Home Power & Energy Loss of electricity sales increased 5-fold in 3-yr
Power & Energy - February 13, 2024

Loss of electricity sales increased 5-fold in 3-yr

Mahfuz Emran : The cost of power generation has been increasing for several years. However, it increased at an abnormal rate in the financial years 2021-22 and 2022-23. Earlier, the average cost of production of electricity was fluctuating. However, the Power Development Board (PDB) is struggling due to the abnormal increase in production cost in two years. Even increasing the price of electricity could not reduce the burden of losses. Rather, the loss per unit of electricity sales has almost quintupled in a span of three years.
This information has come out in a report of PDB. It shows that the supply cost per unit of electricity in 2019-20 financial year was Tk 5.75. The average bulk price at that time was Tk 4.84. In this, PDB’s loss was only 91 paise per unit of electricity sold. And in the fiscal year 2022-23, the supply cost per unit of electricity has increased by Tk 11.38. However, the average bulk price of electricity has increased by Tk 5.98 in the last financial year. In this, PDB’s loss per unit of electricity sales stands at Tk 5.40.
However, the bulk rate has been increased twice in the last financial year. The average price has increased by Tk 6.20 in December 2022 and Tk 6.70 in February 2023 respectively. But at the beginning of the financial year, the bulk rate was Tk 5.17. In this, the weighted average bulk price of the last financial year fell to Tk 5.40.
Meanwhile, the supply cost per unit of electricity for the financial year 2020-21 stands at Tk 6.48. The average bulk price at that time was Tk 5.17. In this, the loss of PDB per unit of electricity was Tk 1.31. And in the fiscal year 2021-22, the supply cost per unit of electricity increased to Tk 8.81. The average bulk price of electricity in that financial year was Tk 5.17. In this, PDB lost Tk 3.64 per unit of electricity sold.
An analysis of the report shows that PDB’s losses per unit of electricity sales were fairly close over a decade from 2012-13 to 2019-20. Out of this, in the fiscal year 2012-13, the supply cost per unit of electricity was Tk 5.64 and the average bulk price was Tk 4.70. In this, PDB would have lost 94 paise per unit of electricity sold. In fiscal year 2013-14, supply cost per unit increased to Tk 6.06. The average bulk price remained unchanged at Tk 4.70. In this, PDB’s loss per unit increased to Tk 1.40.
In the next financial year, the loss slightly reduced to Tk 1.33. In that financial year, the electricity supply cost per unit decreased slightly to Tk 6.30. However, the average bulk price was the same; That is Tk 4.70. However, PDB was in the best condition in 2015-16 and 2016-17 financial years. As the average cost of production fell during that time and the bulk price of electricity increased slightly, the loss per unit came down to a minimum. In 2015-16, PDB’s loss per unit was only 36 paise, the lowest in a decade. And 2016-17 financial year loss per unit stood at 47 paise.
In 2015-16 fiscal year, the average supply of electricity decreased to Tk 5.26 and in 2016-17 fiscal year it was Tk 5.37. And that fiscal year the bulk price was Tk 4.90. In two consecutive fiscal years, PDB’s losses were brought down to minimum levels, and the next fiscal year, the bulk rate was reduced to Tk 4.84.
In the financial year 2017-18, the electricity supply cost per unit has increased to Tk 6.13. But in the financial year 2018-19, it again decreased to Tk 5.85. The average loss of PDB in those two fiscal years was Tk 1.29 and Tk 1.01 respectively.
Incidentally, there are three parts to the cost of power generation. These are fuel cost, fixed cost/capacity charge and variable cost i.e. operation and maintenance cost. And by adding three percent transmission loss and 15 paisa power sector development funds share to the average production cost, the average supply cost of electricity is determined. As a result, at the same rate as the cost of production increases, the cost of power supply also increases at the same rate.

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