Summer dates with power cuts-PDB lacks money to buy fuel for its electricity plants Sharier Khan

The cash-strapped Power Development Board is keeping many fuel based power plants closed to save expenditure and allow load-shedding at a time when electricity demands reached new heights. Unlike last year, the PDB now has enough power generation capacity to address the lion's share of the demand. The power demand has reached a record 6,700 megawatts now with the summer approaching. The power demand has soared as farmers want 1,500MW extra power this season for irrigation to ensure boro paddy production. The dry weather demands sub-soil water to be extracted using pumps. The PDB has been maintaining a power generation between 5,000MW and 5,200MW since November last year and had kept load shedding away for four months. The winter weather helped electricity demand remain under control until late February. Even though the PDB foresaw the demand surge from March, it could do little as it has been hard hit by financial constraints. It has to constantly supply imported fuel oil to various rental and public sector power plants. It decided to maintain around 5,200MW power generation. This left around a 1,500MW demand-supply shortfall. But to cut the margin of load shedding, the PDB went for shutting down power supplies to industrial areas in the evening and reduce 700MW power demand and distribute the remaining 800MW load shedding in different areas of the country, said a competent power ministry source. This measure has generated a lot of criticism as industrial shutdowns have resulted in loss of production which would affect export earnings. The government has directed the power distribution companies to keep the ceiling of load shedding in an area to four hours. But in reality, these companies, Desco or DPDC, are suspending power supplies for six to eight hours daily in an area. A top official explained the financial constraints of PDB, We were given Tk 5,200 crore subsidy during this fiscal year. Already we have spent Tk 5,000 crore. Now if we want to run our full power generation capacity, we will need a monthly subsidy of Tk 1,000 crore, which is not there. We have no option but to go for load shedding. He said if state-owned company Petrobangla could ensure its committed gas supplies to power plants, it would be possible to generate 6,000MW without any extra financial burden on the PDB. Citing an example, he said on March 22 during the Asia Cup cricket tournament, Petrobangla ensured maximum gas supplies to the power plants in a special arrangement, helping the PDB hit a record power generation of 6,065MW. Everybody loves to blast the PDB for the load shedding. The fact is we have the power generation capacity but due to differences in power generation cost and sales cost, we are dependent on subsidy. Once our sales costs reach breakeven, we will not depend on subsidy, he said, People need to understand this. The official also expressed his regrets that people are critical about power tariff hike when they are actually enjoying subsidised rates of around Tk 3 or Tk 4 per kilowatt hour. In remote places like Saint Martin's Island, poor people are spending Tk 30 for per kilowatt hour of solar power and they approached the PDB proposing that they were willing to pay Tk 15 per unit. The PDB aims at increasing the bulk power sales rate to Tk 5 per unit by 2015 from the present rate of around Tk 4. At consumer level, power tariff increase has been proposed for different segments of consumers.

Power crisis: A quick analysis

Khondkar Abdus Saleque A question that agitates everybody's mind is: Why is Bangladesh suffering from such a serious electricity crisis at the penultimate year of a democratic government? The question becomes more pertinent when the Prime Minister, who herself is in charge of power and energy ministry, very often claims to have added more than 3300MW in the national power grid in the last three years. The government adopted a Power Sector Development mega plan in the middle of 2009 which said the country would become load shedding-free by 2012. The document had short-term contingency planning, mid-term planning and long-term planning. It had plan for diversifying the fuel mix bringing in domestic coal, imported coal, LNG, renewable energy in the fuel mix. It had plan of setting up several gas-based large power plants also. The short-term contingency plan has already become a burden. The mid-term plan is in a limbo and the long-term plan is still in the womb of uncertainty. The power and energy sector was mismanaged by the BNP-led government during 2001-2006. The people believed in the election pledge of the Awami League-led grand alliance that if voted into power they would solve the energy crisis. But in the fourth year of the present Awami League-led government, the power crisis has surpassed all past record and the people now believe that this government did not do proper home work, did not have right vision, did not make proper plan and does not have right professional management to implement major power and energy sector infrastructures. The government has apparently politicised power and energy sector management. Its high-voltage mega plan in power sector seems to be on the verge of a mega failure . In the name of contingency planning several rental and peaking plants were introduced by the present government to confront the crisis of power generation and supply crisis. In the short term, there were little other options. If these were properly planned and managed these could have yielded much better dividends. But some quarters, who are said to be beneficiaries of the ruling party, apparently thought the crisis presented a golden opportunity to make quick money and exploited the situation to their advantage. An indemnity bill was passed to cover the loopholes of awarding lopsided contracts to the favoured parties. incompetent developers - first timers. The Bangladesh Petroleum Corporation (BPC) and the Bangladesh Power Development Board (BPDB) were made sacrificial goats. BPC was made to import liquid fuel from volatile fuel market and BPDB was made to purchase power at a cut-throat price. Over and above, the government had to pay huge subsidy from national exchequer. The imported liquid fuel-based power plants were contingency plants -- a stop-gap measure to serve a limited period of time. These were introduced to give some relief until large base-load plants would be commissioned. Two major gas-based power plants at areas adjoining Bibiyana Gas Field are limping for lack of finance. None of the large imported coal-based power plants may even start within the tenure of the present government. The initiative to import LNG has apparently been put the back burner.

Many of the age-old power plants are in a dilapidated state. Keeping these going has become a big challenge. Those which are in operation have now become so fuel-inefficient that supply of additional gas is not enough to even keep the present level of generation. Petrobangla also failed miserably to increase gas production and transmission facilities. Now let us see why the addition of 3300 MW failed to improve the situation. Most of the new power came from liquid fuel-based contingency plants. The actual power demand is never known as PDB possibly has no capacity to measure the actual demand. When it states power demand is now 650MW, it is quite possible the actual demand is about 8000MW. Against that demand the average actual generation is 5200MW. Given about 20 per cent over-all system loss, about 4000 MW power remains accounted for. Most of the contingency plants remain out of operation most of the time as government cannot supply fuel. As such about 3500MW deficit is playing hell with power supply situation all over the country. One has reasons to objectively analyse what have gone wrong. It will not require a professional analyst to do the work. The government introduced the contingency plants apparently without any proper analysis and feasibility study and did not care to check the experience or background of the developers. The government also did not check the quality or efficiency of the old, outdated, energy-inefficient plants and machineries these inexperienced developers had allegedly brought. The government did not have any financial model of these plants. Fuel purchase and supply impacts on BPC were not analysed. Neither had the government bothered what financial crisis it would create for BPDB in buying very expensive power from contingency power plant developers. The government did not foresee what financial disaster these would bring to national economy. Consequently many of the developers failed to set up the plants. Those which were set up cannot generate anywhere near to capacity. The impact of fuel import has made BPI almost bankrupt and same is the case with BPDB which has to buy power from these plants at exorbitantly high price. Huge amounts of foreign exchange have been drained out creating tremendous pressure on national economy. Now, the government is forced to keep most of these plants shut down for most of the time. The power demand/supply scenario has worsened from what was in 2009. It is a major failure of the present government. It has miserably failed to set up major traditional fuelbased base-load plants and it has failed to explore and exploit domestic coal and gas to improve fuel supply. It has also failed to replace fuel-inefficient old plants with modern plants. It seems highly unlikely that the situation will see major improvement in the short term, that is, by 2013. Political uncertainty will make implementation of many ongoing projects very uncertain. Power supply crisis has already adversely impacted export-oriented industries.