Despite electricity demand being nearly half of the generation capacity, the Bangladesh government has extended the contract for a 55 MW gas-based rental power plant. The decision, made on November 8, 2023, raises concerns among energy experts as the country already faces a surplus capacity of about 50%.
The rental power plant, operated by Precision Energy Ltd., will receive a 5-year extension to its existing contract with the Bangladesh Power Development Board (BPDB), at a tariff rate of US Cent 5.7 per kilowatt-hour. Critics argue that continuing to entertain costly rental power plants may increase the government’s subsidy burden.
In 2022, contracts for at least 10 rental power plants were extended with a fund allocation of Tk 6,564.08 crore, and this time, Tk 1205.40 crore has been allocated for the Precision Energy plant. The surplus electricity situation, coupled with the extension of rental power contracts, raises concerns about indiscipline in the power sector and the potential for energy insecurity.
