Spread the love

India Amends Power Export Rules Amid Bangladesh Electricity Supply Concerns(Adani’s Godda Project)

Introduction:- India made changes to its rules about exporting electricity to other countries, in August 2024. These changes were made to protect Indian companies from political risks in countries like Bangladesh. The new rules allow Indian power companies to bring the electricity back to India if there are delays in payments from the countries they supply. One of the companies affected by this is Adani Power, which runs a power plant in Godda, Jharkhand, It’s Called “Adani’s Godda Project“, which sends all its electricity to Bangladesh. Despite these changes, Adani Power has assured that it will continue to meet its commitments to Bangladesh.

Table of Contents

What is the Godda Project?

Adani Power runs a very large power plant in Godda(It’s called Adani’s Godda Project), Jharkhand, that can produce 1,496 megawatts (MW) of electricity. This entire amount of electricity is sent to Bangladesh. The project began in 2017 when Adani Power signed a 25-year agreement with the Bangladesh Power Development Board (BPDB). This agreement, called a Power Purchase Agreement (PPA), marked India’s first project that sends electricity across borders to another country.

Goals and Benefits of the Adani’s Godda Project

Goals of Adani’s Godda Project

Better energy security in Bangladesh: This was to ensure a stable and low-cost supply of electricity to Bangladesh. In fact, the country suffered from frequent power cuts and was highly dependent on costly liquid fuel-based generation.
Economic development in Bangladesh: Availability of stable electricity would ensure industrial growth, with greater employment opportunities and better general living conditions in Bangladesh.
Strengthening India-Bangladesh Relations: The project was considered a meaningful expression of cooperation between the two countries, deepening their economic and strategic ties.
Launching India as an Energy Trader: Godda was India’s flagship initiative to seek the destiny of becoming a significant regional energy player.

Benefit of Adani’s Godda Project

Lower Electricity Cost to Bangladesh: The Godda electricity would cost Bangladesh cheaper than the existing sources of electricity generation for the country, thus saving electricity cost for the customers.
Increased Power Supply Reliability in Bangladesh: The plant was expected to reduce power shutdown and load shedding in Bangladesh and enhance the reliability of power supply in that country.
Environmental Measures: The plant has installed Flue Gas Desulphurization (FGD) and Selective Catalytic Reduction systems to minimize the emissions and ensure compliance with environmental friendly standards.
Employment Generation: The project provided job for the people in both, India and Bangladesh during the construction and operational stages.
Energy Security Upgradations for Both Countries: The project diversified the energy sources to Bangladesh and gave India a strategic asset at the regional level.

Criticism and Concerns

The Godda project has faced some criticism. One issue is that the coal used at the Godda plant is imported from a mine in Australia, which makes the electricity more expensive for Bangladesh. Bangladeshi officials have said that the cost of coal under the PPA is too high. There are also concerns about the high costs of maintaining the plant and its capacity, which adds to the overall expense.

Why Does Bangladesh Need to Import Power?

Although Bangladesh has expanded access to electricity for its people, the country still struggles with problems in getting enough fuel to run its power plants. This has led to many power plants being underused. By June 2023, Bangladesh had a total power generation capacity of 28,098 MW, but about 11,621 MW of this capacity was not being used because of financial and logistical problems.

What Do These Changes Mean?

The new rules in India give power companies more options, reducing their reliance on selling electricity to other countries when there are payment issues. While these changes might cause some short-term disruptions in the supply of electricity to Bangladesh, experts believe that Bangladesh’s long-term energy plans won’t be greatly affected.