Power sector incurs lose at Tk 60,000 cr in 5 yrs

PDB sinking under burden of subsidies, losses

Golam Mostafa Jibon: The power generation capacity of the country has increased with the blessing of rental power plants, but the Power Development Board (PDB) incurred huge losses for purchasing electricity from rental, quick rental and IPP (Independent Power Producers). By buying electricity at a high price and selling it at a low price, the company has incurred a loss of Tk 60,182.49 crore in the last five years. As a result, PDB is sinking under the burden of subsidies and losses. PDB buys electricity from all the government and private power plants of the country at a fixed price. PDB has separate agreement with each center for this. This agreement guarantees the purchase of electricity. Power plants pay fines to PDB, if they fail to deliver power as per the contract. And even if PDB cannot buy electricity from them, the central rent has to be paid regularly. The power department has recently given an account of center rent to the parliamentary committee related to the Ministry of Power, Energy and Mineral Resources. It can be seen that in the financial year 2020-21, the center has to pay a little more than Tk 18,977 crore. Tk 18,123 crores had to be paid in the previous financial year. And in the first nine months of the last financial year, about Tk 16,785 crores have to be paid. All together in two years and nine months center rent has been paid about Tk 54,000 crores.
According to the information of the Power Development Board, since 2009, the government has been giving priority to setting up power plants in the private sector in the country. Since its inception, the power generation capacity in this sector has stood at 11,534 megawatts. These Rental, Quick Rental and IPP bought electricity at a much lower price and sold it at a lower price. As a result, PDB has to account for huge losses every year. Thus, in the five years from the financial year 2017-18 to the financial year 2021-22, the organization incurred a loss of Tk 60,182.49 crore by purchasing electricity from Rental, Quick Rental and IPP. At this time, about 16,460.68 crore units of electricity were purchased from the private sector. Tk 1,39,485.93 crore is spent on it. And by selling that electricity, PDB’s income is Tk 79,303.44 crore. Of them, 43.15 percent of the total production cost was a loss. Furnace oil-fired power plants accounted for 98 percent of the losses incurred by Rental-Quick Rentals and IPPs over five years. At present, there are 52 furnace oil powered power plants in the private sector. Their production capacity is 5,427 MW. More than half of the power plants in the private sector are furnace oil powered.
However, in the last five years, most of the production has come from gas-fired plants. And among rental-quick rentals and IPPs, PDB makes profit only in gas-fired plants. At present, there are 36 such centers. Their production capacity is 3,673 megawatts. And there are six diesel-powered plants with a production capacity of 1,000 MW. Apart from this, there is one coal-fired power plant with a capacity of 1,244 MW. According to the analysis of PDB’s accounts, the power generation capacity in the private sector was 5,213 megawatts in the fiscal year 2017-18. About 55 percent of this is used.
About 2,536.18 crore kilowatt hours of electricity was purchased from these private centers that fiscal year. It costs Tk 16,692.32 crore. And it was sold for Tk 11,906.85 crore. In other words, PDB’s loss in that fiscal year was Tk 4,785.47 crore. Then (2018-19) the capacity of the private sector increased to 5,741 MW. The capacity utilization of these private centers is 54 percent. In this, 2720.11 crore kilowatt hours of electricity was purchased from the private sector. It costs Tk 20,762.13 crore. Its sale price was Tk 12,659 crores. The loss of PDB is Tk 8,103.12 crore.
In the financial year 2019-20, the power generation capacity in the private sector increased to 8,411 megawatts. Of this, only 39 percent is used. About 2,886.76 crore kilowatt hours of electricity was purchased from the private sector in that financial year. It costs Tk 20,731.45 crore. And the income from its sale is Tk 13,600.10 crore. That means the loss is Tk 7,131.36 crore. In the fiscal year 2020-21, the power generation capacity in the private sector increased to 9,734 MW. Of this, 46 percent is used. In that financial year, 3,905.97 crore kilowatt hours of electricity was purchased from the private sector. It costs Tk 31,176.51 crore. And it is sold for Tk 19,398.60 crore. As a result, the loss stood at Tk 11,777.91 crore.
Meanwhile, in the fiscal year 2021-22 that ended last June, the power generation capacity in the private sector increased to 11,534 MW. 45 percent of it has been used. And last financial year, 4,411.66 crore kilowatt hours of electricity was purchased from the private sector. It costs Tk 50,123.52 crore. The income from its sale is Tk 21,738.89 crore. That is, the loss has been Tk 28,384 crores.
According to the information of the organization, the loss of PDB increased by Tk 16,606.72 crore or 141 percent by purchasing electricity from the private sector in the financial year 2021-22. Those concerned said that, the main reason for this is the abnormal increase in the price of fuel oil. At that time, the average cost of electricity production stood at Tk 11.36. And his selling price was Tk 5.8. In the previous financial year (2020-21), the average production cost of electricity in the private sector was Tk 7.98 and the average selling price was Tk 5.12. In the fiscal year 2019-20, the average production cost of electricity in the private sector was Tk 7,18 and the average selling price was Tk 4,86. In the fiscal year 2018-19, the average production cost of electricity in the private sector was Tk 7.63 and the average selling price was Tk 4.80. And in the fiscal year 2017-18, the average production cost of electricity in the private sector was Tk 6.58 and the average selling price was Tk 4.84.
On the other hand, in the last five years, the losses of the furnace oil operated centers were Tk 5,306.31 crore in 2017-18 financial year, Tk 8,455.36 crore in 2018-19 financial year, Tk 8,147.86 crore in 2019-20 financial year, 2020-21 financial year Tk 11,430.93 crore and 2021-22 fiscal year Tk 25,646.13 crore. In total, in five years, the total loss of furnace oil operated centers is Tk 58,986,79 crore.
Meanwhile, in five years, diesel-powered plants have incurred a loss of around Tk 11,713 crore, coal-fired plants alone have suffered a loss of Tk 4,481 crore and solar power plants have suffered a loss of Tk 374 crore. At this time, the profit of gas-powered centers was Tk 15.411 crores.
Bangladesh Energy Regulatory Commission Chairman Abdul Jalil told that PDBE is the only one in the country that sells electricity at wholesale prices. After generating electricity in the centers, it is bought by PDB at the contract price. The company sells that electricity to distribution companies at wholesale prices. However, for the sake of the country and the people, the government keeps prices affordable by subsidizing various sectors of electricity. Wheeling charge (Mashul) is taken by the Power Grid Company (PGCB) for transmission. All in all, there is no other option in the current situation except to subsidize power generation to meet the demand. And while handling these expenses, PDB suffered a loss.