July 11, 2020 Read More →

Bangladesh considering limits on coal-fired power development

The Business Standard:

In late June, state minister for power Nasrul Hamid stated that the Bangladesh government was seriously reconsidering the nation’s plans for coal-fired power plants.

According to comments made at a Centre for Policy Dialogue web discussion, Bangladesh is now considering limiting coal-fired power development to five gigawatts (GW), and with a greater focus on more LNG-fired power.

With the operational 525 megawatt (MW) Barapukuria coal plant, the 1,320MW Payra coal plant essentially completed, and the 1,320MW Rampal and 1,200MW Matarbari plants under construction, Bangladesh will soon have 4.4GW of operational coal power, meaning that the coal-fired generation build has all but ended if the 5GW limit becomes the policy.

The state minister justified this significant rethink by noting that not only were LNG-fired power plants more efficient and cleaner than coal-fired generators, LNG prices were now looking cheaper in the long run.

If this stated willingness to move away from coal power becomes the actual policy, then this change would indeed be a long overdue and a positive step forward for Bangladesh’s power system.

In May 2020, the Institute for Energy Economics and Financial Analysis (IEEFA) published a report which highlighted that the growing overcapacity and capacity payments to power plants that lie idle much of the time were putting Bangladesh’s power system in a perilous financial position. A shift away from developing large coal power plants is prudent, given the current overcapacity, and the fact that Covid-19 will significantly lower power demand growth for the foreseeable future. 

[Simon Nicholas]

More: Is Bangladesh government turning away from coal?

Posted in: IEEFA In the News

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