Bangladesh has given an in-principle go-ahead to expand coal-fired power generation by a further 2,640 megawatts (MW), with two mega projects expected to cost more than $3 billion, officials said.
One of the proposed plants, with a capacity of 1,320MW, is planned at the existing Matarbari coal-fired power plant site in Cox’s Bazar, where transmission infrastructure for evacuating electricity is already in place. The project is estimated to cost about $1.56 billion.
The second 1,320MW plant is planned at the Payra power plant site in Patuakhali.
“We are expected to add another two coal-fired power plants despite environmental concerns,” Bangladesh Power Development Board (BPDB) Chairman Engineer Rezaul Karim told Just Energy News.
Bangladesh-China Power Company Ltd (BCPCL) has already prepared a development project proposal for the 1,320MW Matarbari expansion, with an estimated cost of $1.56 billion, he said.
Why Bangladesh is turning back to coal
Mr Karim said disruptions to energy supplies linked to the conflict between the United States and Iran had exposed the risks of relying heavily on gas-fired power generation.
“We have already suffered in electricity generation from gas-fired plants due to the closure of the Strait of Hormuz amid the US-Iran war,” he said.
He added that oil-fired power plants had also become more expensive following disruptions in the Red Sea.
“Therefore, we have only a reliable grid-tied option for expansion through coal-fired power plants,” the BPDB chairman said.
Bangladesh currently has about 6.69GW of installed coal-fired generation capacity. The proposed projects would increase total coal-fired capacity to about 9.33GW once completed.
According to Mr Karim, the first unit of the expanded Matarbari facility is expected to be commissioned within three years, while the second unit would take about four years.
The government may finance the Matarbari project from its own funds if it fails to secure external financing for the coal-fired project, officials said.
Bangladesh currently needs about 20 million tonnes of coal a year, mainly sourced from Indonesia, to operate its existing coal-fired power plants. Consumption would rise significantly after the proposed expansion, officials said.
For the Payra Phase II project, the government is also seeking financing from China’s Export-Import Bank, Mr Karim said.
Solar expansion planned
The government says it intends to offset some of the environmental impact of the coal expansion by accelerating renewable energy development.
“We are planning to produce 3,000MW of electricity from rooftop solar power by February next year,” Mr Karim said.
The government also plans to raise the share of renewable electricity to 20% by 2030 and 30% by 2040.
Bangladesh currently has about 838MW of grid-connected solar generation capacity, compared with total installed electricity generation capacity of around 29.2GW.
The government has also decided to carry out zonal mapping to identify areas suitable for new power generation projects as part of a longer-term plan extending to 2050.
The proposed coal expansion comes as Bangladesh seeks to balance energy security and rising electricity demand against its commitments to reduce emissions and increase renewable generation.