Joint UNDP/World Bank Energy Sector Management Assistance Program Activity Completion Report No. 031/85 Country: BANGLADESH Activity: POWER SYSTEM EFFICIENCY STUDY FEBRUARY 1985 Report of the joint UNDP/Wortd Bank Energy Sector Management Assistance Program This document has a restricted distribution. Its contents may not be disclosedl without authorization from the Government, the UNDP or the World Bank. VZERGY SECTOR MANA ENT ASSISTANCE PROGRAM The Joint UNDP/World Bank Energy Sector Management Assistance Program (ESMAP), started in April 1983, assists countries in implementing the main investment and policy recommendations of the Energy Sector Assessment Reports produced under another Joint UNDP/World Bank Program. ESMAP provides staff and consultant assistance in formulating and justifying priority pre-investment and investment projects and in providing management, institutional and policy support. The reports produced under this Program provide governments, donors and potential investors with the information needed to speed up project preparation and implementation. ESMAP activities can be classified broadly into three groups: - Energy Assessment Status Reports: these evaluate achieve- ments in the year following issuance of the original assessment report and point out where urgent action is still needed; - Project Formulation and Justification: work designed to accelerate the preparation and implementation of '.nvestment projects; and - Institutional and Policy Support: this work also frequently leads to the identification of technical assistance packages. The Program aims to supplement, advance and strengthen the impact of bilateral and multilateral resources already available for technical assistance in the energy sector. Funding of the Program The Program is a major international effort and, while the core finance has been provided by the UNDP and the World Bank, important financial contributions to the Program have also been made by a number of bilateral agencies. Countries which have now made or pledged initial contributions to the programs through the UNDP Energy Account, or through other cost-sharing arrangements with UNDP, are the Netherlands, Sweden, Australia, Switzerland, Finland, United Kingdom, Denmark, Norway, and New Zealand. Further Information For further information on the Program or to obtain copies of completed ESMAP reports, which are listed at the end of this document, please contact: Division for Global and OR Energy Assessments Division Interregional Projects Energy Department United Nations Development World Bank Program 1818 H Street, N.W. One United Nations Plaza Washington, D.C. 20433 New York, N.Y. 10017 BAIGLADESH POWER SYSTEM EFFICIENCY STUDY FEBRUARY 1985 TALEL OF CONTES I.* SUMMARY .. ...... ........ ................. ......................... 1 Anrdction .............. *0eee......,...... 2 Action Porm ..... ,2 Juatification of the Action Programs. ....... o.......... 4 Coordination of Financing. ............. .e. .o........... S Program ................................................ 5 II* METHODOLOGY ..........................o........................... 10 Evaluation of Benefits........................ .......... 10 Generation, Sales and Power Losses..........,.,....,.,.. 11 Breakdown of Technical and Non-Technical Losses....,..., 12 III. DESCRIPTION OF THE SYSTEM .............. *00000000000000000 13 Management of the Power Sector.................,.......* 13 13 Transmission System ..................................... 1S Distribution System................................,.... 16 Sales and Losses ..................... 17 IV. MAIN FINDINCS A4ij RECOMMENDATIONS ......................... 0000000#00" 24 Introductiono.........0.0.00.0o..,,...................... 24 Economic Operation of the Generation System............. 25 Economic Dispatch. .............. ............. .0.0..... 26 System Changes to Allow More Extensive Use of Gas ..... 27 More Careiul Operation of Individual Units ........,... 28 Generating Efficiency Improvement ....................... 28 Introduction ........................o....................... 2S Khulna Station .....e.............o.o......................... 29 Sahhjibazar Stto ............ ........29 Reduction of Auxiliary Power Consumption and Heat Rate Improvement............................... 30 Non-Technical Losses .................................... 31 Introduction .....o...s......e...............o.oo....o....... 31 Organization of Non-Technical Loss Reduction Program. ............... ................... 31 Metering System............................................ 32 Billing System ....... ... 34 Technical Losses.................................,... 35 Introductione...... 0.00.0.........................00.... 35 Distribution Planning....... .o .................. .*.. 35 Loss Reduction Activities for Existing System,........ 36 Secondary Distribution Network Sectionalization...0... 36 Power Factor Improvement............o.........e....... 37 Reinforcement of 33 kV Lineso........................., 37 Paste Distribution Oeain ......................... 38 Support Systems................ ..................... 40 V. IMPLEMENTATION OF PROCRAMS .................. eoosooeeeess.. 44 Division of Labor and Responsibilities................ 44 Execution Timetable.......................................... 45 Program Coordination.................................. 45 ANNEXES 1. Methodology for Calculating Long-Run Marginal Capacity and Energy Cost for Bangladesh................... 2. Estimation of the Technical Losses........................ 3. Gsneration Capacities...................................... 4. Terms of Reference for Economic Operation of Generating System......................................... 5. Terms of Reference for Improvement of Generating Plant Efficiencyo.. ooo....... ........... ..* . ...o..*....... .e. 6. Terms of Reference for Non-Technical Loss Reduction Program...... ......... .............. .. .......... .......... 7. Terms of Reference for Technical Loss Reduction ......m..... ... ..... .. ....... ........ ..................... 8. Terms of Reference for Improvement of Distribution Operations.. .. ..o ..... .-..-oootoooooo****o --o.*-X 9. Terms of Reference for Strengthening of Support Services.................................................. 10. Execution Timetable for Action Programs................... 11. Report of Mission to Assist BFDB With Interim Loss Reduction............................. IBRD Map 18524 Bangladesh Power System I. SUMMARY Introduction 1.1 This report presents tne main findings and recommendations from a review of the Bangladesh Power Development Board's (BPDB) power loss reduction program, on-site inspection and discussions of the overall man- agement of the utility. 1/ Tke major objective of this activity is to present a series of practical steps for reducing transmission and distri- bution losses and generation costs. The total cost of the recommended programs, which will be implemented in t-wo phases, is about US$50 mil- lion. The first phase will extend over a period of nine months and cost US$6 million. The secontd phase, lasting about three years, will complete the implementation of these projects at a cost of US$44 million. At the end of the project implementation the economic benefits are expected to be about US$36 million per year. Additional financial benefits of US$31 million per year will also accrue from the reduction of aon-technical losses. At the same time, the BPDB would substantially improve its operating, organizational and service efficiency, the benefits of which have not been quantified. 1.2 The present level of losses in the system is about 311 of net generation, which is quite high. Technical losses are around 14Z, while non-technical losses are around 17%. 2/ The value of losses to the economy is considerable: technical losses represent about US$19 million per year, while non-technical losses represent a financial burden to the BPDB of about US$39 million per year. 3/ These high non-technical losses explain much of BPDB's current financial difficulties and affect directly the level of electricity tariffs required to cover the financial cost of power supply. Unless immediate and thorough actions are taken, both types of losses will grow at least at the rate of the system's growth. The mission believes that implementing the recommended actions would reduce technical losses to about 10%, and non-technical losses, 1/ The review was carried out by a mission comprising Messrs: Alfred Gulstone (Power Engineer, Mission Leader), Miguel Bachrach (Economist), Alfred Banks (Generation Specialist, Consultant), Alexander Csida (Distribution Engineer, Consultant), which visited Bangladesh in July 1984. 2/ Technical losses are related to the design of the system and com- prise losses in lines, transformers, etc. Non-technical losses are losses due to unmetered supplies, inaccurate metering, thett, fraud, etc. 3/ These figures pertain to FY83, when net generation was estimated at 3,780 GWh. - 2 - initially, to about 7X. The latter could then be gradually brought down to about 11. 1.3 Another area that needs urgent attention is system dispatch and operating procedures in generation stations. Considerable savings - at least US$10 million per year -- can he achieved by implementing an inte- grated package of changes in plant operations and dispatch, estimated to cost US$12 million. At the same time, the mission has identified a series of measures that would increase energy efficiency at the generat- ing stations and recover derated capacity. These measures are estimated to cost about USS6.0 million and yield savings of about US$6.1 million per year. 4/ Action Programs 1.4 While most of the causes for the high losses are known at various levels of the BPDB, the major barrier for improvement has been the lack of an integrated approach and continuity in the efforts to reduce losses. Accordingly, the mission believes that the most important prerequisite for effectively reducing losses and improving system effi- ciency is a commitment on the part of the BPDB to tackle the problems in a thorough and integrated fashion. To this end, the mission recommends six action programs consisting of specific measures that should be imple- mented in a comprehensive and coordinated fashion. To ensure the success of a program all of its component measures must be fully implemented, particularly in the case of the programs to reduce non-technical losses and to reduce generation cost by applying economic dispatch practices. Partial implementation of these two programs is doomed to failure since the various measures are interdependent and all are required to attain the final objectives. The recommended set of programs consists of: (1) Technical loss reduction. (2) Improvement of distribution operations. (3) Yon-Technical loss reduction. (4) Economic operation of generation system. 4/ In the case of dispatch and plant efficiency improvements, savings are based on the displacement of oil by the less expensive natural gas as a fuel, or by the more efficient use of fuel. In the case of the recovery of derated generating plant capacity, savings are based on the long-run marginal cost of capacity. Details of costs and savings are included in the Annexes referring to each pro-ect. In all cases annual savings are the savings generated during the year when the project is fully underway, and are calculated in 1984 US dollars. 3- (5) Generation efficiency improvement. (6) Strengthening of support services. 1.5 The technical loss reduction program comprises two main acti- vities which will affect techninal losses in the medium and long run. In the medium term, the mission recommends the implementation of specific loss reduction projects in three areas: reinforcement of 33 kV lines, secondary distribution network sectionalization, and power factor improvement. In order to deal with the problem of losses in a long run icrspective, the mission recommends the strengthening of recently created distribution planning units. These units would determine uniform standards for distribution work, identify the major requirements for future expansion of the distribution system, and direct the work on specific loss reduction activities. Since a latge portion of the BPDB's outside cssistance is in the form of tied aid, this unit must also address the problem of differing national standards for power system equipment and construction. This problem should also be considered by the donor community itself. A suggestion is for BPDB to prepare a detailed set of distribution system standards which it would adhere to and would make available to interested donors to determine the scope of equipment they could supply. In addition, given that there are already efforts to deal with loss reduction supported by bilateral and multilateral donors, it is important to coordinate these to avoid duplication and improve the use of scarce resources. 1.6 Although the impact of the distribution planning units will be felt mainly in the long-term development of the system, they should be strengthened immediately. The total cost of the program is estimated to be US$18.25 million, and direct savings are estimated to be about US$19.08 million per year. 1.7 The program to improve distribution operations consists of a series of measures that should be taken immediately to increase the reliability of the system, reduce the number and extent of outages and set the basis for technical loss reduction activities. These measures comprise the rehabilitation of the protective system 5/, improvements in substation maintenance, and improvements in the work methods and equip- ment used by distribution construction/maintenance crews. 1.8 The non-technical loss reduction program contains three major components: (a) strengthening the Commercial Operation Unit, (b) an overhaul and modernisation of the billing system, and (c) an overhaul of the metering system. The total cost of the program is about US$6.74 mil- lion and its financial benefits are estimated to be about US$31 million 5/ Relay and fuse coordination, and replacement and maintenance of relays, fuses and instruments. -4 - per year. 6/ This program is potentially the most profitable in financial terms. Nevertheless, it must be stressed that its success depends entirely on pursuing it with determination, which in turn requires a degree of political commitment and support both in BPDB's management and at the national government level. Subsequent to the discussions of the mission's findings, a follow-up mission, under the ESMAP program, was sent to help the BPDB initiate a crash program to reduce non-technical losses (see Annex 11). 1.9 The economic operation of the generation system has three different components: (a) economic dispatch of the existing system; (b) system changes to allow more extensive use of gas; and (c) improved operation of individual units. The total cost of this program is esti- mated at about US$12 million, and the savings are estimated to be, at minimum, US$10 million per year. 1.10 The generation efficiency program comprises two different activities: (a) partial rehabilitation of the Shajibazar gas turbine generating station, and (b) the reduction of auxiliary power consumption at several generating stations. 7/ The cost of the program is estimated at US$6.0 million and the savings are roughly US$6.1 million per year. 1.11 Strengthening the support services includes: (a) improvement of the stores inventory system, and (b) the creation of a vehicle main- tenance system along with providing some replacement vehicles. This pro- gram will cost about US$4.58 million. The program's benefits are not easily quantified, but both of its components are required'to facilitate implementation of the other programs. Justification of the Action Programs 1.12 The costs and annual savings of the action programs are shown in Table 1.1. In some cases it was possible for the mission to assess the extent of the work required. In other cases the required work cannot be defined until the first phase of the program is implemented. For these cases, an order of magnitude estimate is provided. 1.13 Capacity savings are valued at the long run average incremental cost of capacity, while energy savings are valued at the marginal cost of energy. Savings arising from imnrovements in system operation are valued as the difference in the economic value of fuels being substituted or the economic value of fuel being saved through increased efficiency. The benefits from non-technical loss reduction activities are calculated using the average present financial tariff since they represent addi- 6/ This assumes a 10% reduction of non-technical losses by FY86. 7/ Ashugan;, Siddhirganj, Goalpara and Chorasal. tional cash that the utility would collect for service which is already being provided but which is not paid for. Coordination of Financing 1.14 To maintain the integrity of the programs and to minimize problems of coordination it is desirable for a single agency to finance each program. However, parts of some of the programs ha-e already been financed and thus it is imsortant that donors associated with an indi- vidual program coordinate their activities to maintain its integrity. 8/ Program Priorities 1.15 The set of programs recommended above will be a major under- taking for the BPDB. Effective implementation of the programs will imply considerable changes in the management and operational practices of the utility. Simultaneous implementation of all programs is likely to strain the managerial resources of the BPDB, so it is important to set priorities for the implementation schedule. 1.16 The programs on economic dispatch and on generation efficiency should be carried out simultaneously under the supervision of the Cenera- tion and Transmission Department. As the programs are complementary it would be most convenient to have the rehabilitation of the Shajibazar plant completed at the same time as the system changes to allow more extensive use of gas. 1.17 The programs of non-technical and technical loss reduction may strain the human resources of the organization, especially at the middle management level. It is therefore recommended that the program for non- tzchnical loss reduction under the responsibility of the Finance Depart- ment be initiated first with full collaboration, as required, from the Distribution Department. At the same time, the Distribution Department should start the technical loss reduction program, by strengthening the distribution planning units and undertaking the rehabilitation and restoration of the protective and maintenance systems. Implementation of specific technical loss reduction projects should be deferred until the distribution planning units are functioning. 8/ For example, ADB, under its sixth power project is financing meter- ing equipment and some rehabilitation of the distribution systeme CIDA is financing projects to provide a dispatch center and modern- ize the stores inventory system; the World Bank, under its proposed Transmission and Distribution project plans to finance the Technical and Non-technical loss reduction programs identified in this report. - 6 - 1.18 The support systems should be under the Finance Department, and the stores inventory control and vehicle maintenance systems should be under the Administration Department. These activities can be started immediately since they do not involve the same personnel that would be working on other programs. 1.19 The estimated costs of the programs separated into components showing professional services, equipment and expenses are shown in Table '.2. This table, which is provided for the convenience of poten- tial financiers, shows the programs divided into two phases. In most casea phase one includes identification of precise needs and preparation of specifications for equipment and services; while phase two includes the implementation and training. The mission believes that all of the programs presented are economically justified and can be carried to comr- pletion, but the use of two phases enables a final decision to be taken on implementation after the costs and technical aspects of each program have been reviewed in detail. -7- Toblg 1.1, SWkIARY OF COSTS AND BENEFITS O ACTION PROGAMS (0111'ila of USS) Proorm Cost Savings if ODR b S/C c Technlcal Loss ReductIon, 18.25 1. Distribution plannaing unit 0.95 2. SpecIfic loss reduction projects - ReInfiocment of 33kV lines 8.93 3.1 30.a 2.4 - Secondary distribution sectionalizatlon 6.07 9.4 86.6 10.1 - Power factor Improve_nt 2.30 6.6 182.6 19.8 Distribution uoerations lerone.Ant 4.21 NQj/ I. Rehabilitation of protective systm and establIs hent of substation osintonanco 1.30 2. TralnIng and 6quiprmet for lime construction and eintoenanco crows 2.91 Mon-Technical Loss Reductlon 6.73 30.9 of 272.9 jY 32.0 1. Strengthening of ooarcial aoprations unit 0.40 - 2. Overhagl and modernisation of billing system 2.20 3. Overhaul of mterlng system 4.13 - Economic Operation of gSnerotinm Syvte- 12.00 10.9 90.30 6.7 1. EconomIC dlspatch of existing system - - 2. System changes to all* *e extonsive use of gas 3. iproved operation of Indivi- dual units esneration Imeroveiont 6.00 1. Rehabilitation of Shohjlbatar gas turbine plant - Recovery of ca,=clty 3.05 3.3 83.7 5.7 2. Reduction of plant auxilliry power consusption 2.95 2.8 73.0 6.0 Strena"onlna of SUbOrt ystem 4.58 NO 1. Stores inventory control 0.87 N 2. New vehicles and tiect mintenance system 371N It Annual avings once program is fully implemnted. b Equalizing discount rate. e/ Present value of savings to presont costs ratio (at 12% Interest rate). if Denfits have not boo quantifled. f Direct financlal benefits. jf The beof its for non-technical loss reduction are financial benefits, and the EOR Is the Internal rate of return. Table 1,2: SUMMARY OF ACTION PROGRAM COSTS FOR SERVICES EXPENSES AND EQUIPMENT (USS '000) a/ Phase I Phase 2 Professional Travel and Equipment and Total Professional Travel and Equipment and Total Services Subsistence Software Phase I Services Subsistence Software Phase 2 Total b/ Technical Loss Reduction 495 2S7 199 951 1,454 14,539 15,993 16,94 1. Distribution Planning Unit 495 257 199 951 - - - 951 2. Specific loss reduction projects - Reinforcement of 33 kV Lines - - - - 750 7,502 8,252 8,252 - Secondary distribution sectionalization - - - 510 5,099 5,609 5,609 - Power factor Improvement - - - - 194 1,938 2,132 2,132 Distribution Operations lmprovement 237 107 55 399 737 586 2,475 3,798 4,197 1. Rehabilitation of protective system and establishment of substation maintenance 178 76 55 309 297 132 550 979 1,288 2. Training and equipment for line construction and maintenance crews 59 31 - 90 440 454 1,925 2,819 2,909 Non-Technical Loss Reduction 1,133 789 1,940 3,862 - - 2,877 2,877 6,139 1. Strengthening of Commerclal Operations unit 253 156 11 420 - - - - 420 2. Overhaul and modernization of biliing system 165 118 1,907 2,190 - - - - 2,190 3. Overhaul of metering system 715 515 22 1,252 - - 2,877 2,877 4,129 Table 1.2 (canto) (LISS '000) a/ Phase 1 Phase 2 Professional Travel and Equipment and Total Professional Travel and Equipment and Totel Services Subsistence Software Phase 1 Services Subsistence Software Phase 2 Total b/ Economic Operation of Generating Syste 634 260 - 694 1,566 867 8,690 11,123 12,017 1. Economic dispatch of existing system 337 132 - 469 - - - 469 2. System changes to allow more -extensive use of gas 178 77 - 255 1,108 601 8,360 10,069 1C,324 3. Improved oNperation of individual units 119 S1 - 170 458 266 330 1.054 1,224 Generating Plant Efficiency 277 129 406 966 304 4,237 5,507 5,913 1. Rehabilitation of ShahJibazar gas turbine plant - Recovery of capacity 218 94 - 312 240 117 2,338 2,695 3,007 2. Reduction of plant auxiliary power consumption 59 35 - 94 726 187 1,899 2,812 2,M6 q Strengthening of Support Services 297 173 - 470 445 202 3,465 4,112 4,582 1. Stores inventory control 119 58 - 177 356 167 165 688 865 2. New vehicles and fleet maintenance system 178 115 - 293 89 35 3.300 3.424 3.717 TOTAL 3,073 1,715 2,194 6,982 5,168 1,959 36,283 43,410 50,392 a/ Costs are expressed in constant 1984 USS. b/ Includes 10 physical contingency and excludes local labour (which is included In Table 1.1). - 10 - II.* MITUOUOLODC Introduction 2.1 This section outlines the methods used to estimate the value of savings from power loss reduction, the methods used to estimate sales and generation figures in the BPDB system, and the assumptions underlying the calculation of technical and non-technical losses. Evaluation of Benefits 2.2 Benefits accruing from loss reduction may be of two kinds: capacity savings, and energy savings. Capacity savings are valued at the long run average incremental cost of capacity (LRAIC), while energy sav- ings are valued at the marginal cost of energy (MCE). The LRAIC is estimated as the average present cost of a kilowatt of capacity, based on the projected investment of the current system expansion plan. 9/ This is a proxy for the economic cost of the marginal unit of capaclity that would be required to supply an incremental unit of demand in a least cost expansion plan. The MCE is estimated using the fuel cost per kWh. For the Bangladesh system this varies considerably depending on the time of the day. Consequently, peak, off-peak, and average MCE's are estimated and applied, as appropriate. Throughout this exercise, we assume that the present demand forecast is to be satisfied and that the current expansion plan is the least cost solution to satisfy the demand fore- cast. Thus, loss reduction activities identified by the mission reflect marginal savings in the context of a least cost expansion solution. 2.3 Both energy and capacity costs are estimated at different volt- age levels, reflecting the fact that investments and technical losses in the transmission and distribution system increase supply costs at each delivery point. For instance, the LRAIC at plant level is US$117/kW/yr, while at the 400 volt consumer level it is US$297/kW/yr; similarly, the average HCE is US$0.029/kWh and US$0.036/kWh at these respective levels. Savings due to loss reduction are valued at the points at which they occur. 2.4 The study also evaluates savings arising from improvements in system operation, that is, savings accrued from changes in the dispatch plan or in plant operations which save on fuel costs without having a short run effect on capacity or the energy availability of the system. In this case, the savings consist of the difference in the economic value 9/ Details of all calculations are presented in Annex 1. - 11 - of fuels being substituted, or the economic value of fuel being saved through increased efficiency. 2.5 Financial benefits arising from the reduction of non-technical losses are valued using the existing BPDB average tariLff for energy (US$0.06/kWh). 10/ Generation, Sales and Power Losses 2.6 The mission estimated the generation, sales and losses in close consultation with BPDB's Commercial Operation Unit, which centralizes this information in the organization. In the process of reviewing the data numerous conceptual and numerical inconsistencies were found, and in some cases it was necessary to go back to data sources at plant and circle 11/ levels in order to obtain consistent data. The resulting figures, while not entirely accurate 12/, are a better approximation than any previously available. It was agreed with BPDB management that these estimates would be used for the analysis in this report. 2.7 For the purpose of this report, the definitions used are: (a) Gross Generation: the total amount of electricity produced in the system at the generation terminals. (b) Station Use: the energy used in the generating plants, excluding the ues of electricity by BPDB's employees in or around the plant, small towns in the vicinity of the plant, and/or any electricity delivered by BPDB free of charge. (c) Net Generation: the energy "sent out", or gross generation minus station use. (d) Sales: the total number of kWh billed for any given period of time, including any electricity delivered free of charge. 13/ 10/ That is, TK 1.5/kwh at the current exchange rate of TK 25.0/US$. 11/ A circle is the smallest administrative unit that sends its sales records to the centralized Commercial Operation Unit. 12/ There were instances where metering was obviously inaccurate at the generation and/or high voltage distribution levels. 13/ For example, BPDB defines a quantity of energy delivered to employees as "colony use". These are really sales at no charge. - 12 - 2.8 Estimates for all these figures are presented and discussed in Section III of the report. Breakdown of Technical and Non-Technical Losses 2.9 The distribution of technical and non-technical losses is obtained by estimating the technical losses in the system 14/, and taking the non-technical losses as the difference between these and the esti- mated average total losses for the period July 1982 to May 1984. 2.10 The technic.al components of losses along the transmission and distribution network are identified by engineering calculations based on loading conditions and physical characteristics of the system at the various voltage levels. Series losses in lines, feeders and trans- formers, as well as shunt losses arising in transformer iron cores and in the form of corona and leakage losses at the 132 kV level are considered. The estimates include both peak load and annual energy losses. 2.11 At the higher levels of structural hierarchy (generating sta- tions, bulk transmission and grid substations) the entire system is evaluated. At distribution levels, losses are estimated partly by extrapolating the results of a sample analysis (33/11 kV stations), and partly by i,etting up simplified models of the 33, 11 and 0.4 kV net- works. la addition, rigorous sample studies on selected feeders are carried out with special computer programs. 14/ For details see Annex 2. - 13 - III. DSUCRIPTION OF TOE SYSTWU Management of the Power Sector 3.1 The Bangladesh Power Development Board (BPDB) is a statutory government entity responsible for the generation, transmission and dis- tribution of electricity in Bangladesh. A separate entity, the Rural Electrification Board (REB), is responsible for the distribution of electricity in rural areas. It is organized in the form of rural coop- eratives (PBS) which purchase electricity in bulk from the BPDB. 3.2 The two main government institutions determining policy for the power sector are the Ministry of Energy, to which the BPDB and the REB are accountable, and the Planning Commission, which coordinates the development of the power sector with those of other sectors of the eco- nomy. The BPDB is organized into four departments, some of which are divided according to geographical areas. 15/ The flow of information and the distribution of tasks among the departments seem to be adequate, and the staff at the managerial level are competent. The main characteris- tics of the power system are presented in Table 3.1. Generation 3.3 The BPBD system is predominantly gas-fired (about 63X of gross generation), and the rest is composed of oil-fired plants and a hydro plant. Bangladesh is divided by the Ganges/Brahmaputra River system into two zones, the East Zone and the West Zone. The size and changing course of these rivers prevented the construction of any road, rail or electri- cal transmission facilities between the two zones until 1982, when a double circuit 150 MW, 132 kV transmission link was established. 16/ 15/ The departments are Administration and Finance, Distribution, Planning and Development, and Generation and Transmission. There are two regional divisions which are further divided into two zones each, and each zone is divided into circles. 16/ Although initially operated at 132 kV, the line is designed to operate at 230 kV and its capacity will be approximately 570 MW when it is upgraded to 230 kV operation. - 14 - 3.4 The generating facilities in the Eastern Zone consist of 474 NW of gas-fired plants, 17/ 24.5 NU of oil-fired plants, and 130 NH of hydroelectric plant. Those in the Western Zone consist of 290.7 MW of oil-fired plants (See Annex 3 for a list of generating plants). Table 3.1: BPDB: BLSIC SYSTEM CHARACTERISTICS, 1983-84 Frequency 50 Hz Installed Capacity a/ 1,110 NW Generation Capability a/ 998 MW Peak Demand b7 760 MW - 307 MVAR System Peak Power Factor 0.93 Annual gross generation: Gas 2,350 GWh Liquid fuel 711 GWh Total Thermal 3,061 GWh Hydro 897 Gdh Total 3,958 GWh Annual Net Generation 3,746 GWh Umlber of Grid Substations 42 Transformer Capacity 1,550 MVA Number of 33/11 kV Substations 141 Transmission and Dist ibution Lires 230 kV 178 km 132 kV 2,000 km 66 kV 168 km 33 kV 7,273 km 11 kV and 0.4 kV 20,704 km Number of 11/0.4 kV Transformers 7,259 lumber of Consumers 720,000 a/ Estimated for June 1984. Includes Khulna 110 MW, Chittagong 60 Mu and 30 MU combined cycle recent additions. b/ The demand was restricted by load shed. BPDB estimates that the peak demand would have been about 810 MU if generation were avail- able. Source: BPDB data and mission estimates. 3.5 The establishment of the interconnector in 1982 opened the possibility of reducing generation costs throughout the system, by 17/ Capacities are based on nameplate ratings. The actual ratings are considerably lower in some cases due to deterioration of the units. Distribution of plants corresponds to plants existing in FY82. - 15 - utilizing more of the indigenous gas reserves in preference to imported oil, However, the net exchange between the zones is still modest due to security constraints and technical difficulties in running the main oil- fired plants in the West at low loads. 18/ This is a very important issue since considerable savings could be obtained by generating more power in the East zone and transferring it to the Western zone. This problem is addressed in Section IV. Transmission System 3.6 The major generating stations and load centers are inter- connected by a 132 kV transmission grid (2,000 km) consisting of double and single-circuit transmission lines (Fig. 1). There are also 168 km of 66 kV subtransmission. However, the 66 kV subtrar, xmission system which branches out from Ishurdi substation extends over a relatively limited ar.ea and is not intended for further development. 307 Frequency is normally kept between 49.5 and 50.5Hz. Automatic load shedding is applied with underfrequency relays set at 49Hz, which trip low-priority loads in order to limit the extent of power interrup- tion in case of major grid outages. This scheme saved the system from total collapse on several occasions, when the East-West interconnector tripped. 3.8 The 178 km East-West double-circuit interconnector between Tongi (Eastern Zone) and Ishurdi (Western Zone) substations is designed and built for a rated voltage of 230 kV but was put into service at 132 kV in December 1982, and has been operated at that voltage since then, Conversion of the interconnector to 230 kV operation is planned for 1986-87, when completion of the terminal 132/230 kV substations is expected. 3.9 The BPDB is considering the necessity of reinforcing the interconnection with another tie-line by about 1993 to further increase the power exchange capability and system security. 3.10 Many reinforcements and extensions are under construction or planned for the next decade. These include stringing second circuits on existing double-circuit towers, extending the 230 kV grid down to Comilla9 as well as internal reinforcements and extensions of the 132 kV grid in both the Eastern and Western zones. 18/ The marginal cost of energy (MCE) is substantially different in each of the two zones. For instance, the MCE at the station level for the gas-fired plants in the East is about US$0.009/kWh, while in the West the MCE reflects the cost of oil-fired generation and is about US$0.12/kWh. - 16 - Distribution System 3.11 The distribution system consists of about 7,000 km of 33 kV lines and 21,000 km of 11 kV and 400 volt lines. The systems under the control of the BPDB are three wire, three phase and are built mainly to British standards. The REB systems are three phase, four wire and utilize single phase spurs according to North American standards. 3.12 The 33-kV network functions as a bulk distribution system to supply large consumers, including the REB, as well as 33/11 kV stations with typical transformer capacities of 2xlO or 2x14 MVA. Because the 132 kV transmission grid does not extend to certain remote areas, the 33 kV lines are very long, exceeding 100 km in some cases (e.g. south of Chittagong). 3.13 From the 33/11 kV substations, power is delivered to 11 kV primary feeders that supply large consumers as well as the 400 volt low- voltage secondary networks through 11/0.44 kV transformers. Some of the 11 kV feeders are connected directly to 132/11 and 132/33/11 kV gria substations. 3.14 The 400 volt networks are supplied from centrally located 11/0.4 kV transformers according to European practice. As a consequence, the 400 volt network is very extensive, serving an average of about 100 consumers from one transformer. Demand 3.15 With more than 90% of the population still having no access to electricity, the demand for electric power and new connections is extremely high. As a result, energy generation has grown at about 15% per annum during the last four years, in spite of load shedding, limita- tions on new connections, and supplying loads at reduced voltages in many areas. Thus, in the short to medium term, the growth of the system is going to be supply rather than demand-determined. 3.16 The BPDB considers 12Z a conservative estimate of annual load growth for the next decade, and is taking this figure as the benchmark for their expansion plan. According to this, energy demand would reach 13,005 GWh in FY94, while the system's installed capacity is planned to be 3,390 MW. 3.17 While the daily variation of load is quite significant, with peak load occurring at around 7:00 p.m. (see Fig.2), seasonal changes are almost negligible since air conditioning and fan load in the summer is offset by irrigation load in the winter months. The power factor of the system peak (0.92) implies that the peak is influenced by a significant incandescent lighting load. - 17 - Sales and Losses 3.18 BPDB's electricity sales by customer are presented in Table 3.2. The large industrial and commercial customers account for nearly 60X of sales. Their relatively small number makes them the prz.me target for initial non-technical loss reduction efforts. Table 3.2: SALES AND NUMBER OF CUSTOMERS, 1982-83 Number of Energy Percentage Category Customers Sold of Sales (GWh) Domestic 420,580 438.599 18.3 Small Industrial 34,595 225.473 9.4 Small Commercial 205,629 235.907 9.8 Large Industrial and Commercial 1,531 1,390.592 58.0 Agriculture 6,603 37.433 1.6 Other 261 70.592 2.9 Total 669,199 2,398.596 100.0 Source: BPDB Annual Report. 3.19 Power losses in the BPDB system have been an endemic problem recognized both by the utility and the World Bank. 19/ Table 3.3 presents the best available picture of the situation for the past 23 months. 3.20 Examining the actual figures for losses (on net generation) it becomes immediately apparent that these cannot be used directly due to distortions introduced by the billing cycle and the practice of the BPDB to inflate the sales by issuing "supplementary bills" (vis June 1983). These bills are issued when the BPDB believes that a customer has been underbilled. They relate to time periods as long as 10 years in the past, but the energy is added to current sales and compared with current generation for loss calculations. The resulting fictitious loss figures 19/ Bangladesh: Issues and Options in the Energy Sector, October 1982, World Bank Report No. 3873-BD; and appraisal reports, "Ashuganj Thermal Power Project", May 1982, Report No. 3719c-BD; and "Greater Khulna Power Distribution Project:, May 1989, Report No. 2476a-BD. - 18 - serve to instill a false sense of security in the BPDB management. In addition, most of the supplementary bills are contested by customers and are largely uncollectable. The result is an inflation of the accounts receivable. 20/ 3.21 The mission used two techniques to assess the trend in system losses. Losses (expressed as a percentage of net generation) were trended, and a twelve-month moving average of the losses (expressed as a percentage of gross generation) was taken for each month. The twelve- month averages, shown in Table 3.3, are based on sales which have been adjusted downward to remove some of the supplementarr billing. 3.22 The trended: figures for losses and the moving average show that the power loss reduction program launched by BPDB has had a moderate degree of success. Based on the trended figures, the system loss appears to have decreased by about 6% of net generation during the period July 1982 to May 1984. The BPDB loss reduction program addressed the reduc- tion of both technical and non-technical losses. By the time of the mission the BPDB had implemented some of the measures required for reducing technical losses, such as: (a) the installation of capacitors; (b) replacement of undersized service drops; 21/ and (c) a pilot project utilizing single phase 'istribution and small single phase transformers with low tension distribution eliminated. All of these measures were implemented on a small scale and are unlikely to have had a noticeable effect on losses. 3.23 The measures to reduce non-technical losses were more success- ful. These included organizing the Commercial Operation Unit to oversee the non-technical loss reduction program, making distribution area managers accountable for losses in their area of responsibility and having legislation passed to increase the penalties for theft of electricity. 3.24 The mission believes that progress in loss reduction has been slow because of the present approach and the limited resources devoted to the program. A major effort using the necessary financial resources and modern project management techniques is required to achieve further sig- nificant loss reduction. 20/ As an example of the effects of this practice, from July 1982 to June 1984 supplementary bills totalling 225.6 GWh and valued at TX. 152 million were issued by Dhaka electric Supply. It collected only about TK.25 million, 16.4Z of the total. 21/ The service drop is the correction between the distribution lines and the customer's meter. - 19 - Table 3.3: LOSSES ON GROSS AND NET GENEATIOR Year/ Gross Station Net Adjusted System Total Month Generation Use Generation Sales Losses Losses (GWh) (X Of Gross) (Gwh) (GWh) aI/ (Z of Net) (X of Cross) Jul 82 254.609 4.9 242e235 151.535 37.4 40.5 Aug 276.143 4.5 263.605 172.185 34.7 37.6 Sep 276.355 4.8 263.031 170.012 35.4 38.5 Oct 283.556 4.6 270.572 174.707 35.4 38.4 Nov 268.200 4.7 255.704 170.584 33.3 36.4 Dec 279.336 4.6 226.420 191.204 28.2 31.6 Jan 83 291.938 3.3 282.280 174.041 38.3 40.4 Feb 271.882 3.9 261.285 160.632 38.5 40.9 Mar 309.937 3.8 298.137 181.545 39.1 41.4 Apr 298.233 4.4 284.990 185.273 35.0 37.9 May 309.912 4.3 296.512 188.261 36.5 39.3 Jun 312.574 2.4 299.525 403.886 -34.8 -29.2 Jul 297.464 4.6 283.919 167.056 41.2 43.8 Aug 328.118 4.1 314.600 196.006 37.7 40.3 Sep 311.539 3.4 300.850 199.062 33.8 36.1 Oct 331.039 4.1 317.420 206.978 34.8 37.5 Nov 309.240 2.4 296.243 230.361 22.2 25.5 Dec 311.407 4.1 298.561 219.017 26.6 29.7 Jan 84 326.996 4.2 313.340 208.059 33,6 36.4 Feb 323.748 4.2 310.242 208.018 32.9 35.7 Mar 369.018 4.2 353.693 250,587 29.2 32.1 Apr 358.359 4.4 342.704 242,720 29.2 32.3 May 348.066 4.3 322.988 232.241 30.3 33.3 Average: 30.8 33.7 a/ These are sales adjusted for losses erroneously attributed to staff and/or station use. Sources Mission estimates based on BPDB data. 3.25 The mission estimates that of the total losses - 311 of net generation - 14X are technical, and the remaining 172 are non-tech- nical. The breakdown of technical losses is presented in Table 3.5. 3.26 About 741 of the the technical losses occur in the 33/11/0.4 kV distribution system, particularly at the 400 V level (362) and along the 33 kV distribution lines (221). The main reasons for the technical losses are: (a) The distribution system has not been developed at a sufficient pace to cope with rapidly increasing loads and has therefore become overloaded. - 20 - Table 3.4: TWELVE-MOUTH MOVING AVERAGE OF LOSSES Losses as Year/ Gross Adjusted 2 of Gross Month Generation Sales Generation a/ (Gch) (cub) Jul 1982 254.609 151.535 Aug 2766143 172.135 Sep 276.355 170.012 Oct 283.556 174.707 Nov 268.200 170.584 Dec 279.336 191.204 Jan 1983 291.938 174.041 Feb 271.882 160.632 mar 309.937 181.545 Apr 298.233 185.273 May 309.912 188.261 Jun 312.574 231.880 b/ 37.3 Jul 297.464 167.036 37.6 Aug 328.118 196.006 37.9 Sep 311.539 199,062 37.7 Oct 331.039 206.978 37.6 Nov 309.240 230,361 36.7 Dec 311.407 219.017 36.5 Jan 1984 326.996 208.059 36.2 Feb 323.748 208,018 35.8 Mar 369.018 250.587 35.0 Apr 358.359 242.720 34.5 May 348,066 232.241 34.0 Jun 347.283 247.870 b/ 34.1 a/ Losses are shown as 12 month average and are on the base of gross generation. b/ Sales have been adjusted downward to reflect only about 252 of the supplementary billing for this month. Sources Mission estimates based on BPDB data. (b) Distribution planning has been based on traditional criteria of voltage drop and current rating, rather than on economic opti- mization of investments against the cost of losses. Economic optimum loss levels have dropped significantly all over the world in the last 10 years due to the sharp increases in fuel - 21 - costs. The old rules of thumb for design implicitly embody relative cists that reflect pre fuel crisis conditions. 22/ (c) Power factor correction has been inadequate. Table 3.5: BPDB: ESTIMATED TECHNICAL LOSSES - 1983/84 Source Demand Loss Energy Loss (MW) (X) (GWh) (X) Generation Substations (Step-Up Transformers) 7.6 1.0 17.6 0.5 Transmission Lines (132 and 66 kV) 20.9 2.8 83.3 2.2 132 kV Substations 8.2 1.1 20.2 0.5 33/11 kV Distribution Lines 24.2 3.2 83.8 2.2 33/11 kV Substations 3.7 0.5 23.0 0.6 11 kV Distribution Feeders 'wth 11/0.4 kV 19.2 2.5 74.3 2.0 Transformers 400 V Distribution Network 48.5 6.4 224.5 6.0 Total 132.3 17.5 526.7 14.0 Reference Generation Data: - Peak Demand: 760 MW - Yet Annual Energy 3,746 GWh Source: Mission estimates. 3.27 Non-technical losses (17X of net generation) ore mainly due to inadequate metering and billing systems, theft, and corruption. Details and specific measures to reduce technical and non-technical losses are presented in Section IV. 221 See "World Bank Energy Department Paper No. 6: Energy Efficiency: Optimization of Electric Power Distribution System Losses, - 23 - SaWADS POWER EYM DoIVydflon od Total AcI (MW) and Recaf (MVAR) Gnmtlon 6007 kW 700 600 . A~ _____ X__ toXw 100 0 _ _ _ _ _ 0 4 8 12 16 20 24 iE (HOURS) 19MAnrs14hok DaD: Jura 21d Souros Dipat Csntw. Sddht*-g ~~~~~~~~~~~~~~~~~~~~vmox-67 - 24 - IV. NMIl FINDINGS AMD IRCO NDTIONS Introduction 4.1 This section identifies the sources and relative magnitude of system losses and recommends specific actions to bring them down to economic levels. In addition, it identifies changes in the generation dispatch and improvements in operating individual generating units that will reduce the cost of producing electricity. 4.2 The losses in the Bangladesh power system are high compared to other developing countries. The mission believes that the most signif- icant factors contributing to the high losses are the dependence of the BPDB on aid for basic construction activities, and the low salaries paid to its employees. When using aid financing, the utility is not always free to specify the most appropriate equipment or use the most appro- priate standards. 4.3 The low salaries have two effects. First, it is difficult for the utility to attract and retain well qualified professionals and well educated technicians. 23/ Second, the low salaries paid, especially to the lower grades of employees, make them more susceptible to corrup- tion. The low salary levels is a well known problem which affects the entire public sector in Bangladesh. A comprehensive and effective solu- tion would entail a delicate macroeconomic balance, but this analysis is beyond the scope of this report. 4.4 The BPDB in its project proforma of June 1983 correctly identi- fied many of the sources of system losses and proposed an ambitious set of measures to reduce them. As mentioned in Section III, the BPDB has implemented some of the measures with moderate success. The work in this section is intended to complement the work already done by the BPDB and to more clearly focus the available resources on the specific items causing inefficiency in the power system. It should be stressed that while the analysis sometimes separates problems and actions to be taken in different areas, the implementation of the solutions to a specific problem should be undertaken as an integrated package of measures. Partial implementation is doomed to failure. For example, in the program to reduce non-technical losses, if a good biiling system is established but the quality of metering is unchanged, it is unlikely that a signif- icant reduction of losses would occur. 23/ In contrast, the Rural Cooperatives have more flexible salary policies and can reward an employee for merit. For instance, unlike the BPDB, they are able to attract people with secondary education for training as linesmen. - 25 - 4.5 In some cases funds already have been allocated by other agencies (e.g. the Asian Development Bank) to implement parts of the overall program suggested here. At the time of the mission, the BPDB did not have a complete list of the number and scope of activities being financed by various agencies to reduce losses and improve efficiency. The mission hopes that this document will be used to assist in obtaining the remainder of the financing required to make the implementation effective. Special efforts should be made to improve coordination between agencies and avoid duplication of funding. Economic Operation of the Generation System 4.6 The mission believes that three significant opportunities exist in the BPDB system for reducing the cost of generating electricity through improved operation. These are: (a) Improved overall system efficiency by implementing economic dispatch practices; 24/ (b) effecting equipment and system changes to allow more extensive use of gas-fired plant during off-peak hours; and (c) more careful operation of individual generating units. 4.7 The potential benefits of these measures can be put in perspec- tive by the following examples. The BPDB generated about 3,432 GWh in 1982-83 at a cost of approximately US$68 million. Thus, even a 1% improvement in overall efficiency, which would easily be achieved by implementing economic dispatch practices, is worth about US$680,000 per year. The cost of generation using gas is about US$0.009/kWh compared to US$0.12/kWh for generation using oil. The mission estimates that if the Khulna oil-fired plant could be shut down for eight hours per day, and the energy is generated by gas-fired plants, savings of about US$10 million per year would result. At the individual plant level, a 50°F deviation of the superheat temperature (about 4-5% of normal operating temperature) reduces the efficiency of the plant by one percent. For a 100 MW oil-fired unit this is worth about US$500,000 per year. The economic benefits of improved system operation are thus considerable. 4.8 The technical details and benefit/cost analysis for each of the recommended measures are discussed in the following paragraphs. The cost 24/ Although the BPDB system now is short of generation and at peak the practice is to put on line as much generation as is available, there is considerable opportunity during the 18 off-peak hours of the day to use economic dispatch techniques. - 26 - of implementing the entire package of measures is estimated at US$11 mil- lion and the benefits are conservatively estimated at US$10 million per year. The terms of reference and cost estimates for the work are provided in Annex 4. Economic Dispatch 409 The economic operation of a power system requires that indi- vidual generating units be dispatched in such a way as to minimise the cost of generation at every load level. Saoe of the factors which must be considered are the input-output curve for each unit 25/, the cost of the fuel used by the unit, the energy required to drive plant auxili- aries, the incremental maintenance cost and the transmission losses incurred by running the unit. 4.10 In addition to the "real" power dispatch, considerable savings may be obtained by careful dispatch of the reactive power. 26/ This is achieved by the provision of reactive compensation where it Ta required, correct setting of power transformer taps, and correct setting of the voltage regulators of individual generating units. 4.11 The mission assumes that these issues will be addressed when a proposed dispatch center 27/ is commissioned in 1987. However, until the dispatch center is commTssioned, the BPDB can adopt the following measures to improve system efficiency. 28/ (a) In stations where there are a number of similar units on line, load swings should be taken on a single uuit while maintaining the others at their most efficient operating load. (b) The instrumentation at the generating plants should be over- hauled and upgraded, as required, to allow regular performance tests and continuous performance monitoring. (c) The reactive power flows on the system should Fe studied to determine compensation requirements (static or rotating) and 25/ This is a plot of heat energy into the unit versus electric energy out (e.g. BTu versus kWh) from minimum load up to maximum load. 26/ These savings accrue from a reduction of transmission losses which would otherwise occur if there were large reactive power transfers across the system. 27/ The dispatch center is being installed with financing from the Canadian International Development Agency (CIDA). 28/ Some of them would be required in any event to allow the beat use of the dispatch center. - 27 - transformer tap settings at various load levels to minimize reactive power flows. The necessary compensation equipment should be installed immediately after the requirements are determined. 29/ (d) Power transformers should be switched out of service when not required. 30/ 4.12 The mission estimates that the cost of implementing the above measures would be about US$469,000. A 2X improvement in system effi- ciency would pay for the investment in less than one year. System Changes to Allow More Extensive Use of Gas 4.13 Figure 3 shows that even with the existing tie line capability and with reasonable assumptions regarding unit availability the Khulna oil- fired units may be required only for about 8 hours per day. There are, however, some problems that must be solved before the system could be run this way. The main ones are: (a) The availability of gas; (b) the reliability of the transmission line interconnecting the two zones$ (c) security of supply in the western zone in the event of a trip of the interconnector; and gd) the suitability of the Khulna (110 and 60 MV) generating units for two shift operation. 4.14 The availability of gas is affected by delays in the completion of wells and pipelines. This problem is being addressed, and the mission has been informed that gas availability should cease to be a constraint in the next fiscal year. 4.15 The reliability of the transmission line interconnecting the east and west zones has been low mainly due to incorrect operation of the 29/ It may be possible to decouple some of the existing gas turbine generators and use them as synchronous condensers. 30/ This would reduce transformer iron losses, although it must be implemented with care. For example, the breather system must be carefully maintained to prevent the ingress of moisture which would tend to occur with the temperature changes caused by switching the transformer off periodically. Also, the switching off of one trans- former should not increase copper losses on a paralled transformer beyond the savings in iron losses on the switched transformer. - 28 - protective system, and poor layout at the substations. These are rela- tively minor problems which can be easily solved. 4.16 The supply in the western zone can be secured by upgrading the existing underfrequency load shed system, and by operating possibly one or two gas turbines in the western zone to cover emergency services in the event of a tie line trip. 31/ Full supply can be restored quickly (within about 15-20 minutes) by the use of the existing gas turbines until the tie line is restored or the Khulna plant is brought up to load. 4.17 Finally, although the Khulna units at present cannot operate on automatic controls below about 55% load, the mission believes that the controls can be replaced and upgraded to allow two-shift operation. The reduction in component life due to two-shifting should be valued but is expected to be negligible. 4.18 The cost of the above measures is estimated at US$10.3 mil- lion. The mission estimated that the savings in terms of reduced oil consumption that would be replaced by cheaper gas generation (even if Khulna is taken out of service only for eight hours per day) would be US$10 million per year. More Careful Operation of Individual Units 4.19 This involves operator training, and establishing a monitoring system for each steam unit to show deviations of key variables through each shift. The measurement of deviations would allow management to monitor and control the performance of operators. The variables would i, lude items such as condenser vacuum, superheat temperature, excess air, etc. 4.20 The cost of implementing the scheme, including training of operators, and the improvement of instrumentation is estimated to be US$1.2 million. A one percent change in the efficiency of a 100 MW oil- fired plant with a 40% plant factcr is worth about US$500,000 per year. Generating Efficiency Improvement Introduction 4.21 The mission inspected the five largest plants in the BPDB system (Ashuganj, Goalpara, Ghorasal, Shahjibazar and Siddhirganj) and 31/ Although the BPDB has experienced complete system collapse in the west zone when the tie line has tripped, an improved underfrequency load shed system and the provision of reactive power sources in the west zone would minimize this possibility. - 29 - found that generating plant efficiencies could be improved in all stations by varying degrees. In one case major additional capacity could also be obtained. Findings and recommendations made for plants that were not visited are based upon discussions, system forecasts and inspection of similar equipment. The most serious problem in all the plants visited is that maintenance and calibration of instruments is very poor. This has adversely affected plant efficiency and, in some cases, plant capa- city. In view of this deficiency, all estimates for instrument rehabili- tation include a training component. 4.22 As a general approach to efficiency improvement, the mission reviewed the possibility of adding regenerators or recuperators for each gas turbine. The analysis indicates that these additions are not gener- ally justified. 4.23 Annex 5 outlines terms of reference to implement the recommen- dations. Details of each activity are discussed in the following para- graphs. Khulna Station 4.24 This station is the most diversified in the BPDB system, with two large and three small steam units, eight diesel units and four com- bustion turbines, yielding a total installed capacity of 270.5 MV. Heavy fuel oil is burned in the steam units and light oil is burned in the gas turbine and diesel units. The main findings and recommendations for this station are the following: (a) The small steam and diesel units are old (35 and 29 years, respectively) and represent a total available capacity of 15 MW. Because of their age and forecasted future operation it is recommended that they be decommissioned. (b) The two barge-mounted gas turbine units and the two land based units are in fairly good condition and do not need upgrading. (c) The two largest units (the 60 and 110 MU steam units) require modification of their controls and the use of variable speed drive motors for the boiler air and flue gas fans to reduce auxiliary power consumption. Shahjibazar Station 4.25 This plant is made up of four 16 MW CEM (now Alsthom Atlantique of France) and three 14.75 Fiat gas-fired combustion turbine units installed in 1970-71. Many units are derated to about 50% of name plate - 30 - rating and perform at a low thermal efficiency (17.55%). 32/ The main reasons are: poor maintenance; lack of repair tools and machinery; mal- functioning controls; lack of spare parts; and continuous operation at derated load. 4.26 Rehabilitation of some of these units would improve the reliability and efficiency of the BPDB system. Operation at base load after rehabilitation would reduce oil-fired generation in the western grid. 33/ For this purpose the following actions are recommended: (a) Immediate inspection by factory representatives to determine the mechanical condition of the unit and unit controls; (b) Implementation of a rehabilitation program to recover the de- rated capacity where appropriate. The costs of rehabilitation are estimated at US$3.0 million. Annual fuel savings and capa- city availability would be in excess of US$5 million. Rehabil- itation of these units will also enable BPDB to postpone the 1988 projected retirement of the plant. 4.27 Additional advantages of the rehabilitation plan are: (a) reducing the loading in the overtaxed gas pipeline to the other BPDB gas-fired plants; and (b) providing the capacity to accommodate the banking of the Khulna steam units during off-peak hours. Reduction of Auxiliary Power Consumption and Heat Rate Improvement 4.28 Some of the units at Ashuganj, Chorasal, Khulna and Siddirganj Stations operate with gas-fired boilers. They are all capable of operat- ing at full rating but have an inordinately high auxiliary power consump- tion rate. Two of the plant thermal efficiencies are also lower than expected. With the exception of Siddirganj and Ghorasal, installation of new variable speed boiler fan drives would result in savings in auxiliary power consumption. The cost of this change and other modifications to reduce the auxiliary power consumption would be US$3.0 million with annual savings of US$2.8 million per year. 4.29 In addition, the mission recommends a general rehabilitation of the control systems, and a program to improve condenser vacuum where 32/ These units are probably operating at least 25% below full load thermal efficiency. 33/ Some of the units are already being rehabilitated under an Asian Development Bank Loan. - 31 - appropriate. A redesigned forced draught fan inlet duct is also recom- mended for the Chorasal units. Non-Technical Losses Introduction 4.30 The main reasons for non-technical losses, estimated at about 172 of net generation, are problems in the overall organization, poor metering, inadequate billing systems, theft and corruption. In order to tackle these problems BPDB should undertake an aggressive program con- sisting of the set of actions proposed below. 4.31 The package of actions outlined below is estimated to cost about US$6.74 million, most of it in foreign costs. It is impossible to present an accurate estimate of financial benefits resulting from these activities. However, the mission believes that the proposed package would reduce non-technical losses to about 7Z. The value of the 10X reduction would be about US$31 million per year, in which case the financial payback period would be less than one year. Organization of Non-Technical Loss Reduction Pros 4.32 As an organization, BPDB has been aware of the problem of high non-technical losses in the system and has taken some steps to remedy this situation. The main ones are: (a) The creation of the Comercial Operation Unit to collect data on generation and losses throughout the system, and to monitor the process of metering, billing and collection in the Dhaka area; (b) a program to install and calibrate import-export meters at each distribution division; and (c) The requirement for distribution managers to account for losses in their respective areas. 4.33 These efforts have yielded some positive results, but the changes instituted so far are insufficient to bring losses down to an acceptable level in a timely manner. The main problems identified are: (a) The Commercial Operation Unit has frequently changed its reporting format, making it difficult to identify trends in the variables being monitored. Each station manager uses his own format to report the energy balance at his station. The Commercial Operation Unit is sometimes unsure of the exact coverage and/or content of the reported information. - 32 - (b) The Commercial Operation Unit is insufficiently staffed and does not seem to wield the authority required to deal with the tasks it is supposed to fulfill. (c) The BPDB prepared an excellent program to install and test import-export meters at each distribution division. However, many of the recommendations in the reports associated with this project have not been implemented. There has been no follow-up activity, and the trained personnel have been dispersed throughout the organization to perform tasks unrelated to metering. (d) The requirement for circle managers to account for losses may be counterproductive to the extent that managers have been given a serious responsibility without having the tools to reduce the losses. 34/ 4.34 The success of any non-technical loss reduction program requires immediate strengthening of the Commercial Operation Unit. For this purpose the following actions with an estimated cost of US$420,000 are recommended: (a) The provision of an experienced expatriate commercial manager f-or a period of about two years to set up and run the unit according to modern utility practice. He would be required to manage the non-technical loss reduction program and to train the existing staff. He should report directly to the Board and have full authority to change the reporting systems. (b) The provision of computer facilities (computer time on a cen- tral billing computer of the type recommended below would be adequate) to enable rapid and accurate analysis of monthly data. Metering System 4.35 The metering system is a crucial area where improvements are vital for the success of any loss reduction program. The metering system has several specific problems: (a) There is no regular program for checking, sealing, calibrating, repairing and maintaining meters. In practice, meters are repaired only when reported defective or inoperative, but many 34/ For instance, it is suspected that the sudden reported increase in transmission losses during some months may reflect attempts by managers of circles to transfer the burden of loss accountability into other areas of the system. -33- cases were found where meters went unrepaired for periods of eight or more months. 35/ (b) Meters are mounted inside buildings, making it easy for cus- tomers to tamper with them and difficult for meter readers to read them. (c) Meter installations are insecure. In several installations, although meters are sealed, CT terminals and PT fuses are accessible to the customer. (see Figure 4) (d) In an apparent overreaction, some meters are mounted on poles just below the secondary conductors, requiring the meter reader to climb the poles to read them. This slows the meter reading process considerably. (e) Meters are generally in short supply, making it difficult to replace defective ones in a timely manner. 36/ Also, the variety of models in use makes it difficult to establish standard maintenance procedures. (f) Meter records are not kept. In normal utility practice the movement and calibration history of each meter is maintained through its life cycle on the system. 4.36 The following actions with an estimated cost of US$4.13 million are recommended to improve the metering system: (a) The provision of an experienced meter engineer to regroup the meter testing staff, set up a system for routine checking of power station and import-export metering, and add meters when necessary. (b) The provision of a team. of meter experts to move all the industrial and commercial meters to easily accessible posi- tions, secure the installations, and train local staff. Trainin; should be provided on standards for meter instal- lations, meter sealing procedures, meter testing and meter reading procedures. 35/ The mission found that 12% of the meters out of a sample representing about 50% of Dakha's HV customers were inoperative, and 37% of the meters out of a sample of 100 LV customers were not working or not being read. In addition, reviewing the sales and generation figures, the mission occasionally found obvious problems with meter readings at circle and station levels. 36/ Some meters will be provided through an AD8 loan, but even these will not be sufficient to cover BPDB's needs. - 34 - (c) The provision of metering units required for the above exer- cise. In this respect, it is essential that the tariff study which BPDB is committed to perform be completed quickly in order to identify the types of meters required for industrial and commercial customers. (d) The provision of expatriate staff to set up and run an inspec- tion department and train local staff (for a period of about two years) to investigate metering irregularities. Billing System 4.37 The billing system is one of the key areas where efforts to reduce non-technical losses must be concentrated. At present, the main problems with this system stem from the fact that billing is done manually. As a consequence: (a) The billing process is long and the compilation of aggregate figures is a cumbersome process. (b) It is impossible to monitor the number of customers on the system, especially in urban areas. In fact, not even large industrial customers are adequately monitored. (c) It is virtually impossible to prevent fraud in a system which depends on the action of so many individuals who cannot be adequately supervised. 4.38 BPDB has started to take some steps towards a computerized system by reorganizing the billing system in one of Dhaka's four commer- cial divisions, and by using outside computing facilities for this pur- pose. To bring about substantial and rapid changes this effort is still insufficient. It is therefore recommended that the following actions with an estimated cost of US$2.2 million be taken: (a) Provision of a computer system for all the billing. A central facility with satellite units in the various major load centers is suggested. 37/ (b) Provision of a software package for billing, meter records, and monitoring of consumption. 37/ The satellite units would not be on-line with the central unit, but would independently produce bills and management information. The overall figures would be updated periodically by physically transferring a disc or tape from each satellite to the central computer. - 35 - (c) Provision of expatriate staff for a period of about two years to set up the billing and meter record systems, and to train local staff. It is essential that expatriate staff be used to set up and run the system initially, since a major overhaul of the present system is required. Technical Losses Introduction 4.39 About 14% of the losses in the BPDB system are due to technical reasons* The highest levels are 6Z on the 400 volt system and 2.2% on the 33 kV system. 4.40 In order to address these problems a two-pronged approach is requited. On one hand, the BPDB's distribution planning capabilities must be considerably strengthened in order to ensure that future devel- opment of the system achieves economic loss levels. On the other hand, a series of technical loss reduction activities should be implemented in the existing system. Distribution Planning 4.41 The BPDB has only recently created a distribution planning department, but does not have a uniform set of standards and guidelines to undertake distribution work. The distribution system has evolved in a haphazard manner, with standards in different parts of the system depend- ing on which consultant happens to be working in that area at the moment. 4.42 Most of the distribution system has been planned and developed on traditional concerns of voltage drop and current rating. However, partly because of the shortage of equipment, and partly to maximize the coverage with the available funds, the development has not kept pace with the rapidly increasing demand, resulting in a situation where not only are the losses excessive, but even the voltage drops have far exceeded the original design levels. This is particularly true in the 400 volt network, where most of the consumers receive their supply below 85% of the nominal voltage. Most of the conductors of the main feeders, branches and service drops are undersized; the 11/0.4 kV transformers are overloaded; and many joints and taps have been made with poor technology, resulting in unreliable connections and local overheating. 4.43 To remedy the present situation it is recommended that a dis- tribution planning unit be created and trained to undertake the following tasks: (a) A detailed study on the existing system to identify priority areas for loss reduction activities. - 36 - (b) The preparation of a distribution plan, comprising a detailed forecast of load growth by area, number of feeders required, size and location of substations and transformers, etc. (c) The preparation of a set of distribution standards, outlining optimum voltage levels, conductor types and sizes, protective relay standards, relay and fuse coordination, substation meter types, etc. These standards should be usad for all future expansion/rehabilitation in the system and, when feasible, for the immediate loss reduction activities. 4.44 The cost of improving the distribution planning capabilities is estimated at US$951,000. Direct benefits cannot be attributed to this improvement since it is partly a necessary fixed cost related to imme- diate loss reduction activities, as well as a prerequisite for an effi- cient expansion of the distribution system. Terms of reference for this work are included in Annex 5. Loss Reduction Activities for Existing System 4.45 The recommended measures aim at an accelerated improvement of the distribution system. They are not intended to substitute development and rehabilitation projects being carried out at present, but to supple- ment and modify their execution as appropriate. They should be started after the Distribution Planning Unit is set up and working. 4.46 Since BPDB is aware of most of the prevailing deficiencies and has already prepared a "Loss Reduction Scheme" (June, 1983), the initial steps have already been taken and implementation of actions recommended below would not be expected to take a long time. An implementation time of two to three years is suggested. Secondary Distribution Network Sectionalizatior 4.47 Reduction of the lengths of 400-volt secondary distribution networks by installing new 11/0.4 kV transformers along 11 kV feeders, and splitting the 400 volt networks according to their loading condi- tions. This project will eliminate overloading of transformers and improve quality of service to low voltage consumers. Allocation and sizing of transformers as well as determination of the best locations for splitting the networks will require detailed analysis, but it is esti- mated that about 80,000 kVA will be required. The total cost of this activity is estimated at US$6.1 million and yearly benefits at US$9.4 million. 38/ 38/ Installation of this set of transformers is expected to bring about a 30% reduction in demand losses and 45% reduction in energy losses. - 37 - Power Factor Improvement 4.48 This activity consists of installing 165 fixed and 245 switch- able capacitor banks on 11 kV distribution feeders with a total rating of 185 MYAR within the next two years. 39/ A loss reduction of 15X is expected at all voltage levels, except the 400 volt network. Some of the allocation of capacitors along the various parts of the system has been worked out by BPDB in its System Loss Reduction Scheme Report. Total costs of this activity are estimated at US$2.3 million and benefits at about US$6.6 million. Reinforcement of 33 kV Lines 4.49 The 33 kV lines are heavily loaded. Considerable loss reduc- tion can be attained by increasing the cross section of these lines. By extrapolating load conditions for the 33 kV lines in the greater Dhaka area to the whole country, it is estimated that line sections with a total length of 1,100 km would require reinforcement in the near future. This represents about 15% of the length of all existing lines. As a general guideline, lines with peak loading above 40% of thermal rating during the 1983-89 period need to be reinforced. Selection of lines and methods of reinforcement will require circuit-by-circuit studies. Total costs of this activity are estimated to be US$8.9 million and yearly benefits about US$3.1 million. 40/ 4.50 In addition to the above actions, the following immediate operational measures should be taken, by BPDB to reduce technical losses and avoid overstressing equipment. (a) Avoid keeping parallel-operated transformers at different tap positions for long periods to reduce losses due to circulating currents both at grid and 33/11 kV substations. 41/ (b) Keep voltages during peak and intermediate loading conditions as high as possible, but within tolerance, particularly at the 132 and 33 kV levels. 39/ There may be some scope for power factor correction on end-use devices, for example, florescent lamps. 40/ For the purpose of a global estimate it is assumed that 220 km total line section is reinforced by parallel line additions and 880 km with conductor bundling or reconductoring. In each case doubling the existing cross-sections is assumed for this estimate. 41/ This practice was observed by the mission at stations where automatic tap-changing and telecontrol facilities were inoperative, and taps had to be changed manually at outdoor transformers. - 38 - (c) Avoid development of excessively high grid voltages during light load periods, particularly along lightly loaded lines (e.g. Ashuganj-Sylhet-Mymensingh and Halisahar) to reduce iron and corona losses, as well as voltage stress on equipment. Measures (b) and (c) can be accomplished by cbordinated generator excitation and tap-changer control. (d) Open ring-configured distribution circuits at optimum locations that result in the lowest losses. Distribution Operations 4.51 The mission reviewed the operations of the distribution system to assess whether or not the reliability of the system was adequate and whether or not BPDB has the capability to construct and maintain any system changes required to reduce losses. 42/ 4.52 Distribution operations in the BPDB present the following problems: (a) Poor reliability of the distribution system is due to improper maintenance and malfunctioning of the protection system. Many transformer fuses are bridged out with wire. In addition, because of poor fuse coordination a fault in a consumer's premises often affects an entire feeder and sometimes causes interruptions at a higher voltage level. These contribute significantly to the high level of service outages. (b) Many faults, particularly on 33 kV lines, are caused by the lack of tree-trimming activities which are an essential part of a line maintenance schedule. (c) Control, metering and automatic devices are not adequately maintained at the 33/11 kV substations. Most of the automatic tap-changer facilities are inoperative, and transformer taps cannot be changed from the control room. Current transformer ratios seldom match the range of the quantities monitored, resulting in readings in the lower portion of instrument scales with questionable accuracy. (d) The operating procedures of maintenance crews are poor. For example, an entire feeder is usually tripped to replace a single transformer fuse. 42/ The "capability" refers to the organization, training and equipment used by line crews. - 39 - (e) Some of the grid substations (132/33/11 kV) are overloaded, or do not have reserve in case of transformer outages. (f) Metering and control systems at the grid substations are unre- liable, with considerable equipment out of operation. (g) The tools and techniques being used by the distribution crews are primitive compared to modern utility practice. 4.53 To overcome these problems, the mission recommends the follow- ing: (a) A program to restore and reset the protection and control facilities in the transmission and distribution systems. (b) *The establishment of a planned maintenance program for sub- stations. (c) The provision of equipment and technical assistance to equip and train a number of crews in modern line construction and maintenance techniques. 4.54 The aim of the protection and control program would be to restore, reset and/or modify the existing protection, control and meter- ing facilities in order to ensure protection of lines, cables and station equipment, as well as appropriate control of substations. The program should be carried out by BPDB with the assistance and supervision of expatriate protection and control specialists. The program should con- sist of the following actions: (a) Review the existing protection, control and metering systems and identify deficiencies in order of their importance. (b) Perform three-phase and single-phsse short circuit calculations for the whole system. (c) Establish standard protection, control and metering methods and principles. (d) Identify the restoration, setting and modification actions to be taken at each substation and the relevant new equipment and material requirements. (e) Procure and install the equipment including fuses on the feeders. 43/ 43/ An adequate supply of spares also should be bought at this time. - 40 - 4.55 When the basic restoration is completed, the protection and control team should plan and install a substation maintenance system to ensure that the quality of the protective and control system is main- tained in the future. The cost of these two activities is estimated to be US$1.3 million. Terms of reference are provided in Annex 8. 4.56 The mission estimates that about twenty well-trained line crews could serve as a nucleus which could be expanded by the BPDB to form an adequate resource of maintenance and construction crews. A two stage approach would be required. In the first stage, a consultant would review the present operational structure of the distribution department and the composition of line crews. He would specify the required changes, and the tools and equipment to restructure the department. After the necessary equipment is procured, training would be initiated. It would consist of on-the-job training for linesmen by expatriate crews, while simultaneously, BPDB supervisors would be trained in a utility in a developed country. 4.57 The cost of this exercise is estimated to be US$90,000 for stage one, and US$2.9 million for stage two, including the necessary vehicles and equipment. Terms of reference are provided in Annex 8. Support Systems 4.58 The two major support systems reviewed by the mission were the distribution stores and the motor transport facilities. Both of these affect the ability of the BPDB to implement loss reduction activities. 4.59 The mission found that the stores inventory control is inade- quate. Material available in storage is sometimes thought to be out of stock, resulting in unnecessary work delays. Therefore, a comprehensive computerized inventory control system is recommended. This could carry on from the work that already has been done with CIDA assistance in establishing a material classification system. The main computer pro- posed for the billing system could be used for inventory control. The mission recommends that the exact requirements be first defined with implementation later. The cost of defining the requirements and speci- fying the system is estimated to be US$171,000. The implementation phase of this project is estimated to cost US$688,000. Terms of reference are provided in Annex 9. 4.60 There is no motor transport maintenance system. The mission found that preventive maintenance is not done, and vehicles are repaired only when they break down. Furthermore, it appears that vehicles are repaired far beyond the end of their economic life. 4.61 The mission recommends that a comprehensive motor vehicle main- tenance system be established along with the necessary repair facilities. Replacement of portions of the fleet and the addition of certain speci- - 41 - alized vehicles is also recom_ended. The cost of the first stage of this activity, defining the exact needs for both vehicles and the maintenance system is estimated to be US$293,000. The benefits of this activity are spread over the entire system operation and have not been quantified. Terms of reference are provided in Annex 9. - 42 - Demand and Generation In Eastem and Wesern Zones am ANNUAL PEAK 760 MW 700- GAS RRED CAPAC1Y 610 MW 600 - 800 _M - INMONNECTOR CAPAVJINAT 230 KY 300 T 2 _ 200 - LOAD 0ERAD IJ GI 8 2 > ~~~~~~~LOAD 100D DEIU4ND INi > WERNGRD LOAD R.OW THROUGH INTEONECTOR O ~~~~~~~(EASTTOWB;l t| 0 3 6 9 i12 15 18 21 24 TIME (HOURS) MAJOR WMROANDG GSRED UN S EASERN GRID A*Kugon 220MW Chaog 60 MW ASSUMPS Gh 55KUMW Ore 580 W Unit Out KanU 130 MW doSeece dAIt llmes Shohjbzr 95 MW (6 d 7 Uft In SWve) SIddNfgoWe 8OMW Wdd llank-26M0 - 43 - | ! ., ,% . >'':" ' s*'''''%' | S | lliS ! 2' f  w 7 5 lIi | 111 N S e * ' - - 11 | l - . 9 *, ';a: AS -< - : - ^= :: | . ftsS X S | | | | 8 t | lE 5 lG s rU, .,. - ' I ! E i . i i N N N _ i ffi ffi _: S_ES XW=h= 1:=t..S= _ _ m; hXi1E'le,M'£QiW I wtzb a; tg,- M jV m 't- '4> --: 'i'I - 63 - h_ r,.0 z .z0 t '' v M , ! a _ b'" t _ 'i',--W,t' ' X, S .X w | _^ E EF i __ e^, r !_ t j Hn't iM;= _|1 _l _ __ _ _I l _ - l __ __ l ==!D _ D _ _D __ _ _ _ _ _ _ _ n3 t7 - . - _1_ ! _ :__: _ _£_ | __ __ l . , , . . . __ I - - - - - - - - - - - - B - - C w m n - _ B , s E u _ ! _ss N k | N _ | | ?S Xi ia - | - E | z - | E S - | o. _ | ^# ,'l'"'s-".1 F 4 , ., Nt't , Ej J, . iiVr 'j] ; 1 || 't S W.W(; w - 45 - Execution Timetable 5.4 The timetable for executing each program is presented in detail in Annex 10. The following Table provides a summary of the execution time for each program. Table 5.1: EXECUTION TIME OF ACTION PROGRAMS Duration Program Phase 1 Phase 2 Total INouths) 1. Non-Technical Loss Reduction 9 21 30 2. Technical Loss 9 27 36 Reduction 6 24 30 3. Economic Operation of Generation System 6 24 30 4. Improvement of Distribution Operations 6 16 22 5. Generation Efficiency Improvement 6 17 23 6. Strengthening of the Support Services 6 27 33 5.5 For all programs, Phase 1 refers to the preparation period where the relevant studies are undertaken, job specifications and detailed scope of work organized, and detailed costing and economic evaluation (when necessary) undertaken. Phase 2 is the actual execution of the each program: from procurement of equipment and parts until the end of the program. 5.6 For all programs Phase 1 takes between 6 to 9 months, while phase two takes about 24 months for completion. The total duration of each program is about three years, but sequential links between programs (para 5.8) increase the span of time for completing two programs up to 4 years. It therefore should be stressed that timetables for the different program components should be closely monitored in order to avoid cost overruns and to keep the momentum of each program going. To this end, it is suggested that both the BPDB and the consulting firm responsible for each program agree on a detailed timetable for execution. Program Coordination 5.7 The coordination of activities within each program will be crucial for the success of most programs. An indication of the appro- priate organization of activities in each program can be found in Annex - 46 - 10, wbich presents an imple_wntation guideline and a time framework for each program to be used for reference. 5.8 The following linkages should be coordinated with care: (a) The execution of line crews training before the implementation of technical loss reduction projects and improvements in the protective system: the execution of technical loss reduction projects and the rehabilitation of the protective system cannot be properly implemented without trained linesmen. This means that the program to improve distribution operations and the program to reduce technical losses should be coordinated so that neither one takes longer than four years to fully imple- ment. (b) Coordination of the installation of new instrumentation on gen- eration plants with the implementation of economic dispatch procedures: economic dispatch procedures will only start pro- ducing substantial benefits once the instrumentation in all plants is in place. (c) The coordination between rehabilitation of the Shajibazar plant and the changes to extend the use of gas in generation: while both projects are justified in themselves, the rehabilitation of the Shajibazar plant will ease gas restrictions and bring in additional gas-fired generation capacity to compensate for the reduction in oil-fired generation in the Khulna plant. - 47 - Annex 1 Page 1 of 7 METHODOLOGY FOR CALCULATING LONG RUN MARGINAL CAPACITY AND ENERGY COSTS FOR BANGLADESH The basic figures for calculating long run average incremental capacity coats (LRAIC) have been taken from the expansion plan study pre- pared by ACRES and the BPDB for the years 1984-1995. While several scenarios are considered in the plan, we have taken the "conservative" one, which assumes that the demand for energy will grow at about 12% for the next decade. Demand projections are shown in Table 1. Investment in generation plants, and in transmission and dis- tribution facilities, is divided into local and foreign components, each of which is adjusted to reflect the shadow price of labor and foreign exchange (see Table 2). The RPDB reports that about half of the local costs consist of labor costs. Since the shadow wage rate is considered to be about 75% of the market rate, all local costs are adjusted by a factor of 87.5X. On the other hand, the economy-wide standard conversion factor is considered to be 0.8, so the cost of all foreign components is adjusted by a factor of 125%. The calculation of generation LRAIq costs for Bangladesh involves a few simplifying assumptions. The most important one stems from the fact that data on investment in generation facilities lumps together the expenditures for the next 14 plants, to be commissioned during the next 10 years. It is therefore impossible to separate the costs associated with peaking or with the next-in-line plant. Conse- quently, we consider each plant as a unit of a "composite" plant to be constructed during a ten-year period. Moreover, since additional capa- city will be available at different times, the MW capability of each plant is discounted depending on the estimated date of commissioning. The long run average incremental capacity cost of generation is the sum of the average investment cost in generation plus the average incremental cost of operation and maintenance of generation facilities. The average investment cost of generation is the discounted sum of expen- ditures on generation, divided by the MW capacity obtained through the investment. In the case of Bangladesh, as mentioned above, the MW capa- city is the discounted sum of the capacity available from the 14 planned generation stations. This value is annuitized assuming a 25-year life- time of the equipment and a 12% interest rate. The incremental costs of operation and maintenance of generation facilities (see Table 3) consist of the discounted sum of additional expenditure on operation and main- tenance (excluding fuel costs)incurred during the 10-year period con- sidered, divided by the sum of new MW capacity. The long run average incremental costs of transmission and dis- tribution are calculated for various voltage levels in the same way as we have calculated the LRAIC for generation. The only difference here is that the denominator in all average calculations is the projected incre- mental demand rather than the new capacity of the system. The resulting average is annuitized assuming a 33-year lifetime of the equipment and a - 48 - Annex 1 Page 2 of 7 121 interest rate. Average incremental operation and maintenance costs are also added for each voltage level (including a third of the adminis- trative expenses), while all costs for billing and collection are added to distribution. All figures in Takas have been converted to US dollars using a standard conversion factor of 1.25 on the official exchange rate. Results appear in Table 4. Marginal costs of energy (NCE) are calculated from the data supplied for all generation plants by the BPDB. Since generation in Bangladesh is predominantly thermal, the marginal cost of energy is essentially the cost of fuel (all incremental operation and maintenance expenses are allocated to capacity costs). Before 1982 the power system was clearly divided into two regions -- the eastern region, which used mainly gas-fired plants, and the western region, with oil-fired plants. Since 1982 the system has been interconnected, and, while exchanges between both regions are still limited, we may consider it as a single system. MCEs vary considerably during the day because at peak hours the system still relies heavily on oil-fired plants, which are considerably more expensive than gas-fired plants (the difference in financial costs between these types of plants is of the order of 10 to 20 times). For the estimation of energy costs we take a typical load duration curve during the month of March and estimate the percentage of energy generated at peak time (6.16X). Next, we take the average fuel costs for peaking plants in reverse order of merit (from least to most efficient) during July 83-April 84, to obtain the marginal cost of a peak kWh at market prices. Plants are added until the sum of their generation during March 1984 fulfill the required percentage of energy generated during peak hours. Finally, fuel costs per kWh are adjusted for losses at various stages of transmission and distribution. A similiar procedure is used to allocate base load plants (in order of merit) to obtain the off-peak MCE. Final results are shown in Table 5. Both peak and off-peak MCEs are adjusted to reflect the shadow price of the fuel being used to produce electricity. Shadow Adjustment factors from market to shadow prices for fuels are presented in Table 6. Average MCEs result from averaging peak and off-peak costs. There are two basic problems here. First, since most losses occur at peak time, the correct weight for peak and off-peak energy costs should correspond to the distribution of losses between peak and off-peak times. Secondly, since the system is evolving from gas plus oil-fired generation towards gas plus hydro generation, the true long run marginal cost of energy is going to approach the present off-peak MCE. The first factor would tend to raise the average MCE while the second factor would tend to decrease the average MCR. The compromise solution adopted here has been to average costs taking about 80% of off-peak costs and 202 of peak costs (the present system ratio is about 60% off-peak to 40% peak). Annex 1 Page 3 of 7 Table 1: DEMAND PROJECtICOS FY 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 GENERATION (GkF) Generation (GWh) 4289.1 4774 5305.5 6060.9 6895.8 7788 8723.9 9772.4 10757 11825.7 13005.2 Net Generation 4075.50 4536.25 5041t29 5759.07 6552*39 7400.16 6289.45 9285,73 10221.30 11236.78 12357.54 132 kV 4055.13 4513.57 5016.08 5730.27 6519.63 7363*16 8248,00 9239*31 10170.19 11180.60 12295,75 33 kY 3945.09 4686.21 5207.94 5949.45 6769.00 7644.79 8563.48 9592.70 10559.20 11608e24 12766*05 11 kV 3830.97 4264*08 4738.81 5413*52 6159.25 6956,15 7792,08 8728,59 9608.02 10562.57 11616.09 4 ktV 3749.46 4173*35 4637.98 5298.34 6028*20 6808,14 7626.29 8542.88 9403.60 10337.84 11368.94 Customer 3504,93 3901.18 4335.51 4952.80 5635.05 6364.14 7128e93 7985.73 8790.32 9663.63 10627.49 CAPACITY (MW) Peak 887 993 1112 1279 1471 1692 1861 2047 2252 2477 2725 Net Peak 849.62 951.15 1065.13 1225.10 1409.00 1620.69 1782.57 1960,73 2157.09 2372,61 2610.15 132 kV 841,12 941.64 1054,48 1212.84 1394.91 1604.48 1764*74 1941.12 2135.52 2348*88 2584.05 33 kV 807.99 904.54 1012.94 1165.07 1339.96 1541.28 1695.22 1864,65 2051.39 2256.35 2482.26 11 kV 776.55 869,35 973.53 1119.74 1287.83 1481.31 1629.27 1792.11 1971.58 2168.56 2385.68 0.4 kV 755,31 845,57 946*90 1089.11 1252.60 1440.79 1584,70 1743.09 1917.65 2109,25 2320.43 Customer 700.93 784,70 878.74 1010.70 1162.43 1337.07 1470,62 1617.60 1779.60 1957,40 2153.38 Source: EPOB for gross generation and peak capacity. The rest Is calculated using the mission's estimate of losses, Annex 1 Table 2: INVESTMENT PROGRAM Page 4 of 7 FY 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 INVESTMENT COSTS GENERATION Forelgn 2443 3470 4057.2 2813.9 1705.1 2526,) 4480.1 2381.5 1730.7 2793.5 2961.3 Local 964.8 1250,9 1492.8 1422.1 626.4 945.8 1619.4 1020.6 741.7 995.3 1049.4 TOTAL 3407.8 4720,9 5550.0 4236.0 2331.5 3471.9 6099.5 3402.1 2472.4 3788.8 4010.7 DISCOUNTED GENERATION INYESTMENT COSTS Forelgn 2443,00 3098.21 3245.76 2009.93 1086.05 1435,28 2274.16 1077.60 697.86 1008.48 952.15 Local 964.8 1116.9 1194.2 1015.8 399.0 537.4 922.0 461.8 299.1 359.3 337,4 TOTAL 3407.8 4215.1 4440,0 3025.7 1485.0 1972.7 3096.2 1539.4 996*9 1367.8 1289.8 SHADOW ADJUSTMENT Adj. Foreign 3053.75 3872.77 4057.20 2512.41 1357.56 1794.11 2842,70 1347,00 872.33 1260.60 1190e23 AdJ. Local 844.20 977.27 1044.96 888.81 349*11 470021 719.28 404.08 261,69 314o40 295.25 TOTAL 3897.95 4850.03 5102.16 3401.22 1706.67 2264.32 3561.90 1751.09 1134.02 1575,00 1485.48 INVESTMENT OOSTS TRANSMISSION Foreign 839,3 1262.2 558.4 887.6 1181.9 1204.2 806.3 786 596,1 749.7 764.4 Local 513.7 938e5 469.4 371*6 481.) 420*6 268,8 262 198,7 249.9 254.5 TOTAL 1353 2200o7 1027,8 1259.2 1663 1624.8 1075.1 1048 794,8 999.6 1019.2 DISCOUNTED TRANSMISSION INVESTMENT COSTS Foreign 839.30 1126.96 446,72 634.00 752.80 684.20 409.29 355.66 240.36 270.65 245.75 0 Local 513.70 837.95 37S.52 265,43 306.43 238,98 136e45 118.55 80.12 90.22 81.90 TOTAL 1353.00 1964.91 822.24 899,43 1059,24 923.18 545.74 474.21 320.48 360.87 327.72 SHADOW ADJUSTMENT Adj. Foreign 1049.13 1408,71 558.40 792,50 941*00 855.26 511,61 444*57 300.45 338,31 307,23 AdJ, Local 449,49 733.20 328.58 232.25 268.13 209*11 119.39 103,73 70,11 78,94 71,65 TOTAL 1498,61 2141,91 886,98 1024075 1209,13 1064,36 631.00 548*30 370,56 417.25 378,92 DISTRIBUTION IWNESTMENT COSTS Foreign 619.5 1182,7 1971 2020.1 1717*3 1464 1464 1564.1 1714.2 1864.3 1964.4 Local 640 1387,9 1673.6 1694,9 1495,9 976 976 1042,7 1142,8 1242.9 1309*6 TOTAL 1259,5 3170,6 3644.6 3715 3212.2 2440 2440 2606.8 2857 3701.2 3274 DISCOUNTED DISTRIBUTION INVESTMENT COSTS Foreign 619e50 1591,70 1576,80 1442,93 1093,82 831,82 743,lS 707.74 691.21 673.03 631.64 Local 640,00 1239020 1338.88 1210.64 952,80 554,55 495.43 471*81 460.81 448,70 421 05 TOTAL 1259,50 2830089 2915,68 2653057 2046.62 1386.36 1238.58 1179,55 1152,02 1121.73 1052.73 SHADO ADJUSTMENT AdJ. Foreign 774,38 1989,62 1971.00 1803066 1367.28 1039.77 928.93 884.67 864.01 841.29 789.55 AdJ. Local 560,00 1084.30 1171,52 1059,31 833.70 485,23 433,50 412,83 403,21 392,61 368,45 TOTAL 1334e38 3073.92 3142,52 2862.97 2200.98 1525.00 1362,44 1297.51 1267.22 1233.90 1158.01 TOTALS GENERATION 30729,926 TRANSMISSION 101lo1?84 OISTRIBUTIO 20458.835 So-co: GM and iassion estimatme Annex 1 Pge. 5 Of 7 Table 3: DISCOUNTED INCREMENTAL VALUES OF OPERATION AND MAINTENANCE COSTS FY 84/85 85/e6 86/87 87/88 88/89 89JA0 90/91 91/92 92/93 93/94 94/95 GENERATION 279,600 16.920 16.896 22.134 20.973 21t336 12.250 11.524 10.300 10,026 9.856 TRANSMISSION 44.080 2.698 2.635 3e482 3.325 3,351 1.926 1.829 1.626 1.582 1.547 DISTRIBUTION 269.040 19.102 19.126 25.042 240163 24.803 14.680 13.949 12.654 12.395 12.221 BILLING 39.200 2.202 2.193 2.668 2.186 2.142 1.813 1.713 1.203 1.179 1.158 ADMINISTRA TION 56.320 2.509 2.432 2.983 2,430 2.326 1.955 1.839 1.253 1.217 10195 TOTALS UNADJUSTED ADJUSTED F GENERATION 431.82 6ENRo 400.14 TRANSMISSION 68w0o TRANS. 81e87 DISTRIBUTION 447.18 DISTRIB. 464.03 BILLING 57066 ADMINISTRATION 76.46 TOTAL 1081.19 Source: WM8 and llssion estiates Annex 1 Page 6 of 7 Table 4: S1UMARY OF INCIREENTAL CAPACITY COSTS FOR BANGLADESH Increamntel Incrmaotl OWperation lncremwtal Capacity/ Ratio Annultized and VWlntwnana Total Cumulative Cumulative Item cost Dean"d (AIC) Costs Cost Desmnd AIC AIC (000 TK/T/YEAR) (USS/AWAEAR) (000 TKAW) SHADOW PRICED GENERATION (COST) 30729*93 400.14 (Mi) 1263.93 24.313 3.100 974.29 0.41 3.51 3.511 117.02 TRANSMISSION (COST) 10171.78 81.87 NET iW 929*67 10.941 1.345 929.67 0.09 1,43 4.943 164.78 MW 132 kV 920.37 11.052 1*358 920,37 0.09 1.45 4,958 16Se26 NO 33 kV 88.1t1 11.505 1.414 864*11 0.09 1.51 5,017 167.24 DISTRIBUTION (COST) c4.8.83 464.03 MW 11 kV 849.71 24.077 2.959 849.71 0.55 3.51 8.522 284,08 MW 0.4 kV 826.47 24*754 3.042 826,47 0.56 3.60 8.621 287.37 M CUSTOMER 766.97 26.675 3,278 766.97 0.61 3.88 8.901 296*68 - 53 - Annex 1 Page 7 of 7 Table 5: MARGINAL COSTS OF ENERGY (US O/kWh) Marginal Cost Peak Off-Peak Average Gross Generation 10.02 0.72 2.92 Net Generation 10.50 0.75 3.06 132 kV 10.55 0.76 3.08 33 kV 10.85 0.78 3.17 11 kV 11.17 0.80 3.26 0.4 kV 11.42 0.82 3.33 Customer 12.21 0.86 3.55 Table 6: ADJUSTMENT FACTORS FOR FUEL PRICES Fuel Border Price Actual Price Ratio 1. Jet Fuel (Naphta) 35.4 57.4 0.62 2. Kerosene (SKO) 35.4 43.8 0.81 3. Diesel Fuel (HSD) 33.6 42.8 0.79 4. Fuel Oil 28.2 34.6 0.82 5. Natural Gas 0.72 0.46 1.55 Note: Liquid fuels are in US$/Bbl and natural gas is in US$/MCF. Sources: - For (1) to (3) "Bangladesh: Economic Trends and Develop- ment Administration" Vol II. Statistical Appendix, World Bank Report No. 4822, Prices for July 1983. - For (4) border prices come from "Prices of Crude Petroleum and Petroleum Products, Fourth Quarter 1983", Memo, World Bank, February 16, 1984; actual price comes from Burmah Eastern Limited, Memo, March 8, 1983. - For (5) border price comes from "Marginal Cost of Natural Gas in Developing Countries: Concepts and Applications" Energy Department Paper No. 10, August 1983. Prices have been updated to 1984 US$ using the US consumer price infla- tion. Actual prices have been supplied by BPDB. - 54 - Annex 2 Page -1 of 3 ESTIMATION OF THE TECHNICAL LOSSES Load Characteristics and Basic Analyses Load and Loss Factor. Hourly readings of total MW-generation were collected from the Dispatch Center at Siddirganj for one week around the annual peak demand (June 16-22, 1989) and for a typical week during minimum demand (December 10-16, 1983). Load characteristics are calcu- lated by computer analysis using these two samples. The resulting load factor of 61.6Z and loss factor of 39.6% are applied for the calculation of all current-dependent loss components, except for sample studies of II-kV and 400-volt feeders, where the relevant loadings of those feeders are taken into account, whenever they are available. Power Factor. For step-up transformer the actual value of 0.93 as calculated from the annual total peak generation is applied. For the 132-kV step-down transformers and the distribution system an average power factor of 0.85 is used, except in some sample studies, where actual values could be identified. System Configuration and Data. This information, including structure of the transmission and the distribution systems, transformer ratings, and conductor sizes, was supplied by BPDB in sufficient detail for a general assessment of the losses. The data base was sample-checked during site visits. No-Load and Full-Load Losses of Transformers. In a few cases, where the BPDB could identify the loss characteristics of transformers on specific locations (from manufacturer's test reports), BPDB's data are applied. For the majority of transformers international average values are assumed by establishing a correlation between no-load (iron) and full-load (copper) losses and the transformer rating. For this corre- lation analysis European, American, and BPDB's own data are used. Infeeds at Various Distribution Levels. The peak load of consumers connected at each voltage level is assumed to be proportional to the energy sold at that level. The infeed to a certain distribution network is calculated, accordingly, as the difference between the infeed at the preceding higher level and the energy and power consumed and lost along that higher level of the distribution system. Based on BPDB's billed energy statistics, the following con- sumption pattern is used for the loss calculations. 33 kV: 10% 11 kV: 48% 0.4 kV: 42% 100 - 55 - Annex 2 Page 2 of 3 System Component Categories Step-up Transformers. NW outputs of all generating units were obtained from BPDB for a typical evening peak loading condition. The apparent power loadings of step-up transformers are calculated by the overall power factor of the system (0.93) The peak power losses are then deter- mined by sunming up the no-load and load losses of each transformer calculated with well-known formulas. For the determination of the energy losses, the no-load losses are integrated along the whole year, while the load losses are calculated using the overall system loss factor. Since not all the units were in operation during the peak load hour that was analyzed, the results reflect typical unit availability and peak generation dispatch strategy. 132/66 kV Transmission Grid. Results of load-flow studies for some typical peak loading conditions, with all transmission lines in opera- tion, have been received from the System Planning Department of BPDB. The peak losses in the conductors of the 132 kV and 66 kV lines are determined from these studies with a slight adjustment to reflect small deviations between simulated and actual total peak generation. Annual energy losses are determined using the overall loss factor. Though none of the lines are built with unusually small con- ductors, a certain amount of corona and shunt leakage losses must arise, particularly during the rainy season and foggy periods. An annual average value of 1 kV/km is used to estimate corona losses for the 132 kV lines. Step-down Transformers at 132-kV Substations. The method of calculation is the same as for the step-up transformers, except that a power factor of 0.85 is assumed. Peak loading at each substation was measured at the same peak load hour as in the case of step-up transformers. All 132/33 kV, 132/11 kV, 132/33/11 kV and 132/66 kV transformers are con- sidered, 33 kV Lines. An approximate assessment method is used. The method is based on a simplified model of the extensive 33 kV network reduced to feeders with average length, conductor size and average loadings, concen- trated at the middle-point of the lines. The losses obtained for such a model line are multiplied by the number of lines. In addition, a rigorous diagnostic analysis is carried out for one of the heavily loaded 33 kV lines. 33/11 kV Transformers. The losses of a big sample including transformers at 29 substations in the Greater Dhaka area are determined with the same method used for step-up and step-down transformers. Loadings are deter- mined from simultaneous current readings at those stations during the same evening peak referred to previously. - 56 - Annex 2 Page 3 of 3 The losses obtained for the sample are extrapolated for the whole country in proportion to the ratio of the load at all 132 kV grid substations to that of the Greater Dhaka area. This is readily available from the step-down transformer loss study. 11-kV Feeders. The same method as for the 33 kV lines is applied, but the average load is concentrated at one third of feeder length from the infeed point because of the different pattern of 11/0.4 kV transformers allocation along the feeders. The losses of the 11/0.4 kV transformers are also approximately calculated and included in the 11 kV feeder losses. Sample studies on specific feeders are also performed. 400 Volt Network. Because of the extreme complexity of the 400 volt network, an indirect assessment method is applied. The method is based on the information, confirmed by many individuals within and outside the BPDB, that the 400 V network is so heavily overloaded in most parts of the country that only consumers near the pole-mounted transformers receive single-phase voltage 230 volt, while the majority is supplied at 190 volt or lower voltage with extreme values as low as 130 volt. Accordingly, for the total peak power infeed calculated for the 400 volt level, an equivalent resistance resulting in an average voltage drop of 152 is determined, and losses are calculated from the level of the infeed and the equivalent resistance. In addition, sample studies are being carried out for a rela- tively lightly loaded urban residential supply area. - 57 - Annex 3 GENERATION CAPACITIES Installed Capacity Capability in MW in MW as of June 1983 (MW) () East Zone Kaptai Hydro 130.0 142.0 Ashuganj Steam 128.0 128.0 Ashuganjt G.T. 60.0 55.0 Ghorasal Steam 110.0 110.0 Siddhirganj Steam 80.0 74.0 Shajibazar Gas Turbine 96.0 67.0 Chittagong Gas Turbine 6.5 5.0 Other Diesel 18.0 7.25 TOTAL East Zone 628.5 588.25 West Zone Khulna Steam 60.0 60.0 Khulna Barge Mounted 56.0 46.0 Goalpara GTPS 23.0 20.0 Bheramara GTPS 60.0 54.0 Khulna DPS 7.84 3.5 Khulna Steam 12.48 8.0 Bheramara Steam 4.16 - Saidpur DPS 11.25 9.0 Bogra DPS 6.5 2.6 Bogra Gas Turbine 6.5 - Thakurgaon DPS 10.5 3.2 Barisal and other 32.51 15.85 TOTAL West Zone 290.74 222.15 TOTAL 919.24 810.4 Source: BPDB, Annual Report 1982-83. - 58 - Annex 4 Page- 1of 8 TERMS OF REFERENCE FOR ECONOMIC OPERATION OF GENERATING SYSTEM Summary of Requirements The Bangladesh Power Development Board (BPDB) is soliciting proposals from a consulting firm to prepare and implement a program to improve the operation and dispatch of generating plants and thus reduce the cost of generation. The work, which must be implemented as a coor- dinated program, consists of three elementss (a) Improve the efficiency of the existing system by immediately implementing basic dispatch procedures. (b) Effect procedural and equipment changes that will allow more extensive use of gas-fired operation during off peak periods. (c) Set up procedures to monitor the performance of individual generating units (as it is affected by operator action and/or equipment defects). The work will be done in two phases. Phase 1 will include familiarization with the system, detailed assessment of the costs and benefits of various measures, preparation of equipment and training specifications, and some immediate training activities. Phase 2 will include the procurement, installation and commissioning of equipment, the implementation of operating procedures and final training of BPDB operat- ing and maintenance staff. The overall cost of the program, excluding local staff and facilities, is estimated to be about US$12 million. The phase 1 cost is estimated at US$894,000 consisting of about US$634,000 in professional services and US$260,000 in expenses. The phase 2 cost is expected to be about US$11.0 million consisting of about US$1.6 million in professional services, US$8.7 million in equipment and the remainder in expenses. The program is financed by ___ The executing agency is _ In the following discussion the consulting firm submitting a proposal to do the work is referred to as the "firm" and the work is referred to as the "program". Background The Bangladesh Power Development Board (BPDB) is a statutory government entity responsible for the generation, transmission and dis- tribution of electricity in Bangladesh. The BPDB reports directly to the Ministry of Energy. The allocation of resources for the BPDB is guided - 59 - Annex 4 Page 2 of 8 by the Planning Commission, which coordinates the development of the power sector with those of other sectors of the economy. This program to improve generation efficiency is one of a group recommended by a World Bank/UNDP Power Loss Reduction mission. The mission's report, which describes the power system and outlines the work to be done, is a part of these terms of reference. Scope of Work The work includes everything that is necessary to achieve the objectives listed in the Summary of Requirements. Some of the specific tasks are: Phase 1 (a) Review present system operation and dispatch procedures. (b) Prepare improved dispatch procedures and train BPDB staff in their application. (These procedures should be simple and should form the groundwork for the dispatch operations after proposed SCADA facilities become available approximately in 1987). (c) Inspect the instrumentation on all of the steam, gas turbine and combined cycle units. Specify and prepare cost estimates for equipment and work required to upgrade the instrumentation to facilitate plant and unit efficiency measurement. (d) Specify and prepare detailed cost estimates for the equipment and work required to enable the Khulna steam plants to be used for cycling operation (nightly shutdown of at least eight hours). This includes but is not restricted to: (i) Inspect the two units' control systems in detail and issue a specification (request-for-proposal) to convert or replace the necessary controls and equipment to enable the 60 MS units to operate on automatic control down to the 25-30X load range, and the 110 MW unit down to 45X load and onto the turbine bypass system control. The request-for-proposal shall also require the bidders to include a separate pro- posal for a controls and instrument maintenance contract covering the more complex equipment and systems, such as the microprocessor. (ii) Include in the new automatic systems a boiler fuel oil burner flame monitor/interlock system to protect the units at all operating load levels. - 60 - Annex 4 Page 3 of 8 (iii) Include in the new control systems for these units a micro- processor for optimum overall operating control and effici- ency. The design of the system shall include the capability to remove these units from service in a hot standby or banked mode. The units should be capable of being removed and returned to service on a daily basis. (iv) Evaluate quotations for equipment revisions to minimize damage to the operating equipment. (e) Det,rmine, specify and prepare cost estimates for the equipment and wurk required to improve the reliability of the transmis- sion line interconnecting the east and west zones. Special attention should be paid to the protective system, which has malfunctioned frequently in the past. (f) Study the real and reactive power flows on the interconnected system at peak and low load periods. Determine reactive com- pensation requirements, provide guidelines for dispatch of reactive power, transformer tap settings, etc. Specify and prepare detailed cost estimates for the equipment and work required to provide adequate reactive compensation to minimize system losses at all load levels. Cost/benefit analyses should be used to determine the optimum levels of compensation. (g) Review the existing under-frequency and under-voltage load shed system, determine what upgrading is required to attain reason- able system security (especially in the West Zone if the Khulna plant is two shifted), and prepare specifications and detailed cost estimates for the required equipment and work. (h) Set up and implement individual unit monitoring procedures for all steam units and train BPDB staff in their use. The Opera- tions Management Manual For Fossil Fuel Steam Electric Generat- ing Plants -- United States Department of Agriculture Rual Electrification Administration - REA Bulletin 163-3 -- should be used as a guide for this activity. The Efficiency Control Scheme used by the Thermal Production Division of the Nova Scotia Power Entity in Canada is a good example of the required system. (i) After the cost estimates are prepared, a benefit cost analysis should be performed using economic principles to determine whether or not the work to allow Khulna to be two shifted is justified. - 61 - Annex 4 Page 4 of 8 Phase 2 To the e"tent that the work is justified by the analysis in Phase 1t (a) Procure, expedite, manage the installation, and coumisuion, the equipment required to upgrade the plant instrumentation, upgrade system security, improve the dispatch of real and reactive power and enable Khulna to be cycled. The intent is that the firm should manage these activities and any other required to implement the program outlined in the Summary of Requirements, and deliver a working system to the BPDB. (b) Provide training to ensure that the BPDB operating staff is technically competent to run the system and achieve the envisaged cost savings. Division of Labor and Responsibilities The firm will be fully responsible for the implementation of the program. It will provide all of the services required to ensure the success of the project. The BPDB will provide the following: (a) Access to the plants, documents, and any data required to carry out the work. (b) All transportation in Bangladesh. (c) Counterpart staff as required. (d) Office space, standard office equipment and supplies. (e) Secretarial services. (f) Translation services if required. Guidelines for Proposal The proposal should provide comprehensive details of the following: (a) A work plan in accordance with these terms of reference; (b) A preliminary estimation of the hours per person required for the work and the place in which the work will be carried out. - 62 - Annex 4 Page 5 of 8 (c) The nature of the organization and previous experience in related work in developing countries. (d) Curricula vitae of staff who will be assigned for the study as well as curricula vitae of support staff at Headquarters. (e) Details of hardware offered or arranged for supply. (f) Staff and period to be assigned for establishment of the systems and training of 8PDB personnel inclusive of full curricula vitae and previous experience. A sealed envelope should be enclosed with the proposal indicating the cost estimate of this work based on a system of fixed professional fees, which should also be determined in relation to the actual hours of work. The firm may suggest alternative schemes for attaining the objectives outlined in the Summary of Requirements. Any alternative scheme should be clearly identified as such, and separate work schedules and costs should be provided for each, Once the proposals have been evaluated, BPDB will proceed to negotiate the contract with most qualified firms and if they are unable to reach agreement during the negotiations, proceed to negotiate with the second best qualified firm. BPDB may reject any or all of the offers received if none of them is satisfactory. Form of Contract The contract which will be awarded to the successful firm will be based on the International Model Form of Agreement Between Client and Consulting Engineer No. IGRA 1979 D&S -- produced and issued by the International Federation of Consulting Engineers (FIDIC). Schedule of Payments The schedule of payments will be negotiated and the firm is invited to propose a schedule. However, the BPDB will tie payment to clearly identified performance targets, which may include among others: (a) The completion of analysis. (b) The production of specifications. (c) The completion of training. - 63 - Annex 4 Page 6 of 8 Cost Estimate terse: Economic Operation of Generation System Project: Phase I - Training and preparatlon of specifications for equipment and Instal- lation services Obective: To reduce the cost of generation by Improving dispatch procedures, by Improv- ing the operation of individual generating units, and by making changes that would allow more extensive use of gas-fired generatlon at of f-peak perlods. ,S of ServicefEqulpment: - Provide training In dispatch procedures, - Inspect Instrumentation at generating plants and specify rehabilitation or uWgrading requirements to allow performance monitoring. - Prepare specifications for changes required to two-shift Khulna plant Includ- 'lngs - Improving reliability of Interconnector between East and West Zones. - Uprading underfrequency load shed system and setting up operating proce- dures to provide system security In West Zone If Khulna Is shut down at night. - Specify work required to upgrade controls at Khulna to allow effective two-shifting. - Oatermine any potential reduction of component life. - Set-up efficiency monitoring system for individual units. - Determine reactive compensation requirements, prepare specifications for equipment and provide operating guidelines. Professional Travel and Estimate of Cost (1984 USS): Services Subsistence Training In dispatch procedures (4 man months) 36,000 20,000 Inspect and prepare speclfications for plant instrumentation (30 man months) 270,000 100,000 Prepare specificatlons for upgading controls Khulna, etc. (6 man months) 54,000 24,000 Reactive compensation, transmission line relIabilIty system security (12 man months) 108,000 46,000 Set up Individual unit operating efficiency monitoring (12 man months) 108,000 46,000 Contingencies (10) 58,000 24,000 634,000 260,000 Total Phase 1: US$894,000 -64 - Annex 4 Page 7 of 8 Cost Estimate Program: Economic Operation of Generating System Project: Phase 2 - Installatlon of equipment and final training 2Woictive: To reduce the cost of generation by Improving dispatch procedures, by Improv- Ing the operation of Individual generation units, and by making changes that would allow more extensive use of gas-fired generation at off-peak periods, Scope of Service/Equipment: - Install equipment specifled In Phase 1. - Provide training In use of equipment. - Project management, NOTE: Estimates are approxImate and are provided only to define the order of magnitude of the project, Professional Travel and Estimate of Cost (USS): Services Subsistence Equipment Modification of Khuina plant to two shift operation 600,000 300,000 6,100,000 Upgrade Instruments at other stoam plants 200,000 150,000 300,000 Compensation equipment, underfrequency relays, changes to transmission line 300,000 200,000 1,500,000 Tralnlag (12 man months) 108,000 46,000 Project Management (24 man months) 216,000 92,000 Contingency 10% 142,000 790000 .OOO 1,566,000 867,000 8,690,000 Total Phase 1: USS894,000 Total Phase 2: USS11,123,000 Total Program: USS12,017,000 - 65 - Annex 4 Page 8 Of 8 Estimate of Benefits Prof ram: Ecomonic Operatlon of Generating System Project: System Changes to Allow More Extensive Use of Gas Scope of Services/Equipment: - Upgrade controls at Khulna plant to allow two shift operation. - Improve reliability of East-West Interconnector. - Upgrade underfrequency local shed system to Improve system security. - Determine final economic feasibility of the project. Assumtlons: - Khulna plant can be shut down at least eight hours per day, 335 days per year. - Khulna plant operated at about 110 MV. - Energy not generated at Khulna is replaced by gas-fired generation, - Assume similar heat rate for Khulna and the gas-fired plants used to replace the energy. - Fuel cost differential USS0.0368/kWh, - Life of project 20 years, discount rate 12S. Calculation of Benefits: Energy Replaced Year (GWh) Savings (USS) 1__ 2-20 294.8 10,850,000 Net Present Value (at 12%) 69,026 Savings/Cost Ratio 6,7 EOR 90.3S - 66 - Annex S Page 1 of 12 TERMS OF REFERENCE FOR IMPROVEMENT OF GENERATING PLANT EFFICIENCY Summary of Requirements The Bangladesh Power and Development Board (BPDB) is soliciting proposals to organize and implement the rehabilitation of five thermal power stations (see attached list). The objective of the rehabilitation program is to upgrade the operating condition of these units (stations) to achieve improved unit heat rates, increased capacity and plant availability. This work is to be referred to as "The Program" and is estimated to require 100 man months of service in Bangladesh and 133 man months of head office ser- vices. The overall cost of the program including local salaries and facilities is estimated at US$6.0 million. This includes approximately US$1.0 million in professional services, US$4.2 million in equipment and the remainder in local salaries, travel and living expenses. The program is financed by . The executing agency is the _ The firm performing these services shall be referred to as the Engineer, and the Bangladesh Power and Development Board is to be referred to as BPDB. Background Bangladesh Power Development Board (BPDB) is a statutory gov- ernment entity responsible for the generation, transmission and distri- bution of electricity in Bangladesh. The BPDB reports directly to the Ministry of Energy. The allocation of resources for the BPDB is guided by the Planning Commission, which coordinates the development of the power sector with those of other sectors of the economy. This program to improve the efficiency of generating plants and recover derated capacity is one of a group recommended by a World Bank/UNDP Power Loss Reduction mission. The misrion's report9 which describes the power system and oi'Flines the work to be done, is a part of these Terms of Reference. General The following are the general terms of reference for the con- sulting engineer and project manager: (a) Make a field inspection of the five thermal plants, evaluate operating procedures and condition of each unit in each sta- tion, and submit an offer to undertake the scope of work - 67 - Annex 5 Page 2 of 12 described in these terms of reference. The Engineer is to perform a thorough investigation of the work elements outlined herein and shall also recommend additional rehabilitation work elements which become evident as a result of his investigation. (b) Any additional tasks should be undertaken, provided their eco- nomic feasibility is supported by a cost/benefit analysis. The evaluation factors such as fuel cost and operating regime shall be furnished by BPDB. Cost estimates and benefits derived for each task will be submitted by the Engineer for review and approval by BPDB prior to implementing the work. (c) The Engineer shall manage, design, specify, procure, expedite, implement, and supervise the installation work necessary to upgrade these stations. The Engineer shall prepare engineering design details and construction work job descriptions, where required, for specific tasks. (d) The Engineer will include in his proposal a suggested procedure to be used to handle additions and deletions to his contractual scope of services. This shall include, but not be necessarily limited to, work time estimates with backup data and hourly rates for the work performed. These rates shall be included in the offer. (e) Undertake on BPDB's behalf the specifying, expediting and scheduling of work including the fabrication, transport and timely delivery of equipment, material and/or systems required to complete the project. Where necessary, the Engineer will subcontract special engineering services with the prior appro- val of BPDB. In cases where the repair of a unit of equipment or a system would be best accomplished through the services or replacement parts from the original supplier, the Engineer will submit to BPDB, a check estimate of the value of the service or item(s) being offered. (f) The Engineer will include in his proposal the number of head office and field engineering technical staff he proposes to employ for this work. The time required at the plant site to perform inspections and to research records should be given, including rates and expenses. The Engineer shall include the services of a construction manager, who shall manage the work and liaise with BPDB. The field labor is to be provided by BPDB except for foreign specialized service personnel or special skilled craftsmen. The latter will be furnished by the Engineer as required and will be for BPDB's account. Field supervision, administration and accounting personnel will be furnished by BPDB for the Engineer's management. (g) The Engineer shall plan and schedule the work. The schedule will accommodate the normal operating regime of the BPDB - 68 - Annex 5 Page 3 of 12 system. The tender document should give a first estimate of the overall time required to complete the specified work. Curricula vitae of the key personnel being offered to perform this work shall also be included in the proposal document. (h) The Engineer shall train BPDB staff in the operation and main- tenance of any new equipment installed during the Project. An overall program schedule, from the time of award of contract to completion of the program, shall be included in the proposal. The priority work elements (listed below) are to be completed twelve (12) months after contract has been awarded. Scope of Work The following work elements are to be included in the Engin- eer's base scope of service: Ashulani Station An existing rehabilitation program on the German designed two x 64 MW units (installed 1970-71) is in the final stages of completion, but the station still presents two problems: (a) Recorded auxiliary power consumption (6.45 X) is high for a gas-fired steam station; and (b) the instrumentation at this plant is in poor condition and in need of repair and calibration. In order to overcome these problems, the Engineer shall: (a) Review the plant electrical system to ascertain the reasons for the high level of auxiliary power consumption and recommend steps to reduce it. He shall also evaluate in detail the eco- nomic feasibility of replacing the constant speed boiler induced draught fan motors with variable speed units. (b) Arrange for an inspection of the instrumentation by a qualified instrument control engineer. He shall then retain the services of a controls contractor, who will repair, recalibrate and re- set the major systems' instruments and controls and, where necessary, upgrade and/or replace controls which cannot be repaired. This contractor shall furnish his own repair tools and test stand equipment to carry out his work. (c) The contractor shall perform on-the-job training for selected BPDB trainee engineers during this rehabilitation period by working with and instructing the trainees in the repair and calibration of controls and instruments. - 69 - Annex 5 Page 4 of 12 (d) The contractor shall then update the existing recommended list of the spare parts, tools, and test equipment required to main- tain the instrumentation in good running condition. The Engineer shall then list qualified suppliers of these materials for BPDB and issue specifications for purchase by BPDB as necessary. Chorasal Station The 2 x 55 MW units of this station (installed 1974-75) are of Russian origin. This plant has a 7.95 percent auxiliary power consump- tion rate and a 28.6 percent thermal efficiency. In addition, the instrumentation is in poor condition. The following steps are required to attain improvement in both areas: (a) The low thermal efficiency of these units should be inves- tigated in conjunction with an evaluation of the condition of the instrumentation. Corrective steps are to be taken with BPDB approval to restore the units to peak efficiency and to restore the instrumentation to good working order using the same procedure as at Ashuganj. (b) The existing forced draught fan inlet ducts are designed to remove air from the top of the turbine hall as an efficiency measure. T-he Engineer shall design a second connector to this duct with dampers, to take air from the enclosure at th.e top of the boilers. Khulna Station This plant is the largest in the BPDB system. Several units are very old and small. Replacement parts are in some cases unavail- able. However, the newer steam units are judged to qualify for extensive redesign which will yield considerable savings to BPDB. The major re- design work to be performed concerns the limited capability of the 110 MW and 60 MU heavy oil-fired Czeckoslovakian design (Skoda) steam units to operate below 70% rating on automatic control. The major redesign work to achieve cycling capability is done under a separate contract and is not included in this Scope of Work. However, both units require minor modifications to improve operative and energy efficiency. In order to achieve this objective, the Engineer shall: (a) Evaluate and specify, after BPDB's approval, the substitution of variable speed motor drives on the boiler (forced and in- duced) draught fans on both units. BPDB will provide all the values required for the evaluation. (b) Review the electrical auxiliary system to establish the reasons for its high consumption rate. He shall then present to BPDB a cost-benefit analysis and recommend steps which can be taken to reduce auxiliary power consumption. - 70 - Annex 5 Page 5 of 12 The cost of generating power with the diesel oil burning gas turbine units at this station is amongst the highest in the BPDB sys- tem. The two land-based units are in need of a general factory represen- tative inspection. This inspection shall include repair, recalibration and clean up of the control system. These units are one 12.75 NW Fiat and one 10.5 MM Stal Laval units. Shahjibazar Station This plant is made up of 4 x 16 NW Cie glectro Iecanique (now Alsthom Allantique of France) and 3 x 14.75 MW Fiat gas turbine units, some of which are presently derated to approximately eight MW each. For this station, the scope of work for the Engineer is as follows: (a) An in-depth inspection by a factory representativet including unit controls, to establish the present load limiting factors and poor thermal efficiency on each unit. Quotations to cor- rect these conditions shall be provided by the manufacturer. Additionally, he shall quote on changing the control system to a solid state design. (b) The engineer shall also inspect and evaluate the other parts of the plant to determine additional rehabilitation work required to restore it to rated capacity. This work shall include an inspection of the turbine air filters, the rehabilitation of the plant closed cooling water system, (especially the cooling water pumps), the plant battery room facilities and the control room cooling air system. Based upon all the above inspections and estimates the Engineer shall perform a cost-benefit evalu- ation for review and approval by BPDB. (c) The Engineer shall evaluate the installation of control, elec- trical and mechanical workshops, and the training of qualified BPDB personnel in plant equipment maintenance and instrument maintenance and calibration. (d) A supplementary evaluation shall also address the overall ex- tended useful plant life of these units beyond 1988, based on the rehabilitation of the plant. Siddirganj Station This plant has a one x 50 MU. American designed gas-fired steam unit which has recently been through a major rehabilitation program. In general, this unit is in good condition with only minor existing prob- lems. Three areas shall be investigated by the Engineer at this station: - 71 - Annex 5 Page 6 of 12 (a) The substitution of a variable drive unit for the single boiler forced draught fan motor. If approved by the BPDB, the Engin- eer shall specify and arrange for the procurement and delivery of the new drive unit and shall supervise its installation, (b) The Engineer shall also investigate the remainder of the auxi- liary power load and recommend any other steps or revisions to the unit auxiliary system which would further reduce power consumption to a more acceptable level. The Engineer shall establish unit efficiency and determine other revisions which will increase its present thermal efficiency. (c) Inspection and assessment of the general condition of the unit control systems. The Engineer shall recommend any upgrading of these devices which will further enhance unit operation. Priority of Work The rehabilitation program contains some tasks which shall be started immediately as well as longer term programs which should also be promptly initiated. Other tasks have a lower level of urgency. The BPDB priorities of the work tasks to be performed are as follows: First Priority 1. Plant inspection 2. Shahjibazar rehabilitation program Second Priority 1. Variable speed drive units on major steam units boiler fans. 2. Auxiliary power reduction program, at steam plants. 3. Instruments and control i) rehabilitation program. ii) training program. Division of Labor and Responsibilities The firm will be fully responsible for the implementation of the program. It will provide all of the services required to ensure the services of the project. The BPDB will provide the followingt - 72 - Annex S Page 7 of 12 (a) Access to the plants, to documents and to any data required to carry out the work. (b) All transportation in Bangladesh. (c) Counterpart staff as required and at the educational level spe- cified by the consultant to ensure success of the training. (d) Office space, standard office equipment and supplies. (e) Secretarial services. (f) Translation services if required. Guidelines for Proposal The proposal should provide comprehensive details of the fol- lowing: (a) A work plan in accordance with these terms of reference. (b) A preliminary estimation of the hours per person required for the work and the place in which the work will be carried out, (c) The nature of the organization and previous experience in related work in developing countries. (d) Curricula vitae of staff who will be assigned for the study as well as Curricula vitae of support staff at Headquarters. (e) Details of hardware offered or arranged for supply. (f) Staff and period to be assigned for establishment of the sys- tems and training of BPDB personnel inclusive of full Curricula vitae and previous experience. A sealed envelope should be enclosed with the proposal indicat- ing the cost estimate of this work based on a system of fixed profes- sional fees, which should also be determined in relation to the actual hours of work. The firm may suggest alternative schemes for attaining the objectives outlined in the Summary of Requirements. Any alternative scheme should be clearly identified as such, and separate work schedules and costs should be provided for each. The firm should also provide a schedule of fees for phase 2 of the work, which should be defined at the end of phase 1. Once the proposals have been evaluated, BPDB will proceed to negotiate the contract with the most qualified firm and, if they are unable to reach agreement during the negotiations, proceed to negotiate with the second best qualified firm. BPDB may reject any or all of the offers received if none of them is satisfactory. - 73 - Annex 5 Page 8 of 12 Form of Contract The contract which will be awarded to the successful firm will be based on the International Model Form of Agreement Between Client and Consulting Engineer No. IGRA 1979 D&S -- produced and issued by the International Federation of Consulting Engineers (FIDIC). Schedule of Payments The schedule of payments will be negotiated, and the firm is invited to propose a schedule. However, the BPDB will tie payments to clear performance targets. List of Plants Ashuganj Station: 2x64 MW gas-fired steam plant (German design) Chorasal Station: 2x55 MW gas-fired steam plant (Russian design) Khulna Station: lxllO MW heavy-oil-fired steam unit (Czech design) 1x60 MW heavy-oil-fired steam unit (Czech design) lx12.75 MW diesel-oil-fired gas turbine unit (Stal Laval, Swedish design) WlO.5 MW diesel-oil-fired gas turbine unit (Fiat, Italian design) Shahjibazar Station: 4x16 MW Gas fuel gas turbine unit (Cie Electro Mecanique; French design) 3x14.75 MW gas-fired gas turbine units (Fiat; Italian design) Siddhirganj Station: lx5O MW gas-fired steam plant (American design) - 74' - Annex 5 Cost Estimate Page 9 of 12 Proaram: Generating Plant Efficiency Project: Reduction of Plant Auxiliary Power Consumptlon Objective: To modify plant auxilIary systems In order to reduce auxilIary energy consump- tion. Scope of Services/Equipment Phase I Inspect the generating plants and study the technical and economic feasibi- lity of various measures to reduce auxiliary power consumption. Phase 2 Design, procure, Install and commission equipment to reduce auxI liary power consumption as justifled by Phase 1l Professional Travel and Estlaste of Cost (US$): Services Subsistence Equlpment Phase I Inspection of units (6 cmn months) 54,000 Travel 10,000 Living expenses 22,000 Contingency 10% 5,00 3,000 59,000 35,000 Phase 2 EngineerIng and design 300,000 ProJect management and Installation (6 man months) 360,000 Variable speed fan drives 1,280,000 Spare parts tools and test equipment 600,000 Travel 40,000 Living expenses 130,000 Contingency 10% 66000 17.000 !9.000 726,000 187,000 1,899,000 Total Phase 1: USS94,000 Total Phase 2: USS2,812,000 Total Project: USS2,906,000 Local Cost: USS50,000 - 75 - Annex g Cost Estimate Page 10 of 12 Pro sram: Generating Plant Efficiency Improvement Project: Shahjlbazar Gas Turbine Station - Recovery of Derated Capacity abjective: To rehabilitate the generating units at this plant In order to recover derated capacity and Improve efficiency. Scope of Services/Equipment The work will be done In two phases: In phase 1, a consulting fIrm is required to assess and specify the required maintenance and rehabilitation work, In phase 2, it should supervise the procurement, Installation and commissioning of the necessary eqipment. Professional Travel and Estimate of Cost (USS): Services Subsistence Equipment Phase 1 Review of requirements and preparation of specl- fications (22 man months) 198,000 Travel (4 roundtrips) 20,000 Living expenses 65,000 contingency 10% 20,000 9,00 218,000 94,000 Phase 2 Air filter replacements 30,000 Battery replacements 23,000 Conversion of turbine controls to solid state 320,000 Repair shops 300,000 Replacement of circulating water pumps 40,000 Control system repairs 12,000 Spare parts and materials 1,400,000 Factory service representative 20,000 Project management (24 man months) 198,000 Travel 20,000 Living expenses 86,000 Contingency 10% 22jOOO 11,000 213,000 240,000 117,000 2,338,000 Total Phase 1: US$312,000 Total Phase 2: US$2,695,000 Total Project: US$3,007,000 (excluding local labour) Local Labour: US$45,000 - 76 - Annex 5 Page I1 of 12 Estimate of Benefits Program: Generating Plant Efficiency Improvement Project: Reduction of Plant Auxiliary Power Coasumptlon Scope of Services/Equlpment Upgrade auxillary systems to reduce energy usage, Assumptions - Capacity released by reducing auxiliary demand 94W - Energy seved (9 MW at 75S load factor) 59 GWh/yr - Long run marginal cost of capacity USS117AkW/yr - Discount rate 12% - Average life of project 15 years Calculation of Savings loss Reduction Savings (1984 USS) Year (MW) (Gkh) Demand Energy Total 1 _ - - - 2 4 26 486,000 759,000 1,227,000 3-15 9 59 1,053,000 1,723,000 2,776,000 (Million USS) Net Present Value 14,618 Savings/Cost Ratio 6.03 EDR 73.0% - 77 - Annex 5 Estimate of beefits Page 12 of 12 Proaram: Generating Plant Efficiency lmprovement ProJect: ShahJibazar Gas Turbine Station - Recovery of Oerated Capacity ScoPe of Services/Equipment Inspect and rehabilitate the gas turbine units at this plant to return them to rated capacity and heat rate. Assuwptlons - Reovered plant capacity approximately 20MW - Value of energy saved by Improving efficiency USSO,72 per million Btu - Value of capacity savings US$117/kW/yr, - Plant factor 70% - Life of lmprovement work 10 years Calculation of Savings Loss Reduction Savings (1964 USS) Increased Energy Year Capacity (MW) SavinAs(106 8tu) Capacity EnerL y Total I _ _ _ 2 10 333,704 1,170,000 483,260 1,659,260 3-11 20 667,273 2,341,090 978,132 3,319,272 (ilillon US$) Net Present Value 14,220 Savings/Cost Ratio 5,7 EOR 83,7% - 78 - Annex 6 Page 1 of 9 TMS OF REFRECE POR NON-TECHNICAL LOSS REDUCTION PROCIAM Summary of Requirements The Bangladesh Power Development Board (BPDB) is soliciting proposals to organize and implement a program to reduce non-technical losses from the preoent level of about 17S of net generation to 7X of net generation, or better, in two years. The program should be structured so that it can be continued under the BPDB's supervision to achieve and maintain an ultimate non-technical loss level of 11 of net generation or better. The work will includes, but not be restricted to, the following major items: (a) Reorganize and manage a comercial operating unit which will be responsible for the entire non-technical loss reduction pro- gram. (b) Evaluate billing system requirements, specify, purchase, in- stall and commission billing software and computers. (c) Organize a meter department, advise on the purchase and super- vise the installation of meters for industrial and commercial customers to improve the quality and security of metering. The estimated manpower and equipment requirements for the pro- gram are to: (a) Provide an experienced commercial manager for two years. (b) Provide overseas training to BPDB's existing commercial man- ager. (c) Evaluate billing system needs and specify software and hardware (about 6 man months), (d) Purchase and install a computerized billing system, including training (about 18 man months). (e) Provide an experienced meter engineer for two years and organ- ize a meter department. (f) Provide five meter technicians for about two years. (g) Specify purchase and install about 675 high tension metering units, 623 three-phase demand meters and 2,000 three-phase energy meterse - 79 - Annex 6 Page 2 of 9 Upgrading the metering system should be done in two phases. The equipmant requirements should be specified in phase 1, and the equipment procured and installed in phase 2. Although a similar situa- tion exists with the billing system, the equipment cost estimate is considered to be accurate and thus the activity is shown as a phase 1 process only. The overall cost of the program excluding the cost of local salaries and facilities is estimated at US$6.7 million. The phase 1 cost is estimated at US$3.9 million, consisting of US$1.1 million in profes- sional services, US$1.9 million in equipment and software and the re- mainder in expenses. The phase 2 cost is estimated at US$2.8 million in equipment. The program is financed by The executing agency is the _ In the following discussion, the work is referred to as the "program" and the firm performing the work is referred to as the "firm". Background The Bangladesh Power Development Board (BPDB) is a stati-tory government entity responsible for the generation, transmission and distribution of electricity in Bangladesh. The BPDB reports directly to the Ministry of Energy. The allocation of resources for the BPDB is guided by the Planning Commission, which coordinates the development of the power sector with those of other sectors of the economy. This program to reduce non-technical losses is one of a group recomiended by a World Bank/UNDP Power Loss Reduction Mission, The mission's report, which describes the power system and outlines the work to be done, is a part of these Terms of Reference. Scope of Vork The program must be regarded as an integrated set of measures which must be carefully coordinated to reduce non-technical losses to the target level within the scheduled time of two years. It consists of strengthening a commercial unit which will coordinate improvements in the billing and metering system to improve accuracy and reduce fraud. For convenience, the three activities are described separately. Strengthening of Commercial Unit The firm shall provide an experienced commercial manager for a period of two years to reorganize and strengthen the commercial unit. He will be directly responsible to the Board of the BPDB. The manager will - 80 - Annex 6 Page 3 of 9 create a management information system, reorganize the billing process, organize a meter department and organize an inspection unit, all with the express objective of monitoring and reducing non-technical losses. The manager will also implement measures to improve the collection of cash. The specific tasks of the commercial manager shall include, but not be restricted to: (a) Establish a consistent reporting format and frequency for power system, statistical and financial data. (b) Set report.ng requirements and format for all departments from which data must be collected. (c) Provide regular summary reports, graphs, charts, etc. to the members of the Board. (d) Monitor customer accounts and initiate investigative action when necessary. i) Advise the government on legislation related to theft of service. (f) Establish appropriate billing cycles and collection targets. The firm will provide simultaneous training for the existing commercial manager in a public utility in a developed country. The training should be for two six-month periods, the first starting six months after the start of the program and the second finishing six months before the end of the program. Reorganization of Billing System The firm shall review the existing billing system. It shall then determine the volumes to be processed and management reporting requirements of a billing system consistent with modern utility prac- tices, specify the software and hardware requirements, procure the necessary software and hardware, install, test and put into operation the billing system. The firm will reorganize the billing department and provide the necessary training. The software must be a proven billing system which is being used in utilities elsewhere, with only slight modification! to provide for the BPDB's tariff structure and reporting needs. Tisv hardware must be proven equipment with adequate service facilities available in the region (a service request must be adequately responded to within 24 hours). The BPDB would prefer a system based on a central computer in Dhaka, with satellite stand-alone units in the various distribution areas. The satellite units would provide a complete billing and manage- ment information service to each distribution area and would update the central records periodically by the physical transfer of magnetic discs to the central unit. The system should use stand-alone equipment for interchange and backup. A typical system based on the IBM System 36 - 8l - Annex 6 Page 4 of 9 computer with magazine discs units and magnetic tape for security backup is shown on the project estimate appended to these Terms of Reference. This description is provided only to outline the type of system envi- sioned and does not imply a preference for IBM equipment. In addition to providing a billing system, the consultant will, through the commercial manager, organize billing cycles, the rotation of meter readers and other measures to minimize fraud in the system. Improvement of Metering System The firm shall provide an experienced meter engineer and five meter technicians for a period of two years. Their main functions will be to, under the overall direction of the commercial manager, establish a meter department and an inspection unit consistent with modern utility practice. It is envisaged that two of the meter technicians will be devoted entirely to the inspection unit to follow up and train BPDB staff in following up metering irregularities. Some of the tasks of the meter department will be to: (a) Install new meters or relocate and refurbish existing meters for the approximately 1,500 Large Industrial and Commercial customers, with the express purpose of securing the meters against tampering. The measures to reduce tampering should be low cost, simple and easy to maintain. They should not unduly inhibit the servicing and reading of meters. (b) Create metering standards relating to the location, sealing, testing and maintenance of meters. (c) Relocate and secure the meters of other large customers outside the Large Industrial and Commercial group. (d) Install meter test equipment. (e) Train BPBD staff in testing and maintaining meters. Division of Labor and Responsibilities The firm will be fully responsible for the implementation of the program. It will provide all of the professional services, software and equipment required to ensure the success of the program. The BPDB will provide the following: (a) Accees to documents and data. (b) Counterpart staff as required. (c) Office space. - 82 - Annex 6 Page5 Sof 9 (d) Secretarial services. (e) Translation-services if required. Guidelines for Proposal The proposal should provide comprehensive details of the fol- lowing: (a) A work plan in accordance with these terms of reference. (b) A preliminary estimation of the hours per person required for the work and the place in which the work will be carried out. (c) The nature of the organization and previous experience in the related work in developing countries. (d) Curricula vitae of staff who will be assigned for the study as well as curricula vitae of support staff at Headquarters. (e) Jetails of equipment offered or arranged for supply. I&) Staff and period to be assigned for establishment of the sys- tems and training of BPDB personnel. The information should include full curricula vitae and previous experience. A sealed envelope should be enclosed with the proposal indi- cating the cost estimate of this work based on a system of fixed profes- sional fees, which should also be determined in relation to the actual hours of work. Once the proposals have been evaluated, BPDB will proceed to negotiate the contract with most qualified firm and, if they are unable to reach agreement during the negotiations, proceed to negotiate with the second best qualified firm. BPDB may reject any or all of the offers received if none of them is satisfactory. Form of Contract The contract which will be awarded to the successful firm will be based on the International Model Form of Agreement Between Client and Consulting Engineer go. IGRA 1979 P.I. - produced and issued by the International Federation of Consulting Engineers (FIDIC). Schedule of Payments The schedule of payments will be negotiated and the fir. is invited to propose a schedule. However, the BPDB will tie the payments to clearly defined performance targets. - 83 - Annex 6 Page 6 Of 9 Cost Estimate Progr Non-Technical Loss Reduction. 9roject: Strengthening of Commercial Unito ObJective: To restucture and retraIn the commercIal unit according to modern utilIty practice, Scope of ServicedEgulpmeot: Provide a coirc lal manager for tfO ywars to restructure the coemerclal department, establish reporting system, train the local staff and coordinate the non-technical loss reduction program, Simultaneously, provide overseas training for existing commercial managero Professional Travel and Estimate of Cost (US$): Services Subsistence Equipm_t Phase 1 Salary and benefits 180,000 Travel (2 roundtrips for self and family of 3) 40,0 Living expenses 48,000 Miscellaneous office equipment 10,000 Training for commercial manager two six-month perlods ovweseas 50,000 Travel (2 roundtrips) 10,000 Llving Expenses 44,000 Contingency 10$ 23&000 14.000 '.A0M 253,000 156,000 11,000 Total Phase 1: US$420,000 Total Phase 2: - Total Project: USS420,000 - 84 - Annex 6 Page 7 of 9 Cost Estimate Program: Non-Technical Loss Reduction Project: Upgrading of Billing System Objective: To estabilsh a comprehonsive coMputerized billing system to Improve the off l- clency of producing bills, Improve the accuracy of bills, Improve the manage- ment controls on billing and the management Information from billng. Scope of Service/EquipMent: The provision of computer hardware, software and training to Implement a computerized bIlling and management InformatIon system. The hardware estImate Is based on the use of iBM system 36 computers or similar, and consists of: 1 Central computer with 24 workstations, 2 printers, and I magnetic tap. drive. I large stand-alone remote unit (100,000 customers) with 16 workstations, 2 printers and 1 magnetic tape drlve. 13 small stand-lone remto units wIth 8 workstations and 2 printers. The software consists of oparating utilities along with application software Including: File creation and maintenance; account Inquiry system; billing system; cash receipts; account adjustments; credlt rating; management reporting; audit trails end controls; meter maintenance; and on-line cash desk facility. Professional Travel and Estimate of Cost (USS). Services Subsistence Equlpment Phase I ServIces to evaluate needs and specify system (6 man months) 54,000 Travel 5,000 Living expenses 22,000 Control computer and 200,000 peripherals Large stand-alone computer 160,000 and peripherals 13 small stand-alone 1,144,000 computers and perIpherals System support and utilIlty software 66,000 Application Software Including an on-llne training totorial and personnel training 96,000 144,000 Travel (3 roundtrips) 15,000 Living expenses (3 peopie 6 months) 63,000 Contingency 10 15,000 11 000 173.000 165,000 118,000 1,907,000 Total Phase 1: US$2,190,000 Total Phase 2: Total Project: USS2,190,000 -r - 85 - Annex 6 Page 8 of 9 Cost Estimate Program: Non-Technical Loss Reduction Project: Overhaul of Materlng System Obective: To Improve the quality and security of meterlng of Industrial and comeercial Customers by providing new meters, relocating meter positions, establishing meter testing procedures and meter records, and establishing a meter Inspection de!.artment. Scope of Service/Equipment: - Provide an experienced meter engineer to manage the meter program and establish systems consistent with modern utility practice. - Meter technicians to establish and secure meters and train local staff, - Meter technicians to establish an Inspection department and train local staff, - Meters to replace 75% of the commercial and Industrial meters. Note: This project would be Implemented In two phases: first, the personnel would be recruited and sent on site to assess the actual neads for equipment; second, the equIpment would be ordered and Installed. Professional Travel and Estimate of Cost (USS): Services Subsistence Equipment Phase I Meter engineer for 2 yeors - Salary A benefits 150,000 - Travel 30,000 - Living expenses 48,000 5 meter technicians for 2 years - Salary & benefits 500,000 - Trael 150,000 - Living expenses 240,000 Basic equlpmnt 20,000 Contingency 10% 65,000 47.00 2.000 715,000 515,000 22,000 Phase 2 675 high tenslon metering unit3 1,668,000 623 3-phase demand meters 212,000 2000 3-phse meters 200,000 Meter test equipment 300,000 Materials to relocate meters 200,000 meter seIs 15,000 Contingency 10% 2,877,000 Total Phas 1: USS1,252,000 Total Phase 2: US$2,877,000 Total Project: US$4,129,000 - 86_ Arnex 6 Page 9 of 9 Estimate of D3enefits Proar: Non-Technical Loss Rsduction Project: Entire progran of 3 proJects Scope of Service/Equipment: - Provide commercial manager and training for Incumbent manager, - Provide bililng system. - Overhaul and upgrade metering sywtern Assumptions: - Non-technical losses would be reduced by about 5% at end of 2-year period, and by 10% thereafter. - Assume loss reduction to start from second year. - No increase in benefits after second year (very conservative assumption), - Life of equipment/system 20 years. - Savings valued at average financial tariff USS1.5/ich, at an exchange rate of TK 25AJSS - Forecasted gross generation for 1985/6 and 1966/7 and 4.8% statlon use, Calculation of Financial Benef its Loss Reduction Financial Benefits (USS) Energy Year (GO) Energy I 2 230,1 13,800,000 3-20 515.5 30,930,000 Not present value (at 12%) 208,996,250 Benefit/Cost ratio 32.0 IRR 272.9% - 87 - Annex 7 Page 1 of 13 TERMS OF REFURENCE FOR TECHNICAL LSS RBEDUCTION PROGRAM Summary of Requirements The Bangladesh Power Development Board (BPDB) is soliciting proposals from a consulting firm to prepare and implement a program to reduce the technical losses on the power system from the present level of about 14X of net generation to about 12% or better in two years. The program should be structured so that it can be -ontinued under BPDB's supervision to achieve and maintain economic loss levels about 8S or 9a of net generation. The work, which must be implemented as a coordinated program, consists of two main elements: (a) Establish a distribution planning department to analyze losses in the existing system, plan the orderly expansion of the sys- tem and prepare standards and guidelines for future expansion (the standards must include items such as the optimum size of power transformers, the loadtng and length of distribution lines, optimua voltage levels, etc.). (b) Analyze, plan and implement measures in the existing system to reduce losses and improve the quality of service. The measures may include sectionalization of the secondary network, power factor improvement and reinforcement of the 33 kV lines. The work will be done in two phases. Phase 1 will include familiarization with the system, the provipion of a computer system and software to facilitate analysis of the distribution system and training BPDB engineers to establish a distribution system data base to perfor- analyses and to plan the system expansion. The analyses done in this phase will lead to the work in phase 2, which should start before the end of phase 1 utilizing equipment already in BPDB stores. In addition, the consulting firm will prepare a comprehensive set of distribution stan- dards and guidelines based on criteria to achieve optimum economic loss levels. Phase 2 will include the procurement of material and the manage- ment of specific loss reduction projects identified in phase 1. It will also include the training of BPDB personnel in project management. The overall cost of the program excluding local staff and facilities is estimated to be about US$16.9 million. The phase 1 cost is estimated at US$951,000 consisting of about US$495,000 in professional services and US$199,000 in equipment and softwares, and the remainder in expenses. The phase 2 cost is expected to be about US$16.1 million consisting mainly of equipment. The program is financed by _ The executing agency is _ In the following discussion the consulting firm submitting a proposal to do the work is referred to as the "firm" and the work is referred to as the "program. - 88 - Annex 7 Page 2 of 13 Background The Bangladesh Power Development Board (BPDB) is a statutory government entity responsible for the generation transmission and dis- tribution of electricity in Bangladesh. The BPDB reports directly to the Ministry of Energy. The allocation of resources for the BPDB is guided by the Planning Commission, which coordinates the development of the power sector with those of other sectors of the economy. This program to improve generation efficiency is one of a group recommended by a World Bank/UNDP Power Loss Reduction mission. The mission's report, which describes the power system and outlines the work to be done, is a part of these Terms of Reference. Scope of Work The work includes everything that is necessary to achieve the objectives listed in the Summary of Requirements. Some of the specific tasks are: Phase 1 (a) Advise the BPDB on the quantity and qualification of engineers and technicians and in the physical facilities required for the distribution planning department, which will consist of a cen- tral unit and operating units in each of the five distribution zones. (b) Train and assist the BPDB in the followings (i) The representation of the existing distribution system by suitable nodes and line sections for the purpose of computerized system studies. (ii) Development of suitable study models. (iii) Determination of existing system characteristics and loss levrels. (iv) Application of suitable load forecasting techniques. (v) Study of alternative system development proposals. (vi) Application of economic optimization techniques particularly in the context of system losses. (vii) Determination of the least cost system expansion plans. - 89 - Annex 7 Page 3 of 13 (c) supply a suitable minicomputer system including CRT terminals, printers, digitizers for data entry of maps and drawings, and plotters for obtaining output in the form of maps and circuit diagrams. (d) Supply a package of system analysis software (the software must be proven and be in use elsewhere in a developing country) con- sisting but not restricted to the followings (i) Load Forecasting Program This program should be capable of using basic data such as land use classifications, population growth rates etc. in order to develop future load forecasts. The capabilities si.ould include analysis of past data and regression techniques. (ii) Distribution System Study Program The output of these studies should provide load flows, volt- age profiles and sectional and total losses. Programs are also required for transformer load management, single phase and three phase short circuit studies and (optionally) for transient stability studies. The load flow programs should be capakle of quick -eoetition for modifications (particu- larly in the case *r capacitor installations) or should include optimization methods built into the programs. Pro- grams are also required for iiterfacing with the proposed computerized billing process fcr the collection of consump- tion data and also for interfacing with cassette recorder or other types of output that may be obtained from special instruments (such as demand profile recorders) installed in the field. The various programs supplied should be capable of being used together and capable of operation as a com- plete integrated package. Installation & Training The firm shall be responsible for the complete installation in satisfactory working order of all the hardware and software. The offer should also indicate the period of maintenance guaranteed and other follow-up services offered. The firm should also be responsible for the training of the staff of the BPDB for undertaking the related studies. Such training facilities should include advice on data collection such as special metering devices to be used in the field, organization and vali- dation of input data, operation of the programs and the analysis and interpretation of results. In addition, the firm should: (a) Prepare and specify the equipment and work program to effect specific loss reduction projects in the existing system. - 90 - Annex 7 Page4 of 13 (b) Prepare a comprehensive set of distribution standards and guidelines, with special emphasis on the customer voltage level. Benefit cost analysis should be done to determine what type of distribution system should be used, for example, 3 wire three phase or 4 wire three phase with single phase sections. (c) Prepare a comprehensive 5-year distribution plan for the major distribution centers, using a 20-year horison for conceptual planning. This plan should be complete with budgetary esti- mates and should be suitable for presentation to financing agencies to ensure that the use of aid funds is directed to achieve the overall least cost development of the distribution system. The data collection and analysis should be done by BPDB engineers under the guidance of specialists from the firm. Phase 2 Provide procurement services and project management to imple- ment specific projects developed in phase 1. It tS expected that phase 2 will start before the end of phase 1. This phase should also include a training component so that BPBD engineers will be competent to continue with implementing loss reduction activity after the end of this contract. Division of Labor and Responsibilities The firm will be fully responsible for the implementation of the program. It will provide all of the services required to ensure the services of the project. The BPDB will provide the following: (a) Access to the plants, to documents and to any data required to carry out the work. (b) Counterpart staff as required and at the educational level specified by the consultant to ensure success of the training. (c) Office space. (d) Secretarial services. (e) Translation services if required. - 91 - Annex 7 Page 5 of 13 Guidelines for Proposal The main proposal should be for phase 1 of the program, but unit rates should be provided for phase 2. It should provide compre- hensive details of the following: (a) A work plan in accordance with these terms of reference, (b) A preliminary estimation of the b-urs per person required for the work and the place in which the work will be carried out. (c) The nature of the organization and previous experience in the related work in developing countries. (d) Curriculum vitae of staff who will be assigned for the study as well as Curriculum vitae of support staff at Headquarters. (e) Details of hardware offered or arranged for supply. (f) Complete details of software package offered. This should include a description of each program, form of input data, sample of output and details of where such program have been used to date. (g) Staff and period to be assigned for establishment of the systems and training of BPDB personnel inclusive of full Curriculum vitae and previous experience. A sealed envelope should be enclosed with the proposal indi- cating the cost estimate of this work based on a system of fixed profes- sional fees, which should also be determined in relation to the actual hours of work. The firm may suggest alternative schemes for attaining the objectives outlined in the Summary of Requirements. Any alternative scheme should be clearly identified as such, and separate work schedules and costs should be provided for each. The firm should also provide a schedule of fees for phase 2 of the work which should be defined by phase 1. Once the proposals have been evaluated, BPDB will proceed to negotiate the contract with the most qualified firm and, if they are unable to reach agreement during the negotiationst proceed to negotiate with the second best qualified firm. BPDB may reject any or all of the offers received if none of them is satisfactory. Form of Contract The contract which will be awarded to the successful firm will be based on the International Model Form of Agreement Between Client and - 92 - Annex 7 Page 6of 13 Consulting Engineer No. IGRA 1979 P.I. -- produced and issued by the International Federation of Consulting Engineers (FIDIC). Schedule of Payments The schedule of payments will be negotiated and the firm is invited to propose a schedule. However, the BPDB will tie payments to clear performance targets, some of which may be: (a) A report of the analysis for the existing system. (b) A detailed system expansion plan. (c) A detailed set of distribution standards. (d) The construction of specific loss reduction schemes. - 93 - Annex 7 Page 7 of 13 Cost Estimato P oram: Technical Loss Reductlon Proect: Creation of a Distribution Planning Unit Objective: To create a Distribution Planning Unit In the SPD8 responsible for distribution planning and distribution construction standards and guldelines, Scope of Services/EquIpment Provide three distribution planning engineers for two yeare, and the necessary computer software and hardware to: - Triln SOPB engineers In load forecasting end distributlon expansion planning, - Perform detailed loss reduction studies on the existing system. - Prepere a distrlbution expansion plan (20-year horizon, In detall for first 5 years). - Prepare a comprehensive set of construction standards and guldelines, Professlonal Travel and Estimate of Cost (1984 USS): Services Subsistence Equipment Phase 1 Professional services of 3 endinsers for 2 years - Salary and benefits 450,000 - Travel (self and family) 90,00o - Llving expenses 1"44000 Minicomputer systems (6) 150,000 Software 30,000 Physical Contingency (10) 45.000 23.000 19 000 495,000 257,000 199000 Total Phase 1: USS951,000 Total Phase 2: Total ProJect: USS951,000 Note: This project Is shown as a single activity, It provides the engineering Input to the other projects under this program, - 94 - Annrix 7 Poa Of 13 Cost Estimt sjms Technical Los Aeductlon Projects Seconr Disribution Network StAl lo"l 1ttan ok0t - order Of magnitude estimate only) Objective: To reduc loes on existing secondery networks by splittlng the ntwork Into smiler setins and Instal I Ing more transformers, Scop of Servic.eqiuipMst: install about 60,400 kVA of transformers and extend the 11 kV system, as required, to allow the etional lzation of the weondary network. Note: Th engneaelng Input and precise definition of ths activities will be provided by the nwly formed DIstrIbutiln Planning unit, The standards used will be teah a delped by the unit to attain oaptlm loss levelso Professlonal Travel and Estleate of Cost (1984 US$): Services Subsistence Equipment Phase I - Engineering provded by Distribution Planning Unit, Phase 2 Equipment and material includlng freight 4,635,000 Project mangemnt 464o000 Contingency 46, 00 464,000 ErctWion (Local cst) $464,000 Total Phase 1: Total Phase 2: U$56,073,000 Total Project: USS6,073,000 - 95 - Annex 7 Pag 9 of 15 Estimate of enfits P : Technical Lo1s Rbduction !MLct: Secadary Distrlbutlon Network Sectional ization Soe of Services/Equinment: Installation of about 80,000 kVA of transformers and line extensions to allow sectIonalizatlon of secondary network. AsAltaions: -Energy losss decreased by 45% and demand lss by 30% of present levels (difference Is due to fact that Improved voltags at custower level will Increase demand - ctimates based co sample calculat;ons). -Project lmpl_meted over 3 years with equal amount of transformer ca! 4cIty Installed eab Iewro - During tts lmplemntation period losses assumed to Increrse a; rate of system Vowt* (12 pe annum). -Benefits do not Increase after the end of implementation period, since new standards would be In effect for any new extensions. 3 Life of transformers and associated equipment 33 years. - Dlscount rate 12%, - Value of capaelty savings USA287/W/yr. - Value of energy savins USSO.0333/kNh. Calculations of Savings: Loss Reduction Savings (1984 MSS) DOmand Eneg Ye Demand Lney Total 2 5.4 28.3 1,552,000 942,000 2,494,000 3 12.2 63.4 3,506,000 2,11,000 5,617,000 4-33 20,4 106.5 5,863,000 3,546,000 9,409,000 Net Present Value (at 12S) 54,034 Savings/Cost Ratio 10,1 EOR 86,6S -96- Annex 7 Page 10 of 13 Cost Estimate Program: Technical Loss Reduction Project: Power Factor Improvement (Note - Order of magnitude estimate only) Objective: To reduce technical losses by the Installation of fixed and swltched capacitors on distribution circuits to Improve the power factor. Scope of Service/Equipment: Installation of 185 NYAR of capacitors In 450 kYAR banks, 165 fixed banks and 245 switchable banks, Note: The engineerlng and precise definition of this activity will be provided by the newly formed Distribution Planning Unit, This Includes exact locations and the size of capacitor banks to attain optimum loss levels. Professional Travel and Estimate of Cost (1984 US$) Services Subsistence Equipment Phase 1 - Engineering provided by Distribution Planning Unit. Phase 2 Capacitors and accessories 1,394,000 Switches and controls (time clock) 368,000 Project Management 176,000 Contingency (10%) 18,000 176,000 194,000 1,938,000 Erection (local cost) US$176,000 Total Phase 1: Total Phase 2: USs2,308,000 Total Project: USS2,308,000 - 97 - Annex 7 Page 11 of 13 Estloate ot Benefits Program: Technical Loss Reduction Project: Power Factor Improvement Scope or Services/Equipment Installation of 185 MVAR of capacitors In 450 kVAR banks, 165 fixed banks and 245 switchable banks. Assumptions: - Technical losses reduced by 15% of present level (estimated from sample calculations). - Half of the total amount of capacitors Is Installed each year over a two-year period, - During the two-year period the absolute value of losses related to power factor Increases at the rate of load growth (120)o - An.' new feeders or any additions to existing feeders will be adequately compensated, outside the scope to the project, after the second year. (Thus, benefits do not increase after end of project). - Life of capacitors 20 years, - Discount rate 12%, - Value of capacity savings USS284/kW/yr - Value of energy savings US50*0326AWWh Calculations of Savings Loss Reduction Savings (1984 USS) Demand Energy Year (MV) (GWh) Demand Energy Total 1 - - _ _ _ 2 6.41 34.0 1,820,000 1,108,000 2,928,000 3 14.36 76,2 4,078,000 2,484,000 6,562,000 4-20 14,36 76,2 4,078,000 2,484,000 6,562,000 Net Present Value (At 12%) 43,464 Savings/Cost RatIo 19.8 EOR 182,6% - 98 - tones 7 Page 12 of 13 Cost Estimate Proaram: Technical Loss Reductiou Project: Reinforcement of 33 kV lines ONote - Rough Estimate Only) Objective: To reduce technical losses by strengthening 33 kV lines (reconductorIno or parallel circuits)* Scope of Services/Equipment: - Ouild approxImately 220 km of 33 kV line. - Reconductor approximately 880 km of 33 kVI lIne* Note: The enlneering and pracise definition of this activity will be provided by the newly formed Distribution Planning Unit. Professional Travel and Estliate of Cost (1964 USI) Services Subsistence Equipment Material for nw Itlne construction 4,180,000 Material for reconducting 2,640,000 Project manage mnt 682,000 Contingency (10%) 68.000 682.080 750,000 7,502,000 Erection (local cost) US$662,000 Total Phase 1: - Total Phase 2: USS8,934,000 Total Project: US$8,934,000 - 99 - AAOON 7 Pag 13 of 13 Estimate of _e"ef its Pr"re": Technical Loss Reductlon ProJect: Reinforcement of 33kV Lines Scope of Services/Equilmnt: Build approximately 220 km of 33 kV line. Reconductor approximately 680 km of 3. kV line, Assumptlons: - The losses on the 33 kV system will be reduced by 3?% of their present level (average load on 33 kV lines Is 12,6 kWA, 45% themal rating, Losses are reduced by 37% If conductor cross sectIon Is doubled). - Project Implemented over two years with equal amounts done each year, - During implementation, losses assumed to grow by 12% (of existing losses) per year. - Benefits do not increase after the end of implenmtation period, since system extensions assumed to he constructed using new standards. - Life of lines 33 years, discount rate 12%, - Value of capacity savings US167/kW/yr. - Value of energy savings USSO.0317/kWh, Calculations of Savings Loss Reduction Savings (1984 US1) Oemand E,.rgy Year 4) 6 Demand E Total 1 - - _ _ 2 5.0 17.4 636,000 552,000 1,336,000 3-33 11.2 39.0 1,873,000 1,236,000 3,109,000 Net Present Value 12,752,000 Savings/Cost Retio 2.43 EOR 30.2% - 100 - Annex 8 Page 1 of 6 TERMS OF REFERENCE FOR IMPROVEMENT OF DISTRIBUTION OPERATIONS Sumu_ry of Regr'irements The Bangladesh Power Development Board (BPDB) is soliciting proposals for a consulting company or utility to prepare and implement a program to improve the operations of its DistriLution Department. The work, which should be implemented as a completely coordinated program, is intended to: (a) Restore and reset the protection, the control fa-ilities and the instrumentation in the Transmission and Distribution sys- tems and thus reduce the extent and duration of outages. (b) Establish a planned maintenance program for substations. (c) Equip and train about twenty distribution line construction/ maintenance crews. The line crew training is required to ensure that proposals for improving the fusing of distribution circuits can be implemented. The entire program should be completed in two years, and training must be provided to enable BPDB staff to continue to maintain substations and to maintain the integrity of the protective system. The line crew training should enable BPDB to continue to fornm and train new crews. The work will be done in two phaseso Phase 1 will include familiarization with the system, detailed assessent of the costs and benefits of various measures, preparation of specifications for equip- ment, preparation of training plans and some immediate training acti- viti. s. Phase 2 will include the procurement, installation and commis- sioning of equipment, the implementation of operating procedures, and final training of BPDB operating and maintenance staff. The overall cost of the program, excluding local staff and facilities, is estimated to be about US$4.2 million. The phase 1 cost is estimated at US$399,000, consisting of about US$237,000 in professional services, US$107,000 in expenses, and US$55,000 in equl aent. The phase 2 cost is expected to cost about US$3.8 million, consisting of about US$737,000 in professional services, US$2.5 million in equpment, and the remainder in expenses. The program is financed by _ The executing agency is _ In the following discus- sion the firm submitting a proposal to do the work is referred to as the "firm", and the work is referred to as the "program". - 101 - Annex 8 Page 2 of 6 Background The Bangladesh Power Develc.1'ment Board (BPDB) is a st.tutory government entity responsible for the generation transmission and distri- bution of electricity in Bangladesh. The BPDB reports directly to The Ministry of Energy. The allocation o: rasources for the BPDB is guided by the Planning Commission, which coordinates the development of the power sector with those of other sectors of the economy. This program to improve the operations of the Distribution department is one of a group recommended by a World Bank/UNDP Power Loss Reductitn mission. The mission's report, which describes the power system and outlines the work to be done, is a part of these Terms of Reference. Scope of Work The work includes everything that is necessary to achieve the ojectives listed in the Summary of Requirements. Some of the specific tasks are: Phase 1 (a) Review existing system protection and substation maintenance practices. (b) List the existing protective equipment (relays, etc.) and instrumentation. (c) Perform the necessary short circuit studies and any other studies required for protective system coordinat&on. (d) Prepare relay setting letters and fusing schedules (back-up coordination curves must be provided). (e) Provide utructure of organization required to maintain the protective system and maintain substation equipment. (f) Prepare specifications, detailed cost estimates and implemen- tation schedules for the equipment and the work required to rehabilitate the protective system and instrumentation. (g) Review existing line crew structure, work methods and equip- ment. (h) Prepare specifications, detailed cost estimates and an imple- mentation schadule for the line trucks, equipment and training required to form about twenty line crews. - 102 - Annex 8 Page T of 6 Phase 2 (a) Procure, expedite, manage the installation, and commission any equipment required to u;jrade the protective system and instru- mentation. (The protective system includes relays from the transmission substation level down to fuses on distribution spurs and distribution transformers). (b) Train PODB staff in relay setting, relay testing and relay maintenance. (c) Provide guidelines for the application of fuses, sectional- izers, reclosers, etc. (d) Procure, expedite and put into operation the line trucks and equipment required for the line construction/maintenance crews. (e) Provide personnel to train the line crews in Bangladesh up to the standard of linesmen in a developed country. (f) Arrange training for Bangladesh supervisors in a utility in a developed country (actual hands-on training, not superficial classroom instruction). (g) Supervise the handover of the new line crews to the trained supervisors on their return. Division of Labor and Responsibilities The firm will be fully responsible for the implementation of the program. It will provide all of the services required to ensure the success of the program. The BPDB will provide the followings (a) Access Lo the plantes to documents and to any data required to carry out the work. (b) All transportation in Bangladesh. (c) Counterpart staff, as required, at the educational level speci- fied by the firm to ensure success of the training. (d) Office space, standard office equipment and supplies. (e) Secretarial services. (f) Translation services if required. - 103 - Annex 8 Page 4 of 6 Guidelines for Proposal The proposal should provide comprehensive details of the fol- lowings (a) A work plan in accordance with these terms of reference. (b) A preliminary estimation of the hours per person required for the work and the place in which the work will be carried out. (c) The nature of the organization and previous experience in related work in developing countries. (d) Curricula vitae of staff who will be assigned for the study as well as curricula vitae of support staff at Headquarters. (e) Details of equipment offered or arranged for supply. (f) Staff and period to be assigned for establishment of the sys- tems and training of BPDB personnel, iuclusive of full Curri- cula vitae and previous experience. A sealed envelope should be enclosed with the proposal indicat- ing the cost estimate of this work based on a system of fized profes- sional fees, which should also be determined in relation to the actual hours of work, The firm may suggest alternative schemes for attaining the objectives outlined in the Summary and Requirements. Any alternative scheme should be clearly identified as such, and separate work schedules and costs should be provided for each. Once the proposals have been evaluated, BPDB will proceed to negotiate the contract with the most qualified firm and, if they are unable to reach agreement during the negotiations, proceed to negotiate with the second best qualified firm. BPDB may reject any or all of the offers received if none of them is satisfactory. Form of Contract The contract which will be awarded to the successful firm will be based on the International Model Form of Agreement Between Client and Consulting Engineer Vo, IOtA 1980 P.M. -- produced and issued by the International Federation of Consulting Engineers (FIDIC). Schedule of Payments The schedule of payments will be negotiated, and the firm is invited to propose a schedule. However, the BPDB will tie final payments to clear performance targets. - 104 - Annex 8 Page 5 of 6 Cost Estimate Program: Improvement of Distribution Operations Project: Restoration of Protectien and Control Facilities and Substation Maintenance ObJective: - To restore and reset the protection and control facilities In the transmission and distributinn systems. - To establish a planned maintenance program for substations. Scope of Service/Fquipment: Phase 1: Provide protection special lsts to study the protective system and to provide relay setting guidelines and coordination curves. Specify new or replacement relays, fuses, or Instruments, Train SF08 staff In relay and fhse coordination, Phase 2: Procure, install and commission the recoended equipment, including fuses on transformers and spur linese Prepare and Implement a substation maintenance program. Train BPDB staff In substation maintenance and relay testing, Professional Travel and Estimate of Cost (1984 USS): Services Subsistence Equipment Phase 1 Consulting services to analyze protective system (18 man months) 162,000 Travel (3 roundtrips) 15,000 Living expenses 54,000 Test equipment 50,000 Contingency 10% 16,000 7,000 5.000 Subtotal 178,000 76,000 55,000 Phase 2 (rough estimate for order of magnitude) Consulting services Including project managemont (30 man months) 270,000 Travel (4 roundtrips) 20,000 Living expenses 100,000 Equipment 500,000 Contingencies 10% 27,000 12,000 50.000 297,000 132,000 550,000 Total Phase 1: US$309,000 Total Phase 2: US$979,000 Total Project: US$1,288,000 - 105 - Annex 8 Page 6 of 6 Cost Estimate Program: Improvemnt of Distribution Operations ProJect: Reorgenizatlon and Training for Distribution Department. Objective: To Improve the productivity of the llne construction and line malntenance crews by restructuring them and by tralning them In the use of modern equipment and work methods. Scope of Service/Equipmemet: A two-phase approach Is necessary for the project. in the first phase a consultant would review the present structure of the line crews and the organization of the Distrlbutlon OepartmeAn and Identify the required changes, He would also prepare specifications for the required tools and equIpment, In the second phase the trews would be reorganized, lInesmen would be brought In to train the crews, and Bangladesh Supervisors would be sent overseas for training In a utility, Professional Travel and Estimate of Cost (USS): Services Subsistence Equipment Phase 1 Consulting firm/utility to determine requirements ( 6 man months) 54,000 Travel (2 roundtrips) 10,000 Living expenses Ie,00O Contingency 10$ 5%000 3.000 59,000 31,000 Phase 2 (order of magnitude estimate) Services for four linesmen for one year 300,000 Travel ( 8 roundtrips) 40,000 Living expenses 173,000 Line trucks complete with equipment (20) 1,600,000 Tools and equlpment 150,000 Overseas training for four supervisors 100,000 Travel and living expenses 200,000 Contingency 10% 40,000 41.000 175.000 440,000 454,000 1,925,000 Total Phase 1: fgS$90,000 Total Phaso 2: USS2,819,000 Total Project USS2,909,000 - 106 - Amex 9 Page 1 of 6 TERMS OF REVIRWCB FOR STRBGTCIUEL:J OF SUPPORT SERVICES Summarr of Requirements She Bangladesh Power Development Board (BPDB) is soliciting proposals from consulting firms or public utilities to prepare and imple- ment a program to strengthen .ud organize its support services. The proposed work is intended to streamline the operatioa of the Distribution stores and the motor vehicle transport section. The main components of the program are: (a) To design and implement a computerized stores inventory control system. (b) To design and implement a computerized vehicle maintenance sys- tem and to provide the physical facilities for vehicle main- tenance. (c) To determine the needs for additional or replacement vehicles and procure the necessary vehicles and spares. Preliminary work has been done under Canadian International Development Agency (CIDA) financing, by establishing a material classifi- cation system and a model storeroom. This work should be used as a basis for developing the inventory control system. The work will be done in two phases. Phase 1 will include familiarization with the system, detailed assessment of the costs and benefits of various measures, pieparation of equipment and training specifications, and some immediate training activities. Phase 2 will include the procurement, installation and commissioning of systems and equipment, the implementation of operating procedures and final training of BPDB staff. The overall cost of the program, excluding the cost of local staff and facilities, is estimated to be about U8$4.6 million. The b.4ase 1 cost is estimated at US$470,000 consisting of about US$297,000 in professional services and US$173,000 in expenses. The phase 2 cost is expected to be about US$4.1 millionp consisting of about US$445,000 in professional services, about US$202,000 in expensesp and the remainder in equipment. The program is financed by . _ The executing agency is _ In the following discussion the consulting firm or public utility submitting a proposal to do the work is referred to as the "firm" and the work is referred to as the "program". - 107 - Arnen 9 Page 2 of 6 Background The Bangladesh Power Development Board (BPDB) is a statutory govermuent entity responsible for the generation, transmission and dis- tribution of electricity in Bangladesh. The BPDB reports directly to the Ministry of Energy. The allocation of resources for the BPDB is guided by the Planning Coumisse.on, which coordinates the development of the power sector with those of other sectors of the economy. This program to improve generation efficiency is one of a group recoimended by a World Bank/UNDP Power Loss Reduction mission. The mission's report, which describes the power system and outlines the work to be done, is a part of these Terms of Reference. Scope of Work The work includes everything that is necessary to achieve the objectives listed in the Sumary of Requirements. Some of the specific tasks are: Phase 1 Ca) Review the present operation of the stores. Cb) Prepare specifications for a system to achieve good inventory control and produce regular management reports. The system should be based on a software package which is in use success- fully elsewhere. The extent of customization should be mini- mal. (c) Prepare the requirements for staffing and training in the Dis- tribution stores. (d) Review the condition and procedures used for maintaining the existing transport fleet. (e) Define the requirements and prepare specifications for a com- puterized vehicle maintenance management system. The system should be based on a software package being used successfully elsewhere. The extent of customization should be minimal. (f) Deteriine to what intent vehicle maintenance should be done by the BPDB, and to what extent it should be contracted. (g) Prepare specifications for the required maintenance facilities. (h) Prepare specifications for the vehicles required to replace or supplement the existing fleet. - 108 - Annex 9 Page 3 of 6 Phase 2 (a) Procure, expedite, manage the installation, and commission the inventory system defined in phase 1. (b) Procure, expedite, install and commission the maintenance man- agement system, maintenance facilities and vehicles specified in phase lo (c) Provide training for BPDB employees and ensure that they are competent to operate the inventory control and vehicle main- tenance system. Division of Labor and Responsibilities The firm will be fully responsible for the implementation of the program. It will provide all of the services required to ensure the success of the program. The BPDB will provide the following: (a) Access to the plants, to documents and to any date required to carry out the work. gb) Counterpart staff as required. gc) Office space. gd) Secretarial services, (e) Translation services if required. Guidelines for Proposal The proposal should provide comprehensive details of the following (phase 1 and phase 2 work must be shown separately): (a) A work plan in accordance with these terms of reference. (b) A preliminary estimation of the hours per person required for the work and the place in which the work will be carried out. (c) The nature of the organization and previous experience in the related work in developing countries. (d) Curricula vitae of staff who will be assigned for the study as well as curricula vitae of support staff at Headquarters. - 109 - Pagel4 of 6 (e) Details of Hardware offered or arranged for supply. (f) Complete details of Software package offered. This should include a description of each program,, form of input data, sample of output and details of wihere such programs have been used to date. (g) Staff and period to be assigned for establishment of the sys- tems and training of BPDB personnel inclusive of full curricula vitae and previous experience. A sealed envelope should be enclosed with the proposal indi- cating the cost estimate of this work based on a system of fixed profes- sional fees, which should also be determined in relation to the actual hours of work. The firm may suggest alternative schemas for attaining the objectives outlined in the Summary and Requiremtent. Any alternative scheme should be clearly identified as such,, and separate work schedules and costs should be provided for each. Once the proposals have been evaluated, BPDB will proceed to negotiate the contract with the most qualified firm and, if they are unable to reach agreement during the negotiations, proceed to negotiate with the second best qualified firm. BPDI may reject any or all of the offers received if none of them is satisfactory. Form of Contract The contract which will be awarded to the successful firm will be based on the International Model Form of Agreement Between Client and Consulting Engineer No. IGRA 1979 P.I. - produced and issued by the International Federation of Consulting Engineers (FIDIC). Schedule of Payments The schedule of payments will be negotiated, and the firm is invited to propose a schedule. However, the IPDB will tie payments to clearly defined and measurable performance targets. - 110 - Annex 9 Page 5 of 6 Cost Estimate Proro Strengthening of Support Services Project: Replacement of Part of Transport Flost and Installation of a Computerized Fleet Maintenance System Olbective: To replace the vehicles In the existing fleet which are past economic repair; to supply new vehicles; and to Install and traln MPB In the use of a computerized fles4 management system. Scope of ServicesEgqulpgent: This project would be done In two phases, First, an overseas public utility that operates a large fleet efficlently would be engaged to assess MPOB's requirements for replacement vehicles, new vehicles and spore parts. They would also design and Install a computerized fleet management system, In the seconad hase, the utility would assist WM In procuring the necessary vehicles and provide training with the fleot management systeme Professional Travel and Estimate of Cost (USS): Services Subsistence Equipment Ph8" I Consulting services to define vehicle and management system needs (18 man months) 162,000 Travel (5 roundtrlps) 20,000 Living expenses 70,000 Miscellaneous expenses 15,000 Contingency (10%) 16.000 10,000 Sub Total 178,000 115,000 Phase 2 (order of magnitude estimate) Consulting services to pocre 81,000 vehicles and provide training (9 man months) Travel (2 roundtrips) 10,000 Living expenses 22,000 Vehicles and Spares 3,000,000 Contingency 10% 000_ 3,000 300,000 Sub Total 3,0 C0 3,300000 Phase 1: USS293,O00 Phase 2: USS3,424,000 Total Project: USS3,717,000 - 111 - ANe 9 Pageof S s: S9trengtheing of Support Services Project: Stores Inventory Control ObLectlw - To spocify the requiremts of a computerized stores lnventory control systemo - To Insetll the systm and traIn local staff In Its usme Scone of Service/Equllomnt: Phase Professlonal sevice to specify the requiremnts of a computerize stor Inventory control system. Fhs 2s Professional services to Install the stores Inventory control system and train local staff In Its use (order of manitude estimate only), Nots: Preliminary work has been dona In preparing a material classification system under a CIM project, The computer proposed for the billing system can be utilized for this program, Professional Travel end Estilmte of Cost (USS): _ rvices Subsistence Equlpment Phase 1 Consulting services (12 Mn months) 108,000 Travel (2 roundtrips) 10,000 Living expenses 43,000 Contingancy 10S 11,000 S,OOO 119,000 56,000 Phase 2 Consulting services (36 man months) 324,000 Trawl (6 roundtrips) 30,000 Living expenses 122,000 Softwar 150,000 Cootingancy 10% 2,000 is,0 is. 356,000 167,000 165,000 Phase 1: US$177,000 Phase 2: US$688,000 Total Project: US$865,000 PROGRAM: ECONOMIC OPERATION OF GENERATION SYSTEM I- o 0 aFI w" ECONOMIC DISPATCH REVIEW & IMPROVE DISPATCH STUDY REAL & REACTIVE FLOWS PROCURE EQUIPMENT INSTALL & TRAIN 0 5 10 15 20 25 30 35 40 MONTHS USE MORE GAS COST KMULNA TWO-SHIr l~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ COST INTERCONNECtION IMPROVEMENT ECONOMIC ANALYSIS PROCURE EOWUIPM -NT INSTALL |TRAIN I-,,,', I 0 5 10 15 20 2S 30 35 mOmS IMPROVED OPERAllON OF INDIVIDUAL UNITS COST INSTRtUMENTATION UPGRADE _W~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~L PROCURE PARTS INSTALL & CAUBRATE INSTRUMENT IMPLEMENT EmCIECYcwc MANAGEMENT IVI 0 0 0 S 10 15 20 25 30 35 MONS Annex 10 - 116 - Page 5 of 18 a a 3 , I* as CA NON-TECHNICAL LOSS REDUCIION REORGANIZE COMMERCIAL OPERATION EVALUATE METERING & SIUH|O PURCHASE & INSTALL SILWNO SYSTEM PURCHASE METERS & EQUIPMENT INSTALL MdETERS & TRAIN TRAIN COMMERCIAL MANAGER V o o 0 5 10 15 20 25 30 35 MONTHS I- PROGRAM: TECsniCAL LOSS REDUCTIu I ii 0 Goo TECHNICAL LOSS REDUCOlON CREATE PLANNING UNIT PREPARE DISTRIBUTION STANDARDS STUDY EXISTING SYSTEM PREPARE DISTRIBUTON PLAN PIROCURE EQUIPMENT 0 13 IMPLEMENT PROJECTS f tu 0 50 ..1 . 20 25. 30..io.. 35 40 4 0 5 MONTHS I F-8 PROGRAM.: GENERATION EFFCIENCY IMPROVEMENT 4 o00 I-' AUXILIARY POWER REDUC11ON PROGRAM INSPECT PLANTS PREPARE SPECIICATIONS PROCURE EQUIPMENT INSTALL & TRAIN - 7 A|. ... W//.... .... . .. 0 2 4 6 8 10 12 14 16 18 20 22 24 26 MONTHS REHABILITAIION OF SHAJIBAZAR STATION INSPECT PLANT PREPARE SPECIFICATIONs |7EY PROCURE EQUIPMENT INSTALL & TRAI N . 0 2 6 a ll. 14 16 14 20 24 26 MONTHS I PROGRAM: nDeROVMNT OF DISTRIBUTION OPERATrIONS I -~~~~~~~~~~~~~~~~~~~~ 21 'a NI. do RESTORE PROTECTION & CONTROL REVIEW PROTECTION SYSTEM PROCURE EQUIPMENT INSTALL EQUIPMENT & TRAIN 0 2 48 10 2 1 16 18 20 22 2 MONTHS MAINTENANCE PROGRAM FOR SUBSTAMONS PRIPARC SUWATION MAINNANCE PLAN X 00~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~U SUPIER VSE IMPLIEMENTAinoN 0 1 2 3 4 5 6 7 8 9 10 MONTHS TRAINING OF LINE/MAINTENANCE CREWS REVIEW UNE CREW STRUCTURE PROCURE TOOLS & EQUIP r H TRAIN UNE CREWS TRAIN SUPERVISORS HANDOVER TO SUPERVISORS orlo 0 2 4 6 a 10 12 14 16 18 20 22 24 26 28 moms I PROGRAM: STISNGTHENG OF THE. SUPPORT SYSTEMS 9 I 0C Go UPGRADING & MAINTENANCE OF VEHICLE FLEET REVIEW CURRENT flEET PRACTICES I.- PROCURE VEHICLES a MANAGEMENT SYStEM TRAIN PERSONNEL 0 2 4 6 8 10 12 14 t6 18 20 22 24 26 28 MONTHS INVENTORY CONTROL SYSTEM REVIEW STORES OPERATIONS PROCURE EQUIPMENI INSTALL EQUIP TRAIN STAFF io,~~~~~ MOMS - 130 - Annex 11 Page 1 of 13 REPORT OF MISSION TO ASSIST BPDB WITH IMTERIM LOSS REDUCTION Introduction As a follow up to the joint UNDP/World Bank Power Efficiency Mission, the Government of Bangladesh requested technical assistance to initiate a crash program to reduce non-technical losses. The crash pro- gram is intended to achieve some loss reduction until the complete non- technical loss reduction program recommended by the Power Efficiency Mission can be implemented. In response to this request, the Energy Sector Managemant Assistance Program (ESMAP) fielded a one-man Technical Assistance Mission to start the crash program using existing 8PDB resources and capabili- ties, and to establish an interim work program to be implemented by 5PDB. The potential for reducing non-technical losses was demon- strated by the immediate results of the mission. The energy recuperated as a result of the mission's work is estimated to be about 4,200,000 Kwh, representing Tk 7 million (US$280,000) a year. In other words, with a limited effort of only one month, non-technical losses were reduced almost by 1X of the total (estimated at 600 CWh). A sumary of the energy recuperated is shown in Table 1. In addition to the i_mediate results, the mission has provided a more precise diagnosis of the factors that affect non-technical lossee8, and has presented a detailed work program that BPDB should implement while awaiting the full non-technical loss reduction program. Table 1: SUMMAY 0O' ENEGY LOSSES RECUPERATE lame of Industry Losses/Year findings (kWh) DHAKA Industrial Entity 96,355 CT polarity reversed Container Company 79,875 Meter not working Aluminum Works 5,000 Voltage connection 120' out of phase Flour Kill 163,937 CT shorted Metal Industries 95,623 Suspected pilferage Jute Kill 596,347 Meter slow General Business 372 883 Unmetered service Sub-total 1, CHITTAGOIC Chemical Complex 2 762 116 Voltage fuse open Total i a--:, AM-,~ - 131 - Annex 11 Page 2 of 13 Findings and Recoum_ndations General The mission worked with the Commercial Operation Department, trying to regroup some of the engineers who had been associated with the testing of import-export meters. Since these engineers are scattered all over the country, it was difficult to bring them to Dhaka. The final team created to investigate and to visit high tension consumers initially consisted of six engineers, but ended with only three. The lack of interest by some engineers, and the shortage of vehicles, prevented the use of more than one team for the program. The team examined the meter readers' books for 383 high tension consumers from Dhaka (representative of different types of consumers and areas) and 35 consumer records from Chittagong. In Dhaka and the surrounding areas, 25 services were visited. In Chittagong only 10 services were visited, mainly because all the meter books were in Bengali. Organization The recently created Commercial Operation unit is responsible for the collection of data on generation and losses and for monitoring the process of metering, billing and collection in the entire system. Additional responsibilities are the reduction and control of non-tech- nical losses. Meter testing equipment consisting of a rotating standard meter and a phantom load has been provided to the three major divisions of Dhaka, Khulna and Chittagong. This equipment is necessary, but there there are still major problems preventing the unit from being an effective loss reduction unit: (a) There are no full-time qualified technicians to operate the equipment (rotating standard meter and phantom load) and to test meters. There are no meter technicians except at the central meter shop. As a result, little basic testing is per- formed by the engineers who are occupied with other responsi- bilities within the unit. (b) The lack of experience by some of the engineers prevents them from having confidence and authority to perform their duties. In addition, the weight and size of the phantom load discour- ages many engineers from taking them for field testing. (c) Although each division is responsible for testing all three phase meters before installation, and to recalibrate meters in their own "meter shop", only meters with known problems are tested. The only exception is Chittagong where all meters - 132 - Annex 11 Page 3 of 13 (single phase and three phase) are tested before installation. In this case, previous tests showed many meters to be running fast, some over 40X. Because of the short time spent in Chittagong it was not possible to verify this, but it is clear that there are problems with the testing procedures and/or the equipment. 1/ (d) The percentage error of the rotating standards is unknown cnd hence is not used when calibrating meters. The mission tested one of the standards at the central meter shop and found it to be O.51 fast. In addition, the standard error used by BPDB for high voltage consumers (i.e. 2X) is too large. Recommended actions to deal with these problems are presented in the following sections. Meter Shop The main problems found at the meter shop are the followings (a) The Central Meter Shop lacks adequate equipment, but more important, it lacks meters to testa The meter shop is only used when there is a dispute over meter accuracy. The place is nearly empty and the personnel appear bored and in need of motivation. (b) The special test room where three phase meters are tested and where the only test bench is located is not air conditioned and thus is susceptible to contamination by dust. The room is dirty and testing is not correctly done. (c) With over 700,000 customers and a lack of qualified personnel to field test meters, the meter shop should be full of defec- tive meters or doubtful meters. However, the lack of communi- cation among the departments seems to prevent the use of the available facilities. 2/ In order to tackle these problems, a better utilization and complete reorganization (including a redefinition of the duties of the 1/ It is unlikely that new meters would be that badly calibrated. If in fact the test equipment is almost 402 slow the losses in this area would be considerable. 2/ For example, the Division Chiefs believe that the main meter shop is responsible for the testing of all three phase meters, while the meter shop believes that the Division is responsible for testing all three phase meters. The end result is that meters are not tested. - 133 - Annex 11 Page 4 of 13 central meter shop) is urgently needed. Among the most important steps to achieve this are the following: (a) Training of the personnel. This is needed to keep them updated and to increase productivity. (b) Establish metering standards and policies. If they exist, they are not well known by everyone. (c) Maintain the testing room clean and organized. An air condi- tioning unit is necessary to maintain the room clean. (d) Maintain a control book for all the meters received and dis- tributed. The central meter shop should be the only department responsible for the distribution of meters. Control of serial numbers should be kept by the meter shop. (e) Start testing meters in the field. This can be used as train- ing for some staff who later could become part of the loss control unit. (f) Establish a program to test all portable rotating standards once a year. Metering Equipment The main problems detected with respect to meters are the followings (a) The high tension metering equipment is located with easy access to the consumer. With the exception of very few cases, the current and voltage transformers belong to the consumer and are not accessible to BPDB. In some cases even the meter belongs to the consumer. It is not possible to ascertain who (if any- body) tested the meter before installation and who verified the connections. (b) Low tension metering is in worse condition. The current transformers are installed in the open. Voltage is taken directly from the conductors or the secondary of the power transformer. The metering equipment is so accessible to the consumer that he can do anything he wants with the equipment, without BPDB knowing about it. (c) A program to reseal all high tension metering equipment has been recently completed in Dhaka. The success of the program is doubtful, since meters were not tested before sealing them. Furthermore, it is believed that several unacceptable meters (and CT's and VT's) were sealed. - 134 - Annex 11 Page 5 of 13 (4) Lead seals in conjunction with paper seals are commonly used to avoid tampering. The paper seals are nothing more than a rectangular piece of paper with the signature of the Division Chief and the BPDB seal. The seals are then glued to the sides of the meter and to the CT's and VT's terminals. This type of seal has been introduced because BPDB discovered that an alarming number of people (outside BPDB) had perfectly dupli- cated the seals and sealinb to;,Is used by BPDB. The lead seals used are of poor quality and without serial numbers. The success of the paper seals is yet 'to be determined. The mission believes that it is easier to duplicate paper seals than lead seals. (e) Very little importance is attached to meter accuracy. Because of the lack of full-time meter technicians, meters estimated to be around 7X slow are assumed to be acceptable. (f) Meters in some areas (viz. Narshingdi) are tested by using 3 Kw light bulbs. Besides being inadequate, this procedure is only used for light load testing. Pull load testing is not per- formed. In one of the visited services the new meter ("re- calibrated") is registering less consumption than the previous meter, even though load and working conditions of the service remain the same. (g) Three phase meters for industrial consumers are not tested or calibrated when they are received from the factory. Some of these meters could lose their accuracy during shipment. In order to tackle these problems tho tollowing actions are recommended: (a) Meter calibration should be implemented immediately. A program to recalibrate all meters installed on large industrial and commercial consumers is essential for the reduction of non- technical losses. Meters must be tested as close to 02 error as possible; the +2% regulation is not acceptable for high consumption consumers. The participation of the Central Meter Shop is crucial for the meter recalibration program. (b) The metering equipment is in most cases installed on the consumer panel and out of the BPDB control. This metering equipment must be enclosed in a metallic box owned by BPDB. BPDB should start by resealing all CT's, VT's and meters with new seals until the boxes are obtained. The seals and dies will have to be imported to make them more difficult to - 135 - Annex 11 Page 6 of 13 reproduce. The use of color-coded plastic seals is also recommended in some cases. 3/ (c) "Clip-on" plastic boxes with an opening for the conductor and wires to cover CT's and VT's is also recommended. These boies can be made in Bangladesh and should be used on all those services where there is no other solution. (d) For easy inspection, all metering equipment must be wired using a color code. It is much easier to follow color-coded wires than wires with the same color. (e) It is essential that the consumer provides an adequate space for the metering equipment. If the consumer does not meet this requirement, the services should be denied until an adequate space is provided. This policy will save many problems and misunderstandings in the future. Meter Readers Engineers are responsible for taking the monthly high tension meter readings. Each engineer has been assigned a particular area. The present system, as practiced, has the following problems8 (a) Rotation of meter readers is not practiced, and is believed to be one of the reasons for the high number of metering problems. On one hand, the system lends itself to collusion; on the other hand, when the meter reader goes continously to the same places the inspection becomes a routine job. (b) The meter book showed that in some instances the readings are readjusted to reflect what is believed to be the normal con- sumption. This practice is based on judgement and is accept- able for one month while an investigation is conducted. How- ever in all cases reviewed the service is never investigated and the meter reader continues to estimate consumption for onths or years. Reports from the meter readers are seldom investigated. For instance, in Narshingdi, the visit to a jute mill showed the meter registering between 10-15X slow. More surprising was the discovery that this meter was :eported defective in July 1983 but no action had been taken. (c) In general, very slow action is taken on reports of defective meters, incorrect connections or any other irregularity. The mission saw reports in meter books recommending the revision of 3/ For example, red could represent a consumer that was found stealing energy before, yellow a doubtful consumer, green a consumer with no previous problems, etc. - 136 - Annex 11 Page 7 of 13 meters or replacement of fuses, and after more than a year, nothing is done. For instance, in the Chittagong area a chemical plant had a voltage transformer fuse open, represent- ing losses between 200,000 to 300,000 kWh a month, or over Tk 510,000 a month. The fuse problem was reported many times in 1983 by the meter readers, but again no action was taken. The consequence is the demoralization of the personnel report- ing these irregularities. The lack of definition of responsi- bilities and the lack of will to exert firm action are believed to be the main causes for not taking immediate action on this and other cases. (d) On many occasions metering probleas are not reported for fear of retaliation from the consumer. The personnel believes that reporting irregularities in the service of an important person or firm will endanger their job. In order to start solving these problems, the following actions are recommended: (a) A crucial factor in the reduction and control of the non-tech- nical losses is the motivation of the personnel. People should be made aware of the importance of reducing system losses and the importance of their collaboration. Better use of the meter readers should be made, they are the "eyes" of the organiza- tion, the only group that visits every consumer each month. They should be asked to report every detail they think is important, but most of all they should be shown the results and importance of the findings. (b) BPDB has to obtain complete support of the higher authorities of the Government in dealing with non-technical losses. There should not be any interference with the work and findings of the Commercial Operation unit. BPDB must support and protect the people reporting metering problems by not providing their names, under any circumstances. The unit must be responsible for the findings and of any actions taken and not the indivi- duals taking part in the program. This should be made clear to the personnel reporting or investigating consumers. (c) The establishment of targets and rewards (not necessarily eco- nomic) for the group (or staff member) reporting cases that have contributed the most to the reduction of system losses will give the incentive needed for the success of the program. (d) Advertise that BPDB will start a program to find and prosecute any consumer found stealing energy. The prosecution of a few customers and publication in daily newspapers of their names will serve as an example to others and will prevent expansion of the problem. - 137 - Annex 11 Page 8 of 13 Billing The billing of the estimated 700,000 consumers is still done by hand using only hand calculators. This procedure gives a very doubtful estimation of total sales. Major problems in the billing system are: (a) There are no records showing previous billings, but it is cer- tain that in some occasions billing errors are introduced in the calculation of sales and are therefore reflected on the non-technical losses. (b) BPDB signed a contract with the University to use their com- puter and personnel for billing purposes. The major disad- vantage is that outside personnel will be responsible for the billing. It is doubtful that the University will dedicate enough time and effort to improve the billing system and some times will even delay the billing to take care of their own requirements. The requests for billing records might take days, until they find the time to do it. There is no reason to investigate the billing procedure at this time until the new computerized system proposed in the non-technical loss reduction program is in operation. New procedures and policies will have to be introduced to take advantage of the new system. The first compu- terized billing is expected in December 1984. This will represent an improvement but should be considered as temporary until BPDB obtains its own computer system. Work Program Non-technical losses will not be reduced to an acceptable level until the complete program described in Section IV of the main report is introduced. However, since this will take some time we suggest to start a pre-loss reduction programme at a lower scale, which is well within BPDB's present capabilities. As can be seen by the results of the inspections performed by the team during three weeks, a modest reduction without a large investment can be accomplished. Until the full program is implemented, we recommend, based on the findings, to start reducing the non-technical losses by: (a) Installing meters on all services without meter or with defec- tive meters. (b) Calibrating all three phase meters before installation. (c) Re-training the BPDB staff responsible for the testing of meters. - 138 - Ann 11 Page 9 of 13 (d) Using the central meter shop by requesting their assistance to re-calibrate meters. (e) Improving inter-department coordination and defining their responsibilities more precisely. (f) Starting a program of visits and investigations of all large industrial and commercial consumers, including re-calibration of meters. (g) Motivating the personnel to participate in the reduction of system losses. To make better use of BPDB resources the program should be divided in three stages. Stage One: This stage has already started and should be continued as follows (a) Make a list of all unmetered industrial and comercial ser- vices, including address, account number and estimated consump- tion. (b) Make a program to visit all the services listed in (a) and plan the installation of meters. (c). Install meters in all these services and calibrate the meters before installing them. (d) Organize a loss control unit. The unit will comprise a service inspection team, meter testing and calibration, and review of billing records. (e) Prepare a program to visit high tension consumers. Stage Two: (a) Visit and inspect all high tension consumers. Most of the findings will assist BPDB to determine which services have priority for the installation of metering outfits. 4/ (b) Visit the consumers and calibrate meters following the plan developed in stage one. If it is not possible to do it in the field, bring the meter to the shop. In case the service is left without a meter, calculate its daily consumption and add the consumption after the meter is reinstalled. 4/ Meter unit containing potential and current transformers. - 139 - Annex 11 Page 10 of 13 (c) Keep records of every service visited and meter testing results. (d) Monitor all those services where an irregularity was found (after having it corrected). Stage Threes (a) Analyze results. Make a list of the kwh recuperated. (b) Prepare a plan for the inspection of medium size industrial and commercial consumers. (c) Prepare a plan to install metering boxes. (d) Prepare a plan for the periodical testing of High Tension consumers. Timetable The following is the timetable given to BPDB at the end of the mission (December 18, 1984) to start the "pre" loss reduction program. Stage One: The list of services without a meter or with a defective meter is now available. There are 85 services with estimated consumption in Dhaka and surrounding areas (Chittagong does not have any services with- out a meter and at the time of the mission the list from Khulna was not available). However, 20 meters have been already installed, leaving 65 services without meters. Visit all 65 services and take note of the type of meter needed, CT's and VT's ratios and of special requirements needed to install the meter. Determine if the service will have to be suspended to install the meter, estimate time and judge whether the assistance of the Operation Department will be required to interrupt the service., Coor- dinate with the Operation Department in advance. Make a complete list of CT's, PT's and meters required and have them ready for installation. Estimated time to complete visit: 3 weeks Starting date: December 23, 1984 Completion date: January 7, 1985 Earliest completion date: January 4, 1985 Latest completion date: January 10, 1985 Since there are many services with two meters, request all the high tension meter readers to report all services with two or more - 140 - Annex 11 Page 11 of 13 meters. This must be done at the end of the month of December. Make a list of all services and plan a visit to remove them. This action will provide a number of meters for the services without meters. Estimated time to complete visit and removal of meters; 3 weeks Starting date: January 7, 1985 Completion date: January 26, 1985 Earliest completion date: January 20, 1985 Latest completion date: February 2, 1985 Prepare all CT's, VT's and meters required. All meters must be tested and calibrated before installing them. A test report of each meter tested must be issued. This report will be filed in a special high tension consumer file. Meters should be calibrated as close to 01 as possible, 21 is not acceptable. Estimated time to test and calibrate meters: 2 weeks Starting date: January 7, 1985 Completion date: January 20, 1985 Earliest completion date: January 20, 1985 Latest completion date: February 2, 1985 Estimated time to complete installation of meters: 5 weeks Starting date: February 2, 1985 Completion date: March 9, 1985 Earliest completion date: March 2, 1985 Latest completion date: March 16, 1985 It is necessary to create a "Loss Control Unit" to reduce and control all non-technical losses. This unit will be in charge of making programs and plans for the inspection of services and calibration of meters. The unit will start by "opening" a file for each high tension consumer. This file will contain everything related to the respective service, correspondence, date of installation, meter number, type, CT ratios, date of meter testing, etc. The above information will assist the unit in programming periodical checking and meter testing. The unit will consist of three sections: - Service inspection - Meter testing and calibration - Review of records, billing and control and monitoring of services. - 141 - Annex 1 1 Page 12 of 13 There should be one loss control unit in Dhaka, one in Chittagong and one in Khulna. (a) Service Inspection Section: This section will be responsible for the inspection of all high tension services (later they will also inspect low tension and small commercial consumers). It should consist of three inspection teams, with three members per team: one Engineer (or experienced meter technician), an electrician with some experience in metering and an assistant. After each visit each team must submit a report of the visit, including their recommendations. The report will be analyzed by the head of the control unit (or the head of the service inspection section), who will then take immediate action. (b) Meter Testing and Calibration Section: All meters will be tested and calibrated by this section. A test report will be issued after each test, including the error in accuracy (if any) and the cali- bration obtained. This report will assist BPDB to determine the quality of meters, so that they can be standardized. The section should consist of a field testing team and labora- tory testing team. The laboratory team shall have at least two meter technicians, two assistant meter technicians and a general assistant. The field team should consist cf two groups, each group will consist of one meter technician, an assistant meter technician and a general assistant. (c) Review of Billing Records and Control Section: The respon- sibility of this section will be the the calculation of omitted billing, monitoring of high tension consumers, and monitoring of services with new meter or a corrected meter. The section will review every month all the high tension metering books and make a list of all those services that require an inspection by the service inspection section. The list may result from the meter readers' observations or their own considerations. This section will keep control of the non-technical losses and will generate work for the inspection and meter testing sections. Estimated time to organize the loss control unit: 10 weeks Starting date: December 23, 1984 Completion date: March 2, 1985 Earliest completion date: February 15, 1985 Latest completion date: March 16, 1985 Once the unit is formed, a program to visit high tension con- sumers and to calibrate high tension meters must be established. The - 142 - Annex 11 Page 13 of 13 program should also include the coordination of vehicles available for the visits. The program should start by making a list of all large indus- trial consumers with loads above 1 MW and another with loads below 1 MW. There are 353 services with load above 1 MW and 1211 below 1 MW. They are distributed as follows. Above 1 MW Below 1 MW 1. Dhaka Electricity Supply 91 360 2. Narayanganj Circle 45 166 3. Mymensingh Circle 9 27 4. Chittagong Electricity Supply 60 243 5. Distribution Circle, Chittagong 10 36 6. Distribution Circle, Comilla 36 39 7. Distribution Circle, Sylhet 20 61 8. Khulna Electricity Supply 18 61 9. Distribution, Jessore 8 18 10. Distribution, Faridpur 6 21 11. Distribution, Barisal 20 79 12. Distribution, Rajshahi 20 60 13. Distribution, Dinajpur 10 40 TOTAL: 353 1211 Total of H. T. Consumers: 1564 Expected time to complete list: 1 week Starting date: March 16, 1985 Completion date: March 23, 1985 Estimated time to complete program of visits & meter calibration of service with loads above 1 MW: 15 weeks Starting date: March 16, 1985 Completion date: July 1, 1985 Earliest completion date: June 24, 1985 Latest completion date: July 8, 1985 This work on meters with loads below 1 MW should start in July 1985 and continue until the main loss reduction program is underway. The work program for Stages Two and Three should be developed in Stage One. Pk ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~91" 2 NA ts )s 'BANGLADESH :ri, ,, ! { t - POWER DEVELOPMENT BOARD S .s \a +X POWER SYSTEM s-'-. . -< t ' s UNDt ,) 9 _T sv ; n ~~~~~~~~~~~~~~~~~~~~~~~~~~~EXtSSTINp NOSTRUCTION PLANNED TRANSMIS'SION LINES z H } tr ~~~~~~~~~~~~~ < >¢,=^ G i ) t t~~~~~~~~~~~~~~~~~~~~30 kV t Nt Sis___- tTHAKURGON < /t t>f 37kV LINES EITN N T$AKUROO, . UAJOR POWiER STATIONS PLANf~E EXAENS1O N ID tI N A t3 <-, r.vSTE AM TU RBINE A A 8 SAIDPUR , SAtOPLtR RANGPUR COMBUSTION TUR9INF DIESEL O,INAJPUR - Ke A G P YR .HYDRO - . GAS FIELD DISTRICT BOUNOARIES t -- E -- , PALASHBARI ,' ) '\ - - INTERNATIONAL BOUNDARIES ¢ V e JAIPURhAT " -- - CHHATAK - 250 t ., s . > ~~~~~~~~~~~~J A M A:i U A )fAA ' 5 , r A ' OJAMALPUR ;' > SYLUET *->, ", ,r . u 5 ,/ P 1 t W MY. StEFtStNGH ' g ~~~~~~~~~~~~~~~~~~~~~~~~~S Y l H T <. R A- J S H A H I ,,~ i'MY \ENSINGI FCUALt, I f*\J~~~~~~~~ yN I \,_, __@;RJS"^Ht___tA RPA B NAekAN OHAT ISHORGANJ rAS -24° AMA5RARAR j 240 40 JsKUS HTO KLSHTIA INDIA I * SIDDl~~~~~ ~ ~~~~~~~RGAM 't.a ,) S EARIDP~j, s-YF,\ \. ) E"10^ n \\ 'I& ) J 5 ALIGANJ \ \ ' -- 2 \ 2 c-I ENERGY SECTOR W4ANGEMG==T ASSISTANCE PROGRA4 Activities Completed Date Completed Energy Assessment Status Report Papua New Gutinea July, 1983 Mauritius October, 1983 Sri Lanka January, 1984 Malawi January, 1984 Burundi February, 1984 Bangladesh April, 1984 Kenya May, 1984 Rwanda May, 1984 Zimbabwe August, 1984 Uganda August, 1984 Ineonesia September, 1984 Senegal October, 1984 Sudan November, 1984 Nepal January, 1985 Project Formulation and Justification Panama Power Loss Reduction Study June, 1983 Zimbabwe Power Loss Reduction Study June, 1983 Sri Lanka Power Loss Reduction Study July, 1983 Malawi Technical Assistance to Improve the Efficiency of Fuelwood Use in Tobacco Industry November, 1983 Kenya Power Loss Reduction Study March, 1984 Sudan Power Loss Reduction Study June, 1984 Seychelles Power Loss Reduction Study August, 1984 Gambia Solar Water Heating Retrofit Project February, 1985 Institutional and Policy Support Sudan Management Assistance to the Ministry of Energy & Mining May, 1983 Burundi Petroleum Supply Management Study December, 1983 Papua New Proposals for Strengthening the Guinea Department of Minerals and Energy October, 1984 Papua New Guinea Power Tariff Study October, 1984 Costa Rica Recommended Tech. Ass'. Projects November, 1984 Uganda Institutional Strengthening in the Energy Sector January, 1985