The coal-fired thermal power plant built in Bagerhat’s Rampal generated a total of 3.45 billion units of electricity in the 2023–24 fiscal year (FY). In contrast, the power plant earned BDT 51.4 billion that year. Of this, BDT 21.42 billion came as energy charges (for fuel and related expenses), while BDT 32.76 billion came from capacity charges. That means around 64 percent of the earnings of this 1,320-megawatt power plant came solely from capacity charges.

Experts believe that such high capacity charges should not be the case if the Bangladesh-India Friendship Power Company Ltd. (BIFPCL)-operated plant had been producing electricity at a normal rate. They have called for a review of the plant’s actual power generation capacity and a thorough audit of the financial inconsistencies, as capacity charges have become a major burden for the power sector.

The coal-based power plant, located in Rampal Upazila of Bagerhat, has faced controversy from the very beginning. Environmentalists have long warned that such a project near the Sundarbans could pose serious risks to the environment. Experts have also raised questions regarding the project’s inflated construction costs, the price of imported coal, and other financial issues.

Dr. M Shamsul Alam, an energy expert and Professor at Daffodil International University, told Bonik Barta, “The Rampal thermal power plant has been built as part of a plan to provide financial benefits to India. BPDB has been forced to buy electricity from this plant at a higher price. We’ve seen how heavy capacity charges are financially crippling BPDB. Yet, Rampal continues to take in huge amounts in capacity charges.”

Criticizing the project taken up during the previous AL government, he said, “There were environmental concerns about the Rampal plant from the start. On top of that, the cost of the project and the price of electricity produced raise questions. We don’t even know what the actual contract says. This power plant brings no financial benefit to Bangladesh. That’s why there’s enough ground to move through legal channels and cancel this project.”

According to the financial report of the BIFPCL, the Rampal thermal power plant generated 3.45 billion units of electricity in the last fiscal year. It earned BDT 14.89 per unit, of which BDT 9.49 came from capacity charges. That means the plant received a total of BDT 32.76 billion in capacity charges alone during that fiscal year. In FY 2022–23, the plant had produced 1.33 billion units of electricity, earning a net income of BDT 20.64 billion—BDT 10.05 billion from energy charges and BDT 13.6 billion from capacity charges.

Since the current fiscal year is still ongoing, the Rampal plant’s updated financials have not been published yet. The Bangladesh Power Development Board (BPDB) has also not provided any data on how much electricity the plant supplied or how much it earned in capacity charges during the current FY 2024-25.

When asked about the ideal ratio between electricity sales and capacity charges, BD Rahmatullah, former Director General of the Power Cell, told Bonik Barta, “If a power plant is built with massive investment but fails to generate electricity according to demand, or if its capacity charges are significantly higher than other plants, then there’s no justification for such a plant. BPDB has no opportunity to make a financial gain from a plant like this.”

Discussions with power sector experts reveal that an ultra-supercritical 1,320-megawatt prower plant should be able to supply around 750 million units of electricity per month—roughly 9 billion units per year. But the Rampal plant produced less than half of that—only 3.45 billion units in FY 2023–24. Its second unit went into commercial operation on March 12 last year.

The Payra thermal power plant in Patuakhali, with the same 1,320-megawatt capacity as Rampal, is operated by Bangladesh-China Power Company Limited (BCPCL). In FY 2023–24, Payra generated over 7.54 billion units of electricity. It earned BDT 99.22 billion that year. Of this, BDT 48.42 billion came from energy charges and BDT 49.07 billion from capacity charges.

An analysis of BCPCL’s financials shows that Payra earned BDT 13.14 per unit of electricity sold, with BDT 6.54 of that coming from capacity charges. The unit generation cost for Payra stood at BDT 10.43.

Experts say that, given the high capacity of the Rampal thermal power plant, the capacity charge it receives is disproportionately large. Moreover, the cost per unit of electricity produced at Rampal is higher than that of other coal-based plants. The plant has also experienced repeated shutdowns due to various faults and coal shortages. In 2023 alone, after its launch, the plant was forced to shut down seven times due to mechanical issues and lack of coal. Plant officials say restarting the facility after shutdowns incurs significant additional costs.

When asked, BPDB Chairman Engineer Rezaul Karim told Bonik Barta, “There are discrepancies between the income and expenditure reports of BIFPCL and BPDB. In the last board meeting, BIFPCL was advised to review and make corrections in light of those differences.”

A senior BPDB official, requesting anonymity, told Bonik Barta that the Rampal plant often remains idle for various reasons, leading to large payments in capacity charges despite low power generation. He added, “Sometimes the plant has to be kept idle simply because of a lack of fuel. It had to be shut down last fiscal year due to a fuel shortage.”

The Rampal thermal power plant, a joint venture project, is equally owned by the Bangladesh Power Development Board (BPDB) and India’s National Thermal Power Corporation (NTPC). According to the Power Division, the estimated cost of building this ultra-supercritical coal-fired plant was initially set at BDT 16 billion, based on an exchange rate of BDT 80 per US dollar at the time. However, according to BIFPCL data, the project’s accumulated expenditure now stands at BDT 237.14 billion. Of that, BDT 32 billion came from equity and BDT 178.74 billion from ECA loans.

When asked, energy expert and BUET professor M Tamim told Bonik Barta, “The main reason the capacity charge is higher than usual is that the plant has been left idle. Power purchase agreements generally assume that the plant will run year-round at an 85 percent plant factor, and capacity payments are based on that. If a power plant runs continuously, then the capacity component should never exceed the energy component.”

The joint investment plan between Bangladesh and India to build the coal-fired power plant was initiated in 2010. Back in 2013, a power purchase agreement was signed between BIFPCL and BPDB. Land acquisition, land development, and road construction began for the plant that same year. Nearly nine years later, on December 23 of 2022, the first unit of the plant began commercial operation.

When asked about the capacity charge issue at Rampal, Muhammad Fouzul Kabir Khan, Adviser to the Ministry of Power, Energy and Mineral Resources, told Bonik Barta, “Capacity charge is tied to power generation. It’s not just in Rampal’s case. But their electricity price is higher than other coal-based plants. A benchmark has been set at Matarbari. There, the per unit price of electricity has been fixed at BDT 8.45. Rampal’s cost is BDT 13 to 14 per unit. We are reviewing Rampal’s capacity charge, energy charge, and other issues. These will be revised.”