The government is supplying gas at low cost to the captive power plant industry, but efficiency is 40 percent lower than that in the national power plants.
As the country is now capable of generating sufficient electricity, the government is discouraging captive power plants by increasing gas price and diverting to national power plants, a top official said.
A captive power plant, also called auto producer or embedded generation, is an electricity generation facility used and managed by an industrial or commercial energy user for their own energy consumption. Captive power plants can operate off-grid or they can be connected to the electric grid to exchange excess generation.
Captive power plants are generally used by power-intensive industries where continuity and quality of energy supply are crucial, such as aluminum smelters, steel plants, chemical plants and others.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said ‘the captive power plant efficiency is only 15 percent, whereas national power plant efficiency is 55 percent. That’s why we are discouraging industrialists to use gas in captive power by increasing gas price.’
“The captive power is not efficient. Not only 96 percent, the government wants to increase gas prices by about 300 percent for captive power plants with a view to encouraging entrepreneurs to use national grid power,” he added.
Nasrul further said “We have sufficient electricity. The government will ensure uninterrupted electricity for all at affordable price. No need to use gas in captive power.”
He also said that by the year 2041 the power demand will reach 72,000 megawatts while the generation capacity will reach 79,500 megawatts. At the time, the country’s gas demand will reach about 10,000 mmcfd. The government has already prepared a Gas Management Master Plan to improve the energy situation.
The official said, the government began to allow captive power generation in 1990 due to an unreliable power supply. However, the situation has changed. The country’s power generation capacity has increased more than four times. So, government is planning to gradually reduce the gas supplied to captive power plants.
According to the Power Division, the country’s total electricity generation capacity is 21282MW (including captive, renewable energy and imported). Of this, 2800 MW electricity is being generated by captive power plant.
An official said, currently total gas production is around 3140 mmcfd. Of this, around 400 mmcfd goes to captive power plants. Currently per unit gas price is taka 9.62. The Titas Gas Transmission and Distribution Company has proposed to increase the price to taka 18.04. However, Bangladesh Energy Regulatory Commission will decide on the price.
A Power Division official said, the government is now more concentrated on energy saving. Gas to captive power plants is being wasted. So, the government wants to use the gas in national power plants and reduce gas supply to captive power plants and gradually close it.