. t TRANSMISSION DISTRIBUTION T&Dkeystone-bsc.com/bdpower_keystone.pdfand the statutory Bangladesh...

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1.2 TRANSMISSION & DISTRIBUTION (T&D)

1.2.1 Introduction

In Bangladesh, electricity transmission is carried out by one sole entity - The Power Grid Company of

Bangladesh Ltd. (PGCB). Three parties are responsible for Distribution: (i) the Bangladesh Power

Development Board (BPDB): responsible for distribution of power in district towns (ii) the Rural

electrification Board (REB): responsible for distribution of power in rural areas through 70 rural

electric cooperatives (PBS) and (iii) Three Public Limited distribution companies – the Dhaka Power

Distribution Company (DPDC), the Dhaka Electric Supply Company (DESCO) responsible for power

distribution in Dhaka Metropolitan and Naryanganj, and the Western Zone Power Distribution

Company Ltd, (WZPDCL), which covers the Khulna and Barisal Divisions.

The entire sector is regulated by the Power Division, Ministry of Power, Energy & Mineral Resources

and the statutory Bangladesh Energy regulatory commission i.e. the BERC. This chapter outlines the

role of each entity in T&D.

1.2.2 Transmission Sector: Power Grid Company of Bangladesh Ltd. (PGCB)

In Bangladesh the electricity transmission system (lines, grid substations and national load dispatch

centre) is managed by the Power Grid Company of Bangladesh Ltd. (PGCB), a public limited

company. Prior to its formation, the Bangladesh Power Development Board (BPDB) managed power

generation, transmission systems, and distribution throughout Bangladesh. PGCB was established in

November, 1996 as a fully BPDB owned company under the Power Sector Reform Program of the

Government. The Government of Bangladesh decided to offload 25 percent of its shares i.e. a total

of 91,08,940 Nos. of shares (BDT 100 each) through the Stock Exchanges under the Direct Listing

system in order to bring public participation and more accountability into the company’s activities.

PGCB was listed on October 2006 at Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange

(CSE). Offloading of shares started on October 2006.

PGCB was formed under the restructuring process of the Power Sector in Bangladesh with the

objective of bringing private sector-like efficiency, including the establishment of higher

accountability and dynamism in accomplishing its goals. PGCB is mainly concerned with the

operation, maintenance and development of the power transmission system all over Bangladesh.

The expansion of the grid network, including the installation of new transmission lines and grid

substations are its assigned prime responsibility. After the formation of this company the

transmission systems were gradually handed over to PGCB from BPDB. On December 2002 PGCB

took over full responsibility of the total transmission system of Bangladesh.

PGCB receives power from BPDB and private sector power generation companies and transmits the

electricity to BPDB, REB and 3 other distribution companies. The power generated by different

power plants all over the country is evacuated and transmitted through PGCB's integrated grid

system by 230 kV and 132 kV transmission lines and substations. Currently, 400 kV transmission lines

are under construction to expand the transmission network in the country between Aminbazar and

Meghnaghat. There are two types of substations in the transmission facility. There were six 230/132

kV substations and sixty three 132/33 kV substations when PGCB took over from BPDB and the

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Dhaka Electric Supply Authority (DESA). In 1996 when PGCB was formed, the total length of 230 kV

and 132 kV lines were 838 Circuit km and 4755 Circuit km respectively which increased to 1144

Circuit km and 4962 Circuit km respectively by the 2000-2001 fiscal year.

At present there are 2647.3 Circuit km of 230 kV lines and 6015 Circuit km of 132 kV lines

throughout Bangladesh under PGCB (total 8662.3 Circuit km). From the table below it can be seen

that in 2011 amongst the two types of substations, there are thirteen 230/ 132 kV substations with

the capacity of 7225 MVA and eighty one 132/33 kV substations with the capacity of 10492 MVA.

Therefore, the total current substation capacity is 17,717 MVA. The Transmission Network is

summarized below.

Table 1.2.1: PGCB Transmission Network

Transmission Line as on June, 2011

230 kV 2647.3 Circuit km

132 kV 6015 Circuit km

Substations as on June, 2011

230/132 kV 13 Nos: 7225 MVA

132/33 kV 81 Nos: 10492 MVA

Present Manpower on 31 May , 2011 1992

Source: PGCB

The PGCB grid network throughout the country is illustrated in Figure 1.2.1 on the next page.

Additionally, the PGCB has been using an optical fiber network, that is the optical ground wire

(OPGW) parallel to its over-head transmission lines to establish a digital communication system to

improve the control and monitoring of the transmission system. This optical fiber network is also

used by the telecommunication and IT networks of the country.

1.2.2.1 National Load Despatch Center (NLDC)

The National Load Despatch Center ensures economic and efficient electricity generation and

despatch depending on real-time demand by maintaining generation-demand balance. M/S Areva

T&D, France were awarded the contract to build the necessary infrastructure, which includes

procurement and installation of equipment required for Supervisory Control and Data Acquisition

(SCADA) system, EMS, communication system, fiber optic cable, civil works for control center and

upgrading old Central Load Despatch Centre (CLDC) as back up control center. In total, 113 remote

terminal units (RTUs) (present capacity of NLDC is 128) are installed in 102 power stations and

substations to send data to the control center and to allow for remote control of substations. A total

of 2500km ground wire on existing transmission line was replaced by Optical Ground Wire (OPGW).

Another new 2000 km OPGW was installed for new projects since 2000.In total a communication

network spread over 4500 kilometers of OPGW (optical ground wire) connecting the NLDC with

power stations and substations. Communication system provides voice and data communication.

Old Power Stations and substations continue to have power line carrier (PLC) based

telecommunication in addition to new OPGW and multiplexer based communication.

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Figure 1.2.1: PGCB Area Coverage

Source: PGCB

M/S AECOM (previously Maunsell), New Zealand was the consultant to PGCB in the project.

The total expenditure incurred for constructing NLDC, including consultancy services, was USD 37.44

million. The major activities of the NLDC include:

i) Generation Economic Management

Preparation of economic order of generators

Load Forecasting

Unit Commitment

Generation planning & schedule preparation

Economic Dispatch

Optimal Hydro Dispatch

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System control by maintaining load-generation balance

Load Shedding and Restoration

Maintenance Outage Co-ordination, Schedule, Pre-generation Dispatch

Energy Accounting

Operational record keeping

Monthly operational report

Monthly interruption report

Communication Network Supervision and Transmission

ii) Network Security and Analysis

Network Topology

State Estimation

Operator Load flow

System Security Monitor

iii) Generation Control and Dispatch

Automatic Generation Control: There is a provision for Automatic Generation Control (AGC)

of generators from NLDC. However, owners of Power Stations i.e. BPDB, IPP’s etc. have not

agreed to allow NLDC to control generation directly from NLDC. Therefore, generation

control is presently done by Power Stations themselves but as per instructions of NLDC.

Though the main function of NLDC is to ensure economic electricity generation and despatch and

maintain generation-demand balance, in recent past due to deficit in generation, load balance is also

maintained by the load management of NLDC which included, among others, load shedding. Load

shedding is done following a predetermined policy approved by top management and NLDC

allocates load to different distribution agencies following this policy.

National Load Despatch centre works together with four Area Load Despatch centre situated in

Dhaka, Chittagong, Khulna and Bogra. Area Load Despatch centre mostly coordinates with

Distribution entities.

1.2.2.2 East-West Interconnection

Most of the electricity generation capacity of the country is located in the eastern region, mainly due

to the proximity to available of gas reserves. Of the total installed generation capacity, 6613 MW is

located on the eastern side of the Jamuna river and the remaining 1866 MW on the western side. An

East-West interconnector of 400 MW was introduced to transfer any surplus electricity from the

Eastern side to the Western side. A second East-West interconnector of 1000 MW capacity was also

added in 2009. Together with the old interconnector and currently a combined capacity of 1400

MW, there is no transmission constraint in transferring surplus electricity from the eastern regions

to the western regions.

1.2.2.3 Grid Connection with India

At present, the construction of a 30km 400 kV double circuit transmission line and two 500MW sub-

stations at Bheramara (back to back 400 kVHVDC) in Bangladesh and Bahrampur in West Bengal,

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India are underway. When completed it is expected that Bangladesh will import about 250MW of

power from India. There is also a plan of constructing a 13km 230kV double Circuit transmission line

between Comilla North s/s in Bangladesh & Panatona in Tripura, India. However, this has not been

finalized with India as of yet.

1.2.3 Distribution Sector

The PGCB supplies electricity to the distribution entities, which include: the Rural Electrification

Board (REB), the BPDB, the Dhaka Power Distribution Company (DPDC), the Dhaka Electricity Supply

Company (DESCO) and the West Zone Power Distribution Company (WZPDC).

The table below presents the number of distribution lines and the capacity of substations by each of

the distribution entities.

Table 1.2.2: Lines and Substation Data of 5 of the Distribution Companies

Quantities REB DPDC DESCO WZPDC BPDB Total

Line (km) 218,881 505 3,100 8,915 46,599 278,000

Substation (MVA) 3,993 1,554 1,078 2,136 2,754 11,515

Source: Keystone Databse

DPDC and DESCO distribute electricity within the nation’s capital, Dhaka, they receive 42 percent of

the electricity from the PGCB. REB provides electricity to the rural areas of Bangladesh and receives

the most i.e. 40 percent of the transmitted electricity. WZPDC covers the West Zone of Bangladesh

and receives 6 percent of electricity. BPDB receives 23 percent of electricity and also distributes

electricity to many rural areas and parts of the country that are not covered by the other companies.

The market share of electricity of the distribution companies is illustrated in the following figure.

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Figure 1.2.2: Electricity distribution by Company

Source: “Energy Sector: Challenges of Adding New Capacity” by M. Fouzul Kabir Khan

1.2.4 End-Users of Electricity

Consumers for Distribution mainly consist of Domestic (46 percent) and Industrial (39 percent) users.

Other users include the Commercial and the Agricultural segments. The following chart looks at the

breakdown of electricity used by each consumer category.

Figure 1.2.3: Number of Consumers by Consumer Category


However, the breakdown of electricity changes when looking at the number of consumers receiving

electricity. The two charts below show the number of consumers to whom electricity is distributed

to by the distribution company and the consumer segment.

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Figure 1.2.4: Energy Sales by Utilities and Consumer Category


Domestic consumers i.e. 83 percent of electricity consumers, account for 46 percent of electricity

sales; 2 percent industrial consumers purchase 39 percent of electricity; and commercial and

agricultural consumers use 12 percent and 2 percent respectively. Based on the energy sales, REB

still dominates with 40 percent of energy sales, followed by BPDB (23 percent), DPDC (20 percent),

DESCO (11 percent), and WZPDCL (6 percent) respectively.

The figures also show the rural-urban difference in electricity use. Rural customers are located

mainly in the REB and WZPDCL areas. While together, they account for 75 percent of the consumers;

their share in energy consumption is limited to 46 percent. Predominantly urban consumers of

DESCO and DPDC, 10 percent of the consumers, use 31 percent of electricity.

1.2.5 Policies, Regulations and Regulators

BERC is the authority in charge of setting price of electricity at all the levels of the power sector from

generation to end users. Accordingly, BERC is responsible for setting the retail tariffs for BPDB, REB

and the distribution companies in consultation with all the relevant stakeholders. The retail tariff

structure has been changed several times in the last five years. The following table 1.2.2 depicts the

historical changes in the retail tariff structure. In February 2011, BERC increased the average retail

electricity tariff by 5 percent to BDT 4.16. Again in December 2011, the price of per kilowatt hour

electricity rose by 13.24 percent to BDT 4.71 in the first phase of a two-stage increment, which will

again increase by 7.09 percent on February 1, 2012 taking the average per unit price to BDT 5.02.

No. of Consumer by Utilities

BPDB

16%

DPDC

6%

DESCO

4%

REB

69%

WZPDCL

5%

No. of Consumer by Consumer Category

Dom

83%

Agri

2%

Ind

2%

Others

1%

Com

12%

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Table 1.2.2: Historical Changes in the Retail Tariff in the Past 5 Years

Consumer Category

Range

BDT/Kwh (March 2007)

BDT/Kwh

(March 2010)

BDT/Kwh

(February 2011)

BDT/Kwh (December

2011)

BDT/Kwh (February 2012)

Domestic

Category-A

000-100 KWh 101-400 KWh 401 & above for all units in

KWh

2.50 3.15 5.25

2.60

3.30

5.65

2.60

3.46

5.93

2.73

3.81

6.88

2.87

4.04

7.43

Agricultural Pumping

Category - B

Flat

1.93

1.93

1.93

2.03

2.13

Small Industry

Category-C

Flat

Peak Off peak

4.02 5.62 3.20

4.35

5.95

3.50

4.56

6.24

3.67

5.27

6.75

4.41

5.67

6.90

4.86

Non- Residential Category-D

3.35

3.35

3.35

3.52

3.69

Commercial Category-E

Flat

Peak Off peak

5.30 8.20 3.80

5.58

8.45

4.05

5.85

4.25

8.87

6.80

9.31

5.23

7.33

9.66

5.88

Medium Voltage 11 KV General Category-F

Flat

Peak Off Peak

3.80 6.73 3.14

4.17

7.12

3.43

4.37

7.47

3.60

5.14

7.55

4.40

5.55

7.60

4.86

Extra High Voltage 132 KV General

Category-G-2

Flat 2300-0600 hrs 0600-1300 hrs 1300-1700 hrs 1700-2300 hrs

2.82 1.49 2.48 1.66 5.52

3.10

1.63

2.72

1.82

5.94

3.25

1.71

2.85

1.91

6.23

4.59

4.04 (Off Peak)

6.90 (Peak)

5.02

4.86 (Off Peak)

7.60 (Peak)

High Voltage

33 KV General Category-H

Flat

Peak Off Peak

3.58 6.45 3.03

3.92

6.82

3.33

4.11

7.16

3.49

4.88

7.34

4.30

5.28

7.44

4.78

Street Lights & Pump

Category-J

3.86

3.98

4.17

4.90

5.28

Source: BPDB

PGCB charges a transmission fee i.e. the wheeling charge which was decided by the GoB (BERC was

not formed at that time). From January 2003 the Government has set a transmission tariff at the rate

of BDT 0.1768/ kWh for the 132 kV level. This rate was set by taking into consideration of factors

such as: (i) Net energy transmission (ii) Administrative Cost ( Personnel to Office expenses) (iii)

Repair and Maintenance Cost (iv) depreciation (v) Interest and also allowing a 10 percent return on

net fixed assets and a 3.5 percent allowance for transmission loss.

Initially, PDB and DESA were the only consumers using power at 132 kV level. From January 2004 the

Government has issued a new directive by which distribution companies and Palli Biddyut Samity

(PBS) have started taking transmitted power at the 33 kV level for which a 1 percent additional tariff

was allowed to account for 132/ 33 transformer losses.

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In April, 2004, the transmission tariff was increased by BDT 0.05/ kWh and the tariff has become BDT

0.2268 at the 132 KV level and BDT 0.2291 at the 33 KV level.

In addition to this wheeling charge, the distribution entities have to pay to BPDB according to the

bulk tariff fixed by BERC. The historical change in this bulk tariff in the last five years is shown in the

Table 1.2.3. In February 2011, bulk tariff was increased by 11 percent, which was again increased by

6.66 percent to BDT 2.80/ kWh in August 2011. Recently, BPDB has again increased the average bulk

tariff to BDT 3.27/kWh (4.3 cents). The bulk tariff will rise a further 14.37 percent to BDT 3.74/kWh

from February 1, 2012.

Table 1.2.3: Historical Changes in the Bulk Tariff in the Past 5 Years

Consumer Category

Range

BDT/kWh

(March 2007)

BDT/kWh

(February 2011)

BDT/kWh

(August 2011)

Category-G-1

DPDC -132KV -33KV

2.7575 2.7825

2.9410 2.9680

Category-I-1

REB 1)132KV 2)33KV -Economically insolvent -Economically solvent

2.34 2.05 2.39

2.7575 2.4745 2.7825

2.9410 2.6395 2.9680

Category-I-2

DESCO -132KV -33KV

2.34 2.39

2.7575 2.7825

2.9410 2.9680

Category-I-3

WZPDCL -132KV -33KV

2.34 2.39

2.7575 2.6415

2.9410 2.8175

Category-I-4

Distribution Of BPDB -132KV -33KV

2.34 2.39

2.7575 2.6710

2.9410 2.8490

Category-I-6

Distribution Company in Future -132KV -33KV

2.34 2.39

2.7575 2.6710

2.9410 2.8490

Source: BPDB

BERC is also the authority for setting and monitoring the quality and safety standards of all practices

involved in the construction, commissioning and operations of power plants. In short, its goals

include promoting investment in the energy and power sector by creating a level playing field,

ensuring a reasonable return on investment, rationalizing the cost structure and helping mediate

dispute settlements.

The Power Division oversees administrative activities including appointments of the PGCB Board of

Directors and the top management. The Power Division also reviews and approves development

projects. All purchases made by PGCB are guided by Public Procurement (PPR) Act of 2006 and the

2008 amendments. In the case of foreign aid projects, donor guidelines are followed.

The Power Division also oversees administrative activities including appointments of top

management of BPDB, REB, and Board of Directors and top management of the power distribution

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companies. The Power Division also reviews and approves development projects. All purchases

made by distribution entities are also guided by PPR Act 2008. In the case of foreign aid projects,

donor procurement guidelines are followed.

1.2.6 Equipment Suppliers in T&D

The main components for the transmission network include: Transformers, Transmission lines and

Switchgears. At present two voltage levels, 230 KV and 132 KV are used in Bangladesh’s transmission

network. Thus the transformers used are of 230/132 KV and 132/33 KV voltage ratings. Transformers

are mainly procured on a turnkey basis depending on the necessity of building a new substation or

upgrading existing substation projects. The procurement of transformers might also occur separately

if they are required urgently for substations in operation.

All procurements are done through International Competitive Bidding (ICB) following the PPR Act of

2008. PGCB has specific guidelines for selecting turnkey contractors that they put in the tender

documents detailing the technical conditions, general experience and specific experience required of

the contractor. It has been observed in the past that the prices of equipments or transformers from

USA/European factories are higher than those from Indian/Chinese factories. This discourages the

USA/European turnkey contractors to participate in the international bidding alongside with

Indian/Chinese contractors.

A French company, M/S Areva constructed the National Load Drspatch Centre (NLDC) of Bangladesh.

All the software for EMS were also supplied by Avera. In the case of digital energy meters EDM,

Sweden, Landys Gear, Germany and CWE, USA are the major suppliers for the PGCB.

The distribution network uses very similar equipment to the transmission sector, but of lower

voltage ranges and capacities. The transformers are of 33/11 KV and 11/.4 KV. For the last five to six

years, the key suppliers/ bidders of transformers were CCC, China; GIETC, China; Heavy Electric,

India; CGL, India etc. Some parts of the transformers such as the OLTC (On load tap charger) and

protection devices are procured from European and US companies including MR, Germany, Alstom

UK, ABB Switzerland, SEL USA etc. Key meter suppliers in the distribution sector are Secure Meters,

India, L&T, India, EDMI, Singapore, Landys Gear, Singapore, Shanghai Meter, China, Fae, Brazil and

Dengly, China. The methods of purchasing these equipment include open tendering, limited

tendering, two-stage tendering, single stage two envelope tendering, request for quotations, direct

procurement and request for proposals.

Additional details of equipment supply in the T&D sector are provided in the in-depth analysis.

1.2.7 Future Investment & Opportunities

PGCB has prepared an outline of at least 15 projects that are to be completed by 2017 to upgrade

and expand the transmission network throughout the country. Eight of the projects are scheduled to

be finished by 2012-13. These include both construction of new transmission lines and new

substations in different areas to reduce the shortage of electricity supply. There will also be

construction of grid interconnection with India’s Tripura to purchase electricity for the eastern

region of Bangladesh. There are combinations of short-term and long-term projects that will

construct new substations and new transmission lines all over Bangladesh.

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At present the distribution entities have a total distribution line of 278,000 KM serving over 12

million customers. This sector suffers a system loss of 12.75 percent. To reduce the system loss and

to expand and improve the distribution network BPDB, REB, DPDC, DESCO and WZPDC have

currently several ongoing projects. By 2013-14 BPDB will construct new distribution lines and new

substations in all divisions of Bangladesh. REB has the target to connect at least one million new

customers by 2012-13. DPDC has 14 planned projects which will increase substation capacity, build

new substations, ensure quality power supply, rectify system loss, and provide better service to a

wide range of customers. In the meantime DESCO will work to connect at least 600,000 new

customers in Dhaka and they will also install new prepaid meters all over Dhaka.

Additional details of future expansion plans in the T&D sector are provided in the in-depth analysis.

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CHAPTER 7: TRANSMISSION AND DISTRIBUTION

The Power Division under the MPEMR manages the electricity sector. The power generated by the

BPDB and its generation subsidiaries, the IPPs, is supplied through the PGCB’s power transmission

facilities to the distribution utilities. In the capital city of Dhaka, DPDC and DESCO are responsible for

the electricity supply to retail consumers. In other urban cities, the BPDB, the WZPDCL, and in rural

areas the REB supply electricity to retail consumers.

7.1 Background and Recent Trends

7.1.1 Transmission sector

In the early 1960s the first high voltage double circuit transmission line (132 kV) was built from

Kaptai to Shidhirgonj (near Dhaka). There were substations (132/32 kV) at Chittagong, Feni and

Comilla. This transmission line facilitated the transfer of power from the newly built Kaptai Hydro

Station (80 MW) (commissioned in 1962) to Chittagong, Feni, Comilla and Shidhirgonj. Another 132

kV transmission line was also built from Shidhirgonj to Ullon, Dhaka. With the help of this

transmission line and several other 33 kV lines, power was supplied from Shidhirgonj to the Dhaka

area (in addition to the power received from Kaptai, power was also generated at the Shidhirgonj 30

MW power station). These transmission lines were followed by the Sylhet- Shahjibazar- Ashugonj-

Ghorashal- Shidhirgonj transmission lines, which connected the newly built Shahjibazar Power

Station (1968), the Ashugonj Power Station (1970) and the Ghorashal Power Station (1974). The

liberation war (1971) delayed the commissioning of the Ghorashal power station. At that time the

Goalpara- Bheramar-Ishordi 132 kV transmission line was built; however it was gradually extended

up to Thakurgaon. This line connected the Goalpara and Bheramara power stations to the load

center on the western side of the Jamuna river. Following 1971 newly built power stations and a

number of different load centers were connected to the Eastern Grid (on the Eastern side of Jamuna

River) and the Western Grid (on the Western side of Jamuna River) by new T/Ls.

In 1981 the first 230 kV transmission line from Ghorashal to Ishurdi inter-connecting the eastern and

the western grid was commissioned. This line was initially energized at 132 kV. During the 1980s

high capacity generation units were added to the Ghorashal and Ashugonj Power Stations. To

transmit power from these power stations, new 230 kV transmission lines were built between

Ghorashal – Ashuganj and Ghorashal- Tongi. At the same time the first east west interconnector was

energized at 230 kV.

In the nineties, a 230 kV transmission line from Raujan to Hatazari was commissioned to transmit

power from the Raujan Power Station. In 2000, the Hatazari to Comilla North T/L was commissioned.

The Ashuganj- Comilla and the Ghorashal- Haripur 230 kV transmission lines were commissioned few

years earlier. These T/L constituted the backbone of the 230 kV lines of the eastern grid.

After PGCB was formed in 1996, it started construction of a 230 kV backbone line for the western

grid (Khulna- Ishurdi- Bharabari- Shirajganj- Barapukuria). New 230/132 kV substations were

constructed at Aminbazar and Rampura to feed bulk power to the Dhaka area. The Meghnaghat-

Haripur- Amin Bazar and the Amin Bazar- Tongi 230 kV T/Ls were constructed to transmit power

from IPP power stations at Haripur & Meghnaghat and also to feed the Amin Bazar 230/132 kV

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substation. Between 2002 and 2005 all the above mentioned T/Ls and Substations were

commissioned.

In 2008, a second east-west inter connector was commissioned connecting the Ashuganj Substation

and the Shirajganj switching station. From this period till today many other 132 kV lines and

substations were commissioned to feed more load centers, while at some other substations

capacities were increased.

As the acquisition of land is becoming difficult, particularly in city areas, the PGCB has started the

construction of Gas Insulated Substations (GIS) with the extension of the Jaydebpur 132/33 kV

substation using GIS units (2006) and commissioning the Gulshan (132/33 kV) GIS substation (2006).

Another GIS was built in Gallamari, Khulna. There are also 230/132 kV GIS substations in the old

airport area (Agargaon, Dhaka) along with three other 132/33 kV GISs in the Dhaka area.

With the increase of load demands as well as power generation capacities, the PGCB has now

started the construction of 400 kV transmission lines. The first 400 kV double circuit T/L between

Aminbazar and Meghnaghat is expected to be commissioned (initially at 230 kV) in 2012-2013.

Another 400 kV transmission line from Bibiayanabazar to Kaliyakar, with 400/230/132 kV substations

at Kaliyakar is planned to facilitate transmission of power from the under construction IPP power

stations at Bibiyana bazar which are expected to be commissioned during the later parts of 2012-13.

Table 7A.1 of Appendix 7A shows the details of the ongoing projects in the transmission sector being

implemented by the PGCB which are expected to be completed within next two years. The

objective/ benefit of these projects as well as number of sub-stations with the number and capacity

of Transformers for each substation are also shown in the table.

7.1.2 Distribution Sector

Though the Power Grid Company of Bangladesh Ltd. (PGCB) is the sole electricity transmission entity

in the country, there are five entities that actually distribute this electricity. They include: (i) the

Bangladesh Power Development Board (BPDB), distribution of power in district towns; (ii) the Rural

electrification Board (REB) responsible for distribution of power in rural areas through 70 rural

electric cooperatives (PBS); (iii) the Dhaka Electric Supply Company (DESCO), responsible for power

distribution in North Dhaka Metropolitan area; (iv) Dhaka Power Distribution Company (DPDC),

responsible for South Dhaka Metropolitan area and Narayanganj; and (v) the Western Zone Power

Distribution Company Ltd, (WZPDCL), which covers the Khulna Division, the Barisal Division and the

greater Faridpur District.

With the addition of additional power generation and transmission facilities all the distribution

utilities have already started various projects for power transmission to their customers. BPDB has

undertaken the ‘Town Power Distribution Project’ in Rajshahi, Pabna, Sirajgonj, Bogra, Joypurhat,

Gaibanda, Nilphamary, Dinajpur, Thakurgaon and Rungpur districts during the 2003-04 period. BPDB

has reported a 87.05 percent completion rate of these projects as of February 2011.

In addition, BPDB has undertaken two power distribution system projects for the ‘Emergency

Rehabilitation & Expansion of Urban Areas’ in its Chittagong and Northern Zones in July 2008. BPDB

has completed 46.18 percent and 35.73 percent of these projects respectively as of February 2011.

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A list of BPDB’s ongoing projects along with their implementation time and present status is given

below:

Table 7.1: BPDB Ongoing Distribution Projects

Sl.

No

Name of the Project Implementation Time Present Status

01. 10-Town Power Distribution Project (2nd Revised)

(Rajshahi, Pabna, Sirajgonj, Bogra, Joypurhat, Gaibanda,

Nilphamary, Dinajpur, Thakurgaon, Rungpur)

Original: 2003-04 To 2007-08 Revised: 2003-04 To 2009-10

87.05 percent up to

February 2011

02. Emergency Rehabilitation & Expansion of Urban Areas

power Distribution system under Chittagong Zone

(2nd Revised)

01-07-2008 To

30-06-2011

46.18 percent up

to February 2011

03. Emergency Rehabilitation & Expansion of Urban Areas

power Distribution system under Northern Zone (2nd

Revised)

09-07-2008 To

30-06-2011

35.73 percent up

to February 2011

04. Central Zone Power Distribution Project Mymenshingh 01-12-2009 To

31-06-2013

11.00 percent up

to February 2011

05. Renovation & Augmentation of Distribution Lines &

11/0.4 KV S/S under Sixth Zone of BPDB

01-07-2010 To

31-12-2011

21.00 percent up

to February 2011

06. Pre-payment Metering Project for Distribution Southern

Zone Chittagong (Phase-1)

01-01-2009 To

31-12-2010

0.42 percent up to

February 2011

07. Greater Chittagong Power Distribution Project, SCADA

Rehabilitation

01-01-2009 To

31-12-2011

33.00 percent up

to February 2011

Source: BPDB

There are also five ongoing distribution projects under REB, which has the total estimated cost of

357.11 million USD. The detailed list is given in the following table.

Table 7.2: REB ongoing distribution projects

Sl.

No.

Name of the Project Estimated Cost (in MUSD)

1 28 Nos. 132/33 KV Grid S/S 86.69

2 419 KM 132/33 KV X-mission Line 32.58

3 28 Nos. 132/33 KV Poer X-former (Augmentation) 42.97

4 33 KV line with required equipment(6666) 178.37

227

Sl.

No.

Name of the Project Estimated Cost (in MUSD)

5 38-Set 33KV River crossing 16.5

Total 357.11

Source: REB

DESCO has also started several projects for upgrading and expanding their distribution systems by

strengthening DESCO’s Electric Distribution Network. These projects are expected to cost

approximately USD 171 million.

DESCO’s Upgrading & Expanding Distribution System project in the Gulshan Circle area mainly

includes constructions of 33/11 KV (GIS) substations, installation of 33 KV UG Cables as source lines

for new Substations and the installation of HT/LT Composite Distribution lines. This project is

funded by the GoB, ADB and DESCO itself. The estimated cost of this project is USD 80 million with

an expected implementation in June 2012.

DESCO has also undertaken its own ‘Electric Distribution Network Strengthening’ project that mainly

includes the construction of 33/11 KV (GIS) substations, installation of 33 KV UG Cable as source

lines for new Substations and the installation of HT/LT Composite Distribution lines. The project was

funded by the GoB, ADB and DESCO itself. The estimated cost of this project is USD 66 million with

an expected implementation in June 2013.

The construction, augmentation and rehabilitation of eight 33/11 KV (GIS) Sub-stations of DESCO is

an own-financed project of DESCO. It includes: Construction of 33/11 KV (GIS) Substations in

Agargoan, Banani, Niketon, Purbachal and Mirpur-6 and the rehabilitation & reinforcement of the

33/11 KV (GIS) Substations at the Digun, Joarshahara and Tongi areas. The estimated cost of this

project is USD 24 million with an expected implementation in June 2013.

The Construction of a Central Warehouse building project of DESCO at Mirpur is estimated at cost of

total USD 1.2million and this project has an expected implementation in December 2012. The

following table summarizes DESCO’s ongoing projects:

Table 7.3: DESCO Ongoing Projects

Sl.

No.

Name of the

Project

Procurement of the project Implementati

on Period

Estimated

Cost (in

million BDT)

1 Upgrading &

Expanding

Distribution

System in

Gulshan Circle

i) Construction of 33/11 KV (GIS) Substations.

ii) Installation of 33 KV UG Cable as source line for new

Substation

iii) Installation of HT/LT Composite Distribution line

iv) Installation of 11 KV UG Cable

June 2012 5949.00

Fund :

DESCO, GOB

& ADB

228

Sl.

No.

Name of the

Project

Procurement of the project Implementati

on Period

Estimated

Cost (in

million BDT)

v) 11/.4 KV 200 KVA X-former

vi) 11/.4KV 25 KVA X-former

2 Strengthening

DESCO’s Electric

Distribution

Network

i) Construction 33/11 KV (GIS) Substations.

ii) Installation of 33 KV UG Cable as source line for new

substation

iii) Installation of HT/LT Composite Distribution line

iv) Installation of11 KV UG Cable

v) 11/.4 KV 200 KVA X-former

vi) 11/.4KV 25 KVA X-former

June 2012 4859.20

Fund :

DESCO, GOB

& ADB

3 Construction,

augmentation

and

rehabilitation of

08 Nos 33/11 KV

(GIS) Sub-station

i) Construction of 33/11 KV (GIS) Substation at Agargoan,

Banani, Niketon, Purbachal and Mirpur-6

ii) Rehabilitation & Reinforcement of 33/11 KV (GIS)

Substation at Digun, Joarshahara and Tongi

June 2013 1770.00

DESCO Own

fund

Total 12578.2

Source: DESCO

DPDC’s five ongoing projects include: the reinforcement, renovation and augmentation of 33/11 kV

sub-stations project financed by ADB, development of new 132/33 kV and 33/11 kV sub-stations

project financed by ADB and KFW, procurement and installation of 132/33 kV 50/75 MVA

transformers financed by ADB, the upgrade of the Shyampur BSCIC 11 kV switching station financed

by ADB and the rehabilitation and augmentation of the distribution network of the DPDC financed by

the GoB. These projects are expected to cost approximately USD 56 million. The detailed statuses of

these projects are shown below:

Table 7.4: DPDC Ongoing Projects

Sl.

No.

Name of the Project Procurement of the

project

Implementation

Period

Estimated Cost (in

MBDT)

Comments

1 Reinforcement,

Renovation and

Augmentation of

Replacing of 19 nos. of

old 10/14 MVA X-mers

by 20/28 MVA X-mers

01/07/2006-

30/06/2011

1335.0576

(PA USD

12.811M)

210 MW capacity

increase in 33 KV

level

229

33/11 kV Sub-station

(ADB financed)

(GOB 438.2846)

2 Development of New

132/33 kV and 33/11

kV Sub-station

(ADB & KfW

financed)

Construction of 2 nos.

2X50/75 MVA ,

Construction of 5 nos.

2X20/28 MVA

01/07/2006-

30/06/2012

4246.155

(PA USD 36.773M)

(GOB 1772.02)

224 MW & 240 MW

capacity increase in

33 KV & 132 KV

level respectively

3 Procurement and

Installation of 132/33

kV, 50/75 MVA

Transformer Project

(ADB financed)

3 nos. 132/33 kV 50/75

MVA X-former.

01/09/2006-

30/06/2011

544.156

(PA USD 4.943 M)

(GOB 198.095)

180 MW capacity

increase in 132 KV

level

4 Up-gradation of

Shyampur BSCIC 11

kV Switching Station

to a regular 33/11 kV

Sub-station Project

(ADB financed)

2X20/28 MVA

Transformer

01/07/2006-

30/06/2011

184.809

(PA 1.787 M)

(GOB 59.699)

45 MW capacity

increase in 33 KV

level

5 Rehabilitation and

Augmentation of

Distribution Network

of DPDC

(GOB financed)

29 km 11kV line, 38 km

11.4 kV line & 73 km 0.4

kV line

01/01/2010-

30/06/2012

1690.712

(PA 0)

(GOB 1690.712)

Improve

Distribution

network. Ensure

Reliable Power

Supply

Total PA USD 56.314

Source: DPDC

In order to reduce system loss and increase consumer satisfaction through more accountability

measures, the WZPDCL was established and incorporated as a public limited Company on the

4th November, 2002 under the Companies Act 1994. It started operating from April, 2005 when it

signed Vendor Agreements (VA) & Power Sale Agreements (PSA) with BPDB.

The WZPDC has undertaken several projects which will cost approximately USD 76 million. Among

these projects, the Power Distribution Projects in the 21 districts will cost approximately USD 63

million and will be financed by the GoB and the WZPDCL. Another large project: a prepaid e-

metering System includes a total of 105,000 1-Phase and 10,000 3-Phase meters installations. This

project is expected to cost approximately USD 12 million. The detailed statuses of the ongoing

projects under the WZPDC are given in the following table.

230

Table 7.5: WZPDC Ongoing Projects

Sl.

No.

Name of the Project Procurement of the project Implementati

on Period

Estimated Cost

(in MBDT)

1 21 Districts Power

Distribution Project,

Financed by GOB &

WZPDCL

For 10 Nos. 33/11KV S/S 20 Nos. 5

MVA X-former,14 Nos 10/13.33MVA

X-former,63 KM 33 kV New line &

148Km Rennovation line,1210 Km LT

New & 1250 Km

Rennovation,1100Nos. 3-Phase

Distribution X-former

01/01/2011-

31/12/2013

4691.8

2 Prepaid e-metering

System

105000 Nos.1-Phase Meter,

10,000 Nos.3-Phase Meter

01/01/2011-

30/06/2014

885.5

3 Solar Energy

20 KW SOLAR PANEL AT WZPDC

OFFICE & SUB-STATION

2011-2014 10

4 SCADA SYSTEM

10 Nos Scada for 33/11 kV Sub Station

under WZPDCL

2012-2014 10.8

5 VIDEO CONFERENCING

SYSTEM

Installation of Video Conferencing

System

2012-2014 2

Total 5598.1

Source: WZPDC

7.1.3 Level of compensation in T&D

Transmission lines in Bangladesh are not long and series compensation has so far not been used.

Shunt compensation of 450 MVAR at the 132 KV level and 770 MVAR at the 33 KV level have so far

been installed at different grid substations. Another 500 MVAR at different grid substations are also

being installed. Installation of further shunt compensation units in next 3/4 years is not planned. A

list of Capacitor Banks already in operation at different grid circle is shown below in the Table 7.6.

Table 7.6: Grid Circle wise Capacitor Bank Information

Sl No. Circle Name At 33KV At 132KV

Capacity

(MVAR)

No Of

Units

Capacity

(MVAR)

No Of Units

01 Chittagong 220 44 45 1

02 Comilla 20 4 - -

231

Sl No. Circle Name At 33KV At 132KV

Capacity

(MVAR)

No Of

Units

Capacity

(MVAR)

No Of Units

03 Dhaka 185 39 180 2

04 Khulna 80 16 180 4

05 Bogra 265 53 45 1

Total 770 156 450 8

Source: PGCB

In the distribution sector only DESCO (60 MVAR) uses shunt compensation at their substations and

lines. Previously BPDB installed 170 MVAR shunt capacitors which are not presently operative. There

is no level of compensation in use in the other distribution companies’ substations. But at consumer

level the customer has to install shunt capacitors to improve its power factor according to the load.

The customer has to maintain a power factor of 0.9521 to get exemption from a penal tariff.

7.1.4 Technical and commercial losses in T&D

Energy losses occur in the process of supplying electricity to consumers due to technical and

commercial losses. The technical losses are due to energy dissipated in the conductors and

equipment used for transmission, transformation, sub- transmission and distribution of power.

These technical losses are inherent in a system and can be reduced to an optimum level. The

commercial losses are caused by pilferage, defective meters, and errors in meter reading and in

estimating unmetered supplies of energy.

Reasons for high technical losses

The following are the major reasons for high technical losses in our country: -

Inadequate investment in transmission and distribution, particularly in the sub-transmission and distribution sectors. Low investment has resulted in an overloading of the distribution system without commensurate strengthening and augmentation.

Haphazard growth of sub-transmission and distribution systems with the short-term objective of extension of the power supply to new areas.

Large scale rural electrification through long 11kV and LT lines.

Too many stages of transformations.

Improper load management.

Inadequate reactive compensation

Poor quality of equipment used in agricultural pumping units in rural areas, cooler air-conditioners and industrial loads in urban areas.

Reasons for commercial losses

Theft and pilferage account for a substantial part of the high distribution losses in Bangladesh. Theft

/ pilferage of energy is mainly committed by two categories of consumers i.e. non-consumers and

bonafide consumers. Antisocial elements avail unauthorized/unrecorded supplies by hooking or

232

tapping the bare conductors of L.T. feeder or tampered service wires. Some of the bonafide

consumers willfully commit pilferage by way of damaging and / or creating disturbances in

measuring equipment installed at their premises. Some of the modes for illegal abstraction or

consumption of electricity are given below:

Making unauthorized extensions of loads

Tampering the meter readings by mechanical jerks, placement of powerful magnets or disturbing the disc rotation with foreign matter.

Stopping the meters by remote control.

Willful burning of meters. Changing the sequence of terminal wiring.

Bypassing the meter.

Changing the C.T. ratio and reducing the recording.

Errors in meter reading and recording.

Improper testing and calibration of meters.

7.1.4.1 Losses in transmission sector

Transmission loss consists of only technical loss as there is no scope malpractice. Over the years the

transmission loss has come down from 3.44 percent in 2005-06 to 2.66 percent in 2010-11 with the

construction of more 230 kV transmission lines, the installation of more capacitor banks for shunt

compensation, replacing old transformers with higher capacity transformers and also with the

construction of new 132 kV lines. Metering systems have also greatly been improved by replacing

old meters with three phase four wire programmable digital meters which have also negated or

reduced the scope of malpractice. The meter readings for the energy transmitted are taken by

committees consisting of engineers from PDB, concerned Power Station personal and the PGCB.

Similarly energy received by the distribution companies is taken by committees consisting of

representatives of PDB, PGCB and concerned distribution agencies, which further safeguards

reduces the issue of malpractice.

The following table summarizes the transmission loss for the last five years.

Table 7.7: Technical Losses in Transmission Sector

Year Transmission loss (percent)

2010-2011 2.66

2009-2010 3.07

2008-2009 3.23

2007-2008 3.55

2006-2007 3.15

2005-2006 3.44

Source: PGCB

233

7.1.4.2 Losses in distribution sector

In the distribution sector the loss has also come down to less than 50 percent in the last ten years.

This is because of the planned expansion of the distribution lines, the introduction of efficient

metering system (prepaid meters, digital meters, AMI meters etc.) and improved billing and

collection efficiency.

The following table summarizes the distribution loss in the last 12 years.

Table 7.8: Losses in Distribution Sector

Fiscal Years System loss ( percent)

1999-2000 26.09

2000-2001 25.34

2001-2002 23.92

2002-2003 21.64

2003-2004 20.04

2004-2005 17.83

2005-2006 16.53

2006-2007 17.14

2007-2008 15.56

2008-2009 14.33

2009-2010 13.49

2010-2011 12.75

Source: Power Cell

The authorities want to reduce system loss by installing new digital meters, AMI meters and prepaid

meters. At the 33 KV level, the target is to reduce loss from 12.10 percent to 9.50 percent within the

next 5 years. In case of T&D, the target is to reduce system loss from 14.40 percent to 11.70 percent

gradually by the 2015-16 financial year. The following table summarizes the expected system loss in

the Transmission and Distribution sector.

Table 7.9: Target Loss in T&D Sector

Fiscal Years System loss (percent)

at 33 kV level

Transmission System

loss (PGCB)

Total T&D Loss

2011-2012 12.10 2.65 14.40

2012-2013 11.45 2.60 13.70

2013-2014 10.80 2.55 13.10

2014-2015 10.20 2.50 12.40

2015-2016 9.50 2.40 11.70

Source: Power Cell

234

7.1.4.3 Value of aggregated technical and commercial loss and the issue of theft

High technical losses (9percent) in the system are primarily due to inadequate investments over the

years for system improvement works, which have resulted in unplanned extensions of the

distribution lines, overloading of the system elements like the transformers and conductors, and a

lack of adequate reactive power support.

The commercial losses (currently 3.5percent) are mainly due to inefficient meter reading and billing

systems, theft & pilferages. This may be eliminated by improving metering efficiency, proper energy

accounting & auditing and improved billing & collection efficiency. Improving the accountability of

the personnel / feeder in-charges may help considerably in the reduction of aggregated technical

and commercial losses.

The following table summarizes the amount of technical and commercial losses in the past five

years.

Table 7.10: Historical Loss in the Distribution Sector

Organization Technical Loss Commercial Loss Total Loss

DESCO 8.86 0.00 8.86

DPDC 9.00 8.50 17.50

REB 9.00 5.40 14.40

BPDB 9.00 12.20 21.20

WZPDCO 9.00 2.50 11.50

Source: Power Cell

7.2 Policy, Regulation and Regulators

7.2.1 Regulatory product compliance

Products used must comply with relevant IEC standard or any other standard as mentioned in bid

document. Power Grid Company of Bangladesh (PGCB) is the only organization/utility/company

engaged in transmission sector requires license from Bangladesh Energy Regulatory Commission

(BERC). Also while undertaking new projects clearance certificate from Department of Environment

must be obtained. But license from Explosive authority/similar organization is not necessary.

Frequency allocation for wireless communication is to be obtained from Bangladesh

Telecommunication Regulatory Commission (BTRC).

Any imported T&D products that are sold in the local market must be certified by the Bangladesh

Standard Testing Institute (BSTI) under the Ministry of Industry. But in case of products that are

procured by the bidding procedures in the distribution sector BSTI certification is not needed.

Though there is no specific standard is mentioned in the bidding documents the products are always

checked to see whether they have any environmental and health hazards.

All the distribution entities follow International Electro technical Commission (IEC) and Institute of

Electrical and Electronic Engineering (IEEE) standards; moreover the REB also follows the American

235

National Standard Institute (ANSI) guidelines for purchasing all sorts of electrical equipment. All

distribution entities also look for ISO certified manufacturers.

7.2.2 Predominant maintenance philosophy

Preventive maintenance is the predominant maintenance philosophy in the transmission and

distribution sector of Bangladesh. The preventive maintenance schedule is drafted on the basis of

the manufacturer’s instruction manual and working experience. Condition monitoring is also in

practice which is based on operational data, periodical inspection, tests etc. However, breakdown

maintenance cannot be avoided altogether.

But due to a shortage of distribution substation capacity, it is very difficult to conduct scheduled

maintenance. Consequently, industries have adopted the break-fix maintenance philosophy. If the

substation has an excess capacity then the authorities opt for preventive maintenance.

7.2.3 Adoption rate for communication protocols

HART/FF/FDT protocols are not yet in use in transmission sector of Bangladesh. In every

Measurement Instrument the distribution entities use the communication protocols RS 285 and RS

485.

7.3 Nature of the Market

7.3.1 Market size of T&D sector

The transmission network in Bangladesh transmits power generated by Power Stations to the

distribution network. Total installed generation capacity connected to grid system at present is 8,033

MW (derated capacity 7,413 MW (BPDB Website 31st December, 2011)). However, the maximum

power generated is 5,244 MW (as of August 2011). This is excluding the captive generation by

industries which is estimated to be about 1,500 MW (installed capacity). Per capita consumption of

electricity is about 220 kWh per annum (with captive generation taking into account). It is estimated

that 50 percent of population is getting the facility of electricity. There will be an additional

generation capacity of 11606 MW by 2015 against the forecasted demand of 10283 MW (Power

system master plan 2010).

The existing Transmission network consists of following Transmission lines & Substations

1. Transmission line:-

A) 400 kV Transmission line length: 0 ckt.km B) 230 kV Transmission line length: 2,647.3 ckt.km

C) 132 kV Transmission line length: 6,015 ckt.km

2. Sub-station :-

A) 400/230 kV Substation Capacity: 0 B) 230/132 kV Substation Capacity: 7,225 MVA C) 132/33 kV Substation Capacity: 10,492 MVA

236

As per present planning Transmission network in 2015 will be as follows.

1. Transmission line:-

A) 400 kV Transmission line length: 1,400 ckt.km B) 230 kV Transmission line length: 3,018.3 ckt.km C) 132 kV Transmission line length: 6,445 ckt.km

2. Sub-station :-

A) 400/230 kV Substation Capacity: 5,360 MVA B) 230/132 kV Substation Capacity: 12,525 MVA C) 132/33 kV Substation Capacity: 12,457 MVA

In addition to power generated by the BPDB, it is also the single buyer of power generated by all

IPPs. Small IPPs, Rental P.S and Quick Rental P.S. sells to BPDB and the PGCB transmits power to the

distribution entities. PGCB also transmits power to distribution divisions of BPDB (who sell power

directly to consumers in places not covered by the distribution companies).

At present 50 percent of the population is covered by the national grid and there is a plan for full

coverage by 2021. Presently the transmission lines are (230 kV and 132 kV) 8,662 km long and

distribution lines (up to 33 kV) are 278,000 km long. The expected load addition up to 2021 is

approximately 20,000MW. As such, three times more distribution lines are required to distribute

20,000 MW i.e. 556,000 km extra distribution lines are needed by 2021. The supply plan of the

distribution entities are given in the distribution expansion plan table.

7.3.2 Market analysis of T&D products

7.3.2.1 Transformers for transmission (230/ 132 kV and 132/33 kV)

At present two voltage levels 230 kV and 132 kV, are in use in the Bangladesh transmission network.

Therefore, the transformers used are of 230/132 kV and 132/33 kV voltage ratings.

Transformers used in the system are of following capacity:

Table 7.11: Different Types of Transformer in the Transmission Sector

A. 230/132 kv B. 132/33 kv

3 phase 150 MVA

Single phase 75 MVA i.e. 3x75MVA

80/120MVA; 66/100MVA; 50/75MVA;

48/64MVA; 35/50MVA; 25/41MVA; 25/33MVA;

15/20 MVA

Source: Keystone Research

The capacities of the transformers of a new sub-station are determined on the basis of forecasted

demand of electricity for the next 5 years of the area to be served by that substation. When

transformers of an existing substation are fully loaded, it is replaced by transformers of a higher

capacity. Transformers thus relieved are shifted to another sub-station where lower capacity

transformers are already overloaded or almost fully loaded.

237

Transformers are procured against new sub-station projects or via the upgrade of old sub-station

projects. These projects are done on a turnkey basis. Sometime transformers are also procured

separately if urgently needed for sub-stations which are in operation.

All procurements are done through International competitive bidding (ICB) following the Public

Procurement Act 2006 (with its amendments). In case of the foreign aid projects, donors’ guidelines

are also followed.

PGCB selects Turnkey contractors through International competitive bidding (ICB) for project work

/large supply and generally follows some technical and nontechnical conditions, which are included

in the tender document. A Turnkey contractor/ Bidder must fulfill the following conditions:

General experience: Bidder should have construction project management experience of at least 1(one) turnkey project (contract amount should be similar to present contract) outside their own country within the last 10 (ten) years as of the date of opening of technical proposals. The experience should be supported by user’s certificates indicating their address, telephone & fax numbers and detail of projects.

Specific experience: Bidder must have the experience of the successful completion of at least 2 (two) similar or higher capacity projects including engineering, erection, testing and commissioning within the last 10 years as of the date of opening of technical proposals. The experience should be supported by user’s certificates in their letter head indicating address, telephone & fax numbers of the users and detail of projects.

Bidder must furnish copies of ISO 9001/1992 or equivalent certificates of proposed manufacturers of individual equipment.

Bidder must provide a supply record of at least 10 (ten) years of equipment of the proposed manufacturers.

The said equipment should in satisfactory service of similar or higher specification for a minimum of 3 years as of the date of bid opening. At least one evidence report from end users of satisfactory service should be mentioned as above. Evidence of satisfactory service shall be in the end user’s respective letter head stationary indicating address, telephone & fax numbers of the users.

The bidder should submit satisfactory type test certificates of all equipments except transformer’s from independent testing laboratory.

Typed test certificates or reports of Power Transformer shall be from independent testing laboratory or manufacturer’s own testing laboratory. Test carried at manufacturer’s own testing laboratory must have been witnessed by any one or more of the following persons:

• A representative from independent testing authority/laboratory • A representative from independent inspection agency • An employer’s representative

The bidder should provide(in case bidder himself is not manufacture of equipment) manufacturer’s authorization showing the bidder has been duly authorized by the manufacturer or producer of related plant and equipment or component to supply & install that item in employer’s country.

Only Tape changers manufactured by MR, Germany or ABB Sweden are accepted and it is specified

in tender document.

The prices of some of the HV Power Transformer purchased by PGCB against different

projects/supply through International Competitive Bidding (ICB) are given in the following table.

238

Table 7.12: Recent Purchase of HV Power Transformer

Name of

Project

Name of

Turnkey

contractor

Date of

contract

Name of

Manufacturer

Voltage

rating &

capacity

Unit Price

FOB CIF

Constructio

n &

Extension

of Grid

Substations

including

transmissio

n line

facilities

(Phase-1)

China National

Electric wire &

cable

corporation,

China

Lot-2 24

24.05.2009

Shandong Dachi,

China

132/33 kV,

25/41 MVA

USD

869,910

USD

915,146*

132/33 kV,

50/75 MVA

USD

869,910

USD

915,146*

ABB, INDIA Lot-3

21.12.2009

ABB, INDIA 132/33 kV,

25/41 MVA

___ Euro 600,752

ABB, INDIA Do ABB, INDIA 132/33 kV,

66/100 MVA

___ Euro 675,055

Hyosung, Korea

Lot-1

02.02.2009

Hyosung, Korea

230/132 kV,

3x75 MVA

Euro

2,513,292

Euro

2,602,937

Hyosung, Korea

Lot-1

02.02.2009

Hyosung, Korea

230/132 kV,

150 MVA

Euro

1,431,284

Euro

1,482,336

SiddhirganjManiknagar 230 kV Transmission Line

Consortium of

GS ,Korea &

Crompton

Greaves, India

Siddhirganj

S/S

Sept.,2010

Crompton Greaves

,India

230/132 kV,

225/300

MVA

___

USD

1,403,500-

Siddhirganj

Maniknaga

r 230 kV

Transmissi

on Line

JV of Shandong

Wuzhou

Electrical co. ltd.

& Shandong

Takaoi Power Co

ltd.

Maniknagar

S/S

Dec.,2010

Shandong Takaoi

Power Co ltd.

230/132 kV,

225/300

MVA

____

USD

1,176,591

Supply of

Transforme

rs

Crompton

Greaves, India

Crompton Greaves,

India

132/33kv

50/75MVA

____

USD

6,62,939-

Source: PGCB

*M/s China National Electric wire & cable corporation, China (CCC) quoted same price for

132/33kv, 25/41 & 132/33kv,50/75 Transformers.

It is observed that the price quoted by turnkey contractors for equipment/transformers for project

work are generally higher than the price quoted by contractors for supply of

equipment/transformers.

239

It is also observed price of equipment/transformers from European/USA manufacturing factories are

higher than those (with identical specification) manufactured in Indian/Chinese factories. For this

reason it is difficult to get European/USA manufactured equipment/for transformers through ICB

particularly when Indian/Chinese turnkey contractors participated in bidding.

It is necessary to have the approval of executive committee of the National Economic Council

headed by Prime minister through via the Planning commission for any project where government

financing is involved including for projects that have a foreign aid component. For evaluation of bids

received trough ICB, the concerned organization forms a Tender evaluation committee(TEC) which

include representatives of the Design, Project and Finance offices of the organization, two

representative of different ministries/ organizations and a consultant, if any. Therefore for Govt.

financed projects the Ministry of Power, Energy & Mineral Resources (MOPEMR), MO Planning, the

Planning commission all have influence with regard to the approval of the project. Concerned donor

agencies also have influence in case of a project with a foreign aid component.

Generally in PGCB consultants were not engaged in the majority of projects. However the following

consultants were in engaged in few projects:-

a) M/s Mott McDonald, UK b) M/s Nippon-Koei, Japan c) M/s Fitchners ltd, Germany d) M/s AE Com (former/s Maun sell), New Zealand for NLDC project. e) Korean Electric Power co. ltd.(KEPCO),Korea

7.3.2.2 Transformers for distribution (33/11 kV and 11/.4 kV)

Initially the projects were financed by Official Development Assistance (ODA) from Japan and UK, the

equipment were procured mostly from UK and Japan. In the case of REB, as it was US financed; most

of its equipments were procured from US and Canada.

In case of ADB financed projects, the competition was open to all and all the entities followed PPR

2006 and PPR 2008 guidelines. In the case of open the tendering process, most of the equipment

were procured from China and India.

For the last five to six years the key suppliers/ bidders of transformers were CCC, China; GIETC,

China; Heavy Electric, India; CGL, India etc.

Some parts of transformers like OLTCs (On load tap chargers) and protection devices were procured

from European and US companies like MR, Germany; Alstom UK, ABB Switzerland, SEL USA etc.

Key customers are the different the distribution entities like BPDB, DPDC, DESCO, WZPDC and REB.

Of course, there are a few private customers; IPPs purchase the above items.

There are several methods of purchasing these transformers. These are open tendering, limited

tendering, two-stage tendering, single stage two envelope tendering, request for quotations, direct

procurement and request for proposals. In contrast to open tendering which is open for all

competitors, the limited tendering is open to only the parties who are invited to participate in it. In

the single step stage two envelopes tendering process the technical and financial proposals are

submitted separately in two different envelopes. For smaller purchases, the authorities use request

for quotations process and for procurement of intellectual and professional services they use the

request for proposals process. Direct procurement is used as sole source procurement in cases

240

where competition is considered inappropriate. As all the products are procured through these

methods the price is market driven.

7.3.2.3 Substation automation and protection

Sub-station equipment automation is designed and provided by concerned manufacturers or

Turnkey contractors. For standardization of operating performance, facilities and spare

requirements, the main protective relays manufactured by ABB (Switzerland/Sweden), Siemens

(Germany), and Areva (France) are used in the transmission network. More detail will be given in the

final report.

7.3.2.4 EMS/DMS/GIS software

M/S Areva, France constructed the National Load DispatchCentre in Bangladesh. All the software

including the software for EMS is supplied by M/S Areva, France.

ABB, Sweden constructed Supervisory Control and Data Acquisition (SCADA) for DPDC with the help

of SPIDER SCADA Software.

7.3.2.5 Meters/AMI

PGCB always purchases 3 phase 4 wire programmable digital energy meters with class of accuracy

0.2 for the transmission sector particularly for inter organizational metering. PGCB prefers meters

manufactured by EDM Sweden, Landys Gear Germany, and CWE USA. Supply of energy meters are

generally finalized during pre-contract negotiation meetings.

DPDC has been recently purchasing 3 phase 4 wire programmable digital energy meter (AMI/ AMR)

with class of accuracy 0.2 for the HT (11 kV) consumer. Key suppliers of these meters are: Secure

Meters, India; L&T, India; EDMI, Singapore; Landis+Gear, Singapore; Shanghai Meter, China; Fae,

Brazil; Dengly, China

7.3.2.6 Communication

Till 2000 PDB/PGCB were using power line carriers for internal communication and load dispatching,

but from 2000., OPGW were installed along with all new transmission lines and ground wires of

almost all old transmission lines were replaced by OPGW. A communication system using OPGW was

introduced.

At the initial stage, communication equipment manufactured by ABB were used. These were used till

the NLDC was constructed by Areva, France. All equipments, software, hardware for NLDC were

from Areva including communication systems. Now, the Areva and the ABB equipments/ software

are in use in the transmission system but in the future, communication systems compatible with the

NLDC software and hardware will be used.

The distribution entities use the available communication systems of Transmission network. Other

than that, wireless communication (Motorola Equipment) and PSTN/ cell phones are also used.

7.3.2.7 UPS

NLDC uses UPS supplied by Areva, France. Important sub-stations are provided with emergency

diesel generator sets.

241

7.3.2 Market analysis of monitoring and control solutions in T&D

Products of Bentley Nevada are not in use in transmission sector. However, it is learnt that

automated data acquisition, analysis and decision support system of Bentley Nevada is in use in

some of Gas Turbine Power Stations of BPDB. In addition Vibration monitoring & protection

instruments of Bentley Nevada are in use in many combined cycle & Gas Turbine Power Stations in

Bangladesh.

Measurement solutions, Inspection technologies, Dresser and Control solution products are not in

use in electric power transmission industry of Bangladesh.

7.3.4 Key Players

7.3.4.1 Transmission sector

The Ministry of Power, the Energy and Mineral resources (MPEMR) and the PGCB are the most

important players in the transmission sector. BPDB as the single largest electricity producer and

single buyer is also an important player. Distribution entities as receivers of electricity transmitted by

PGCB also play important roles.

The list of Turn Key Contractors who were awarded to different contracts to implement different

projects in transmission sector during last five years is given in the Table 7.12. The detailed list of

contract awarded to different vendor is given in Table 7B.1 of Appendix 7B. From the detailed list it

can be seen that Siemens, India (along with Siemens, Germany & Siemens, Bangladesh), China

National Electric wire & cable Import/ Export corporation, China (CCC) & ABB Ltd., India won

maximum numbers of contract in the substation side. The following table lists the major turnkey

contractors in the transmission sector:

Table 7.13: Turnkey Contractors in the Transmission Sector

Turnkey Contractors

1. Energypac, Bangladesh. 2. ABB Ltd., India 3. JV of Energypac, Bangladesh & ABB, India. 4. Basic Engg. Bangladesh 5. China National Electric wire & cable Import / Export

Corporation, China (CCC). 6. Siemens, India. 7. Consortium of Siemens, Germany, Siemens, India &

Siemens, Bangladesh 8. Consortium of Siemens, Germany & Siemens,

Bangladesh 9. HG Power, Malaysia. 10. Hyosung Corporation, Korea.

11. Consortium of Hyosung Corporation & Samsung Corporation

12. JV of Samsung & Handbeak co. ltd., Korea 13. KEC , India. 14. Crompton Greaves, India (CGL). 15. Consortium of GS E&C,Korea & Crompton

Greaves, India. 16. Consortium GS &E C 17. JV of Shandong Wuzhou Electrical co. ltd. &

Shandong Takaoi Power Co ltd. China. 18. Marubeni, Japan 19. Cobra Instalaciones Y Servicios S A, Spain 20. Jyuoti Structure Ltd., India 21. Sanergy, Iran

Source: Keystone Study

Although, there are no dominant player in Transmission line construction, M/S H.G. Power, Malaysia

won highest number contract .ide. Overall, it is observed that Indian companies dominate the list of

vendors. It needs to be mentioned that although M/S H.G. Power, Malaysia registered in Malaysia,

the company is in Indian ownership.

242

Indian & Chinese manufacturers dominate the list of manufactures of different equipment &

materials. This is due to fact that they are near to Bangladesh & prices are more compatible in

comparison to manufacturers of other countries particularly European countries. However, Circuit

Breakers manufactured by Areva Germany, Siemens Germany & ABB Sweden are also supplied.

Bibyana-Kaliakor 400 kV Transmission line and Kaliakor 400/230kV & 400/132 kV Substations are

financed by EDCF, Korea and being a tied loan the most of the equipment/materials to be supplied in

this projects are from Korea.

Before 2005, the situation was a bit different. At that time most of the manufacturers from India &

China didn’t qualify to supply equipment & materials due to lack of operational experience

particularly in 230 kV system. However, with passage of time they gained the required operational

experience and became qualified to supply equipment/materials to Transmission sector.

The main protective relays manufactured only by ABB (Switzerland/Sweden), Siemens (Germany),

and Areva(France) are used in transmission network for better co-ordination and to facilitate

standardization of operating performance & spare requirements.

The following table lists major manufacturers of equipment, which were supplied by the Turnkey Contractors of Substation:

Table 7.14: Manufacturers of Substation Equipment

Product Type Products Manufacturers

Transformers

400/132 kV Transformers Hyosung Corporation, Korea

230/132 kV Transformer i)Daian, Japan ii) Hyosung Corporation, Korea iii) Crompton Greaves Ltd. (CGL), India iv) ABB Ltd., India v) Shandong Takaoi Transformer Co ltd., China

132/33kv Transformer i) TBA, China ii) Crompton Greaves Ltd. (CGL), India iii) Shangdong Dachi, China iv) ABB Ltd., India

Circuit Breaker

400 kV Circuit Breaker Siemens, Germany

230 kV Circuit Breaker i) Siemens, Germany ii) Crompton Greaves Ltd. (CGL), India iii) New Northeast Electrical (Shenyang) High Voltage Switchgear Co. Ltd., China

132 kV Circuit Breaker i) Areva, Germany ii) ABB India iii) Siemens, Germany iv) Crompton Greaves Ltd. (CGL), India v) Shandong Takaoi High Volt Switchgear Co. Ltd., China vi) ABB, Sweden

Instrument Transformer (CT & PT)

400 kV Instrument Transformer (CT & PT)

CGL, India


i) Crompton Greaves Ltd. (CGL), India ii) ABB, India


i) ABB, India ii) Energypac, Bangladesh iii) Henghyang Nagfang,China iv) Crompton Greaves Ltd. (CGL), India v) Shandong Takaoi High Volt Switchgear Co. Ltd., China vi) ABB, Sweden

GIS unit

230 kV GIS unit i)Siemens, Germany ii)Shandong Takaoi High Volt Switchgear Co. Ltd., China

132 kV GIS unit Siemens, Germany

243

Product Type Products Manufacturers

Protective Relay i)ABB, Switzerland

ii) Areva T&D, France iii) Siemens, Germany


The following table lists major manufacturers of Transmission Line equipment/material:

Table 7.15: Manufacturers of Transmission Line equipment/material

Equipment Type Manufacturers

Tower i) Steel Products, India

ii) KEC ,India

iii) Bosung, Korea iv) Weifang Changian Steel Tower Stock co., Ltd. China

v) Confidence Steel, Bangladesh

vi) K2Engg., Korea ( Proposed ) vii) Samwoo , Korea ( Proposed )

Conductor i) Sterlite, India

ii) ZTT , China

iii) Hangzhou Conductor Co.Ltd. iv) Apar, India v) Taihan, Korea

Underground Cable TBA Cable Co Ltd.,China

Insulator i) Dalian, China

ii) NGK, Japan iii )NGK, China

OPGW i) NKT, Germany

ii) Prysmian, Spain

iii) LS Cable, Korea iv) ZTT, China v) Taihan Cable


7.3.4.2 Distribution sector

There were four major procurements in the last five years in DPDC. The details of these

procurements along with their contract values are given in the Table 7.15. From the table it can be

shown that Energypac Engineering Ltd., Bangladesh is the main contractor for DPDC projects. Out of

the four procurements they were involved in three of them. ABB Ltd., India was involved with one

project with Energypac by forming a consortium. Another project was also solely contracted by

them. Areva Energietechnik GmbH, Germany was also involved in a project by forming a Joint

Venture with Energypac.

Table 7.16: Distribution Efficiency Improvement in DPDC Area (2009-2011)

SI No Name of Package Name of

Contractor

Contract Price

Foreign (USD)

Contract

Price Local

(BDT)

Total Contract

Price (BDT)

1 Design, Supply, Installation,

Testing and Commissioning of

10 nos. upgraded substations.

Energypac

Engineering Ltd.

12,144,880.87 11,35,36,769

.50

95,63,91,501.88

244

SI No Name of Package Name of

Contractor

Contract Price

Foreign (USD)

Contract

Price Local

(BDT)

Total Contract

Price (BDT)


Testing and Commissioning of

Shaympur 33/11 kV Substation

at Existing Switching Station

Consortium of

Energypac

Engineering Ltd.,

Bangladesh and

ABB Ltd., India

1,715,282.10 1,59,91,020 13,50,31,597

3 Design, Supply, Installation of

132/33 kV Transformers and

Associated Materials at

Mogbazar, Maniknagar and

Shyampur 132/33 kV

Substations

ABB Ltd., India 4,920,404.64 39,991,986.6

0

38,14,68,068.88


Testing and Commissioning of 5

nos. of new 33/11 kV

Substations.

Joint Venture of

Areva

Energietechnik

GmbH, Germany

and Energypac

Engineering Ltd.,

Bangladesh

9,391,215.55 14,35,70,418

.75

79,53,20,778.60


The list of major manufacturers of distribution breakers and transformers is given in the Table 7.16.

CGL, India is the manufacturer of all types of breakers and power transformers of DPDC projects. 132

kV breakers are also manufactured by Pinggago, China; Siemens, Germany and ABB, Germany. Most

of the 33kV and 11 kV breakers are manufactured by CGL, India; Siemens, India; ABB, India; Areva,

Germany; TBEA, China and TAMCO, Malaysia. Local companies’ (Energypac, Powerman, Betelco etc.)

11 kV breakers are also procured. Power Transformers (132/33 kV and 33/11 kV) are mostly

manufactured by TBEA, China; CGL, India; Hocker Sidley, UK and BHEL, India. Only one local company

i.e. Energypac’s 33/11 kV transformers are found in the DPDC projects. Again, all the distribution

transformers (11/.4 kV) are procured from local manufacturers.

Table 7.17: Manufacturer of the different components of the DPDC Substations

Item Manufacturer

132 KV Breaker Pinggago, China; CGL, India; Siemens, Germany; ABB, Germany

33 KV Breaker CGL, India; Siemens, India; ABB, India; Areva, Germany; TBEA,

China; TAMCO, Malaysia; Energypac, Bangladesh

11 KV Breaker CGL, India; Siemens, India; ABB, India; Areva, India; TBEA, China;

TAMCO, Malaysia; Energypac, Bangladesh; Powerman,

245

Item Manufacturer

Bangladesh; BETELCO, Bangladesh;

132/33 kV Power Transformer TBEA, China; CGL, India; Hocker Sidley, UK; BHEL, India

33/11 kV Power Transformer TBEA, China; CGL, India; Hocker Sidley, UK; BHEL, India; Energypac,

Bangladesh; ABB, India

11/.4 kV Distribution Transformer Local Manufacturers like GEMCO, Energypac, BETELCO, ADEX,

POWER-MAN etc.


The detailed lists of Last five years procurements by DESCO are given in the Appendix 7C. 33 kV GIS

breakers are mainly manufactured by Areva, Germany. Other 33 kV breakers are from Compton

Greaves, India; Areva, India and Energypac, Bangladesh. Again, 11 kV breakers are mainly

manufactured by Tampco, India; Areva, India and Siemens, India. Compton Greaves, India is the major

manufacturer of most of the transformers of different types. Recently, DESCO procured some 25 kVA

Single Phase transformer from GE, Bangladesh also. In case of metering equipment, most of them are

either Chinese or Indian products. Secure, India is a major manufacturer for most of the 11 kV

metering equipment. The following table gives the list of major equipment manufacturers for DESCO

projects:

Table 7.18: Manufacturer of the different components of the DESCO projects

Item Manufacturer

33 kV GIS Breaker Areva, Germany

SF6/VCB Breaker (33 kV) Compton Greaves, India; Areva, India

33 KV RTC Panel/OLTC Compton Greaves, India; Energypac, Bangladesh

33 kV RTC Panel, outdoor Breaker Compton Greaves, India; Energypac, Bangladesh

11 kV Breaker Tampco, India; Areva, India; Siemens, India

20/28 MVA Transformer Compton Greaves, India; Energypac, Bangladesh

200 KVA Station Transformer Eaglerise, China; Compton Greaves, India; Energypac,

Bangladesh

500KVA 3-Phase Transformer Compton Greaves, India

25 KVA Single Phase Transformer General Electric, Bangladesh

11 KV Metering (Different Ratings) Secure, India


246

The detailed lists of Last five years procurements by BPDB in various distribution projects are given

in the Appendix 7D. Most of the equipments including the distribution transformers (100 kVA and

250 kVA) are procured locally. In some projects a few Indian and Chinese equipments are procured.

For instance, South China Electric Dev. Co Ltd, China was the manufacturer of the 100 kVA and 250

kVA distribution transformers of the Central Zone Power Distribution Project of BPDB.

In most of the REB projects of last five years, different equipments are locally procured and most of

the manufacturers are local companies. There is no major procurement of WZPDC in this period.

7.4 Future Investment and Opportunities

7.4.1 Yearly plan to meet generation addition

PGCB has prepared an outline of at least 15 projects that are to be completed by 2017 to upgrade

and expand the transmission network throughout the country. Eight of the projects are scheduled to

be finished by 2012-13. These include both construction of new transmission lines and new

substations in different areas to reduce the shortage of electricity supply. An important project that

is currently on going is the electricity interconnection between Bahrampur, India and Bheramara in

the Western region of Bangladesh. Under this project, there will be construction of 30 KM 400 KV

double circuit transmission line and a back to back 400kV HVDC station at Bheramara. When

completed this will be first electrical interconnection with a neighbouring country and will allow an

import of up to 500mW (the present commitment is 250 mW) from India. In the future Bangladesh

may export surplus (if, any) electricity through this T/L.

The projects to construct and expand new transmission lines include the Raozan-Sikalbaha- Anowara

& Hathazari-Khulshi 60 KM 230 KV transmission Lines, the Ishurdi-Rajshahi 70 KM 230 KV

transmission Lines, the RPCL Mymensingh-Tangail via Bhaluka 180 KM 132 KV double circuit K

transmission lines, Goalpara-Bagerhat 45 KM 132 kV 2nd Single Circuit transmission lines and

Chandraghona-Rangamati-Khagrachari 80 KM 132 KV Transmission Lines. After completion these

T/Lswill meet the power demand in their respective areas.

There are also projects to build new substations by 2012-13 including 230/132 KV Substations in

Shyampur, Jhenaidah and four new 132/33 kV substations with interconnecting lines in Mymensign-

Tangail.

There are two more transmission line projects to be finished by 2014-15 which are the Aminbazar-

Maowa -Mongla 400 kV, Mongla -Khulna(S) 230 kV Transmission lines and the Anowara -

Meghnaghat 400 kV Transmission lines. These will transmit the power generated by proposed large

coal fired Power Stations at Mongla, Khulna & Anowara, Chittagong to Khulna, Dhaka, Chittagong

and other areas.

Along with these short-term projects, there are three longer term projects to be completed within

2017 including the Khulna(s)-Barisal (N) 230 kV transmission line project, the Ruppur-Bheramara-

Zajira 400 kV transmission line project and the Ashuganj-Joydebpur 400 kV transmission line.

In the Table 7A.2 of Appendix 7A, projects planned for transmission sector to be implemented by

PGCB during next five years are shown.

247

7.4.2 Distribution expansion planned to get all of the power generation to consumers

At present the distribution utilities have a total distribution line of 278,000 KM serving over 12

million customers. They suffer a system loss of 12.75percent. To reduce the system loss and to

expand and improve the distribution network BPDB, REB, DPDC, DESCO and WZPDC have several

currently ongoing projects.

BPDB currently has six projects with completion dates within 2013-14 for the construction of

distribution lines, substations and renovation works at Mymensingh, Chittagong, Comilla, Sylhet,

Rangpur and Rajshahi. The total cost of these six projects is approximately USD 535 million.

Table 7.19: Upcoming Projects of BPDB

Sl

No

Name of the Project Completi

on Date

Project

Cost (Tk

Crore)

Objective of the projects

01 Power Distribution Development

project, Mymenshingh Zone

2013-14 637.00 Construction the distribution lines,

substations and renovation works


project, Chittagong Zone

2013-14 1088.00 Construction the distribution lines ,



project, Cumilla Zone




project, Sylhet Zone




project, Rangpur Zone




project, Rajshahi Zone



Source: BPDB

Under REB, there are another six projects which are to be completed within 2012-13. These projects

will connect one million new consumers in the rural areas with the distribution network through the

construction of 14500 KM of new distribution lines in the Dhaka, Chittagong, Sylhet, Khulna, Barisal

and Rajshahi division. These will cost approximately USD 4.75 billion.

Table 7.20: Upcoming Projects of REB

Sl

No


on Date

Project

Cost (Tk

Crore)


01 One million new connections project 2012-13 34800.00 To connect one million new consumers

02 Rural Electrification extension project 2012-13 1322.00 Substation and distribution lines extension

248

Sl

No


on Date

Project

Cost (Tk

Crore)


(Rajshahi, Rangpur, Khulna and

Barishal area)

03 Rural Electrification extension project

(Dhaka Division-1)

2012-13 498.00 Construction of 4100 km distribution lines


(Chittagong-Sylhet Division-1)



(Rajshahi-Rangpur Division-1)



(Barishal Division-1)


Source: REB

Year wise detailed procurement plan for REB is given in the Appendix 7E.

DPDC has at least 20 projects including both short-term and long-term ones with several objectives.

Through these projects, DPDC will increase substation capacity, build new substations, ensure

quality power supply, rectify system loss and provide better service to a wide range of customers.

The estimated total cost to implement these projects is USD 580 million. The upcoming project list is

shown in the Appendix 7F.

The detail procurement plans for different projects are shown in the Appendix: 7G.

To extend the distribution network in Dhaka and to serve electricity to at least 600,000 new

customers DESCO has seven planned projects that are currently in operation. These projects will

upgrade their existing mechanisms, strengthen distribution lines, electrify some new areas in Uttara,

and install new prepaid meters all around Dhaka and install SCADA systems. Three of the projects

have already started. Their combined cost is approximately 330 million. The following table lists all

the upcoming projects up to 2015 and their respective procurements.

Table 7.21: Upcoming Projects of DESCO

Sl

No

Name of the Project Compl

etion

Date

Project

Cost (Tk

Crore)

Procurements

DESCO

01 Strengthen of distribution line project 2011-12

486.00 i) Construction 33/11 KV (GIS) Substations. ii) Installation of 33 KV UG Cable as source line for new substation iii) Installation of HT/LT Composite Distribution line iv) Installation of11 KV UG Cable

249

Sl

No

Name of the Project Compl

etion

Date

Project

Cost (Tk

Crore)

Procurements

v) 11/.4 KV 200 KVA X-former vi) 11/.4KV 25 KVA X-former

02 Extension and renovation of distribution system project (Gulshan Area)

2011-12

595.00 i) Construction 33/11 KV (GIS) Substations. ii) Installation of 33 KV UG Cable as source line for new substation iii) Installation of HT/LT Composite Distribution line iv) Installation of11 KV UG Cable v) 11/.4 KV 200 KVA X-former vi) 11/.4KV 25 KVA X-former

03 Construction, augmentation and rehabilitation of 08 Nos 33/11 KV (GIS) Sub-station

2011-2014

177.00 i) Construction of 33/11 KV (GIS) Substation at Agargoan, Banani, Niketon, Purbachal and Mirpur-6 ii) Rehabilitation & Reinforcement of 33/11 KV (GIS) Substation at Digun, Joarshahara and Tongi

04 Replacement of existing 11 KV overhead line by underground cable in 04 routes

2011-2014

180.00 Installation of 11 KV Underground 16 KM Cable

05 Electrification of Uttara 3rd Phase & Purbachal Model Town

June 2015

1000.00 1) Construction of 33/11 KV (GIS) Substations. ii) Installation of 33 KV UG Cable as source line for new substation iii) Installation of HT/LT Composite Distribution line iv) Installation of11 KV UG Cable v) 11/.4 KV 200 KVA X-former vi) 11/.4KV 25 KVA X-former

06 Prepaid Metering (200000 Nos) 2011-2014

110.00 Installation of 2,00000 Prepaid meter at Uttara, Mirpur, Baridhara and Gulshan.

07 DESCO’s SCADA System June 2015

100.00 Equipment for Real Time data acquisition and 33 KV & 11 KV feeder control

Source: DESCO

According to the three years development plan of DESCO the total year-wise procurement of

different equipments is given below:

Table 7.22: Year-wise Procurement Plan of DESCO

Sl Particulars 2011-12 2012-13 2013-14

1 Source line (33 KV) (km) 25 30 27

2 Distribution line (11 KV) (km) 250 300 270

3 No of substation (33/11 KV) (Nos) 10 0 5

4 No of 11 KV switching station (Nos) 2 2 1

250

Sl Particulars 2011-12 2012-13 2013-14

6 Distribution Transformer (11/0.4KV) (Nos) 400 490 327

7 No of feeder (11KV) (Nos) 29 34 35

8 132/33 KV Grid SS (Nos) 0 0 3

9 Prepaid metering (Nos) 20000 80000 100220

Source: DESCO

WZPDC has one project on the cards to extend the distribution system and substations in 21 districts

within 2012-13 that will cost approximately USD 57.2 million. In this period there is also plan for

prepaid metering system expansion, solar energy projects, SCADA system and Video conferencing

system.

Table 7.23: Upcoming Projects of WZPDC

Sl

No


on Date

Project

Cost (Tk

Crore)


01 21 district electricity distribution

project

2012-13 469.00 Extension of distribution systems and

substation

02 Pre-paid e-metering System 2012-13 88.55

03 Solar Energy 2012-13 1.00

04 SCADA System 2012-13 1.08

05 Video Conferencing System 2012-13 0.20

Total Cost 559.81

Source: WZPDC

The detailed equipment procurement plan of WZPDC for these projects is given below.

Table 7.24: Procurement & Installation Item from 2011 to 2013 of WZPDCL

Sl No. Item Description Quantity

01 5 MVA X-former 20 Nos.

02 10/13.33 MVA X-former 14 Nos.

03 33 KV Line( New+ Renovation) 211 KM

04 11,11/.4,0.4 KV line( New & Renovation) 2460 KM

251

Sl No. Item Description Quantity

05 11/.4,3-Phase Distribution X-former 1100 Nos.

06 1-Phase Meter 105000 Nos.

07 3-Phase Meter 10,000 Nos.

08 Solar Energy 20KW

09 SCADA System 12 nos.

10 Video conferencing System L/S

Source: WZPDC

Further procurement plan for projects like system efficiency improvement, pre-paid e-metering

system and SCADA System is also given in the following Table 7.25.

Table 7.25: Procurement & Installation Item from 2014 to 2017 of WZPDCL

Sl No. Item Description Quantity Estimated Cost In Crore TK

01 5 MVA X-former 18 Nos.

585.0

02 10/13.33 MVA X-former 18 Nos.

03 33 KV Line( New+ Renovation) 215 KM

04 11,11/.4,0.4 KV line( New &

Renovation)

2500 KM

05 11/.4,3-Phase Distribution X-former 1700 Nos.

06 1-Phase Meter 140000 Nos. 118.58

07 3-Phase Meter 14,000 Nos.

08 SCADA System 36 nos. 3.24

Total Cost 706.82

Source: WZPDC

7.4.3 Asset mapping in the transmission and distribution utilities

Asset mapping in not very popular in the transmission and distribution utilities. Asset mapping

technologies like Dissolve Gas Analysis (DGA) is completed only for the testing purpose before the

purchase of the transformer and after that this is done only once in a year.

252

7.4.4 Unmanning of substation in T&D

At present there are no unmanned substations in the transmission and distribution network except

for the ones in REB. From inception, all the substations of REB were unmanned. But these

substations are still controlled manually and there is no remote control in these substations. At

present there is no plan for unmanning the substations of other distribution entities or PGCB.

7.4.5 Distribution automation

Still the utilities are aware of the benefits of distribution automation. Substation wise automation

has already started in some areas. There are plans to improve the real time monitoring of the all the

substations. DESCO has already introduced 33/11 KV Substation Automation programs. DPDC and

BPDB are also taking similar initiatives.

7.4.6 Software for outage detection and workforce management

DESCO and DPDC are also using a Complaint Management database which was developed by using

Microsoft access with help of in-house IT experts.

7.4.7 Use of billing and CIS Software along with Meter Data Management (MDM) Software

All distribution utilities of Bangladesh DESCO, DPDC, REB and BPDB are using billing software and

Meter Data Management Software.

7.4.8 Smart Meter technologies in the distribution utility

The distribution utilities have plans to convert all conventional meters to smart meters. Some of the

companies that are supplying these meters are: Secure Meters, India; L&T, India; EDMI, Singapore;

Landis+Gear, Singapore; Shanghai Meter, China; Fae, Brazil; Dengly, China. DESCO has already

explored a Remote meter pilot project at Mirpur and Prepayment meters in Uttara.

7.4.9 Market for power backup/power quality

Market for power backup i.e. UPS is discussed in section 7.3.2.7.

7.5 Issues and Challenges

7.5.1 Finance required to build the transmission capacity

Financing is always a challenge for the transmission sector. Since the establishment of PGCB in 1996,

this state-owned organization has implemented many projects. In the initial period, Asian

Development Bank (ADB) was the major financier of many the PGCB projects. In addition, KFW also

came forward by financing a transmission line. Other foreign financiers include: NDF (Nordic fund,

Scandinavian countries), SIDA (Sweden), DANIDA (Denmark) and JICA. Two transmission lines were

implemented with suppliers’ credit (one Chinese and two Indian companies). Furthermore, PGCB has

also implemented few projects through their own financing. In addition, one project was financed by

the Palli Bidyut Samity (PBS), Dhaka 1. The Government of Bangladesh has always supported PGCB

by financing the local currency portion of the total project costs (on the basis of 60 percent equity

and 40 percent loans). At present, different projects are being financed by the ADB, JICA, World

Bank, EDCF (Korea) and the KFW. Negotiations are going on with the local branch of a foreign

commercial bank for financing the Barisal-Bhola-Bahauddin 230 KV double CKT Transmission Line.

253

The ongoing projects of PGCB are being financed by the ADB, the JICA, the KFW and the EDCF

(Korea). The Bibiyana-Comilla (N) 230 kV transmission line project is being financed by the GoB &

PGCB itself. Negotiations are currently taking place a foreign commercial bank (Local Branch) for

financing the foreign currency portion of the Barisal-Bhola-Burhanuddin 230 kV Transmission Line

project. The local currency portion of all the above projects is being financed by the GoB.

For financing future projects, discussions are going on with the ADB, World Bank and the JICA

through the Extended Resources Division of the GoB for financing some of the above-mentioned

projects. Moreover, the donor agencies have shown interest in financing these projects. One or two

small projects may be funded by the PGCB itself. There is a possibility of financing via suppliers’

credit though recent experiences in this regard have not been encouraging. Financing projects by

taking loans from commercial Bank is also an option but it is difficult to get long term loans from

commercial banks. Lately, the Government of Bangladesh has been trying to promote Public-Private

Partnerships (PPP). However, no policy has yet been formed. In future, PPPs may play an important

role in financing the transmission sector. However, this will largely depend on the tariff structures of

the country.

As per present planning, a total of USD 552.92m and USD 946m in local and foreign currency will be

required to implement the upcoming next five years’ projects.

7.5.2 Financing challenge to distribution expansion

As per present planning a total of 6948 million USD is needed for the distribution facilities, out of

which 2759 Million USD is in foreign currency. If there are any additions to the generation capacity

there must be some financing arrangements will be required for the T&D sector.

To meet the finance for the upcoming distribution projects utilities are still looking for donors. But

the common donors of Bangladesh like the ADB, the WB, the KFW, the IDB etc are placing a lot of

conditions which are proving to be very difficult to fulfill. Hence the utilities are now looking for

alternative financers.

7.5.3 Grid connection with neighboring countries and amount of imports planned

The first Electrical Inter Connection between Bangladesh and India is under construction. This Inter

connection consists of a 85km (30 km In Bangladesh part & 53km in Indian part) Bahrampur (India)

to Bheramara (Bangladesh) 400kV double circuit Transmission line, one 400kV switching station at

Bahrampur and one 500MW HVDC back to back 400/230kV sub-stations at Bheramara. The

switching station at Bahrampur and the 53km Transmission line in the Indian part is being

constructed by Power Grid Corporation of India (PGCI), whereas 500MW HVDC back to back

400/230kV sub-stations at Bheramara and 30km transmission line in Bangladesh part is being

constructed by Power Grid Company of Bangladesh (PGCB). When completed it is expected that

Bangladesh will initially import about 250MW of power from India.

There is also a plan for constructing a 13km 230kV double ckt. transmission line between Comilla

North switching station in Bangladesh and Palatana in Tripura, India. However this has not been

finalized with India yet. The main objective of this project is to import power from the Combined

Cycle Power Station being built at Palatana, Tripura, India.

In addition PGCB also prepared proposals for constructing the following 3 radial lines.

254

1. Bongaon (India) - Jessore (Bangladesh) 132 kV 50km (10 km in India & 40 km in Bangladesh)

Transmission line.

2. Krishnanagar (India) - Chuadanga (Bangladesh) 132 kV 46km (24 km in India & 22 km in

Bangladesh) Transmission line.

3. Dalkhola (India) - Thakurgaon (Bangladesh) 132 kV 46km (24 km in India & 22 km in Bangladesh)

Transmission line.

Proposals of above 3 lines are yet to be discussed with India. It is likely that India will want back to

back HVDC connection to prevent disturbance in one side affecting other side and also to have

control over the power flow. On the other hand Bangladesh will want AC connection for transferring

of small amount of power. The cost also does not justify construction of back to back HVDC

connection.

The Power System Master Plan (PSMP) also envisages following Interconnections.

1. Myanmar- Bangladesh Transmission line.

Anowara, Chittagong is the likely to be the location for substation in Bangladesh side. This line is

proposed to be built by 2020 and will allow transfer of 500 MW.

2. Shilchar (India) –Fenchuganj (Bangladesh) Transmission line.

This line is proposed to be built by 2025 and will allow transfer of 750 MW.

3. Kishanganj (India) –Bogra (Bangladesh) Transmission line.

This line will facilitate import 500 MW power from Nepal and proposed to be built by 2025.

4. Alipurdua (India) –Bogra (Bangladesh) Transmission line.

This line will facilitate import 500 MW power from Bhutan and proposed to be built by 2025.

However no plan has been done yet regarding these transmission lines.

7.5.4 Plans being formulated for distribution to incorporate variable distributed

generation

There is not specific plan to incorporate distributed generation system (solar, biogas, micro-grid

etc.). Still BPDB has some upcoming projects planned on grid connected solar PV. The Government

also has recently published the Renewable energy policy. It is taking different steps by which 5

percent of total generation by 2015 will be met from renewable energy and 10 percent by 2020.

According to the GoB plan 500 MW from Solar, 200 MW from wind and 100 MW from biomass, in

total 800 MW of distributed generators will be added within the next five years. Some of these

projects are outlined below.

Table 7.26: Upcoming Renewable Energy Projects

Sl. NO. Location of the Project Capacity Type of Project

1 Parki Beach, Chittagong

[Pilot Basis]

20 MW Wind Power

175

CHAPTER 4: POWER GENERATION

4.1 Background and Trends

Significant efforts aimed at adding new generation capacities characterized the power sector of

Bangladesh in recent years. As a result, installed capacity and evening peak electricity generation

have increased over the period of 1994-2011. Compound Annual Growth Rates (CAGR) during this

period were 5.81 percent, 7.17 percent and 5.62 percent for installed capacity, derated capacity and

evening peak generation respectively. A significant portion of this addition in generation came from

liquid fuel based(Diesel, HFO) power plants rising the overall contribution of liquid fuels in power

generation to 12.6 percent in 2011 compared to only 5 percent in 2010. However, the addition in

installed capacity is not reflected in terms of proportional increase in power generation. More

power plants have become non-operational in recent years resulting in huge gap between derated

capacity and evening peak generation since FY 2005-2006 as evident from figure 4.1. Moreover,

increase in generation costs resulted in huge budgetary subsidy. The government has also estimated

USD 366 million as subsidy in the energy sector for the fiscal year 2011-12 which is 333.33 percent

higher than that of the FY 2009-10.29 The government has proposed to allocate USD 872 million in

the power sector as the development budget for FY 2011-12 which is 340 percent higher than that of

FY 2009-10.

Installed, derated capacity and evening peak generation as of December 31, 2011 was 8,033 MW,

7,413 MW and 4,728 MW respectively.

Figure 4.1: Installed, Derated Capacity and Evening Peak Generation 1994-2008 (in MW)

Source: Power Cell

29

1 USD = 82 BDT (as of December 29, 2011)

1500

2500

3500

4500

5500

6500

7500

8500

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

UptoDec2011

Installed Capacity (MW) Derated Capacity (MW) Evening Peak Generation in MW

176

In line with the increase in generation capacity, average daily electricity generation has increased

steadily from 25.26 M kWh in FY1994-1995 to 72.26 M kWh in 2009-2010 as shown in Figure 4.2.

This represents a CAGR of 7.70 percent over the period.

Figure 4.2: Average of Daily Electricity Generation 1994-2010 (in M kWh)

Source: Powercell

As of June 2011, household electrification rate increased to 50 percent of the total population

compared to 47 percent in April 2010. Considering the captive generation as well per capita

consumption of electricity grew by 7.2 percent during this period and now the consumption stands

at 252 kWh per capita. Electricity generation in Bangladesh is overwhelmingly gas based. More than

82 percent of evening peak electricity is generated by using natural gas (Figure 4.4). This is followed

by liquid fuel and coal with generation shares of 12.61 percent and 2.49 percent respectively. Hydro

accounts for 2.78 percent of generation. Compared to previous year’s (2010) power generation mix,

contribution of natural gas decreased by approximately 8 percent and contribution of liquid fuel

increased by 152 percent in the mix of total generation of electricity. Around 1,169.88 M kWh of

electricity generated in 2010 was attributed to coal whereas in 2011, only 780.74 M kWh of

electricity was generated from coal based power plants.

Figure 4.3: Energy Generation (FY 2010): 29,247 M kWh Figure 4.4: Energy Generation (FY 2011): 31,355 M kWh

Source: Powercell

0

20

40

60

80

Average Daily Electricity Generation

Coal 4.00%

Liquid Fuel

5.00%

Hydro 2.00%

Natural Gas

89.00%

Coal 2.49% Liquid

Fuel 12.61%

Hydro 2.78% Natural

Gas 82.12%

177

Public and private sectors equally share the power generation sector of Bangladesh. 51 percent of

Bangladesh’s total power plants are owned by the state. The Government, in face of the country’s

current power crisis envisions electricity for all by 2021 while ensuring a reliable supply at affordable

prices. The target has been particularly set in line with the United Nations Millennium Development

Goals (MDG) for economic development and poverty alleviation. Empirical data on electricity

generation and GDP growth reveals a correlation of 1.5 to exist between the two variables. Thus, an

increase in GDP by 7 percent requires power generation to increase by 10.5 percent. According to

the government’s Election Manifesto, power generation targets include 5,000 MW by 2011, 7,000

MW by 2013 and 20,000 MW by the year 2021. Maximum power generation stood at 5244 MW in

2011. The government of Bangladesh claims to progress according to its plan and projects the

possibility of generating 7,000 MW and 8,000 MW by years 2013 and 2015 respectively.

4.2 Nature of the market

The market for electricity includes households, agriculture, industries, and transport. In Bangladesh,

about 50 percent of the population currently has access to electricity. The remaining 50 percent

represents the market yet to be brought under the national grid. The present generation capacity

(derated) of 7,413 MW cannot be realized to its fullest due to the events of forced outage,

maintenance activities and particularly fuel constraints i.e. gas supply shortage. One-fourth of the

generation plants of the power system are more than 20 years old, which causes higher

maintenance costs and regular plant outages. In addition, gas supply shortfall forced the power

plants to operate at a reduced capacity in recent years. Hence, even the demand originating from

within the grid remains unmet. Against the demand of 6,454 MW (with DSM) in the year 2011, the

actual generation capacity falls short by 1,000-1,200 MW, which reaches around 2,000 MW during

the summer months.

Figure 4.5: Planned Electricity Demand-Supply Balance

Source: Power Division

As the country suffers a shortage of dependable electricity generation, the ongoing power system

development programs emphasize capacity addition. However, the implementation trends do not

2011 2012 2013 2014 2015 2016

Maximum Demand with DSM(in April)

6,765 7,518 8,349 9,268 10,283 11,405

Dependable Capacity (End ofDec.)

5091 6348 9192 10287 11811 13629

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

MW

178

provide a promising picture of this development program. In order to meet the demand on short-

term basis, a number of plants on the quick rental basis have been contracted and commissioned.

The share of the quick rental in the added capacity was 32.3 percent in 2010 and in the next year the

projected contribution by these plants was 67.9 percent. Such a high dependence on quick rental

power plants does not provide the assurance that the power supply scenario is becoming more

reliable and stronger any time soon. Nevertheless, the government’s projection of the demand-

supply trend of the power sector draws an optimistic picture that includes having surplus generation

capacity from the year 2013 onwards.

4.2.1 Demand forecast for electricity

Over the last ten years, net energy demand has grown at an average compound annual rate of 8.1

percent. The Power System Master Plan 2010 (PSMP) forecasted year wise demands for electricity in

Bangladesh up to 2030 (Appendix 4A). According to the projections by PSMP, Grid system demand

for with Demand Side Management for 2015, 2020 and 2030 would be 10,283 MW, 17,304 MW and

33,708 MW respectively as opposed to the current (2012) demand of approximately 7,518 MW.

Captive demands for areas where grid is not likely to reach within the projected years are estimated

to be 1,335 MW, 1,515 MW and 2,951 MW for 2015, 2020 and 2030 respectively.

The Power System Master Plan 2010 forecasts the demand for electricity on the basis of GDP growth

and the elasticity of electricity demand. The projection also considers the possible impact of

demand-side management (DSM) programs. DSM programs involve using energy-saving equipment

and machinery, conducting holiday staggering programs in the industrial segment, and avoiding

wastage of electricity.

The power demand forecast shows that the demand for electricity will be growing at around 10

percent over the next decade. The growth will slow down after that and will stabilize at a rate of 7

percent from the year 2028 onwards. However, considering the reinforcement from DSM, demand

for electricity is projected to be growing at a comparatively slower rate. A noteworthy fact is that the

off-grid demand goes up over the forecasting horizon. The power system master plan does not seem

to have any plans in connecting the entire population to the national grid in the near future, which

casts doubt about the government’s commitment to their stated vision of providing electricity to all

by 2020.

The impact of DSM is very significant in the power sector analysis as the master plan estimates up to

a 15 percent reduction in demand for power due to appropriate practice of DSM projects. In

Bangladesh, a number of initiatives have already been taken to popularize DSM for both primary

energy and power usage. The initiatives include: holiday staggering program in the industrial

segment (reduced 150 MW of demand), closing the shopping malls at 8 pm (reduced 350 MW of

demand), distributing over 10 million energy saving CFL bulbs at free of cost among the subscribers

(reduced 150-160 MW of demand), providing advice on DSM, and encouraging DSM through mass

promotions. However, the DSM measure, supplying energy efficient CFL bulbs, failed due to poor

quality of bulbs procured under the program.

179

For power system development analysis, Bangladesh is divided into five geographical regions: the Central, Northern, Southern, Western and greater Dhaka regions as shown in figure 4.6

Figure 4.6: Geographical Segmentation in Power System Development Program

Source: Power System master Plan 2006

The load distribution factor for a region is that region’s percentage of total national demand. Table

4A.2 in Appendix 4A presents estimated electricity demand for each area for the Base Case of the

Power Sector Master Plan 2006.

The regional substation load based on the results of the Power System Master Plan -2010 is shown in

the figure 4.7 below. The substation load of Dhaka region is approximately 40 percent, which is the

highest. In addition, the substation load of the east region is approximately 70 percent. If the

amount of the power generation is equally located in both the east and west, the power flow from

the west to the east will be approximately 20 percent. As the Jamuna River divides the country into

eastern and western zones, a huge amount of investment will be required to construct the river-

crossing transmission line. Therefore, it is important that the power development plan be consistent

with the regional load balance.

180

Figure 4.7: Substation Load by Region

Source: Power System Master Plan 2010

4.2.2 Supply plan to meet the demand

In order to meet the growing demand for electricity, 15,000 MW of new generation capacity has

been planned. The plan involves commissioning a number of quick rental and rental power plants as

immediate measures to meet the demand in the short run. Once the generation scenario is

strengthened after the completion of large power projects, small generation units will be gradually

uninstalled. The Generation Expansion Program of GoB is planned to be implemented in the

following phases:

Immediate: 6 -12 Months

Rental and Quick Rental Plants (liquid fuel) Short term: 18 - 24 Months

Peaking Plants (liquid fuel) Medium term: 3 - 5 years

Combined Cycle Plants (Gas or dual fuel)

Peaking Plant (Gas or dual fuel)

Coal fired steam plants Long term: beyond 5 years

LNG based Combined Cycle Plants

Domestic/Imported Coal Power Plant

Gas/Oil based Peaking Plant

Nuclear Power Plant

Renewable Energy

Anticipated completion of the new power generation projects up to 2016 are illustrated in Table 4.1.

181

Table 4.1: Calendar-wise Project Completion (from 2010 to 2016)

YEAR 2010

(MW)

Commissioned

2011

(MW)

2012 (MW) 2013 (MW) 2014

(MW)

2015 (MW) 2016 (MW) TOTAL

(MW)

Public 255 1107 582 1040 1270 450 1500 6204

Private 270 105 1319 1134 1053 1900 1300 7081

Quick Rental 250 1238

1488

Total 775 2450 1901 2174 2323 2350 2800 14,773

Source: Bangladesh Power Development Board

Indigenous natural gas, coal, LPG, LNG, nuclear, cross-border trade and hydro resources are mainly

considered as fuel for the additional generation plan. Other factors such as availability of fuel,

cooling water, transportation of heavy equipment, proximately to grid network and load center etc.

are also considered for plant placement. The generation plan up to 2030 segmented by fuel type is

illustrated by the following figure:

Figure 4.8: Power Generation Plan till 2030 by Fuel Type

Source: Power System Master Plan 2010

The plan heavily relies on coal based power generation in the future, while the contribution of the

gas based plants are expected to decline over time. Both domestic and imported coal resources are

given equal priority in the generation plan. However, the prime minister of Bangladesh has recently

declared its intention to conserve domestic coal for future generation and meet present demand

through imports. Moreover twelve noted citizens protested the proposal of a coal-fired power

project near the Sundarbans. They expressed their worries over a move to sign an agreement with

the NTPC of India for setting up the proposed 1,300-megawatt plant at Rampal upazila in Bagerhat.

The other fuel types and cross-border power trade will be undertaken as acting in a supporting role

in meeting the national demand.

182

The year wise detailed power development plan according to the PSMP 2010 is given in table 4B.1 in

Appendix 4B. The name of each power plan indicates the region where it is planned to be

commissioned.

4.2.2.1 Region wise supply (existing and planned)

Summary of BPDB’s supply forecast up to 2016 is given in the table below. According to the plan,

Khulna zone in the western grid will have greatest addition of up to 2,743 MW of installed capacity

while no capacity addition will be made in the Rajshahi zone in the coming 4 years. A detail list of

existing and planned power plants divided into different regions is provided in Appendix 4B table

4B.2 and 4B.3.

Table 4.2: Summary of Existing and Planned Power Supply (Regional Breakdown)

Eastern Grid Western Grid

Existing

Dhaka Chittagong Comilla Mymens

ingh Sylhet Khulna Barisal Rajshahi Rangpur

Installed Capacity

(MW) 3333 937 1167 232 571 959 78.5 483 340

Derated Capacity

(MW) 3164 887 1054 197 563 864 68 463 306

Planned

Installed Capacity

(MW) 1853 1246 265.5 145 1524 2743 450 1052


4.2.3 Mix of plants, e.g. Large, CHP, Peaking etc.

In Bangladesh there is no system for combined heat and power (CHP) service. The Peak and Base

load power generation addition depend upon the demand fluctuation in the daily load curve. The

figure below depicts the general demand fluctuation and generating operational conditions in a

typical day. Gas based combined cycle power plant, nuclear and coal-fired power stations

demonstrate several advantages over a stable fuel supply system as well as economic efficiency

making the systems suitable for base generation power. Gas (LNG) power stations are more suitable

for mid-generation power due to environmental adaptability and operations capability as compared

with other generations. Oil and hydro powers are able to operate flexibly over demand fluctuations;

hence these powers are suitable for peak generations.

183

Figure 4.9: Optimum Mix Generation

Source: TEPCO Annual Report

To set the long-term power source configuration driving the peak and base load power plants,

screening analysis for the power system is done analytically. The screening analysis consists of a

combination of the fuel/cost graph and the electric power demand duration curve. It shows what

demand uses which power supply, i.e., economically optimal combination of power supplies. The gas

price in Bangladesh is much lower than the international price. If fuel prices are assumed to increase

because of tight demand of the primary energy, the optimal power supply configuration ratio would

be- oil 10 percent, gas 20 percent, and coal 70 percent.

To estimate the mix of power plant, it is necessary to find out the actual peak demand and base load

demand. In Bangladesh, the power supply has constantly remained strained in peak hours. Potential

demands have not been met, and rotational outage has frequently occurred.

Table 4.3 depicts the characteristics of base-middle-peak generation.

184

Table 4.3: Characteristic of Base-Middle-Peak Generation

Base Middle Peak

Hydro Nuclear Coal Gas/LNG Oil Hydro(Pumped

Storage Hydro(Dam/pndage)

Economic Condition

Fixed High Low High

Variable - Low Middle High -

Operational Condition

Start up duration

Fast Slow Middle Fast

Load Control

- - Slow Middle Fast

Source: PSMP Study Team

The following figures (4.11 and 4.12) illustrates power development plan by BPDB up to 2010 for Base load generation by fuel type for base scenario.

Figure 4.11: Power Development Plan by FY 2030 (MW)

Figure 4.12: Power Development Plan by FY 2030 (%)

185

4.2.3.1 Year wise plan till 2016

According to Bangladesh Power Development Board’s Planning for the next 4 years, the following

mix (Table 4.4) of Peaking, Large and Combined Cycle Power Plants will be commissioned

throughout 2012 to 2016.

Table 4.4: Mix of Plants (Large, Peaking, CCPP) 2012- 2016

Peaking Plants Large Plants Combined Cycle PP

2012

No. of Plants 11 4 1

Capacity (MW) 1287 295 163

Contribution in Total additions in Generation

44% 16% 4%

2013


Capacity (MW) 3027 199 1726


91% 6% 52%

2014


Capacity (MW) 3054 0 2463


93% 0% 75%

2015

No. of Plants 8 0 8



93% 0% 65%

2016

No. of Plants 3 0 1



100% 0% 32%

186

Source: BPDB

4.2.3.2 Long term plan (2010-2030)

According to the PSMP-2010, the maximum demand in 2015, 2021 and 2030 will be 10,000; 19,000

and 34,000 MW respectively. To meet the demand with reliability, installed capacity needs to be

increased to 24,000 MW and 39,000 MW by the year 2021 and 2030 respectively. Generation

capacity from different primary fuel in the year 2030 would be:

Domestic and imported coal based ST- 19,650 MW (Base Load)

Nuclear power- 4,000 MW (Base Load)

Gas and LNG- 8,850 MW regional Grid- 3,500 (Middle)

Regional Grid- 3,500 MW (Peaking)

Liquid Fuel, Hydro, Renewable- 2,700 MW (Peaking)

4.2.4 Projects under pipeline

As of December 2011, 39 power projects were in the pipeline with 6,784 MW of installed capacity in

the private sector and 5,098 MW of installed capacity in the public sector. Detailed list of the

projects in the pipeline is provided in Appendix 4C. The list includes the name, location, capacity,

fuel type and expected commissioning date of the projects.

4.2.5 Realistic addition

Will be provided in the final report.

4.2.6 Rental and quick rental projects under pipeline

There are no projects under pipeline for rental and quick rentals. The last were commissioned in 2011.

4.2.6.1 Mix of fuel for rental and quick rental

No new rental or quick rental projects are in the pipeline. Figure 4.13 shows the fuel mix for rental projects that were recently commissioned i.e. in 2010 to 2011.

Figure 4.13: Fuel Mix for Rental Projects Commissioned in 2010-2011

48%

26%

26%

FO

Gas

HSD

187

4.2.7 Commercial arrangement of contracts

The nature of commercial arrangements varies depending on the ownership structure of the power

projects. Commercial arrangement of contracts of BPDB owned power plants follow the Public

Procurement Rules (2008) which is discussed in a later section (4.2.9).

Commercial arrangement of contracts in case of IPPs is guided by the Private Sector Power

Generation Policy of Bangladesh (IPP) whose tenure could be anything from 7 to 22 years. Nature of

contracts could be of three manners. The Power Purchase Agreement (PPA) is a contract between

BPDB and the IPP where BPDB is bound to purchase the power produced by the IPP. The Fuel Supply

Agreement is between the IPP and the Fuel Supplier (namely Petro Bangla) where the IPP is

guaranteed uninterrupted fuel supply. The Implementation Agreement (IA) is a direct contract

between the IPP and the Government where the government gets involved in the implementation of

the project.

Rental Power Plants again follow PPR or a competitive bidding process whereas contracts for quick

rentals are awarded based on negotiation. Price determination in such cases either requires the

single buyer to supply fuel where the vendor only gets the capacity payment or the vendor is

allowed to import the necessary fuel directly, provided the fuel is a pass through item. Payment is

made by the single buyer on a monthly basis in Bangladeshi taka, unless otherwise specified in the

contract. The duration of the contract may vary from a minimum of three years up to twelve years.

However, contracts have extended beyond twelve years in the past.

Rental power plants have a ‘must dispatch’ obligation under the contract up to the declared capacity

with an acceptable level of variance. A default results in penalty. But if directed by the load dispatch

authorities to produce a lower amount of electricity or go for a complete shutdown, the vendor is

entitled to receive capacity payment only.

According to the power generation expansion plan, the GoB intends to phase out rental power

plants shortly with the commissioning of gas or coal-based large scale steam turbine or combined

cycle power plants. Any delay in execution of the plan will automatically extend the rental contracts

resulting in the government either choosing to continue providing high subsidies or seek alternatives

measures e.g. tariff inflation, extensive load shedding, etc.

4.2.7.1 Future challenges that power sector (especially national government) could face because

large amounts of very high cost rental power has been contracted

The addition of new power facilities to the national grid for the last few years has come at a

significant cost to the economy and the government as much of the new electricity comes from the

use of expensive fuel oil-fired rental plants which produce power at over six times the prices charged

by the standard gas-fired plants. The financial burden imposed by rental power plants has

contributed to a troubling decline in the country’s scarce foreign exchange reserves because of

import of capital machinery and additional fuel oil for the rental power plants and make hefty

increases in the price of fuel oil and power to ordinary consumers.

188

Since January 2009, there has been an increase of 2,900 MW in power. However, net gain in power

is only about 1,500 MW due to the lack of maintenance and old age of already existing plants. About

1,088 MW out of the 1,944 MW created by the GoB has come from the use of untendered rental

power plants. The rental power plants run on expensive imported fuel oil — either furnace oil or

diesel. The government buys 2 million tones more than it had to, three years back. Moreover, the

power produced by these plants is more than six times the cost of power from the standard gas-fired

power stations which have in the past produced most of the country’s power.

Within a year, till August 2011, BPDB has more than doubled the amount of energy it buys from

rental plants which produce electricity at USD .1630 a kilowatt-hour (unit) which is over six times

what the public sector plants sell power for, USD .024 a unit. At the same time, there has been a 25

percent decrease in the level of low-cost power generated in the public sector plants. Consequently,

according to the BERC, the power board will spend more than double the amount of money on a

unit of power in February than it did when the government first assumed office — USD .065

compared with USD 0.029. In order to deal with these significantly higher costs, the government

increased the retail prices of both fuel oil and power. The price of power was increased by

approximately 25.5 percent whilst the cost of diesel and kerosene went up by 39 percent,

compressed natural gas by 79 percent and furnace oil by 131 percent.

Economists of the country say that the increase in fuel oil and power prices has contributed to the

surge in inflation which has risen from 7.5 per cent in November 2010 to 11.6 per cent in November

2011. They accuse the government of failing to consider the consequences of this policy on an

economy which already had a large budget deficit and claim that it will take a long time for the

economy to recover. The economy is trapped in a cycle where inflation is increasing whilst at the

same time local businesses are not able to invest as banks have lent significantly to the government.

The government has exhausted its borrowing limit, around USD 2.26 billion, for the financial year

2011–12 from the banking channels and thus created a liquidity crisis for the entrepreneurs. Few

steps have been taken thus far by the power board to decrease the use of its low-cost power

generating plants through renovation of its old plants to replace the use of expensive rental plants.

The power board is yet to formulate a guideline for the release and use of the Power Maintenance

and Development Fund which was created with some of the additional money it collected from an

increase in power prices in February 2011.

The rental power plants together have emerged as a serious challenge for the government. The GoB

is left with no option other than spending a substantial amount from its reserve to run the rental

plants, which has again come under strain of late because of the less-than-expected inflow of foreign

assistance and remittance income, on the import of additional quantity of diesel and furnace oil.

Apart from the foreign exchange expenditure, what is worrying the government more is the subsidy

that it would have to provide on account of the supply of fuel to the rental power plants and the

gross mismatch between power procurement and selling tariffs. There are confusions about the

subsidy estimates since varying disclosures are made from to time by men in-charge of the ministry

and agencies concerned. However, according to the latest estimates, if selling tariffs remains

30

1 USD = 82 BDT (as of December 29, 2011)

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unchanged both in the case of petroleum products and power, the government would have to

provide subsidies worth USD 2.8 billion - USD 1.7 billion on oil marketing by the Bangladesh

Petroleum Corporation (BPC) and USD 1.1 billion on power purchase, mainly from rental power

plants, by the Power Development Board (PDB) in the current fiscal. If the 'subsidy' estimates are

right, the government will have difficulty in meeting those, particularly when the allocation against

all types of subsidies in the national budget for this fiscal is little over USD 1.1 billion. In such a

situation, the government will take recourse to what most governments do; it would borrow from

banks in excess of the amount projected in the budget, thus, adding more fuel to an already high

inflationary pressure (point-to-point inflation, according to the Bangladesh Bureau of Statistics, was

12 per cent in last September).

4.2.8 Conversion efficiency of existing plants

One fourth of the generation plants of the power system are more than 20 years old causing higher

maintenance costs and plant outage. The current status of existing gas-fired power plants Facilities

under BPDB control can be roughly classified into 4 groups. The current state of each is shown in the

following table.

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Table 4.11: Classification of Gas-fired Power Plants under BPDB Control


The capacity of a conventional facility using steam turbines (ST) ranges from 55 MW to 210 MW. For

adopted steam conditions, the pressure is 13 MPa for a 210 MW unit (maximum capacity) and 9.0

MPa for a re-heat type with a temperature of 540 °C and non-re-heat type with a temperature of

535 °C. The design performance (thermal efficiency) of such a facility is approximately 30 percent;

lower than that of a coal thermal power generation plant. The oldest facility was produced in 1974.

Almost all gas turbine facilities (GT) are old, small-capacity, and with low thermal efficiency except

for the recently installed large-capacity plants in Tongi and Baghabari. Manufacturers supplying the

facilities include GE (USA), ALSTOM (France), Mitsubishi (Japan), and Hitachi (Japan).

Figure 4.14 illustrates the current state efficiency of each gas-fired power generation facility.

Figure 4.14: Actual Efficiency of Gas fired Power Plant

Source: BPDB, System Planning

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Lack of inspection funds and regular maintenance leads to “break down maintenance” and lower

efficiency. Moreover, the reduced efficiency of the steam turbine facilities was caused by steam

leakage from turbine, absence of a high-pressure heater, difficulty to maintain a vacuum in the

condenser, and leakage from thin pipes in the condenser. Some gas turbines reduced in efficiency

with age. To improve the efficiency BPDB prepares retirement plans for the existing power

generation plants. Higher efficiency may be achieved through re-powering of the existing power

stations, construction of higher efficient gas combined power stations and allocation of gas to more

efficient power stations. The retirement plan by BPDB for the gas fired facilities is given in Appendix

4D.

4.2.9 Procurement procedures for parts, repairs and services

Procurement procedures of goods (parts) and repair maintenance & expert services of power plants

usually follow the Power Procurement Rules-(PPR) 2008 and Power Purchase Agreement-2003 of

GOB. For procurement purposes of projects funded by development partners, partner’s or donor’s

guidelines are followed. State owned power plant projects specifically follow the PPR 2008 rules.

Privately owned power plants also follow a competitive bidding process unless required otherwise

for specific goods. Equipment/parts suppliers are usually responsible for repair and services of parts,

usually bound by ECP contracts, for a certain period of time.

The procurement processes under PPR are briefly discussed below. A detailed summary as well as a

copy of the Public Procurement Rules are attached in Appendix to the power generation sector.

Table 4.12: Procurement Procedures under PPR 2008

Open tendering competition open to all interested firms

Limited tendering competition limited to those invited to tender

Two stage tendering Similar to open tendering but proceeding in two stages

Single-Stage Two Envelope tendering Similar to open tendering but Technical and Financial Proposals submitted

in two separate sealed envelopes simultaneously.

Request for quotations a simplified method of smaller purchases

Direct procurement sole source procurement when competition is inappropriate

Request for proposals used for the procurement of intellectual and professional services

4.3 Key Players

4.3.1 Main customers today and in the future

A Single Buyer System prevails in the power sector making. Almost 100 percent or all of the

electricity generated is either produced or purchased by Bangladesh Power Development

Board (BPDB) making it the sole customer of power generation companies. Nevertheless, a

small portion of electricity produced by rather small IPPs and RPPs are directly synchronized

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to the 33kV distribution line of selected Palli Bidyut Samity (PBS) of the Rural Electrification

Board (REB). Unless a cost-based or economic tariff structure is operational in the country, a

”Power Exchange” or open market system or other improved methods for trading electricity is

not likely to be introduced in Bangladesh anytime soon. As such, the buyer-seller dynamics is

expected to remain the same.

Customers for GE would comprise of power generation companies that have been awarded or

will be awarded contracts to set up power projects in the future. Both private and public

sectors actively participate in the power generation scenario of Bangladesh. The Public–

Private ratios for the current and for the next four years are summarized in table 4.1. As of

2010, the public private ratio in terms of capacity installed stood at 13:9. From the above table, it is

apparent that, the public private ratio for new projects commissioned up to 2016 stands at 7:8. This

indicates an increase in private sector involvement in the power generation sector. Customers in the

future can thus be expected to largely comprise of private power generation companies.

4.3.1.1 Vendors awarded contracts for power generation services for the past 5 years

The list of vendors and Machine OEMs that were awarded to set up Power Plants in the last 5 years are given in Appendix 4F.

4.3.1.2 Key buying criteria for customers

Tariff for electricity is determined by the Government or the single buyer through the Bangladesh

Energy Regulatory Commission (BERC). Customers are bound to procure electricity at the fixed rate.

Grid electricity, being cheaper, is preferred by retail customers as alternative sources usually cost

more.

Suppliers of equipment for both Public projects and IPPS are more or less chosen by a competitive

bidding process. Suppliers are initially shortlisted given they meet all technical standards. The bidder

offering the most competitive price i.e. the bidder offering the lowest tariff is finally awarded the

contract.

4.3.2 Vendors awarded contracts for power generation services for the past 5 years.

Vendors awarded contracts for different power generation services are provided in Appendix 4 E.

Names of equipment/spare parts/ services and corresponding manufacturers, local agents and

contract winning companies are enlisted according to capacity and type of power plants.

4.3.3 Operation expenses for existing plants

Operating, Maintenance, administrative and Personnel expenses of BPDB Power plants during FY

2007-2008, 2008-2009 and 2009-2010 are given in the Appendix 4G. Operating costs and

maintenance cost may vary across power plants depending on type, size and plant utilization factors.

Fuel costs, fixed O&M costs and variable costs of existing power plants are also provided in Appendix

4G.

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4.3.3.1 Maintenance practices

Absence of any specific regulations regarding routine inspections of public power units calls for

generators to independently carry out inspection activities at their discretion. Stringent supply

demand situations make it difficult to halt operations for maintenance purposes. Lack of inspection

funds is also a probable reason for less frequent inspections. Thus operations continue non-stop

until the equipment breaks down leading to greater damage and longer repairing periods; a classic

case of “break-down maintenance.” In order to ensure implementation of regular inspections, the

Power System Master Plan -2010 recommends the revision of existing rules and regulations and

enables the maintenance scheme to shift over from break-down maintenance to time-based or

condition-based maintenance.

Figure 4.15: Conceptual comparison of three different maintenance strategies

Source: Keystone Research

One of the reasons why majority of the plants today are incapable of reaching designated

performance levels of capacity and efficiency is restorative nature of maintenance activities instead

of preventive. As such, most repairs take place after something breaks down. Meeting the stable

power demand would require a transition to the concept of “take care before break down” in place

of the current “repair after break down” philosophy. In other words, proceed with regular

inspections regardless of whether something is broken or not such as “Time Based Maintenance

(TBM)” or heeding equipment predictors during monitoring (Condition Based Maintenance (CBM)”.

4.3.4 Sales channel for GE competitors

Power Procurement Rules-(PPR) 2008 are followed in case of public power plants as discussed

earlier. Selection of sponsors for power plants in case of IPPs follows a similar competitive bidding

process where BPDB issues a Letter of Intent (LoI) to the awarded company. The sponsor company

then starts selection procedures of Engineering and Procurement (EPC) contractor and the

Operation and Maintenance (O&M) contractor. The EPC contractor and the O&M contractor directly

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The National Energy Policy (1995) addresses both energy conservation and environmental issues.

The policy suggests utilization of energy for sustainable economic growth, development of the

indigenous energy sources and assurance of environmentally sound and sustainable energy

development programs causing minimum damage to the environment.

The Environment Policy and the Energy Policy have seven recommendations; of which the following

three are relevant to the power plants.

a. “Environmental Impact Assessment should be made mandatory and should constitute an

integral part of any new energy development project.”

b. “Use of economically viable environment friendly technology is to be promoted.”

c. “Popular awareness to be promoted regarding environmental conservation.”

National land Use Policy 2001

According to the national Land use Policy, 2001, the following objectives could be relevant to power

plants.

Prevention of the current tendency of gradual and consistent decrease of cultivable land for

the production of food to meet the demand of expanding population;

Ensuring usage of land in harmony with natural environment;

Usage of land resources in the best possible way

Protection of natural forest areas, prevention of river erosion and destruction of hills;

Prevention of land pollution; and

Ensuring minimal use of land for construction of both government and non-government

buildings.

Environmental Conservation Rules (ECR) 1997 amended 2003

These are the first set of rules, promulgated under the Environment Conservation Act 1995. The

rules set, among others, (i) the National Environmental Quality Standards for ambient air, various

types of water, industrial effluent, emission, noise, vehicular exhaust etc., (ii) requirement for and

procedures to obtain Environmental Clearance, and (iii) requirements for Environmental Impact

Assessment (EIA) according to categories of industrial and other development interventions.

Obtaining Environmental Clearance

"EIA Guidelines for Industries" published by the Department of Environment (DoE) and the

"Environment Conservation Rules 1997”are the formal documents providing guidance for

conducting Environmental Assessment. Any proponent planning to set up or operate an industrial

project requires obtaining an “Environmental Clearance Certificate” from the DoE, under the

Environment Conservation Act 1995 amended in 2002.

The application for Environmental Clearance includes a project feasibility study report, the EIA

report, No Objection Certificate (NOC) of the local authority; Mitigation Plan for minimizing potential

environmental impacts; and appropriate amount of fees in ‘treasury chalan’ (in the present case the

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amount is BDT = 100,000). The DOE authority reserves the right to request additional information,

supporting documents, or other additional materials for the proposed project.

The ECR (1997) focuses on the classification of industries into three main categories i.e. Green,

Amber and Red; based on their pollution potential. Red listed industries are those that can cause

'significant adverse' environmental impacts and are, therefore, required to submit both Initial

Environmental Examination (IEE) and an EIA report. These industrial projects may obtain an initial

Site Clearance on the basis of an IEE based on the DoE’s prescribed format, and subsequently submit

an EIA report for obtaining Environmental Clearance.

Power Plant projects fall under the “Red” category according to ECR’97, and would therefore

require, among others, an EIA for obtaining Environmental Clearance from the DoE. This involves

three steps. First, obtaining site clearance to permit pre-construction and construction activities;

second, obtaining approval of the EIA study and third, obtaining Environmental Clearance. This

permit is required before the power station can be operated.

Refer to the “Environmental Regulation for Existing Plants and Current emission Levels” section

under the power generation sector study for policies around particulate and gaseous emissions

levels.

4.4.2 The policy on selection of a plant size for a particular location

The determination of the size of a power plant in Bangladesh usually precedes the selection

of a suitable site. Demand for power and a least cost expansion plan is the basis for the

generation expansion planning procedures. Fuel availability and cost drives the selection of

generation options. Optimal locations for power plants are then ranked considering the

following factors:

Proximity to the load centers and their forecast load demand.

Transmission to the load centers.

Availability of adequate space at the site.

The value of the land for other uses.

The suitability of the ground and geotechnical conditions for construction of the plant.

The possibility of flooding or seismic events.

Potential sources of cooling water and makeup water.

Fuel deliverability at the site.

The impact of the facility in a positive or negative manner on the local environment.

Sources of fill and construction materials.

Access to the site for transportation of heavy equipment and construction materials.

Availability of social facilities near site.

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4.5 Future Issues and Challenges

4.5.1 Impact of global demand-supply dynamics on the Bangladesh market

From the demand side perspective, there is no relationship between demand for electricity

and the global demand-supply situation.

Any increase in the price of major equipment in the international market will eventually

increase the investment cost for setting up of a power plant in Bangladesh, resulting in cost

overrun. Delays in the procurement of such equipment may result in a time over-run for a

project. Any increase in the price of fuels in the international market will eventually increase

the generation costs.

4.5.2 Impact of current gas availability and low gas pressures

The power generation scenario of Bangladesh heavily relies on natural gas as fuel source. The share

of other fuel sources is negligible. At present fuel consumption for power generation is as follows:

Table 4.18: Present Fuel Consumption Scenario

Total D-Coal I-Coal Gas FO HSD Others D-Coal I-Coal Gas FO HSD

[GWH] [GWH] [GWH] [GWH] [GWH] [GWH] [GWH] [1,000t/y] [1,000t/y] [mmcfd] [1,000t/y] [1,000t/y]

35,474 659 0 28,885 3,948 1,564 416 239 0 792 882 405


About 82.12 percent of the annual power is currently being generated from indigenous natural gas

reserves. The gas demand ratio of the power sector (grid Power and captive power) to all sectors

used to be around 45 percent, but the consumption pattern started declining from the 2007. The

trend of the Gas Demand Ratio is shown below:

Table 4.19: Gas Demand Ratio of the Power Sector for All Sectors


The following figure shows the month-wise availability of gas in the power sector for the years 2009,

2010 and 2011 (up to July). It is clear from the trend that the supply of gas was reduced in the latest

years even during the peak season. Due to this gas supply shortfall a number of plants could not

operate at their usual capacity. This causes an average generation loss of around 500-800 MW

currently.

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Figure 4.16: Month-wise Average Gas Availability for Power Generation in MMCFD


Production loss due to the gas shortage and low gas pressure reached 792 MW as on November 1,

2011 (Appendix 4 I, Table 4I.1). Two of the plants had to be kept inactive and the Haripur NEPC GT

110 MW plant had to be converted to a liquid fuel based plant because of the lack of adequate gas

supplies. It should also be noted that the Shikalbaha Peaking GT was in partial operation only

because Chittagong ST Unit 2,180 MW was under maintenance. Otherwise this plant would have had

to be shut down as well.

4.5.3 Plan to address low gas pressure at power plants

The generation expansion plan undertaken by the government reduces the power system’s reliance

on natural gas as the primary fuel. However, a large portion of the future demand of power is still

planned to be met by gas based generation. The projection of the status of the gas based power

production scenario is shown in the Appendix 4 I, Table 4I.2.

Gas Requirement will rise up to nearly twofold by 2018. In order to meet the projected demand for

gas in power generation, the following plans of actions have been undertaken:

New gas based plants are planned where gas is available (Sylhet, Bhola).

At least 50 percent allocation of total produced gas is planned for power generation.

Enhanced exploration activities to ensure gas supply to power plants.

All the new gas based power stations are designed with gas booster compressor.

To meet additional gas demand for the gas based proposed power plants in Meghnaghat,

Haripur and Siddhirgonj areas and also to ensure gas supply with requisite presser in existing

power plants in Siddhirgong area, GTCL has taken up Bakhrabad - Siddhirgonj Gas

Transmission Pipeline project under WB loan. Additional 380 MMSCFD gas will be required

to be transported to the proposed and existing power plants. The pipeline has designed to

supply 400 MMSCFD with a pressure 1000 psi (g). This pipeline would also be the initial

source to supply gas to the southern part of the country. Tender evaluations for the pipeline

project have been completed and GTCL expected to place work order within June, 2011 and

this pipeline project will be commission by June, 2013.

To overcome the acute gas shortage with low presser TGDTCL has taken up MonohNorsindi

500

550

600

650

700

750

800

850

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Gas Availability in 2009 Gas Availability in 2010 Gas Availability in 2011

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gas pipeline project which will bring benefits to the gas consumer of Demra, Siddhirgonj and

Narayangonj areas. TGDTCL has given work order but there is case in the court against this

work order, for which contractor could not start the work. They expected the contractor will

start work very soon and the project will be completed by June, 2012. After completion this

pipeline gas flow & pressure will be increased in some extent in Siddhirgonj RMS which can

be used to operate gas based power plants in this area.

CHEVRON Bangladesh has started installation of Gas Booster Compressor at Muchai near

Rashidpur gas field and installation and commissioning work will be completed by

September, 2012. The inlet and outlet pressure of the compressor is 1000 ps (g) and 1300

psi (g) respectively. Gas pressure at the subsequent area will be improved.

GTCL has also taken up a project to install the Gas Booster Compressor at Ashuganj (AGMS).

Tender evaluation has been completed and they expected to give work order in the month

of May, 2011 and probable date of completion by end of 2012. This will also help to increase

gas flow and pressure in Dhaka area.

CHEVRON Bangladesh has started exploration of gas in Moulovibazar and they have a plane

to supply additional 900-1000 MMSCFD gas from Bibyana and Jalalabad gas field by 2013.

4.5.4 Significance of financing as a bottleneck for power projects

Power Generation is a capital-intensive sector requiring substantial investment for setting up power

plants. Therefore, financing is always a major drawback in the growth of the power sector. Large

multilateral financing institutions like the World Bank or the Asian Development Bank have rarely

showed any interest in financing power generation projects in Bangladesh until recently. These

organizations have, in recent years, sanctioned loans to a few public sector power generation

companies to install medium size (120/150/335/360 MW) power plants. Recently, the Government

has invested an amount equivalent to more than one billion US Dollars in a single project for setting

up of 820 MW diesel-based peaking power plants in various locations of the country. These

instances indicate that financing of large projects will get positive responses from relevant quarters

in future. However, bureaucracy involved both in the donor and recipient ends make the

implementation time of the projects unpredictable lengthy.

On the other hand increased government borrowing from the commercial banks is aggravating the

liquidity crisis faced by banks suppressing funds available for private sector investments. Moreover

an implementation of the Basel III by 2014 would require banks to follow more stringent standards

of maintaining capital adequacy and liquidity which might prove getting financing from the

commercial banks more difficult.

4.5.5 Scope for bundled sales and sales dependent financing of equipment

Equipment sales are usually not a package for procurement. Power generation projects are

procured on an Engineering Procurement and Construction (EPC) basis. The vendor bidding for the

project will be responsible for Engineering, Procurement and Construction of the project as a

whole.

Normally the turn-key EPC contractors are awarded a certain power project with the condition that

the turn-key contractor will supply goods from reputed companies like, ABB, Alsthom, GE or

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