REB extends outdated power contracts amid gas crisis

Special Report :

Bangladesh is grappling with an acute gas crisis, with local gas production falling sharply, from an average of 2,448 mmcfd in 2016 to just 2,039 mmcfd as of January. Despite this severe shortfall, the Rural Electrification Board (REB) is pushing to extend expired contracts for Small Independent Power Plants (SIPPs) that are highly inefficient, exacerbating the strain on gas resources.

These small, reciprocating engine-based SIPPs consume up to 50 per cent more gas than modern combined-cycle plants, further stressing the country’s limited gas supply. In the face of Bangladesh’s gas crisis, continuing to operate such inefficient plants under expired Power Purchase Agreements (PPAs) is economically and environmentally reckless.

The Bangladesh Power Development Board (BPDB) has suspended the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010 to promote transparency and efficiency in energy procurement, but REB continues to push for contract extensions without competitive tenders. This defies government directives, especially when cheaper electricity is available through imports from the Indian Electricity Exchange (IEX) at nearly half the cost.

With Bangladesh facing a critical gas supply gap, the government must step in to halt these contract extensions and prioritize efficient energy production, according to experts. The focus should be on transparent, competitive tendering processes to ensure sustainable use of resources and to modernize the country’s energy infrastructure. Continuing to extend inefficient contracts in the midst of a gas crisis not only worsens the situation but raises concerns about potential corruption.