Adani power plant to incur Tk 700 cr monthly loss

Coal prices estimated 42pc higher

Mahfuja Mukul: Bangladesh is gradually moving towards coal-based power plants from rental-quick rental. There are currently two coal-fired power plants in production. Three more centers are coming on stream in the next few months. Recently, in a meeting, a comparative picture of the cost of power generation of these five centers was presented, which came into the hands of Daily Industry.
Payra is among the largest coal-fired power plants started production in 2022. The Rampal plant started supplying power to the national grid last month. Three more centers are going to start production in a few months. Although these power plants are supposed to use almost the same quality of coal, there is an unusual difference in prices. Among these, Adani’s power plant has the highest coal price.
Coal prices at Adani’s plant have been pegged at around 42 per cent higher than at Payra power plant. About $64 million or Tk 700 crore will be lost in this month. This information has emerged in an analysis of the Power Development Board (PDB).
This information was highlighted in a meeting held recently with the representative of Adani in the electricity department. It shows the cost calculation of five power plants by sector wise analysis.
In this case the cost has been calculated assuming full capacity utilization (85 percent plant factor) of each center.
According to PDB data, the price of imported coal for Payra power plant has been pegged at $245 per metric ton. In this case, the calorific value (heating capacity) of each kilogram of coal is 4,600 kcal. Coal of the same quality is being bought for Rampal power plant at $254.38 per metric ton.
Besides, the price of coal for Barisal coal-based power plant has been fixed at $260 per metric ton, $270 for Banshkhali SS power plant and $347 for Adani.
According to this, the price of coal at Adani’s power station is higher than Payra’s power station by $102 per metric ton or 41.63 percent. And if compared with the Banskhali power plant, the price of coal at Adani’s center is higher at $77 per metric ton or 25.52 percent.
Fuel cost per unit of power generation based on full capacity utilization (85 percent plant factor) of five power plants was also highlighted in the meeting. It can be seen that if the capacity is fully utilised, the energy cost per unit of power generation in Payra power plant will be Tk 13.89, Barisal power plant Tk 14.57, Rampal Tk 15.02, Banshkhali power plant Tk 15.37 and Adani Tk 19.62.
In other words, Adani’s fuel cost is Tk 5.73 or 41.25 percent higher than that of Pyara.
Meanwhile, a separate account was presented in the meeting with a comparative analysis of the coal prices of Payra and Adani power plants. It shows that according to the Newcastle Coal Index last December, the price of coal was $404 per metric ton.
A discount of 45 per cent per metric ton is given on the quality of coal being procured for Payra power plant. According to the agreement, if the price of coal exceeds $110 per ton, Payra Power Plant has to pay 55 percent of the additional price.
The terms of this contract of Pyara are being followed for other coal power plants in the country. However, the discount factor was not considered in the contract executed with Adani in 2017. In breach of contract, Adani will have to pay the full price for the coal. In this, 4,600 kilocalories of heating coal will cost about $64 million or Tk 684 crore per month (one dollar = 106.95 taka).
Those concerned say that the additional benefits provided by the government for Adani’s power plant do not end here. Adani will get more benefits by defaulting on the deal. In this case, if Adani’s power plant is ready to supply power at full capacity, but the Power Development Board (PDB) does not purchase power according to the demand for any reason, Adani will still get the full price of the coal. However, no such condition has been placed in the case of other domestic power plants.
Evidence of this was found by finding copies of contracts executed with Adani. Sub-section (4) of Clause 13.1 (g) of the Agreement contains a provision in this regard. It shows that if the dependable capacity of the power plant is 70 percent at 85 percent plant factor (full capacity), then if PDB buys 50 percent of the power, then additional 20 percent of the coal price has to be paid.
Again, if the dependable capacity of the power plant is 70 percent at 60 percent plant factor (under capacity), PDB will have to pay additional 10 percent coal price if it buys 50 percent power.