360MW Haripur unlikely to be extended: Low cost power gets low or no importance
Staff Reporter :
The Haripur 360 MW combined cycle power plant (CCPP), developed by AES Corporation in 2001, has reached the end of its 22-year initial contract period without a likely extension.
The plant, known for its efficient and cost-effective electricity generation, ceased operations in November 2023 after fulfilling its contractual obligations.
According to official sources, the Bangladesh government has not procured electricity from the plant since then.
AES Corporation, a prominent US company, established two significant base-load power plants in Bangladesh during the early 2000s—the Haripur 360 MW CCPP in 2001 and the Meghna Ghat 450 MW CCPP in 2002. These plants were recognized for their high efficiency and low-cost electricity production.
Under the power purchase agreement (PPA), the state-owned Bangladesh Power Development Board (BPDB) sourced electricity from these independent power producer (IPP) plants.
Initially, Haripur’s electricity tariff was remarkably low at Tk. 1.56 per unit, setting a benchmark not just within Bangladesh but globally.
A World Bank document from June 24, 2014, publicly disclosed a comparison of power generation costs among various IPPs.
It highlighted that during the late 1990s, when other IPPs like Khulna Power Company Limited and NEPC were charging significantly higher prices (Tk. 16.03 and Tk. 20.20 per unit, respectively), Haripur and Meghna Ghat offered electricity at Tk. 1.56 and Tk. 2.33 per unit, respectively.
The current average generation cost of electricity in Bangladesh has risen to over Tk. 10 per unit. Notably, the government recently set the retail tariff for electricity at Tk. 8.95 per unit through a gazette notification issued on March 1.
Until last year, Bangladesh Power Development Board (BPDB) was procuring electricity from the Haripur plant at Tk 3.32 per unit, which was the most competitive rate among all private power plants. However, in November 2023, the Power Purchase Agreement (PPA) expired, leading to BPDB halting its electricity purchases from the plant.
BPDB’s decision to cease purchasing electricity from Haripur raised eyebrows, especially given that the plant was renowned for its efficiency and low production costs compared to other IPPs. Many were surprised by the unilateral move, particularly since BPDB continued to procure electricity from higher-cost plants, including those owned by Summit Group. A senior BPDB official, speaking anonymously to UNB, attributed this decision partly to a lack of strong advocacy from the Haripur plant’s side to renew the contract with BPDB. This absence of lobbying efforts, according to the official, means that the country will miss out on accessing low-cost electricity.
However, there remains a possibility for the government to negotiate with the owner-company of the Haripur plant, potentially acquiring and operating it under BPDB management.
Sources indicate that AES Corporation, a US-based company, initially developed the Haripur and Meghnaghat power plants. Through subsequent ownership changes, Malaysian Pendekar Energy Limited now owns and operates these two plants.
In 2003, AES sold the plants to the UK company CDC Globeleq, which sold the plants to Malaysia-based Pendekar Group in 2007.
Official sources said the government had to pay Tk 50-55 crore a month to purchase electricity from the Haripur power plant for its 360 MW electricity.
“But from November 2022, the operator of the plant has not been receiving any bills from the BPDB for which it lost interest to continue its operation”, said another source.
He also mentioned that BPDB is also not interested to extend its operation as it has contractual obligation to buy electricity from newly established plants like Summit Group’s Meghnaghat Plant, Unique Group’s Meghnaghat plant and also some coal –fired power plants which electricity cost is between Tk 6.50 to Tk 30 per unit.
