Electricity generation sees meteoric rise to 20,383MW
Bangladesh has emerged from power-starved nation to power-surplus country as the electricity generation meteorically rose to 20,383MW from meagre 21MW in 1947.
In 50 years, Bangladesh attained power or electricity generation autarky and the country is also at doorstep of getting supply from its nuclear power plant.
Seamless supply of power is the key vehicle for keeping the economic wheel moving as Bangladesh aspires to graduate from Least Developed Country (LDC) to middle-income country by 2021 and developed county by 2041.
Bangladesh has been achieving impressive economic growth which is over 6.5% over the last decade and to retain the growth reliable power and energy are the main driving force and frequent power cut costs 2%–3% loss of GDP per year, a World Bank study shows.
Despite being an energy-surplus country, Bangladesh still remains a low energy-consuming country with per capita consumption 370 kWh till 2019, although it was 10.657 kWh in 1972.
Brief history of power production in Bangladesh
British regime enacted Indian Electricity Act, 1910 and first power station was established in 1947 with only 21 MW capacity in the then East Pakistan which is now Bangladesh.
For better management and sustainable power supply “Electricity Directorate” was established and later on in 1959, “Water and Power Development Authority” (WAPDA) was created to meet the growing demand of electricity in agriculture and industry; and later in May 31st of 1972, WAPDA was split into two separate organisations —“Bangladesh Power Development Board” and “Bangladesh Water Development Board”.
To electrify the countryside, the then government in October, 1977 established Rural Electrification Board (REB) and so far, managed to provide power connections to approximately 26.459 million consumers with more than 0.482 million kms of lines.
According to the Power Sector Master Plan (PSMP), government has a goal of universal access to electricity by 2021 when Bangladesh will celebrate 50 years of independence and birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman as power generation capacity rose to 20,383MW from 3,268 megawatt after Awami League assumed power for the second time.
According to the data of Bangladesh Power Development Board, electricity generation capacity of the country stands at 20,383MW as on June 2020 against the demand of average daily electricity consumption 9,000MW- 11,000 MW as power consumption climbed as high as 12,900 MW during summer while it falls flat to 6000MW in winter.
Sources of power
As of June 30, 2020, out of 20,383MW power generation capacity, public sectors capacity stands at 9,568 MW, private sector capacity stands at 8,884 MW, 771 MW from private and public joint venture, and 1160 MW from cross-border while captive power and renewable energy contribute to 2,800 MW and 365MW respectively.
Power sector investment
Once a power-starved nation, Bangladesh, emerges to the global stage as a power-surplus country riding on the aggressive investment by private, public and G2G investment. To meet the growing demand of electricity, government had revised the Private Sector Power Generation Policy of Bangladesh, 1996 in 2004 and framed policy guidelines for private participation in the power sector in 2008 coupled with the revision of Electricity Act 1910.
With revised Electricity Act 2016 government aimed to attract FDI to the power sector.
As of today, around USD15 billion was invested by the private sector over the last decade and private sector’s market player hoped that by 2030, there will be some USD50 billion funneled into power sector to keep the country’s buoyant economic progress in line.
On the other hand, public investment also increased significantly over the period of 2009 to today as government so far invested around $30 billion in the power sector of them, $24 billion was spent on power generation and rest of the money was invested into the improvement of transmission and distribution lines.
FDI inflow to power sector amounted to 10.12% of the total foreign investment in country as of March 2020.
Weakness in transmission and distribution line
Despite being an energy-surplus country still 6.5% people are out of universal electricity coverage, reveals BBS data in 2018, showing that 93.5% of people in Bangladesh came under the coverage of electricity. Weakness in transmission and distribution became a bottleneck in ensuring reliable electricity to the consumer end especially in rural areas.
Bangladesh had taken a project titled “Power grid network strengthening project” with the estimated cost of $1.4 billion to be implemented by 2024 with the Chinese assistance of $970 million.
The Asian Development Bank (ADB) also came up with $300 million loan for expansion of transmission line in greater Dhaka and the western zone of Bangladesh.
WB in another report said that uninterrupted electricity supply in rural areas will open window for small entrepreneurs to set up industries in the countryside area which ultimately facilitate the local people to work within their locality and will help stop flow of rural people moving to the cities for livelihoods.
Under-construction power plants
To boost the nation’s fast-growing economy, Bangladesh laid out a detailed plan projecting the future demand of electricity which is 40,000 MW by 2030. As of February 2020, 48 power plants with the capacity 16,875 MW are now under construction while 149 power plants with the capacity of 30,748 MW are now in the contact singing stage. The power demand in Bangladesh was projected to be 39,663 MW in revised PSMP-2016 (although PSMP was first adopted in 2010).
Problem of power plethora
Bangladesh quest for power security turns out to be a white elephant as more than 45% of the generation capacity which is 20,383MW now remains unutilized against the highest demand of 12,900 MW which poses a car crash like disaster in the power sector as government spent a huge sum of money which is as much as Tk 505 billion as capacity charges in last decade from FY10 to FY19.
Last fiscal year alone the government paid Tk 9,000 crore to 74 private companies as capacity payment despite remaining unused for years.
Bangladesh in era of nuclear power
The Bangladesh’s quest for nuclear energy is dated back to 1961 during the Pakistan period before shifting the project to Karachi instead of Rooppur area of Pabna. But after the independence, Bangabandhu Sheikh Mujibur Rahman revived the nuclear power dream again decided to set up a 200MW nuclear power plant at Rooppur.
Bangladesh is on track to become 30th country in the world to become nuclear power country with the installation of 2,400 MW capacity nuclear power plant.
Energy expert, Professor M Tamim lauded the achievement of Bangladesh in power sector for being power-surplus country saying, " Power and energy are two main key drivers of economic development. We managed to solve the electricity problem with some aggressive approaches like awarding rental and quick rental power plants to private sector players in unsolicited deal to solve the nagging problem of frequent power cut and load shedding".
"Injudicious decision to set up more and more power plants than the actual demand is now costing the tax payers money heavily as government has to pay capacity payment to the private sector power plant despite no use of those power plants. It is an overdue action to phase out rental and quick rental power plants now as government has to pay huge subsidy from machinery tools import to fuel," added the BUET Professor of Petroleum and Mineral Resources Engineering.
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