Power generation is not growing in line with the forecasted spike in demand in the coming months centring on warmer temperatures, the fasting month and the irrigation season, leaving people staring at frequent and extended power cuts.
The Bangladesh Power Development Board (PDB) planned to produce up to 17,300 megawatts of electricity a day against the projected peak summer demand of 17,800MW.
However, achieving the target would depend on the smooth supply of imported fuels like gas, coal and oil, which the government is unable to do for the strain on the dollar stockpile, according to officials involved with the plan, who spoke to The Daily Star on the condition of anonymity due to the sensitivity of the issue.
As of February 14, which is the latest available statistics from the Bangladesh Bank, the foreign currency reserves stood at $19.9 billion, enough to meet at best three months’ import bills.
Already, many areas in Dhaka and elsewhere in Bangladesh are experiencing power cuts of up to 500 megawatts (MW) a day, when the demand is nowhere near the peak.
Since February 15, the PDB has been producing between 9,500MW to 10,500MW in the evening peak hours against the demand of more than 11,000MW, meaning people in many areas in Dhaka and elsewhere are experiencing daily power cuts before the demand hit anywhere near the peak.
In fact, the state-owned agency started load shedding in the last half of January when the temperatures were still low.
Meanwhile, the government isset to hike the electricity price from the billing month of March, according to multiple top officials of the ministry of power, energy and mineral resources. A gazette notification on this is expected soon.
In short, users will have to count a higher bill without any improvement in their electricity supply when the utility is needed the most.
“There is no logic behind the electricity price hike before synchronising the fuel price with the international market,” said Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue.
The move will impact the overall economic activities and fuel inflation further, he said.
Inflation averaged 9.7 percent in the first seven months of the fiscal year, much higher than the government’s revised target of 7.5 percent.
The more the government tries to solve the fuel shortage issues through the traditional ways, the deeper the government gets caught in a vicious circle, Moazzem said.
“To meet imports amid the dollar shortfall, the government took a loan of $2.1 billion with a high interest rate of 7.5 percent to pay the fuel bills. This short-term solution will plunge the country into a deeper crisis for a long time.”
The government is trapped in this situation as it failed to take the right decision at the right time, said Moazzem, adding that it will be tough to manage the fuel supply issues in the last quarter of the fiscal year.
“If there were around 2,000MW solar-based plants, the government would have been able to cut short the fuel requirements for that much power generation. They couldn’t increase the local gas supply for a long time either,” Moazzem added.
To meet the upcoming demand during the summer months, the PDB would be banking on gas and coal-fired power plants.
According to the plan, the highest 6,760 MW would come from gas-fired power plants subject to the availability of around 1,300 million cubic feet of gas per day.
“In a recent meeting, the Petrobangla officials said they will be able to increase the gas supply from March,” said Khandaker Mokammel Hossain, member (generation) of PDB.
However, Petrobangla officials told The Daily Star supplying that volume of gas to the power sector is unlikely.
The coal-based power plants are expected to produce 4,100MW of electricity during the peak season, while 2,340MW will arrive from India.
The furnace oil-based power plants are unlikely to contribute much towards meeting the summer electricity demand.
While the government cleared about 38 percent of their outstanding bills amounting to Tk 27,000 crore by issuing special bonds, the power plants are facing issues in getting their fuel.
“The government cleared the bills by issuing bonds to the banks. But those banks have a liquidity and a dollar crisis,” said a PDB official informed with the proceedings.
Regarding power generation from the high-cost diesel-fired plants, he said that those have been left as backup options in PDB’s summer plan.
Last year, the highest power generation was 15,648MW on April 19, against the demand of 16,096MW.
Daily Star
