Capacity charge burden

The government is going to take a loan of $2.3 billion from the International Islamic Trade Finance Corporation (ITFC) to tackle the ongoing energy and forex reserve crises. Good news indeed! We have so far known that the government couldn’t import coal due to dollar crisis. This loan programme is indicative of fund crisis.

According to the newspaper reports, about one-third of the total power generation is now unutilized for many different reasons. Either it is a fuel crisis or maintenance-related downtime. While Rampal Power Plant is facing a shortage of coal, Petrobangla is not able to increase gas supply. There is also shortage of furnace oil and diesel that is hampering electricity generation at full capacity.

The Power Development Board officials reportedly acknowledged the fact of fuel crisis. The gas crisis has already hit hard the power plants in Haripur, Bheramara, Ghorasal, Ashuganj and Sirajganj. The Rampal Power Plant has remained shut since April 2023 due to the shortage of coal. In Barguna a 307-MW power plant is now closed as it has no coal to generate power. The PDB and PGCB data shows that 100 out of the 154 power plants in the country can’t produce electricity at full capacity.

Power plants based on furnace oil can now produce only 2660MW of electricity while they have the capacity of generating 5, 925MW. Similarly, privately-owned diesel-fired power plants have the capacity of producing 230MW of electricity but they can produce only 1286MW of power. Experts are saying that the country is facing fuel crisis due to dollar shortage that has been crippling the country for the past one year.

The government had a plan to produce at least 16, 000MW of electricity a day during the sweltering heat from April to June when the country experience heat waves across the country. But the government has so far failed to generate the least 16, 000MW of electricity in a day since April 01. On April 09 the Power Development Board (PDB) could generate a record 15, 648MW of electricity. Since then it has declined steadily. The country’s total capacity of generating electricity is 22, 566MW while it is producing much less than 15, 000MW.

Amid this crisis the ITFC loan has been sought mainly to tackle the ongoing energy crisis as the country is currently grappling with a dire energy crisis. This newspaper on Wednesday published a news item on this loan agreement between the ITFC and the Bangladesh government. This loan would be used to keep the imports of refined fuel oil, gas and liquefied natural gas (LNG) steady and to reduce the pressure on the forex reserves, the Business Post said quoting a letter of the Energy and Mineral Resources Division. The letter has recently been sent to the government agencies concerned.

The power crisis began as production in many coal-fired power plants have been limited or halted due to coal shortage as the local suppliers failed to deliver coal due to unpaid dues. The crisis intensified further after the Payra Thermal Power Plant closed down two of its units earlier this month. However the government coffer is not running short of making payment to power plants as capacity charges to the tune of Tk7.66 crore every day.

The capacity charges the government is paying to the power plants that have long being sitting idle should be stopped immediately. The government can easily save money, if capacity charges are not paid, to tackle the crisis. We urge the government to stop all the power plants that are being given capacity charge in the greater interest of the nation because ultimately the loan burden will pass down to the people mounting their misery.