The Government has decided to extend Power Purchase Agreement (PPA) with Venture Energy Resources Limited, (Bangladesh) for next 2 years (2020-2022) to supply electricity from Bhola 35.5 MW Quick Rental Power Plant (NewAge, 9 Oct 2020). This decision is totally contradictory with the earlier decision of the Government. The State Minister for the Ministry of Power, Energy and Mineral Resources told that the Government will phase out all rental power plants by 2021 (Business Post, 27 June 2020).
The country is already experiencing overcapacity and has to pay around 1.2 billion US dollar every year as Capacity Charge of the private power plants. Rental Power Plants (including Quick Rental) are taking one-third of the money (NewAge, 4 June 2020).
Bhola is the only island-district of Bangladesh. The island already has two power plants i.e. state-owned Bhola 220 MW Gas Based Power Plant and Aggreko 90 MW Gas-Based Rental Power Plant. These power plants evacuate electricity through Bhola-Patuakhali 33 kV submarine line, the only connection to the national grid. The total population of Bhola District is 2,037,201 and 200 MW is enough to cover 100% people of the island district. Besides, the district could get electricity from the Payra area in an emergency.
After the latest decision, the Government has to pay BDT 1479.50 million (USD 17.83 million) per year for only this power plant, as estimated. It is to mention that the power plant got an extension in 2018 to supply power at a rate of BDT 3.48 per kWh (UNB, 6 Feb 2018) but the company received BDT 3.65 per kWh in the same period and got BDT 683.93 Million (USD 8.24 Million) as Capacity Charge in addition to the price of gas, evacuation charge and rent of the land which were paid by the government as compensation.
If the power plant generates 114.71 gWh electricity like 2018-19, the Government will have to pay BDT 321.18 million (USD 3.87 Million) as capacity charge at a rate of BDT 2.8 per kWh. In addition to that, the government will have to pay USD 161.1 million for power transmission, land rent and the price of fossil gas from Shahbazpur Gas Field and transmission charge of Sundarban Gas Company Limited (SGCL).
One of the conglomerates of Bangladesh, Sinha Group (owner of Medlar Group and Opex Group also) is the owner of this power company along with other power companies like Sinha Power Generation Company Limited, Sinha Peoples Energy Limited, Sinha Energy Limited and EQ Capital Energy Bangladesh Limited which have several Gas and liquid fuel-based Rental and Quick Rental Power Plants.