@BananaRepublic @LeonBlack08 @SoulSpokesman @Pingle
Guys the overall cost of the power supplied by Adani in the last fiscal was 12 Taka/kwh, which is only around 2 Taka/kwh more than the cost of saying generating the same power from Payra but of course you need to pay for the plant, obtain land and not worry about pollution.
It now seems almost certain that the price is based on current coal prices and so the initial quoted 14 Taka/kwh was at the much higher coal prices from 18 months ago.
"The Adani power costs Bangladesh about 12 taka ($0.1008) a unit, an official of the Bangladesh Power Development Board said, citing the latest audit report for financial year 2023/24.
That is 27% higher than the rate of India's other private producers and as much as 63% more than Indian state-owned plants, he added."
I will reiterate that the argument was always primarily about the need.
Nonetheless regarding cost per unit, we need to take a deeper look before comparing the rates.
The Adani group responded to the TBS report and compared the costs of local stations with theirs and here's what The Business Standard responded in response to Adani claims regarding cost. It also points finger at the 12 tk claim and it points finger at economies of scale in the local plants to explain why the local power plants were higher. Looking only at cost/kwh alone is a narrow view to assess why this deal was bad for Bangladesh. We need to take into account overall need based on capacity vs demand.
Please read the full article in the link. I am just posting the TBSs response to Adani -
The costly power from Adani’s 1,600MW coal power plant in India is one of the many reasons why Bangladeshis are paying significantly higher rates to use electricity in recent years
www.tbsnews.net
Our reply:
The rejoinder does not factually contradict any part of our news story. But it tried to establish that Adani's power was not so expensive by citing examples of the high tariff of Rampal and Payra coal power plants.
The Business Standard's report on Adani clearly mentioned that the costly power from Adani's plant is one of the "many reasons" why Bangladesh is paying significantly higher rates to use electricity in recent years.
The rejoinder claimed that Adani's power tariff ultimately came down to Tk 11.89 per unit after 15 months of operation and this is lower than that of Rampal and Payra power plants.
The fact is the power tariff of Rampal and Payra power plants are also questionable and they demand a separate story. But if we dig into how the tariffs of Rampal and Payra became higher, we find that
Adani's tariff was lower because its power plant was utilized to maximum potential while Rampal and Payra operated partially.
The generation cost of per unit electricity includes several cost components —---fuel cost, capacity payment and Operation and Maintenance charge. If a plant's load factor or usage of the plant is higher, the generation cost of per unit electricity of that particular plant will be cheaper.
On the other hand, if a plant remains unused or runs at limited capacity, its per unit electricity cost will be higher due to its capacity and operation and maintenance charge.
During the said period, the Adani's plant load factor (PLF) or usage of the plant capacity was 90% while Payra and Rampal's PLF was only 60% and 34%. Shortage of coal obstructed Payra and Rampal to generate electricity at highest capacity.
As these plants were not in maximum use, but took the capacity charge as fixed cost, therefore, overall cost of per unit electricity of these plants went up.
We have argued that compared to power purchase cost from the Indian electricity exchange market, the price of Adani's power was way higher. The rejoinder just stated that we compared Adani's tariff to "decade-old" Indian power exchange rate, adding that the price of Adani power is very much aligned with the current Indian exchange market rate.
But we cited official data saying, Bangladesh bought Adani's power for Tk14.02 per kilowatt-hour (or a unit) in 2023. Bangladesh bought another 1,100MW power from India's electricity exchange market at Tk7.83 per unit. (This is what I was referring to in my previous post - of we needed to purchase electricity from India due to higher demand, why didn't we pursue more imports from TriPura at a significantly lower cost.)
In the
first quarter of 2024, the cost of Adani Power's electricity has been costlier than other peer coal power plants in Bangladesh.
Cost of Payra Power plant electricity was Tk12.73 per kWh and the cost of Rampal plant's electricity was Tk11.47 in January, while the cost of Adani's electricity stood at Tk15.
In February, Payra and Rampal power plants' electricity cost was Tk13.80 and Tk13.02 per unit respectively, while Adani Power plant's electricity cost was Tk15.75.
In March, Payra's electricity cost was Tk12.65 per kWh while the cost of Adani Power's was Tk13.92 per unit.
Our report also questioned whether it was necessary to buy Adani's power at such a cost when Bangladesh still had so much surplus power generation capacity. Due to such a bad planning coupled with economic crisis, today Bangladesh has piled up arrears of $800 million with Adani alone.
