Shawdesh Desk:

# Coal price in Rampal, Payra power plants $ 250 per ton

# Adani wants to fix coal price at $400 per ton

# Adani agrees to send reps following BPDB letter

The embattled Adani Group of India, entrusted with providing electricity to Bangladesh, is set to fix coal price for its power plant 60 percent higher than the actual.

If the coal price is so high, the power provided by the company to Bangladesh will be costlier, experts cautioned.

According to sources at the Power Division, Adani Group is adamant to increase coal import price by 60 percent and the company would like to open LCs for the purpose accordingly.

In a letter, Adani informed Bangladesh Power Development Board (PDB) of its decision.

Sources confirmed that coal is being imported for Rampal and Payra power plants at $250 per ton albeit Adani’s extraordinary move.

Rampal 1320 megawatt coal-fired power station is constructed at Rampal upazila of in Bagerhat District by Bharat Heavy Electricals Limited (BHEL) for the Bangladesh-India Friendship Power Company Private Ltd. Meanwhile, Payra 1320 MW Thermal Power Plant is a 1,320 megawatt coal-fired power station built in Kalapara Upazila of Patuakhali District in southern Bangladesh. It is a joint venture between the North-West Power Generation Company Bangladesh Limited (NWPGCL) and China National Machinery Import and Export Corporation (CMC).

Going to 60 percent upper compared to the two above power plants, Adani proposed to fix the unusual coal import price.

In January, BPDB sent letter registering objection to the decision of coal import at $ 400 per ton and requested the Adani to reconsider the issue.

Responding to the letter, Adani has reportedly agreed to send a team to Bangladesh to discuss the issue.

Adani’s 1,600 megawatt power plant is located at Godda district in Jharkhand state of India. Bangladesh entered into a deal to buy power from the power plant for 25 years.

Power supply to Bangladesh from the Indian company is going to start from next month but higher coal price sparked tension among officials concerned and experts.

BPDB in its letter said Adani should import coal at the price of Rampal and Payra power plants.

Md Habibur Rahman, Secretary to Power Division, said Adani has agreed in principle that its coal import will not be costlier than two other power plants.

Bangladesh will have the issue resolved before buying power from Adani, he added.

Agreement with Adani in 2017

The current power production capacity of Bangladesh is 22,700 megawatt. On April 16, 2022, Bangladesh produced record power of 14,782 megawatt which was much lower than the total production capacity. Although many power plants are lying idle, the country has to count Tk 20,000 crore annually in capacity charges.

Coming to state power in 2009, Awami League government had focused on power generation and invested in expanding power plants. Besides, the government moved to import electricity from neighbouring India.  Accordingly, Bangladesh entered into deal with Adani in 2017 to buy 1,160 megawatt power.

Mentionable, Adani is making headlines for its financial irregularities affecting its share price. The financial pariah sparked protests of opposition in the parliament and elsewhere. Oppoistion demanded joint parliamentary committee (JPC) and Supreme Court monitored probe into the scam.

Besides, mango farmers and environmentalists filed a public interest litigation (PIL) with the Calcutta High Court challenging Adani’s power plant and high-voltage supply line which will affect farming and environment.

How coal price is fixed 

BPDB enters into agreement with all the government-approved power plants to buy electricity. Although the deal is silent about value of per unit electricity, it gets capacity charge specified. However, operation and fuel prices vary depending on production of power.

The power producing companies buy fuel and use it in the plants while BPDB pay for electricity along with price of fuel.

If fuel is procured at higher price, per unit electricity becomes costlier, sources claimed.

Coal price is fixed based on the indexes of Australia and Indonesia which are two major coal exporters. Price of coal is enumerated in the websites of those countries although the same can be imported at lower price by negotiation.

The authorities make an average between the price of Australia and Indonesia to fix the coal rate.

Officials at BPDB and Power Division apprehended that Adani is trying to realize extra money for the purpose of coal.

Conditions of agreement need to be scrutinised

In last 14 years, wholesale price of electricity jumped on 11 occasions and retail price on 12 occasions making consumers scapegoats. Even in January, retail price of electricity increased twice by 10 percent. The countrymen suffered a lot due to load shedding just on the eve of winter. So, uncertainty persists in electricity supply in the coming summer. However, the government is asking people not to be worried as Adani will supply soon. The experts argued that conditions of paying capacity charge and affordable price of coal and per unit electricity should have been explicit in the deal.

(Translated by Firoz Al Mamun)