Home ›› 27 Feb 2023 ›› Front
Around one and a half years ago, the government had said that consumers around the country will get cheap and uninterrupted electricity after the coal-fired power plants start generation and this will also boost the growth of the economy and export-oriented manufacturing industry.
But the real situation of the plants may not appear so easy when the summer hits after the cool weather of the winter and spring.
Despite the commissioning of large power plants, like Payra and Rampal, the overall crisis in the power sector has intensified recently while the recently hiked electricity tariffs on top of rising inflation have only doubled public suffering.
Experts, and even power sector officials, say that the situation will become worse during the upcoming summer due to inefficiency in grid and distribution management, energy supply disruption due to foreign currency shortage, non-payment of dues by Independent Power Producers (IPPs), and loss adjustment activities of Bangladesh Power Development Board (BPDB) to keep electricity prices affordable.
While the authorities blame the Russia-Ukraine war for this ongoing crisis, analysts do not fully agree with them. Experts have blamed the primary dependency on fuel and gas import and prolonged negligence when it comes to exploring domestic sources.
Besides, the burden of costs has also increased following the construction of unplanned power stations, they said.
International energy expert Khondaker Abdus Saleque described the country’s current electricity problem as one of the most complicated ones. “It will be difficult to deal with the national crisis in the coming summer without preventing 18 crore citizens from wasting energy. This difficult time will remain from March till October.”
However, Power Division Secretary Md Habibur Rahman told The Business Post on Friday that there is no chance of electricity disruption during the upcoming Ramadan, summer heat and the irrigation season.
Meanwhile, BPDB sources said the government may once again produce electricity by burning expensive liquid fuel (furnace and diesel) to keep the power supply around the country balanced.
This will further push up BPDB’s power generation cost and electricity prices will become unsustainable. Although, State Minister for Power, Energy and Mineral Resources Nasrul Hamid has repeatedly said that expensive diesel-fired plants will not run during summer this year.
According to a recent BPDB projection for summer, the peak demand for electricity will be 16,500 MW — of which 4,000 MW will be sourced from coal-fired plants (including the Adani Group’s one in India), 6,000 MW from gas-fired ones, 1,160 MW imported from India, and 5,400 MW from liquid fuel-fired plants and other sources.
Last year, due to gas shortage, BPDB incurred a loss of Tk 22,547 crore in power generation from liquid fuel, for which the board has recently requested the Finance Ministry to subsidise.
But the government now has no choice but to adjust the power tariffs from time to time to tackle BPDB’s losses to meet the IMF’s condition, for a $4.7 billion loan, on no subsidy for power and energy sectors.
However, BPDB is still seeking subsidy because, without that, it will not be able to supply electricity as per the demand during summer.
The problem with gas
According to BPDB’s projection, it would need 1,400 MMcf/d gas to generate 6,240 MW of electricity in April-May and the board has already asked Petrobangla to ensure its supply.
In reply, sources said, Petrobangla told BPDB that it will be possible to supply a maximum of 1,000 MMcf/d of gas to the power plants.
Petrobangla data shows that 36 LNG shipments, bought at $1.6 billion including the gas purchased from the spot market, will arrive in the country until June.
It is known that Petrobangla is unable to pay the dues of two LNG terminals in Maheshkhali due to a funding shortage. However, Petrobangla will need around $2 billion in total by May to meet the energy supply demands of power plants, industry, households and others.
Recently, the state-run corporation has written to the Finance Ministry asking for money to meet this demand.
Abdus Saleque said that 7,000 MW of electricity can be produced if Petrobangla can supply 1,100 MMcf/d of gas. “For this, however, the high efficient power plants will have to operate.”
Coal and crisis
The government will rely heavily on the coal-fired power plants, including Rampal, Payra and Adani Group’s plant in India’s Jharkhand, to meet the high demand during summer and irrigation season.
Apart from this, Power Division expects to get electricity from S Alam’s Banshkhali Coal Power Plant in Chattogram and Barisal Coal Power Plant in Barguna in May-June after they come into operation.
With these two, the authorities aim to generate 4,000 MW of power using coal in May-June, sources said.
The Rampal power plant resumed production recently after being shut down for a month due to a coal shortage. At least 500-600 MW of electricity will come from this 1,320 MW plant in Bagerhat.
However, with the current amount of coal stockpiled and in the pipeline, the plant will be able to generate electricity until April. Project Director Subhash Chandra Pandey has expressed worry that the plant may shut down again in April if the coal supply is discontinued.
Meanwhile, the Payra power plant is also in the same crisis. Due to non-payment of dues, coal import here has been suspended since January 1.
Bangladesh-China Power Company Managing Director AM Khorshedul Alam said that electricity can be produced from the stored coal until March 20-22. “There is also pressure to repay the loan to the Exim Bank of China.”
IPPs in trouble
After gas and coal, furnace oil is a key source of power generation in Bangladesh and it’s used by most private sector IPPs.
Around 54,852 tonnes of furnace oil will have to be imported every month to meet BPDB’s estimated 5,000 MW power generation target from liquid fuel In April-May, according to Bangladesh Independent Power Producers Association (BIPPA). About $230 million will be needed for this, it said.
Meanwhile, IPPs owe about Tk 16,500 crore to BPDB and they are unable to pay due to various reasons. These private entrepreneurs are also facing problems in opening LCs for fuel oil import due to the dollar crisis.
BIPPA leaders recently met the Bangladesh Bank governor and sought cooperation and assistance in this regard.
BIPPA President Faisal Khan recently told reporters that most power plants have lost the ability to purchase fuel due to non-payment of BPDB dues. Besides, there is a shortage of dollars that has hit the IPPs hard.
According to BPDB, the country’s total power generation capacity is 24,114 MW. However, due to the energy crisis, power plants are unable to produce electricity according to their capacity. If plants sit idle, the government will still have to pay the capacity charge.
The government has paid Tk 1 lakh crore to the private power plants as a capacity charge. BPDB officials said that this cost will increase further in future as more new power plants are being built.
