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‘North-West Power Company plans for leading position in electricity generation’

As the newest company in power sector of Bangladesh, North-West Power Generation Company Limited has already reached its success milestones.

With a view to reducing the consumption of primary fuel, the company begins to turn simple-cycle power plant into combined-cycle plant in the history of the country.

With the same amount of fuel that is used in simple-cycle power plant, the combined-cycle plant reduces the cost of the electricity production as well as it increases power production.

He who has reached the company into the destination of success is Engineer AM Khurshedul Alam, managing director of North-West Power Generation Company Limited.

Khurshedul has been working in the power sector for more than 40 years. He was known as ‘Project Man’ to all of the staff of Bangladesh Power Development Board while he was working there.

In an exclusive interview with Aminur Rahman, editor of energynewsbd.com, AM Khurshedul Alam talked about the success story of his company.

energynewsbd.com:  As the newest company in power sector of Bangladesh, what are the developments that North-West Power Generation Company Ltd has done in the last few years?

AM Khurshedul Alam: In 2007 to cope-up with the growing load demand as well as to comply with the policy of the government enough generation of electricity needs to be added.

With a view to meeting up the growing demand of electricity of the system of the country, North-West Power Generation Company Limited (NWPGCL) has been formed, incorporated and registered in August, 2007 under the framework of the government power sector reforms policy and the provision of the companies act, 1994.

The company has primarily started its functioning with Khulna 150 megawatt (MW) peaking power plant project, Sirajganj 150 MW peaking power plant project which have already been completed in due time. The third one (Bheramara 360 MW Combined-Cycle Power Plant Project) undertaken in 2012 is under construction and going to be commissioned very soon.

The company intends to be the leading power generating utility in the country in the long run. In order to fulfill the prevailing demand of electricity of the country, NWPGCL had decided to upgrade Sirajganj 150 MW Peaking Power Plant and Khulna 150 MW Peaking Power Plant to 225 MW combined-cycle power plants and it is already done.

As a consequence, extra 75 MW has been added to each plant without using any additional fuel except exhaust flue gas from the existing 150 MW power plant.

NWPGCL has been implementing Bheramara 360 MW CCPP Project, Sirajganj 225 MW CCPP (2nd Unit-Dual Fuel) Project, Sirajganj 225 MW CCPP (Dual Fuel-3rd Unit) Project.

Besides three, Sirajganj 400 MW (±10%) Dual Fuel CCPP Project (4th Unit) has been being implemented under PPP with Sembcorp, Singapore. Moreover, it has been implementing Payra 1,320 MW Coal Based Thermal Power Plant Project in joint venture with CMC, China.

energynewsbd.com:  In Bangladesh, NWPGCL is the first company which has transformed a simple cycle power plant into a combined cycle one. How did NWPGCL come up with the idea and how many power plants have been transformed in such a manner as of now?

Khurshedul Alam: Originally, Sirajganj and Khulna gas turbine power plants were conceived as peaking power plants, meaning, they will supply power during the peak hours when power consumption is high (in the morning and evening).

However, when the power plant was being constructed, the demand for electricity had grown and they were running as base load power plants, meaning, they were running continuously and supplying power to the grid. In case of base load power plants, efficiency is very important to keep the generation costs down.

Hence, NWPGCL studied options for improving efficiency and decided that the best method was to convert the simple cycle power plant into combined cycle, which will result in 33% increase in output and 51% increase in efficiency.

Till now two power plants - Sirajganj and Khulna 150MW power plants - have been converted into combined cycle power plants.

energynewsbd.com:  With dwindling gas reserve of the country, your company has the plan to construct a LNG-based power plant. Where will it be established and what will be its capacity?

Khurshedul Alam: Considering the current gas reserve of Bangladesh and the daily requirement in the national gas grid, it is not possible to supply necessary quantity of natural gas to operate an 800 MW power plant as well as the other plants mentioned above.

It is, therefore, needed to ensure an alternative source of natural gas and to establish required pipeline and ancillary facilities to make available uninterrupted gas supply to the power plants.

Preliminary estimate places the gas requirement for an 800 MW power plant at a rate of 125-130 mmcfd. Combined with the gas requirement of other power plants, the gas requirement may increase to above 250 mmcfd by the year 2021.

The government of Bangladesh has set a target for raising the capacity of nearly 15,000 MW power generations in the country to about 24,000 MW by the year 2021 and to about 40,000 MW by the year 2030 in order to meet the increasing national demand of electricity.

According to the above target set in Bangladesh Power System Master Plan- 2010, an 800 MW LNG-based combined cycle power plant will be constructed at Khulna by North-West Power Generation Company Ltd. The proposed Khulna 800 MW LNG-based power plant will be operated as a base load plant with a plant factor ranging between 70%-80% depending on the grid demand.

The power plant will be comprised of two units of 400 MW each and is scheduled to be commissioned by the end of 2019. The power plant will be located at Khalishpur, Khulna on the bank of the Bhairab River.

The existing gas transmission line of 1000 psig operating pressure is nearly 19 km away from the proposed plant location.

An inter-connecting line will be built up to the power station with an operating pressure of 300 psig including a regulating and metering station to be installed at the power plant premises for delivering gas at required pressure and quantity.

energynewsbd.com:  The government has put priority on coal-based power plant, what is the plan of NWPGCL in this regard and what steps have you taken to implement the plan?

Khurshedul Alam: Future energy mix for power generation in Bangladesh leads the path towards coal. Bangladesh has no other choice but to develop coal-based power plants to meet the ever increasing demand for electricity.

Sustainable power generation (affordable and available for long-term) requires steady, reliable supply of primary energy. There is no additional gas in the country, and oil is too expensive with volatile price fluctuation.

This leaves us with coal-based power generation. More than 50% of the total generation of electricity will come from coal in the near future. The present government’s plan is to develop 20,000 MW coal-based power plants by 2030 which is a pragmatic decision in terms of fuel choice.

As per the Bangladesh Power System Master Plan 2010, the government has set a target for NWPGCL to install 2,640 MW coal-based power plants by 2030.

In commensurate with the government target, NWPGCL has a plan to implement two 1,320 MW ultra-supercritical mega projects at Dhankhali, Patuakhali in two phases.

These two plants will be operated by imported quality coal. One of these already has been put in the construction track which will be commissioned in 2019.

As a part of this plan, NWPGCL has taken some effective steps. It is almost a newly created power generation company, which is alone still not sound to install such a coal-based mega project. So, the solution was to establish a strategic alliance of joint venture.

For this purpose, NWPGCL signed the joint venture agreement (JVA) with CMC on June 09, 2014 at the Great Hall of the People, Beijing, China in presence of the Hon’ble Prime Minister of the Bangladesh Sheikh Hasina and her counterpart the Hon’ble Prime Minister of the People’s Republic of China Li Keqiang in order to implement Payra 1,320 MW thermal power plant project by using eco-friendly ultra-supercritical technology on turn-key basis and by establishing a joint venture company (JVC).

In this perspective, in order to meet the ever increasing demand of electricity, Bangladesh-China Power Company (Pvt) Limited (BCPCL), a Joint Venture Company of NWPGCL and CMC, was formed and registered with the Registrar of Joint Stock Companies and Firms (RJSC), Dhaka, Bangladesh on October 01, 2014 under the provision of the Companies Act, 1994.

Just after the formation of the company, BCPCL, development project proposal of land acquisition, land development and protection for Payra 1,320 MW coal-based thermal power plant project was prepared and then approved by ECNEC on October 21, 2014.

International tender for the EPC work of the said project was invited simultaneously. The company took only four months to complete the total bidding process, including tender invitation, pre-bid meeting, tender evaluation, board approval, issuance of NOA and its acceptance.

At last on March 29, 2016 the company signed EPC contract with the consortium of NEPC and CECC, China for execution of the project. The well-developed land was handed over to the EPC Contractor on March 30, 2016. All these tough and impossible tasks were accomplished following the critical path method (CPM).

For cutting down project implementation time, the company has provided a special clause in the EPC contract that EPC contractor will have to invest 15% of the EPC cost (Foreign Currency Portion) from its own resources, which will be reimbursed after financial closing.

The project company has arranged the project loan. The Government of Bangladesh through Ministry of Finance has already given the consent in principle to issue sovereign guarantee for 50% (NWPGCL Portion) of the total debt.

After negotiation over the Term Sheet submitted by the Export-Import Bank of China (CEXIM), the Standing Committee on Non-concessional Loan (SCNCL), Bangladesh approved it on September 15, 2016.

The Framework Financial Agreement of US$ 1.984 Billion for Payra 1,320 MW Thermal Power Plant Project between the CEXIM and BCPCL was signed on October 14, 2016 in presence of the President of the People’s Republic of China and the Prime Minister of the Government of Bangladesh at the Prime Minister’s Office, Bangladesh.

The EPC work of Payra 1,320 MW coal-based thermal power plant project (1st phase) runs in full swing. It is expected that the 1st Unit and 2nd Unit of the plant will come into operation in April, 2019 and October, 2019 respectively.

energynewsbd.com:  For constructing a coal-based power plant, land scarcity and resettlement are big issues. How does NWPGCL plan to tackle those problems?

Khurshedul Alam: Bangladesh is a densely populated small country. Because of her land scarcity, we were compelled to acquire minimum land, only 982.77 acres for 2,640 MW coal-based power plants (1,320 MW-first phase and 1,320 MW-2nd phase).

The project will create a direct short-term employment opportunity for the local community during the implementation stage. There will be an opportunity for women to work as construction workers if the local custom permits them.

The tree plantation component of the project will be implemented by engaging local women who will be willing to work at the site. Some indirect employment opportunities will also be created due to augmentation of agriculture and trade and commerce resulting from local level infrastructural development.

It is expected that the income level of the local community with multi-purpose employment will move up for the sake of implementation of the project.

With the project implementation, various economic and non-economic institutions will crop up which include: industries, commercial organisations, health and educational institutions and other social development organisations.

We have a comprehensive plan for resettlement for the affected people due to acquisition of land. Using the social and technical judgments, we have prepared the resettlement action plan (RAP) for the affected people, covering the basic facilities. Major considerations are as follows:

(a) The household who lost less than 20 decimals of homestead land may be provided 6 decimals of homestead plot and the household who lost more than 20 decimals may be provided 8 decimals of plot in the resettlement area;  (b) Water supply through 10 hand tube wells or one deep tube well with overhead tank; (c) Shops to be provided for the business households who lost shops; (d) Two ponds [one in the front side and another one in back side for common water use for different purposes]; (e) Office-cum-community centre; (f) Community clinic; (g) Electricity connectivity; (h) Playground for children; (i) Mosque with all facilities; (j) One Eidgah with facilities; (k) Upgrading of the nearby school, if necessary, due to increased presence of students from the resettled households; (l) Internal paved roads; m) Drains, fencing, garden, etc. will be developed.

energynewsbd.com:  What impacts these coal-based power plant will have on the economy of the country?

Khurshedul Alam: Coal-fired power plants, due to their large capacity and low cost per kWh, are typically used as base load power plants by the grid operators. They also can be run without interruption for extended periods of time.

Thus, they are typically used by the grid operators to supply uninterrupted power to the major consumers such as industrial and bulk consumers.

This helps in sustained production and output from the industries and provides in turn the constant employment and improves country`s economy.

energynewsbd.com:  Your company has established a hub of power generation in Sirajganj. How was it possible?

Khurshedul Alam: In the year 2012, NWPGCL has established a 150 MW gas turbine peaking power plant at Soydabad, Sirajganj.

It was a simple cycle power plant. In the following year, NWPGCL upgraded this power plant into a 225 MW combined cycle power plant. Till now this is the only operational power plant unit in the Sirajganj Power Generation Hub.

This power plant is termed as Sirajganj 225 MW CCPP (Unit-1). In the meantime, NWPGCL has incepted several other power plant construction projects beside this power plant.

Those are Sirajganj 225 MW CCPP (Dual Fuel-2nd Unit) Project, Sirajganj 225 MW CCPP (3rd Unit – Dual Fuel) Project and Sirajganj 400 MW (±10%) Combined Cycle (4th Unit – Dual Fuel) IPP Project.

NWPGCL has taken measures to implement Sirajganj 7.6 MWp Grid Connected PV Solar Power Plant Project in the vicinity of Sirajganj Power Generation Hub.

This was possible only for the government’s positive and effective approach to the power sector; close monitoring of the Power Division over the company’s projects; and the collective and continuous effort of the company’s concerned manpower.

energynewsbd.com: Though finding appropriate financing is one of the major challenges of constructing a power plant, your company has been able to tackle that successfully. How did you make that possible?

Khurshedul Alam: Well, you know constructing any power plant requires huge investment. Appropriate financing is crucial to construct and operate a power plant.

As the government grant is allocated to different high-triggered sectors along with power sector and the abundance of grant recipient from the soft loan donor group makes it competitive and challenging to depend on a single source of financing.

So rather than confining in traditional ways of financing, we focus on diversified financing alternatives. We have GOB financing, development partner financing (ADB/JICA), ECA financing, Public Private Partnership (PPP) and self-financing.

Summing up all together, the proper application of money, the dedication of self-motivated employees, close and relentless supervision of the Ministry of Power, Energy and Mineral Resources and managerial and operational excellences made things possible in the best manner.

energynewsbd.com:  Why do the foreign loan disbursing organisations put confidence on your projects?

Khurshedul Alam: Confidence does not come in a day. It requires extensive efficiency to perform a task and maintain the efficiency over a period of time. Goodwill is the reflection of that.

We do have a very good reputation of timely completion of our projects without further extending the tenure. We are awarded “The best performing project team” by ADB for several times.

Our Debt Service Liabilities (DSL) payment history puts additional confidence to our lenders. We thrive to complete the project in time smoothly, operate the plant successfully and repay the loan as per Short-Term Loan Agreement (SLA).

This overall process gives us the competitive advantage and leads us in generating values and confidence in the foreign loan disbursing organizations.

energynewsbd.com:  In future, which are the places you have decided to construct new power plants?

Khurshedul Alam: To meet the future challenges of demand of electricity of Bangladesh, NWPGCL has decided to implement some new power plants in different suitable locations of the country.

As gas and oil are limited natural resources and exhausting rapidly, at present we are going to focus on renewable energy, coal and LNG-based power plant projects.

NWPGCL intends to implement 800 MW LNG-based Combined Cycle Power Plant Project in Khulna by December 2019. Besides these, it has a schematic comprehensive future development plan for implementing different power plant projects of different sizes, capacities and technologies.

In the meantime, the company has constituted the Renewable Energy Cell to implement wind and solar power plant projects.

There is a strong potential for solar energy within the country. NWPGCL intends to implement Sirajganj 7.6 MWp Grid Connected PV Solar Power Plant Project and now-a-days its development project proposal (DPP) is under the process of approval in the Planning Commission of the government.

Under the Renewable Energy Cell of the company, 100 MW grid connected PV solar power plant will be implemented in Faridpur by June 2018.

Moreover, Payra 100 MW solar power plant will be constructed on the ash pond of the Payra 1320 MW Thermal Power Plant Project in Patuakhali by June 2021.

NWPGCL believes in wind as a viable and competitive source of clean energy to help meet energy challenges and aims at becoming a recognised player in this field of Bangladesh.

It intends to implement Payra 50 MW Wind Power Plant Project in Patuakhali by June 2019 and its feasibility study is going on by FEDI, China.

It will construct Payra 1,320 (2x660) MW Thermal Power Plant Project (2nd phase) in JV with CMC, China. Moreover, NWPGCL intends to establish another 1,000 MW ultra-supercritical power plant by using indigenous coal.

 

 

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