Payra Power Plant May Halt Operations for Weeks due to Coal Shortage

Bangladesh: Due to a shortage of Coal, officials were forced to shut down one of the two units of the Payra Power Plant on May 25, which was the first time in its three years of operation. Another unit will cease production in about a week if the situation remains the same. The Payra 1,320MW Thermal Power Plant, previously regarded as a reliable power source for the Barishal region and parts of Khulna and Dhaka, has been affected by the shortage of coal. According to sources from the country's largest Coal-fired power plant have disclosed that they currently have only 50,000 tonnes of Coal in stock, and each of the two units requires around 6,000 tonnes per day. They have also warned that the second unit of 660MW will stop functioning after almost a week.

The Bangladesh-China Power Company Ltd (BCPCL) is responsible for operating the power plant, whereas China National Machinery Import and Export Company (CMC) holds a 50 percent stake in the plant and pays for the Coal. Bangladesh Power Development Board pays for the coal shipments, and it usually takes six months for CMC to receive the payment. However, on April 27, the BCPCL informed the Ministry of Power, Energy and Mineral Resources, the PDB, and Bangladesh Bank that CMC has banned Coal supply to Payra Power Plant until the dues are paid. The BPDB has not yet cleared the dues.

M Khurshedul Alam, the Managing Director of BCPCL, informed that the due amount is approximately $300 million, and ongoing negotiations about the payment for Coal are taking place with PDB and Bangladesh Bank. He mentioned that they have received $58 million as of last Thursday and are guaranteed to receive another $100 million by this month. Hoping for the CMC to lift the ban on Coal supply, he stated that they would initiate the Letters of Credit (LC). However, even if they begin tomorrow, it will take a minimum of 25 days for the Coal shipment to arrive. This implies that the entire power plant will be non-operational for three to four weeks.

At 9:00 am on Thursday, The Power Grid Company of Bangladesh (PGCB) reported that the power plant generated less than 660MW of electricity. Yesterday, the production remained between 300 and 350MW. Presently, the country is generating roughly 12,200MW of electricity, which is below the demand of 13,000MW to 13,500MW. Meanwhile, Rampal Power Plant resumed its operation on May 16 after three weeks due to the lack of Coal. However, it is only utilizing fifty percent of the capacity of its one operational unit.

Yesterday, the Coal-based power plants produced approximately 2,000MW of electricity, whereas their capacity is 3,440MW. Payra authority was instructed to keep the plant operational for as long as possible. He further added that they are waiting for the next Coal shipment and if the weather remains favourable, the national demand will not increase. Even if the power plant shuts down, there will be no power cuts as they will ensure a normal supply of electricity from other sources. The first unit of Payra Power Plant commenced commercial operations on May 15, 2020, while the second one started operating a few months later.