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Madanganj 102 MW (Summit) Dual Fuel Power Plant (Unit 1)

Dec 9, 20234 min read

Current Status: Operation

Source: Summit


Madanganj 102 MW Dual Fuel Power Plant, also known as Summit Narayanganj Rental Power Plant (Unit-I), is a reciprocating engine-based power plant situated on MN Ghoshal Road at Tikkar Mor of Madanganj under Bandar Upazila in Narayanganj District of Bangladesh (Location Map: 23.5897, 90.5152). It is sponsored by Summit Narayanganj Power Limited (SNPL), a Special Purpose Vehicle (SPV) of Summit Group, as a Quick Rental Power Plant (QRPP) for five years. The sponsor declared its Commercial Operation Date on 1 April 2011 and, as per schedule, the power plant was to retire on 31 March 2016. But the date has been rescheduled to 9 March 2022 after 6 years of extension.


Capacity

The installed and net capacity of Summit Narayanganj Unit-I Power Plant is 103  MW and 102 MW respectively.


Context

Honourable Prime Minister of Bangladesh, Sheikh Hasina inaugurated the 102 MW dual fuel power plant of Summit Narayanganj Power Limited in Madanganj, Narayanganj on 20th March 2011, just 270 days after signing of the contract. It is the first comprehensive dual fuel power plant in Bangladesh. All machines and auxiliaries were purchased from Wärtsilä is a Finnish company which manufactures and services power sources and other equipment in the energy markets. All other entities that have worked to complete this power plant were Bangladeshi companies such as Summit Power Limited, UDECO a Bangladeshi leading engineering & construction company and Energypac Power Generation Ltd. The power plant is operational since 2011 under Summit Narayanganj Power Limited (SNPL) (Summit Power International).


The 10-year agreement that Summit Power signed with Bangladesh Power Development Board (BPDB) to sell power from its Narayanganj power plant unit 1 expired on 31 March. The company said in a press release published on the website of both exchanges that it had received the letter from BPDB. According to the letter, the 102 MW Narayanganj unit was completely shut down on April 1 (The Business Standard, 2021). In order to extend the project's lifetime, Summit Power then submitted an application to the Ministry of Power, Energy, and Mineral Resources. The Bangladesh Rural Electrification Board (BREB) recently approved the production of the power plant once more in light of that application. After receiving verbal consent, the business said that power plant output resumed on March 24,2022.


On 13 April, 2022 through Dhaka Stock Exchange (DSE), the company said that they have officially received consent for power generation from Power Development Board (PDB) and the generation contract will be effective for the next two years from March 23, 2022 (Share Biz, 2022). The finance minister said that they had renewed the contracts for two years against the proposals of five years. He also informed that the contracts were renewed on the condition of “no electricity, no payment”. Replying to another question, he said no payment would be given as a capacity charge, a clause under which the government pays a certain amount of fees in case of not buying power from the private producers (New Age, 2022).


Fuel Supply

Fuel supplier of this power plant is Summit Oil & Shipping Company Limited (SOSCL), a subsidiary of Summit Group, for the power plant (SOSCL 2022).


Sponsor

The  sponsor of Madanganj 102 MW Dual Fuel Power Plant is Summit Power Limited (SPL).


Finance

The BPDB extended the term of the 102 MW rental power plant at Madanganj in Narayanganj district  2 more years. The government has to pay Summit Narayanganj Power Limited BDT 1,156.52 crore (Business Insider, 2022). According to another source as per the approval the Bangladesh Power Development Board (BPDB) will pay BDT 11.58 billion to Summit Narayanganj Power Limited's 102 MW Madanganj plant. Per unit power from this power plant cost BDT 16.40, which is BDT 1.12 less than the previous cost of BDT 17.52. (FE, 2022). 


Power Generation

Total power generation from 2010-2011 to 2021-22 is 4516.97 gWh.


Capacity Charge

Bangladesh Power Development Board (BPDB) had to pay the sponsor BDT 1563.27 crore as a capacity charge till 2022-2023. The average per unit cost is 12.15 BDT. Total cost of the power plant till FY 2022-2023 is 5763.02 crore BDT.

Year

Generation (gWh)

Total Cost (crore BDT)

Unit Cost (avg BDT)

Capacity (crore BDT)

FY 2022-2023

0.00

0.00

0.00

0.00

FY 2021-2022

109.32

210.02

19.21

33.12

FY 2020-2021

353.34

343.61

9.72

73.14

FY 2019-2020

223.22

265.85

11.91

145.25

FY 2018-2019

204.83

345.83

16.88

144.43

FY 2017-2018

310.14

374.67

12.08

144.03

FY 2016- 2017

463.06

408.24

8.82

132.45

FY 2015-2016

577.19

480.42

8.32

174.11

FY 2014-2015

579.82

720.57

12.43

168.83

FY 2013-2014

555.63

876.44

15.77

167.05

FY 2012-2013

526.07

882.37

16.77

169.53

FY 2011-2012

413.85

643.90

15.56

171.83

FY 2010-2011

200.50

211.10

10.53

39.50

Total

4516.97

5763.02

12.15

1563.27

Criticism

The operation of rental power plants usually involves the consumption of significant amounts of fuel. The country depend on foreign import in case of HFO, transportation and extraction of the fuel can contribute to resource depletion and environmental degradation. The burning of fossil fuels in rental power plants releases greenhouse gases, contributing to climate change. This is a global issue with long-term consequences. Moreover, the rental and quick rental power plant also creating great economic burden for the country. The old and outdated rentals will create an additional burden of BDT 2,726 crore (USD 317 million) annually, with BDT 594 crore coming from capacity charges (Mehedi H., 2022).


References

 
 
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