Quick rental power plants in Bangladesh: A preliminary assessment

The paper examines the economics of quick rental power plants in Bangladesh. Over the last few years, severe power crisis compelled the government to enter into contractual agreements with the private entrepreneurs for high-cost temporary solution, such as rental power and small independent power producers (IPPs), mostly diesel or liquidfuel based, on an emergency basis. The paper observes that prudent economics requires that the strategy for meeting the electricity demand be based on least cost option in Bangladesh. For this, an integrated approach to the power sector is needed since the current crisis is, to a large extent, a fuel crisis caused by delays in decision making regarding power generation and finding a substitute for the depleting domestic gas supply. The shortage of gas increases the cost of power by raising the dependence on imported liquid fuel and lowering the efficiency and capacity of power plants designed to run on gas. The paper recommends that new capacity procurement should be based on least cost criteria to minimise the cost of power to the economy to support poverty reduction and improve competitiveness of the economy.click here  to download the Paper