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Meghnaghat 100 MW (IEL) HFO Power Plant

Dec 5, 20234 min read

Current Status: Operation


Meghnaghat 100 MW Furnace Oil Power Plant, also known as Orion Meghnaghat Rental Power Plant, is a reciprocating engine-based power plant situated on Meghnaghat Island in Islampur under Sonargaon Upazila in Narayanganj District of Bangladesh (Location: 23.6115, 90.5928). It is sponsored by Orion Power Meghnaghat Limited (OPML), a Special Purpose Vehicle (SPV) of Orion Group, as a Quick Rental Power Plant (QRPP) for three years. The sponsor declared its Commercial Operation Date (COD) on 8 May 2011 and, as per schedule, the power plant was to retire on 7 May 2016. But the date has been rescheduled as 9 March 2023 after 2 times of extension for 7 years in total.


Capacity

The installed and net capacity of Instrumentation Engineers Limited (IEL) Meghnaghat Power Plant is 106 MW and 100 MW respectively.


Context

Orion Power Meghnaghat Power Plant (OPML) formally known as IEL Consortium Limited is a power producing company with a 100 MW capacity. It is an HFO-based power plant with European machinery and equipment that is located close to the Meghna River's bank in Islampur Village, at Meghnaghat, Sonargaon, Narayangonj construction was finished in a record-breaking 9 months. Since May 2011, the plant has consistently supplied electricity to the national grid, and it recently received a five-year extension (SCRIBD). It started its commercial operation on 8 May 2011 with an initial PPA for five years. After an extension, the current PPA expired in May 2021 after 10 years of operation (Hassan Mehedi, 2022). On 23 March 2022, the government approved to extension by two years the time frame of this HFO-based power plant (IPP) to fulfill the nation's rising need for electricity. Even though a five-year extension was proposed, Cabinet Division Additional Secretary Md. Zillur Rahman Chowdhury stated that the new tenure for this HFO-based leasing power plant has been extended by two years. He also added that this private power plant would not be subject to a capacity fee, and a "no electricity, no payment" policy would apply to this power plant (Energy and Power, 2022).


Land Acquisition

The power plant is built on an area of 8 acres (SCRIBD).


Finance

The project had a BDT 624 crore overall cost (SCRIBD). The government would give Orion Power Meghnaghat Ltd. BDT 1,146.51 crore for the 100 MW HFO-based power plant at Meghnaghat (Energy and Power, 2022). The financing of the project has been raised locally.

Sponsor

The Sponsor of the Meghnaghat 100 MW HFO power plant is Orion Power Meghnaghat Limited (OPML) (Orion).


Contractors

IEL has finished setting up a 100 MW HFO-based Power plant in Meghnaghat, Dhaka, using machinery and supplies provided by Wartsila OY, Finland (Wikimedia Commons, 2022).


Fuel Supply

Orion Oil & Shipping Ltd (OOSL) is the fuel supplier of the Meghnaghat 100 MW HFO power plant. BPDP (Bangladesh Power Development Board) and the Ministry of Energy and Mineral Resource have given OOSL authorization to engage in the trading and import of HFO for the associated businesses (OOSL).


Power Generation

Total power generation from 2010-2011 to 2022-23 is 4134.51 gWh.


Environment

According to the power plant authority the power plant features an integrated ETP system that allows all discharged oily water to deposit in an oily water sludge tank. From there, the sludge accumulates in the sludge tank and clean water drains into the rain pit through an oily water separator. After that, the vendor with the license removes this muck. (OPML).


Criticism

Questions have been raised about the government's allocation of power plants with unspecified future power supplies. Concerns have emerged regarding the purchase of electricity at a high rate of Tk 16.40 per unit, compared to the average public sector tariff of Tk 4.29 per unit and the private sector tariff of Tk 8.02 per unit (FE,2022). Meghnaghat 100 MW HFO quick rental power even without capacity payments, is seen as problematic, with a significant unused capacity. The use of furnace oil has increased electricity costs by 67%, and the situation may worsen due to the high international oil market caused by the Russian invasion of Ukraine (New Age, 2022).


Capacity Charge

BPDB had to pay the sponsor BDT 1544.77 crore as a daily capacity charge till 2021-2022. The total cost of the project till FY 2022-2023 is BDT 5864.37 core. The per unit average cost is BDT 12.94.

References

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