nov," Bangladesh Post, May 10, 2019
  17. "Payra power plant may take more time to go into operation," Business Standard, November 3, 2019
  18. "Payra coal power plant takes off," The Daily Star, January 14, 2020
  19. "Coronavirus stalls Payra plant commissioning," Business Standard, February 5, 2020
  20. "Payra power plant set to become economic burden on Bangladesh," New Age, March 14, 2020
  21. "Payra power plant unit 1 starts commercial operation," Dhaka Tribune, May 15, 2020
  22. 22.0 22.1 22.2 "1,320 MW Payra plant awaits inauguration," The Daily Star, March 28, 2021
  23. "Payra power plant: Govt risks making additional payment," The Financial Express, January 6, 2021
  24. Annual Report 2020, Bangladesh-China Power Company Limited (BCPCL), p. 62
  25. "Power overcapacity in Bangladesh grows, economic burden too," New Age, December 3, 2021
  26. "Payments to owners of power plants sans use of electricity surge to Tk 250b," The Financial Express, November 14, 2021
  27. "Second unit of Payra 1,320MW power plant resumes production," The Business Standard, April 26, 2022
  28. "Prime Minister inaugurates Payra power plant," March 21, 2022
  29. "Company Overview," China National Machinery Imp. & Exp. Corp. website, accessed May 2014
  30. "CMC Machipex Sd. Bhd.," China National Machinery Imp. & Exp. Corp. website, accessed May 2014
  31. "Joint venture to start working for 1,320MW plant ," DhakaTribune, October 13, 2014
  32. "Govt approves $3.5 billion loan for Rampal, Payra power plants," Reporters bd, October 4, 2016, archived December 27, 2020
  33. 33.0 33.1 Annual Report 2020, Bangladesh-China Power Company Limited (BCPCL), p. 62
  34. Aminur Rahman Rasel, "BCPCL plans another 1,320MW plant," Dhaka Tribune, August 18, 2016
  35. "PDB to become holding company, employees against the move," Dhaka Tribune, January 1, 2018
  36. "Future Projects," North-West Power Generation Company Limited, accessed December 2017
  37. "Salient Features of Payra 1320MW Thermal Power Plant Project (2nd Phase)," BCPCL, accessed December 2021
  38. "Ongoing Projects," North-West Power Generation Company Limited, accessed June 2019
  39. "Approval of Environmental Impact Assessment (EIA) Report for Proposed Payra 1320 MW Ultra Super Critical Coal Based Thermal Power Plant (2d Phase)," Government of the People's Republic of Bangladesh, Department of Environment, October 9, 2019
  40. "Ongoing projects," North-West Power Generation Company Limited, accessed May 2021
  41. "Ongoing Projects," North-West Power Generation Company Limited, updated May 2021
  42. "Payra coal fired power plant sets country's benchmark," The Financial Express, January 23, 2021
  43. "Ongoing Projects," North-West Power Generation Company Limited, updated November 11, 2021
  44. "Ongoing Projects," North-West Power Generation Company Limited, updated January 16, 2022
  45. "Ongoing Projects," North-West Power Generation Company Limited, updated June 9, 2022
  46. "Choked by Coal: The Carbon Catastrophe in Bangladesh of their homes and farmlands," Market Forces, November 2019
  47. "Air quality, health and toxics impacts of the proposed coal power cluster in Payra, Bangladesh," Center for Research on Energy and Clean Air, May 2020
  48. 2016 Master Plan "Revisited", Bangladesh Power Division, November 2018
  49. "Update on the Coal Power Plants in Bangladesh: Feb 2022," BWGED, February 2022

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