Electricity Crisis: Bangladesh's Largest Thermal Power Plant Payra Shutting Down

Dhaka: Bangladesh faces an acute power shortage as the Payra Power Plant, the country’s largest and most modern thermal power plant, was temporarily shut down on Monday due to the coal deficit emerging from the dollar crisis.

On May 25, a power plant unit was shut down due to a coal shortage. Due to the depletion of coal stocks, the remaining units have also been shut down. This might cause severe load shedding throughout the country, including Dhaka, Barishal, and Khulna. There are also concerns about industrial production disruptions.

This is the first time the Payra power plant has been shut down since it began operations three years ago. Several rounds of discussions with the relevant authorities to address the coal scarcity failed to produce a solution. Due to the power plant being shut down, there will be a 1200 MW power shortfall on the national grid. This might result in severe load shedding across the country.

Coal and Fund Shortage

AM Khorshedul Alam, managing director of Bangladesh-China Power Company Limited (BCPCL), told the media, "Coal cannot be brought from abroad due to the dollar shortage. The power plant was kept running for a long time by bringing in coal. The company's debt is approximately 36 million dollars. It will be impossible to bring in more coal if these dues are not paid. I have alerted the Ministry of Power, Energy, and Mineral Resources, as well as other relevant parties, about the crisis.”

Nasrul Hamid, the State Minister of the Ministry of Power, Energy, and Mineral Resources of the Government of Bangladesh, also told the reporters, 'It is not possible to pay for the coal due to some shortage of dollars. This problem will be solved within a few weeks.'

Two Payra thermal power plant units in the Patuakhali district of Bangladesh have a combined production capacity of 1,320 MW. This centre supplied more than 1,200 megawatts of electricity per day on average. At least 13,000 tonnes of coal are required to generate electricity at this plant daily, and the coal was imported from Indonesia.

The power plant was operated by Bangladesh's government organisation, Northwest Power Generation Company, and China's government organisation, China National Machinery Import and Export Company (CMC). Later, a separate company named Bangladesh-China Power Company Limited (BCPCL) was formed under equal ownership by the two companies.

CMC has given coal to the Payra thermal power plant for six months. Later, with three more months of arrears, the amount of arrears in nine months stands at 390 million dollars (about 4 thousand crores of Bangladeshi Taka). The authorities could not pay this amount due to a dollar shortage. Because of this, coal imports were stopped. In order to solve the dollar crisis, the people concerned could not come to a solution even after several meetings with the representatives of the Bangladesh Bank.

China National Machinery Import and Export Company (CMC), the Chinese partner of the power plant, provided the loan to buy the coal needed to run the Payra power plant.

Bangladesh-China Power Company Limited (BCPCL) director Khorshedul Alam, who manages the power plant, said, “From the beginning, CMC used to buy coal for the power plant. They usually pay for the purchase of coal and collect the coal money every six months. Now, due to the inability to pay the outstanding coal import bills, new coal cannot be purchased.”

He also said that as of last April, about 390 million dollars were due. The payment they made in November last year was due this April. “We could not pay this amount in April. If this outstanding bill is not paid, CMC will no longer pay for the purchase of coal. As a result, it will not be possible to buy coal for the power plant,” Alam said.

Power Cuts to Increase

The average daily electricity demand in Bangladesh is 13 to 13,500 megawatts. On the contrary, on average, 12 to 12.5 thousand megawatts of electricity are produced every day.

Bangladesh Power Development Board (PDB) officials say electricity has been coming from Pyara for three years; it did not stop for even a day. The country's most reliable power plant will shut down due to a lack of coal, reducing production. This will result in a large gap between electricity demand and production. This will increase load shedding. Many power plants are already not operational due to a lack of gas.

PDB Public Relations Officer Shamim Hasan told the media that the Payra Power Plant has been producing electricity at its full capacity daily for the last three years since its commissioning. So, if the power plant is shut down, the level of load shedding may increase slightly. If it rains during this period, there may not be much pressure on electricity because the demand is lower during the rainy season. But if the weather is clear and the temperature is above 35 degrees, then the level of load shedding will increase slightly. In that case, the areas where electricity is supplied from the Payra power plant may experience relatively high pressure. Shamim Hasan said that the level of load shedding might increase slightly across the country to maintain the balance.