The power tariff of the coal-fired 1,200-megawatt Matarbari power plant is going to be as high as its peers, observed energy experts, saying that the government-approved power tariff made it appear as if the tariff was lower than that of the electricity purchased from similar power plants.
On April 29, the advisory committee on government purchase approved the public power plant鈥檚 power tariff at Tk 8.44 a kilowatt-hour or 7.6621 US cents a kWh, with Tk 5.84 a kWh spent as fuel cost and Tk聽2.60 a kWh given as capacity charge.
An official document showed that the rates of fuel use and capacity charge were determined considering that the power plant operated at 85 per cent of its capacity.
The document also showed that the calculation considered the dollar exchange rate to be Tk 110.25.
The dollar exchange rate is crucial in determining the tariff since power plants depend on fuel import for their production and their capacity charge is paid mostly in the dollar. The current dollar rate, according to the Bangladesh Bank, is Tk 122.
鈥楥onsidering the dollar rate at such a low level in the calculation is misleading,鈥� said Hasan Mehedi, member secretary of the Bangladesh Working Group on Ecology and Development, a forum of rights activists and organisations.
鈥楾he tariff of coal-based power plant is tough to determine for it involves so many issues and uncertainties,鈥� he said.
An analysis done past year by the Bangladesh Power Development Board revealed that the average fuel cost among all coal-fired power plants in the country was Tk 7.02, more than 16 per cent higher than what the newly approved Matarbari tariff allowed.
The fuel cost varied greatly depending mainly on machine quality, coal quality and the operational period of power plants. For instance, the fuel cost in a unit of the Barapukuriya power plant was Tk聽12.30, the PDB analysis showed.
In joint venture coal-based power plants, the fuel cost ranged between Tk 6.67 and Tk 7.84. The coal-fired independent power plants鈥� fuel cost ranged between Tk 6.26 and Tk 6.75.
For an ultra-supercritical coal power plant, the technology of which is also used in Matarbari, the BPDB鈥檚 fuel cost stood at Tk聽6.77.
The fuel cost could vary greatly due to the high vulnerability of the international fuel market. During the Covid pandemic, the price of a tonne of coal reached $400. The current price of coal is below $100 a tonne.
The BPDB analysis also revealed that the average government-set cost stood at Tk聽4.63 past year, nearly 45 per cent higher than what the Matarbari was allowed to get.
鈥楾he plant availability factor could influence the power tariff,鈥� said Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis, a research organisation.
Power tariff goes up if the plant鈥檚 capacity remains unutilised, energy analysts said, given that the capacity charge is paid anyway. Increased utilisation contributes greatly to decreasing tariff, they said.
In 2023-24, according to the BPDB, the average plant availability among the coal-based power plants was 35.25 per cent.
The plant factor of the Adani coal power plant, which is supplying electricity from India, was 62.32 per cent, which was the second highest plant factor after import with 85 per cent plant factor.
Power plants in Bangladesh have never run at 85 per cent of their capacity in recent time.
The ongoing dollar crisis is a major reason for keeping power plants idle due to lack of fuel supply.
The BWGED estimated that the Matarbari power plant would actually get Tk聽2,565 crore a year at the current dollar exchange rate.
If the plant availability dropped to 60 per cent, the BWGED said that at the newly announced tariff per unit of production cost at the Matarbari power plant would stand at Tk聽10.55.
The tariff would increase to Tk 13.14 if the plant availability dropped to 37 per cent, which was the average plant availability of Barapukuria and Payra power plants between the financial years of 2020-21 and 2023-24.
The average coal power tariff in 2023-24 was Tk聽12.74.
ANM Obaidullah, member of the BPDB, said that the government-approved tariff was determined based on the dollar exchange rate the day the plant rolled into commercial operation.
鈥楾his is the base price,鈥� said Obaidullah.
鈥楧epending on situations, the tariff could be changed,鈥� he said, saying that power tariffs were paid after evaluation based on the actual situation.
Unlike the other power plants, the Matarbari power plant started its operation without having signed a power purchase agreement.
The first unit of the Matarbari power plant started commercial operation in December 2023 and the second unit started operation in August 2024.
So far the plant has received only the fuel cost for running its operation.
