Tax Benefit to Coal-based Power Plants

[eastwatch]

Tax break for coal power plants - Govt announces waiver to lure in investors

Friday, July 19, 2013
Tax break for coal power plants
Govt announces waiver to lure in investors
Sohel Parvez

Tax break for coal power plantsThe National Board of Revenue has given a 15-year tax waiver for electricity generation through coal in a bid to encourage private investors to establish coal-based power plants.

Companies that will sign contracts with the government by June 30, 2020, to establish coal power plants will receive the tax break on income from electricity generation, the NBR said in a notice.
Companies that will begin producing electricity after June 30, 2023, will not get the facility, it added.

Foreigners working in those private coal power plants will also receive a three-year tax waiver from the day they arrive in Bangladesh.

Companies will not require paying taxes on interest payment on foreign loans.

Payment by companies as royalties, fees for technical know-how and technical assistance will also be eligible for the waiver, according to the notice.

The NBR also offered tax benefits for private power generation firms that produce electricity based on other types of fuels, except coal.

The revenue administration’s move coincides with the establishment of a 1,320 megawatt coal-fired power plant under a joint venture in Rampal, 14 kilometres from the Sundarbans.

Left-leaning organisations and green activists oppose setting up the coal power plant near the world’s largest mangrove forest, on grounds that the coal-power plant will threaten biodiversity.
The tax incentive comes as the government plans to gradually cut dependence on gas-based power generation by increasing electricity production from coal through the use of domestic deposits and imports.

Coal now accounts for 2 percent of total power generation capacity with the government aiming to raise the share to 24 percent by 2017.

By 2030, coal is projected to produce half of total electricity demand at 38,700 megawatts, according to the Power Sector Master Plan.

Presently, Bangladesh has a reserve of 2,797 million tonnes of coal in five coal mines in the north and northwest. Of the mines, electricity generation has begun at Boropukuria in Dinajpur.

Coal in the rest of the mines is yet to be extracted, in the absence of a coal policy and opposition from left organisations and environmentalists over the coal extraction method. Last year, a government-formed expert committee submitted a draft of the coal policy.

The tax incentives have been given in advance to encourage private investors to establish coal-fired power plants after finalisation of the coal policy, an NBR official said.

For using other fuels for electricity generation, companies will receive a 15-year tax break for starting production by December 31, 2014. Foreign employees of these firms will get a tax break for three years from the day they arrive in Bangladesh.

These companies will also not be required to pay taxes on the interest payment on foreign loans, royalties, fees on technical know-how and technical assistance.

Private companies will get five-year tax exemption if they start power generation after December 31, 2014.

 

[Mattrixx]

BD should give priority to coal based power plants for its long term future.

 

[saleen_s7]

are the coals which will be imported be also free of tax? secondly, is coal really the best way to generate electricity?

 

[Mattrixx]

are the coals which will be imported be also free of tax? secondly, is coal really the best way to generate electricity?

Coal is a good material to generate electricity. Cost effective and reliable. But its not environment friendly.
As BD is largely dependent on gas. As gas reserve is limited. We have to think different to secure the power
sector. In that coal is a good choice for BD. As oil, gas and hydro these things are not suitable now.
BD got 3 billion tons of coal reserve. And the world is also dependent on coal.

OECD iLibrary: Statistics / OECD Factbook / 2013 / Electricity generation

Welcome to Energy and Mineral Resources Division, Bangladesh

 

[Skies]

Coal is a good material to generate electricity. Cost effective and reliable. But its not environment friendly.
As BD is largely dependent on gas. As gas reserve is limited. We have to think different to secure the power
sector. In that coal is a good choice for BD. As oil, gas and hydro these things are not suitable now.
BD got 3 billion tons of coal reserve. And the world is also dependent on coal.


Welcome to Energy and Mineral Resources Division, Bangladesh

But, in case of BD, is not making those coals useable through the mining process into the deep mine more expensive than using oil?

 

[saleen_s7]

Coal is a good material to generate electricity. Cost effective and reliable. But its not environment friendly.
As BD is largely dependent on gas. As gas reserve is limited. We have to think different to secure the power
sector. In that coal is a good choice for BD. As oil, gas and hydro these things are not suitable now.
BD got 3 billion tons of coal reserve. And the world is also dependent on coal.

OECD iLibrary: Statistics / OECD Factbook / 2013 / Electricity generation

Welcome to Energy and Mineral Resources Division, Bangladesh

Coal has efficiency rate of 40%. You have to take this into account. Secondly, I do think Bangladesh has sufficient amount of gas and more is yet to be discovered. In order to maximise the gain, the govt can try to ban cng cars and vehicles or at least not every jack and jill use it. At any rate, a more feasible govt policy would be is to encourage both. Also, mind you, more and more countries are slowly moving away from coal based power plants. Building hyrdo dams is also a good alternative around the shylet area.

 

[Mattrixx]

Coal has efficiency rate of 40%. You have to take this into account. Secondly, I do think Bangladesh has sufficient amount of gas and more is yet to be discovered. In order to maximise the gain, the govt can try to ban cng cars and vehicles or at least not every jack and jill use it. At any rate, a more feasible govt policy would be is to encourage both. Also, mind you, more and more countries are slowly moving away from coal based power plants. Building hyrdo dams is also a good alternative around the shylet area.

But those countries whom are developed today is based on coal. As we are developing.
For 2020-2050 coal should be the choice. Till 2020 gas and oil should be used.
As hydro electricity in hill areas costs more land. We shouldn't go for that. But renewable energy
should be the ultimate goal. By 2050 there will be a massive development in this sector.
Example is tidal hydro electricity. Also nuclear power will be more secured by that time.

 

[HIMEL@BD]

It's certainly a good decision. We need more coal based power plant, But Sundarban must be saved. Rampal power plan project must be shifted or canceled

are the coals which will be imported be also free of tax? secondly, is coal really the best way to generate electricity?

Too much caring about nature is luxury for a nation like ours while even developed nations have more coal based power plant

 

[Mattrixx]

It's certainly a good decision. We need more coal based power plant, But Sundarban must be saved. Rampal power plan project must be shifted or canceled

Yes I also support this.

 

[Mattrixx]

But, in case of BD, is not making those coals useable through the mining process into the deep mine more expensive than using oil?

But oil and gas is not gonna remain for eternity.

If bnp gov ever comes and works for coal mining we should support it. But they try to sell the interests to foreigners. And there will be always people to protest, against coal mining.

 

[Skies]

But oil and gas is not gonna remain for eternity.

If bnp gov ever comes and works for coal mining we should support it. But they try to sell the interests to foreigners. And there will be always people to protest, not to coal mining.

well, BNP is also corrupted,

anyway, I am enjoying the absence of load shedding this summer, AL has done this good thing for me/us

it is unbelievable, how there is no load shedding now in this summer season, no matter if oil burns

 

[Mattrixx]

well, BNP is also corrupted,

anyway, I am enjoying the absence of load shedding this summer, AL has done this good thing for me/us

it is unbelievable, how there is no load shedding now in this summer season, no matter if oil burns

How can you say this. Everyone is corrupted. Bnp is a "pukur chor" in my eyes. And AL is "shidhel chor".

And didnt you see the criticism going on. When AL was putting efforts to generate more electricity.

 

[scholseys]

@eastwatch ...coal is very polluting...do you know anything about clean coal energy? and how can bd benefit from it?

 

[scholseys]

Clean coal offers green electricity for world’s poor - FT.com

July 15, 2013 9:27 pm
Clean coal offers green electricity for world’s poor

From Prof Emeritus Frank Clemente.

Sir, Regarding Leslie Hook’s article on smog in northern China (“China smog cuts 5.5 years from average life expectancy”, July 9), the answer worldwide is clear – build a global fleet of advanced coal power plants. Clean Coal is the path out of poverty for the 1.3bn people who lack any electricity whatsoever and another 2.3bn who have inadequate access to power.

China is the prime example of beneficial electrification from coal. Since 1990, coal-based electricity in China has increased 650 per cent to more than 3,500bn kWh. During the same period, life expectancy has increased by five years, infant mortality has declined 60 per cent and 600m more people have attained access to an improved water source. The maternal mortality ratio declined from 110 to 38 and female literacy increased 35 per cent. Universal access to electricity has been achieved, allowing families to light their homes, refrigerate food and medicine and reduce indoor air pollution through more efficient means of cooking. All the while, gross domestic product per capita has increased sevenfold and poverty has decreased literally by hundreds of millions. In fact, more than 80 per cent of the global population taken out of poverty since 1990 are Chinese – living in a nation that obtains 78 per cent of its electricity from coal. Health improvements and socioeconomic progress have been so profound that the International Energy Agency has referred to China as a coal-fuelled “economic miracle”.

Building centralised advanced coal plants in northern China and other developing regions would produce clean electricity and allow families to burn less oil, charcoal, wood, coal and dung for localised energy. The widespread use of these fuels is one of the primary causes of the smog discussed by Ms Hook.

China is already building some of the cleanest power plants in the world along the eastern coast, eg Yuhuan. Such supercritical and ultra-supercritical facilities produce more power per unit of fuel than traditional plants and have far fewer emissions. Deploying these highly efficient plants would reduce carbon dioxide emissions from coal use by 25 per cent and pave the way for carbon capture, utilisation and storage. The IEA has indicated carbon capture is central to meeting climate policy goals.

Sustainable coal continues as the world’s most rapidly growing fuel for good reason – it is the only global energy source with the scale to simultaneously eradicate poverty, propel economic progress and provide a clean environment.

Frank Clemente, Professor Emeritus of Social Science, Penn State University, US

Bangladesh must be looking into the 'clean coal' technology.....on the other hand i am against extracting coal. We don't have much land area and are one of the most densely populated countries in the world, extracting coal will destroy our biodiversity and the environment.

 

[Skies]

Clean coal offers green electricity for world’s poor - FT.com

July 15, 2013 9:27 pm
Clean coal offers green electricity for world’s poor

-When coal is used as a fuel source, the gaseous emissions generated by the thermal decomposition of the coal include sulphur dioxide, nitrogen dioxide, carbon dioxide, and other chemical byproducts that vary depending of the type of the coal being used. These emissions have been established to have a negative impact on the environment, contributing to acid rain and climate change. As a result, clean coal technologies are being developed to remove or reduce pollutant emissions to the atmosphere. Some of the techniques that would be used to accomplish this include chemically washing minerals and impurities from the coal, gasification, treating the flue gases with steam to remove sulfur dioxide, carbon capture and storage technologies to capture the carbon dioxide from the flue gas and dewatering lower rank coals to improve the calorific value, and thus the efficiency of the conversion into electricity.

-Environmental Organizations Don't Want Clean Coal. It's Making Fossil Energy Too Expensive.

-Getting that CO2 out of the coal and capturing it is the easiest part. Exhaust gas from coal burning is forced though a liquid solvent that absorbs the CO2. The solvent is subsequently heated to liberate the CO2 in much the way a bottle of carbonated soda releases dissolved CO2 when opened. The CO2 is then compressed to liquid form (about 100 times the normal atmospheric pressure) for storage.

-That amounts to a whole lot of CO2 to capture and store somewhere (“sequester&#8221. For example, a carbon capture and sequester (CCS) start-up operation at American Electric Power’s Mountaineer Plant in West Virginia captures a few hundred tons of CO2 daily. This is a small fraction of about 10,000 tons produced daily by a typical 500-megawatt plant. Now consider that America’s coal-fired power plants generate about 1.5 billion tons annually. Capturing that would mean filling 30 million barrels with liquid CO2 every day, amounting to roughly one and one-half times the volume of crude oil our country consumes.

Environmental Organizations Don't Want Clean Coal. It's Making Fossil Energy Too Expensive.

-All of this costs money…lots of it. First, it demands a huge amount of energy, requiring the coal-fired plant to burn about a quarter more coal to handle the sequestration while producing the same amount of electrical power. This is required to pay for capturing the CO2, compressing it, and transferring it for storage somewhere. The added fuel demand also expands necessary mining operations, coal transportation, and, unlike plant-nourishing CO2, the production of real pollutant byproducts, such as fly ash.

-"clean coal is kinda like clean ****"

-The bad news: Carbon sequestration extracted from the coal is prohibitively expensive. Capturing and compressing coal exhaust perversely requires a lot more energy, which is costly. This, plus lingering technical concerns, make scaling up the technology difficult. The World Resources Institute, which favors implementation of CCS, notes the quandary: "In technology development there is a period referred to as the 'valley of death,' where a technology has been proven in the laboratory and on a small scale, but has yet to become commercially viable."

Clean Coal Isn’t a Joke

Bangladesh must be looking into the 'clean coal' technology.....on the other hand i am against extracting coal. We don't have much land area and are one of the most densely populated countries in the world, extracting coal will destroy our biodiversity and the environment.

So the Clean Coal tech. which needs extra treatments seems would not be cheaper for BD and yes extracting coal will destroy lands.