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Power & Energy - January 28, 2024

Power sector fails to create full capacity

Average generation 13,208 mw against 31,000 mw capacity

Mahfuz Emran : According to the data of Bangladesh Power Development Board (BPDB), the total production capacity of the power sector in the country will stand at 31 thousand megawatts by the end of last year. The highest average daily generation of electricity in the country in 2023 was in September, at 13,208 MW. And the average generation fell to the lowest in January, at 9,600 MW. Even if there is a 10 percent growth, the highest average production of electricity this year will remain at 15,000 MW. However, the electricity department’s comment is that the maximum production of electricity this year has been estimated at 17,500 megawatts.
Experts said that in measuring electricity demand, the maximum (peak hour) and minimum (off-peak hour) production of a specific time is considered. Analysis of data by the government power transmission company Power Grid Company of Bangladesh (PGCB) shows that the highest average generation of electricity in 2023 was in September. In that month, the peak production in the evening peak hour was 14,065 MW. During the day it was 12,351 MW. The highest average production of electricity in that month was 13,208 MW in terms of day and night.
Minimum production occurs in January. At that time, the highest average generation in the evening peak hour was 9,608 MW. And the day was 8,466 MW. Adding the calculation of day and night shows that the average minimum production in that month was 9,037 MW.
According to the data of BPDB, as of January this year, the total power generation capacity in the country is 25,951 MW. By 2024, government, private and joint power plants are expected to add at least 5,480 MW of production capacity. Out of this, 2,774 MW will be added from government power plants, 1,492 MW will be added from private and 1,244 MW will be added from joint power plants (PPP). If this capacity is added, the total power generation capacity in the country will reach 31,431 MW.
Energy experts say that the country’s power sector has been reeling in losses and financial crisis for a long time. In order to get out of the financial losses in this electricity sector, the unreasonable expenditure should be reduced. In particular, the cost of power plant construction and unused power plants should come out.
Energy expert and former professor of BUET Ijaz Hossain told, “In the power sector, the capacity growth rate is much higher than the demand.” This in turn affects the electricity tariff. It is being said that the demand for electricity will increase, in fact, considering the economic context, it may not increase this year. It is also difficult to say how much demand growth will be in the future. To get out of this situation, the use of inefficient power plants should be eliminated. Expired power plants can no longer be renewed. Also, the construction of beige load-based power plant cannot be planned at the moment. At present, the power plants which are working, they have to be balanced with the demand.
According to the data of the electricity department, the electricity production capacity has increased by about 10.80 percent in the fiscal year 2022-23 compared to the fiscal year 2021-22. Although the production increased only 5.85 percent.
Production is not increasing as production capacity is increasing. This increases the financial loss of the electricity department. PDB has to pay capacity charges by installing large capacity power plants. Despite huge government subsidies, the company’s accumulated financial losses and filing burden are increasing. Along with this, the electricity tariff is also increasing. In the last financial year 2022-23, PDB has made a loss of Tk 11,765 crore. In this way, the electricity price is increased repeatedly to reduce the burden of continuous losses. However, it is not able to reduce the burden of liabilities and losses of companies like PDB.
In FY 2021-22, PDB’s average cost per unit of electricity generation was Tk 8.84. In the financial year 2022-23 it increased to Tk 11.33. That is, in the space of one year, Tk 2.49 per unit has increased. PDB officials said that it may increase further in the current financial year.
The power generation capacity in the country is shown to be about 26,000 MW but the actual capacity is not more than 21,000 MW. Of this, the captive capacity in the industrial sector is 3,000 MW. There is 500 MW of off-grid renewable electricity. Besides, there are old and closed power plants with a capacity of about 2,000 megawatts.
According to Power Cell, an electricity policy and research institute, not all of the figures shown as total electricity production capacity in the country are connected to the grid. Here the organization feels that it is necessary to show the electricity connected to the grid as the actual production capacity of the sector.
Director General of Power Cell, Engineer Mohammad Hossain told, “We are saying that the power generation capacity is overall. Where captive, renewable and old and under renovation power plant capacity is to be excluded. If the calculation capacity is excluded, the ‘dependable capacity’ of electricity is 21,000 megawatts. Last year we had 16,500-megawatt electricity demand. As such, the additional capacity is not much. What is shown in the capacity is correct in a sense, but it should be noted that the whole of this capacity is not grid beige.
A large part of the government’s financial expenditure is going to the power and energy sector of the country. PDB has had to spend more than Tk 1 lakh crore in the last decade as the capacity charge of the center while increasing the power generation capacity. Private sector power generation companies have taken these money.
In the National Parliament last year, Minister of State for Power, Energy and Mineral Resources Nasrul Hamid said that in the last 14 years, 82 private and 32 rental power plants have been paid a total of Tk 1 lakh 4 thousand 926 crore 81 lakh for capacity charges.

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