Supplement, Oil & Energy

Goverment to restrict captive power plants

Published : 22 Feb 2020 08:01 PM | Updated : 19 Jun 2021 12:52 PM

As the country is now capable of generating sufficient electricity and the captive power plant efficiency is very low, the government is likely to restrict captive power plants in industry. To this end, the Power Division has already requested the Bangladesh Economic Zones Authority (BEZA) not to allocate land for power plants in economic zones without the consent of the power division, an official said.

A captive power plant, also called auto producer or embedded generation, is an electricity generation facility used and managed by an industrial or commercial energy user for their own energy consumption. Captive power plants can operate off-grid or they can be connected to the electric grid to exchange excess generation. Captive power plants are generally used by power-intensive industries such as aluminum smelters, steel plants, chemical plants and others, where continuity and quality of energy supply are crucial.

According to a power division official, some power plant projects have been allowed in special economic zones without the consent of the power division. The power division has also requested the energy and mineral resources division (EMRD) to provide a list of captive power plants as many industrial units are using captive electricity for not getting a smooth supply of electricity.

Earlier, State Minister for Power, Energy and Mineral Resources, Nasrul Hamid, said ‘the captive power plant efficiency is only 15 percent, whereas national power plant efficiency is 55 percent. That’s why we are discouraging industrialists to use gas in captive power by increasing gas price.’ “The captive power is not efficient. Not only 96 percent, the government wants to increase gas prices by about 300 percent for captive power plants with a view to encouraging entrepreneurs to use national grid power,” he added.

Nasrul further said “We have sufficient electricity. The government will ensure uninterrupted electricity for all at affordable price. No need to use gas in captive power.” The government is supplying gas at low cost to the captive power plant industry, but efficiency is 40 percent lower than that of the national power plants.

The government is now allocating 478mmcfd of natural gas to the 1,771 captive power plants. It has taken an initiative to reduce dependency on captive electricity through improving the power supply from the grid. The government is discouraging captive power plants by increasing gas price and diverting to national power plants, a top official said.

The government began to allow captive power generation in 1990 due to an unreliable power supply. However, the situation has changed. The country’s power generation capacity has increased more than four times. So, the government is planning to gradually reduce the gas supplied to captive power plants.

According to the Power Division, the country’s total electricity generation capacity is 22,787MW (including captive, renewable energy and imported). Of this, around 2800 MW electricity is being generated by captive power plants.  A Power Division official said, the government is now more concentrated on energy saving. Gas to captive power plants is being wasted. So, the government wants to use the gas in national power plants and reduce gas supply to captive power plants and gradually close it.