Environmental & Social Review Summary
Project Number
8750
Company Name
Khulna Power Company Limited
Date ESRS Disclosed
Feb 5, 2010
Country
Bangladesh
Region
South Asia
Last Updated Date
Dec 31, 2016
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Jun 4, 1998
Signed : May 27, 1999
Invested : Aug 4, 1999
Sector
Gas - Thermal Power Generation
Industry
Infrastructure
Department
Gbl Infrastructure & Natural Resources
Project Description
Environmental Review Summary (ERS)
Project Name BANGLADESH: KHULNA POWER PROJECT
Region Asia
Sector Infrastructure
Project No. 008750
April 17, 1998
1. The Khulna Power Company (KPC) is proposing to build, own, and operate a 96 MW normal operating load (114 MW installed capacity) barged-based thermal power plant in the suburb of Khalispur in the city of Khulna, Bangladesh. Khulna is the third largest city of the country and an industrial and economic hub. KPC is a company formed by a consortium led by Wärtsilä NSD Power Development (Asia) Ltd., a subsidiary of Wärtsilä NSD Corporation of Finland, the world’s leading manufacturer of medium speed diesel engines for power generation. The consortium also includes two Bangladesh companies, United Enterprises and Co. Ltd., and Summit Industrial & Mercantile Corporation (Pvt.) Ltd., who have specialized expertise in engineering and construction and liquid cargo storage and transportation. The project is being developed in response to a Request for Proposals (RFP) to purchase power from barge mounted power plants issued by the Bangladesh Power Development Board (BPDB) in November of 1996. The project is required to address the acute power shortage in Bangladesh. KPC has entered into a 15 year power purchase agreement with BPDB.
2. The barge-based power plant will utilize Wärtsilä model 18V32 duel-fuel engines as prime power movers. These engines are capable of burning both liquid and gaseous fuels and are equipped with Wärtsilä’s latest low nitrogen oxides (NOx) combustion control technology. There will be 19 engines on-board for an installed capacity of 114 MW when operating with heavy fuel oil (HFO). The engines will be mounted on two Commodore power barges, with nine engines installed on one barge, ten on the other. The barge-mounted power plant design has a number of features that make it attractive for power production, especially the speed and efficiency of construction. The power plant will deliver power to an existing BPDB substation located immediately adjacent to the proposed site. The proposed fuel for the power plant is HFO for the first phase of operation, switching to natural gas for the balance of plant operational life, once natural gas becomes available. Although final details of gas availability are not known at this time, the most probable arrival date is considered to be 2004. Natural gas will be delivered by pipeline to the site.
3. The project site is part of an oil tank farm property owned by PADMA, the state oil company. PADMA’s facilities are concentrated on the west end of the site, and include tanker and barge loading/unloading berths, tanks, and a truck loadout area. Because the power plant is barge-based, there will be no major on-site activities related to construction of a powerhouse. There will be construction of on-shore fuel storage and handling facilities, a jetty for unloading fuel, a 100 m long interconnection to the nearby BPDB substation, and office and social facilities for on-duty personnel. As the site is now mostly grassed, work required to clear the site would be minor. Existing facilities that will be removed include small diameter above-ground pipelines, a storage tank and other minor facilities.
4. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor, and the technical appraisal and site review completed by IFC’s Technical and Environment Department staff and a consultant to IFC. The following potential environmental, health and safety impacts of the project were analyzed:
· site selection and land use;
· site contamination from past activities;
· air emissions from construction and plant operation;
· noise during construction and plant operation;
· liquid effluents;
· liquid and solid waste disposal;
· oil transportation safety and spill potential;
· social impacts;
· fire prevention and emergency response;
· employee health and safety programs; and
· impact management and monitoring.
KPC has prepared an environmental assessment for the project to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. The information provided is summarized in the paragraphs that follow.
Site Selection and Land Use
5. The proposed site for the project was identified by BPDB in their RFP for the project. As part of its project planning, KPC also conducted a search for alternative sites that might offer environmental and technical advantages over the proposed site. No other suitable sites of sufficient size were identified in close proximity to an existing transmission substation. The project is located on an uninhabited, vacant property owned by the state oil company PADMA. No resettlement of residents or economic displacement was required. The proposed use is consistent with the industrial uses to the west, and the east, mixed use areas to the south, and the Bhairab River to the north. Residential areas primarily occur south of the site in core area of Khalispur, although some BPDB housing is adjacent to the proposed site. Several educational facilities, jute mills, markets, and oil storage depots are located in the general area of the proposed site.
Site Contamination from Past Activities
6. The proposed power plant site is located at the east end of the PADMA property, which is unused except for one diesel fuel storage tank and associated piping, which will be moved. Some areas of the site exhibit visible oil stains from past activities by PADMA, but there is no significant contamination or other site impairment. Excavation of about 42,000 m3 of soil will be required to develop the enclosed reservoir that will house the barges. Excavations and other site construction will be monitored, and any contaminated soil will be segregated and turned over to PADMA for disposal. Most of the excavated soil (70 to 80%) will be used by PADMA for site fill and some will be sold to customers in the Khulna area. Saturated soil material will be trucked to nearby sites used for dewatering sediments from river dredging.
Air Emissions from Construction and Plant Operation
7. During construction, issues pertaining to air quality will be dust and suspended particles generated by excavation, demolition of existing facilities, and movement of vehicles at the site. Nevertheless, their combined effect is not expected to be significant due to the limited extent of the construction activities and low dust generation due to the high water content of the soils.
8. During operations the proposed power plant''s emissions of SOx and NOx will meet the current World Bank emission guidelines and also meet the draft World Bank emission guidelines for engine-driven power projects. The emissions of particulate matter do not meet the current guideline (50 mg/Nm3) but meet the proposed guideline (75 mg/Nm3).
9. The predicted ambient pollutant levels contributed by the proposed power plant are within all Bangladesh standards and World Bank guidelines on a stand-alone basis. The site is adjacent to an existing power plant with an installed capacity of 110 MW (currently operating at an estimated 55 MW), and a 60 MW power station which is not now operating. Thus, the baseline conditions could be expected to present some level of pollution from the existing sources. Modeling of the emissions from the adjacent existing plant indicates that World Bank guidelines for ground level concentrations of SO2 (24 hour average) would be exceeded. When the proposed plant is factored into the modeling, the predicted frequency of exceeding the 24-hour guideline for SO2 is slightly higher than when the existing plant is operating on a stand alone basis, although the maximum 24-hour concentration is not any higher. The land area affected by combined operation of the plants is significantly larger than in the absence of the proposed power plant. However, over much of the new area affected the maximum concentration exceeds the guideline by a relatively small amount, which in turn suggests that the excursion above the guidelines in those areas is infrequent.
10. Means to mitigate these relatively minor effects on ground level SO2 concentrations so that there will be no net decrease in ambient air quality are being further investigated by the sponsor. These include: determining if the dispatch of the existing plant will drop off (and hence reduce SOx emissions) once the proposed plant is operating due to economic reasons or due to the current state of repair of the facility; evaluating the plans currently in place to refurbish the existing plant - the sponsor is looking at the possibility of supporting the refurbishment to address SO2 emissions and plume dispersion, such as consideration of installation of a taller stack; and determining if the delivery date of natural gas can be accelerated so that all plants can operate fully within all applicable air quality guidelines. As the detailed project planning proceeds, the specifics of these issues will become more certain and clearer, and allow the sponsor to make decisions about how to best proceed in its efforts to maintain or improve overall air quality in the airshed.
Noise During Construction and Plant Operation
11. Noise measurements were taken at three locations in the vicinity of the project: a school and a fire brigade located across the Bhairab River, and the project site itself. Because the power plant units will be assembled offsite on the power barges, noise impacts during construction will result only from site development and be of short duration. Noise modeling performed for the project indicates that for distances greater than 150 m from either the existing or proposed plants, the sound levels from the new power plant will be below that of the existing environment (i.e., less than a 3 dBA change, which is generally considered insignificant due to imperceptibility). For distances closer than 150 m, including the BPDB Company Housing south of the plant, sound levels are predicted to be 4 to 5 dBA above existing ambient sound environment. This is generally considered a just-perceptible difference in sound exposure. Additional noise monitoring will be carried out upon completion of the proposed plant to confirm compliance with recommended noise guidelines or recommend structural, building use or other mitigation measures should they prove necessary.
Liquid Effluents
12. The engines will be water-cooled using a single pass system. The water intake structure on the Bhairab River will also serve as a jetty for the docking and unloading of the coastal tankers that will be delivering the HFO. Raw cooling water drawn from the river will be filtered to reduce the concentration of fine silt particles. Discharges from the copper ion anti-fouling system comprise of low levels of copper only and will meet World Bank guidelines and Bangladesh regulations. No significant amounts of chemicals will be added to the water that will be discharged from the barges. On-site systems will be provided for treatment of stormwater and sanitary and domestic wastewater. All effluents to water from the site are expected to comply with World Bank and Bangladesh guidelines.
13. A computer model was run to determine the potential effects of cooling water on the temperature of the waters of the Bhairab River and its subsequent impacts. Computer modeling suggests that the temperature of the discharged cooling water will be about 10C above the inlet ambient temperature at the discharge point, and less than 3°C at the edge of a mixing zone 100m downstream of the discharge point, meeting both World Bank guidelines and Bangladesh regulations for thermal discharges into inland waters.
Liquid and Solid Waste Disposal
14. On-site storage of feed and waste fuels, lubricants, coolants, solvents and other chemicals will be required for operation and maintenance of equipment. Handling and disposal of these materials will be carried out in accordance to the programs set up by KPC. During plant operation, lubricating oil in standard steel barrels will be delivered to the site. The drums will be stored on site in an area with secondary containment until their contents can be transferred into fixed storage tanks. No significant impacts are anticipated as a result of these operations.
Oil Transportation Safety and Spill Potential
15. Although delivery of fuel is being handled under contract, it nevertheless is an integral part of the project. Fuel will be provided under a private fuel supply agreement with a major oil company, who will make about one delivery every two days by ship from a terminal in Chittagong, in southeastern Bangladesh. The route from Chittagong to Khulna involves some open ocean travel in the Bay of Bengal, but is mostly along inland waterways, and is useable year-round. These are established routes, including oil shipments, and the project shipments will not involve a new activity or a significant increase in existing traffic. Oil is currently delivered via this route to the existing Khulna Power Station, using tankers of the size contemplated.
16. Two 7,500 tonne capacity tanks with secondary containment will be constructed for on-site storage of HFO, which will enable the plant to operate continuously at full load for 30 days. Land-based storage tanks will also be constructed for lube oil, light fuel oil (LFO), waste oil, and sludge. There will be 1,500 tonne capacity day-storage tanks on both the barges. These storage tanks will be contained within a protective hull to safeguard against leakage. In addition, the barges are moored in an enclosed reservoir, effectively eliminating the possibility of collision-related hull damage and its resulting fuel oil spill.
Social Impacts
17. Socioeconomic impacts are largely beneficial ones. There will be a positive, short-term impact on employment and local businesses as a result of construction activities. Also, a reliable source of electricity will bring with it widespread economic benefits to the area. One potential impact might have been the possible interference with the operation of the country boat landing site located near the northeast boundary of the site. However, plans are being made to maintain access to a suitable landing site throughout the construction period.
18. The project is also planning a Social Goodwill Fund, to be made available to the local community for its general benefit. KPC has already begun discussions on the fund, which will be administered by the company, with a number of humanitarian organizations, orphanages, local bodies and educational institutions that are expected, generally, to receive lump-sum, one-time grants. Discussions with other agencies and organizations are also ongoing. At present, significant amounts are also being reserved for discretionary future uses.
19. Although a formal public consultation program was not required, agency and stakeholder consultation was included in the environmental assessment program to ensure that all significant issues were identified and resolved. Community leaders, government agencies and NGOs were consulted to discuss potential issues associated with the project. In general, consultation yielded support for the project, based on the need for improved electrical service and the benefits associated with construction and operation of the plant, such as employment and increased business for associated industries and businesses.
Fire Prevention and Emergency Response
20. Emergency preparedness plans, specific to the Khulna project, will be drawn up prior to the commissioning of the plant, according to model plans developed by the Wärtsilä organization for this type of power plant. These include plans for spill prevention, control, and contingency (SPCC), civil unrest and riots, fire emergencies, and natural disasters.
Employee Health and Safety Programs
21. An occupational safety and health manual, specific to the Khulna plant, will be drawn up prior to the commissioning of the plant. The manual will follow the format of a detailed generic safety manual developed by the Wärtsilä organization. The generic model conforms with the approach to occupational safety and health that has been developed in the United States under the Occupational Safety and Health Act (OSHA) of 1970 and related regulations.
Impact Management and Monitoring
22. KPC will ensure that appropriate corporate resources, reporting systems and accountability systems are in place for the successful implementation of its environmental management system. The objectives of the environmental management system, as well as the company’s success in meeting them, will be reviewed on a continuing basis by senior management. Corrective action will be taken when objectives are not being achieved. Moreover, objectives will be modified in the light of changing environmental laws, regulations and standards, as well as in response to improvements in environmental technologies. Environmental management requirements will be specifically addressed in contractual agreements, and KPC will implement oversight procedures to ensure compliance.
23. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that the proposed project is being designed to address all applicable Bangladesh environmental, land-use and occupational health and safety laws and regulations as well as to meet World Bank policies, and environmental, health and safety guidelines.
24. IFC will monitor Khulna Power Company’s ongoing compliance with World Bank policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by the sponsor and by conducting periodic site reviews during project supervision.
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April 17, 1998 11:33 AM
Environmental and Social Mitigation Measures
Broad Community Support
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