Home Bangladesh Electricity generation cost jumps from Tk 5-11 in 3 years
Bangladesh - Power & Energy - 2 weeks ago

Electricity generation cost jumps from Tk 5-11 in 3 years

Zarif Mahmud : For 9 consecutive years from the fiscal year 2011-12, the average cost of power generation remained at Tk 5. However, breaking that circle, the cost per unit of power generation in 2020-21 financial year stands at around Tk6.5. In the next two financial years it increased by leaps and bounds. In the last financial year, the cost per unit of electricity production has exceeded Tk11. And unit losses have quadrupled in the last three years in line with the average cost of power generation.
This information has emerged in a report of the Power Development Board (PDB). It can be seen that a century ago, the average cost per unit of electricity generation in 2011-12 was Tk5.12. Out of this fuel cost was Tk2.97. And other expenses were Tk2.15. Out of this the average fixed cost/capacity charge was Tk 1.99 and the average variable cost i.e. operation and maintenance cost wasTk 0.16.
Meanwhile, the average cost per unit of electricity production increased to Tk11.04 last financial year. Out of this fuel expenditure was Tk7.11 and other expenses were Tk3.93. Among other expenses the average fixed cost/capacity charge was Tk3.49 and the average variable cost was Tk 0.44. That is, the average cost of electricity production has increased by Tk5.92 in a span of one era. But in the last three financial years it has increased by Tk5.29.
Analyzing the data of power generation for a decade, it can be seen that the average fuel cost per unit of power generation in the fiscal year 2012-13 was Tk3.18. In the next financial year, it increased to Tk3.81. In the financial year 2014-15, the average fuel cost slightly decreased to Tk3.78, in 2015-16 financial year it further decreased to Tk3.04 and in the financial year 2016-17 it was Tk2.83. In the next financial year, it increased again to Tk3.44 and in 2018-19 financial year it again decreased to Tk2.92.
Meanwhile, new power plants did not increase much from 2012-13 to 2015-16 fiscal year. As a result, the average fixed cost per unit of electricity production in those four years was Tk1.88. Out of this, the average variable cost in 2012-13 was Tk 0.31. However, in 2013-14 and 2014-15 it decreased to 19 paise. In the next financial year, it further reduced to 18 paise.

Adding the fuel cost, the average production cost for those four financial years is Tk5.47, Tk5.88, Tk5.85 and Tk5.10 respectively. The average cost of power generation in 2015-16 was the lowest in the last era (Tk5.10). Earlier, the average minimum cost of power generation in 2010-11 was Tk 3.95.
According to the information, the average fixed cost of power generation in 2016-17 fiscal year has increased by Tk 2.12. In the next fiscal year, it increased to Tk 2.31 and in 2018-19 fiscal year Tk 2.49. In addition to this, the average cost of change for 2016-17 financial year is 26 paisa, 2017-18 financial year is 20 paisa and 2018-19 financial year is 26 paisa. By adding fuel cost, the average production cost for those three fiscal years is Tk5.21, Tk5.95 and Tk5.67 respectively.
Global fuel oil prices collapsed due to Corona in 2019-20 financial year. In that fiscal year, the average fuel cost per unit of electricity production decreased to only Tk2.13, which was the lowest average fuel cost in an era. However, due to the decrease in production due to Corona, the average fixed cost increased to Tk3.13 and the average variable cost 32 paisa in the financial year 2019-20. In that fiscal year, the cost per unit of electricity production was Tk5.58. It was the last fiscal year when the average cost of production remained at Tk5.
In the next financial year, the average fuel cost increased to Tk3.16. 2021-22 financial year average fuel cost increased by Tk5.37. However, as production increases, average fixed cost decreases in fiscal years 2020-21 and 2021-22. The average fixed expenses for those two fiscal years were Tk2.84 and Tk2.82 respectively. 28 paisa and 34 paisa respectively added to the variable cost. In this, the average cost of production in the financial year 2020-21 is Tk6.29 and in the financial year 2021-22 8 Tk 0.54.
Meanwhile, the fiscal year 2022-23 has broken all records of energy expenditure in power generation. Last financial year, the average fuel cost per unit of electricity production was Tk7.11. This is attributed to the increase in fuel oil and coal prices in the international market and increase in gas prices in the country. Although the price of oil and coal in the international market has come down towards the end of the financial year. Those concerned think that the benefits will be met in the current financial year.
Last financial year several big power plants including Adani, Rampal have been connected to the national grid. Average fixed cost has increased along with fuel cost. Added to this are high variable costs. These two costs were Tk3.49 and 44 paise respectively, which is the highest ever in the power sector. In total, the average cost of electricity generation has increased to Tk11.04 in the last financial year.
Incidentally, the average supply cost of electricity is determined by adding 3 percent transmission loss and 15 paise share of power sector development fund to the average generation cost. As a result, at the same rate as the cost of production increases, the cost of power supply also increases at the same rate. However, the government did not increase the average bulk price to adjust the cost of production and supply. In this last financial year, PDB’s loss per unit of electricity sales stood at Tk5.40. Although four years ago in the financial year 2019-20, the loss was only 91 paise.

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