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Indian Adani Power Plant starts power supply to Bangladesh today

Staff Reporter:

Though commercial operation of Adani Power’s Godda Jharkhand plant started on April 7 to import about 800 MW of electricity by Bangladesh, the tariff dispute has not been settled yet.
Initially, Adani started its power export to Bangladesh today (March 9) on a test basis.
According to official sources, state-owned Bangladesh Power Development Board (BPDB) approved a commercial operation date (COD) following its inspection by a 3-member technical team, headed by a superintendent engineer (energy audit).
“The technical team went to India in the third week of March and returned home in the first week of April spending about 10 days in Apani’s Godda power plant,” a source told on condition of anonymity as the issue is highly sensitive.
“But the issue of the tariff was not settled. After objection from the Bangladesh side, the Adani Power offered to lower the coal price, still it is not complying with Bangladesh’s stand,” he said.
He mentioned that Adani uses GAR of ICI-5000 coal which is low quality coal, but wants to quote the price GAR of ICI -6500.
Instance the price of an ICI-6500 is $179.84, while the price of ICI-5000 is $95.50. In this case, Adani is seeking to quote the coal price at $179.84 which is not acceptable to Bangladesh,” he added.
He also mentioned that following the recent discussion between Adani and BPDB in Bangladesh, Adani has agreed to lower the price and wanted to keep it between the tariffs of Payra power plant and Rampal power plants.
“But they don’t stick to a certain formula of coal pricing which is problematic for Bangladesh as every month BPDB will have to negotiate with Adani on the tariff issue which is not desirable for Bangla-desh”, said the senior official of the BPDB.
Earlier, a high level team of Adani Group came to Dhaka on February 23 and discussed resolving the issues on “coal pricing mechanism of the power purchase agreement (PPA)”.
Both the sides heard each other and they presented their points in favour of their respective sides on the issue. Adani’s representative informed them that they would communicate BPDB’s stance on the coal pricing mechanism of the PPA to their top management and they will sit in more follow-up meetings.
The visited Dhaka as the Bangladesh government sought a revision to the power purchase agreement (PPA) it signed with Adani Power Ltd for importing electricity over a 25 years of period from its ther-mal power plant in Jharkhand, India.
It seems the price of coal to be purchased as fuel for the project has emerged as the prime bone of con-tention.
The BPDB sent a letter to the Adani Group following a request it received in relation to opening LCs (in India) to import the coal that will be used as fuel for the 1,600 MW plant in Jharkhand,” a highly-placed official of BPDB told .
Since practically all the power generated by the plant located in the Godda district of Jharkhand state will be exported to Bangladesh, Adani Power requires a demand note from BPDB that it can present to Indian authorities before opening LCs against the coal import.
The cost incurred to import the coal, including transport from port to plant, will ultimately be borne by Bangladesh, with the price factored into the PPA’s tariff structure.
At that time when a huge volatility was prevailing on the global market with soaring fuel price, Adani Power recently sent a request for BPDB to issue the demand note, where the coal price is quoted at $400 per metric ton (MT) – far above what BPDB officials believe it should be given the present state of the international market.
“In our view, the coal price they have quoted ($400/MT) is excessive – it should be less than $250/MT, which is what we are paying for the imported coal at our other thermal power plants,” the official said.
The BPDB official referred to the coal procurement of Rampal Power Plant where the supplier Bashundhara Group won the contract to supply coal at $232.33 per ton to reach the product to the jetty. However, later the coal price declined substantially.
The same sources also said Bangladesh’s stance on the issue was communicated to Adani Power officials during the visit of a delegation led by State Minister for Power, Energy and Mineral Resources Nasrul Hamid to the site of the power plant that took place in the first week of January.

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