Japan’s Energy For a New Era, a partially government-owned Japanese power company, pocketed about $200 million in capacity charge since investing less than $500 million in Bangladesh four years ago revealed a report released by Bangladesh Working Group on External debt on Saturday. The JERA currently has ownership over 783MW installed power generation capacity since it bought a 22 percent share in Summit Power and a 49 percent share of the 750MW Meghnaghat power plant owned by Reliance Power in 2019.

Like other private investors in the power sector, Bangladesh guaranteed profit on JERA’s investment with capacity charge which the power plants will continue to generate for about two more decades.

Two more liquefied natural gas-based power plants with an installed capacity of 1,301MW are expected to begin operations by this year with a capacity charge that will earn JERA $1.55 billion over their lifetime of 22 years.

‘It is clear that JERA’s target is to get profited from building unnecessary power plants in poor and developing countries in Asia, including Bangladesh,’ read a line of the report. ‘JERA’s intention has never been to ensure energy security of the citizens,’ said the report. The two new LNG-based power plants are coming into operation when Bangladesh is grappling with an acute gas crisis, prompting the government to pursue gas rationing, for about two years in some sectors. Bangladesh’s current gas demand is over 224 crore cubic feet daily. From the domestic sources and imports, Bangladesh can barely meet 48 percent of the gas demand by supplying about 109 cubic feet. The two new LNG-based power plants will further increase the gas demand by 21.39 crore cubic feet daily, said the report, suggesting that the gas crisis would worsen with the two power plants rolling into operation.

‘The price of electricity will go further up,’ said the report. The upcoming LNG-based power plants would alone earn JERA $1.55 billion in capacity charge over their lifetime of 22 years. JERA also owns a Floating Storage and Regasification Unit jointly with Summit Power at Maheshkhali, which earned the Japanese power company over $62 million in capacity charges in the four years since 2019. Over the same period, JERA made $123 million in capacity charges from its partnership with Summit Power and Reliance Power in power production.

In June, the Cabinet Committee on Economic Affairs approved the building of another FSRU, jointly by Summit Power and JERA, with the capacity to supply 60 crore cubic feet daily. The FSRU is supposed to be operational in 2026, generating $93.69 million every year in capacity charge. JERA spent $300 million in buying 22 percent share of Summit Power and $175 million in buying Reliance Power shares. JERA was established in 2015 incorporating Tokyo Electric Company and Chubu Electric Power Company. In eight years, JERA has invested in building power capacity worth 67,000MW globally.

News Link: https://www.newagebd.net/article/215608/jera-paid-200m-in-capacity-charge-since-2019