Home Bangladesh Pvt power generation cost double than govt
Bangladesh - Power & Energy - December 28, 2023

Pvt power generation cost double than govt

Inefficiency & high-capacity charges

Zarif Mahmud: Since the beginning of 2009, the government emphasized the establishment of power plants in the private sector to deal with the deficit. Rental-quick rental is followed by several large-scale power plants. In this, the power generation capacity in the private sector is more than that of the government. But most of the private sector centers are inefficient. Still, capacity charges are seen for these centers. In this, electricity is being produced in the private sector at twice the cost of the government plant.
This figure was obtained by analyzing the data of electricity generation cost for the fiscal year 2022-23. It can be seen that the average cost of power generation at the center of Power Development Board (PDB) and other government companies. However, electricity has been produced at double the cost in the private sector.
According to the data of PDB, 1,743,250,000 kilowatt hours of electricity was generated in the centers of the organization last financial year. In this, fuel cost is Tk 7,776 crore and operation and maintenance (O&M) cost is Tk 358.30 crore. Apart from this, fixed expenses including salaries and allowances were Tk 5,172.29 crore. That is, the total cost is Tk 13,306.62 crore. In this, the average cost of power generation in PDB centers is Tk 7.63.
Meanwhile, 1,574,230,000 kilowatt-hours of electricity have been generated in the centers of other government companies except PDB. In this, the fuel cost is Tk 5,667.47 crore and the O&M cost is Tk 337.78 crore. And fixed expenses including salaries and allowances were Tk 4,783 crores. That is, the total cost is Tk 10,788.25 crore. In this, the average cost of power generation in other government centers is Tk 6.85.
On the other hand, 4,334,940,000 kilowatt hours of electricity was generated in the centers of private companies last financial year. In this, the fuel cost is Tk 43,070.11 crore and the O&M cost is Tk 2,540.62 crore. And the fixed cost i.e. capacity charge was Tk 17,155.85 crore. That is, the total cost is Tk 62,766.59 crore. In this, the average cost of power generation in private centers is Tk 14.48.
Analysis of the data showed that private sector power generation has high expenditure in every sector. One of these was fuel costs. The average fuel expenditure of PDB last financial year was Tk 4.46 and that of other government centers was Tk 3.60. However, the average fuel cost of private sector centers was Tk 9.94. However, the average expenditure on O&M is 21 paisa for PDB and 50 paisa for other government centres. And in the private sector, the average cost is 59 paise. Similarly, the average fixed expenditure of PDB is only Tk 2.97 and the average of other private centers is Tk 3.04. However, in the private sector, the average fixed cost or capacity charge is Tk 3.96.
In this context, CAB’s energy advisor Professor M Shamsul Alam told that PDB has to run some small power plants to meet the low demand at the local level. The cost of those diesel-powered centers is very high. Still, PDB’s power plants have lower overall fuel costs because of their relatively high efficiency. However, most of the private sector power plants use low quality equipment. They use more fuel.
He also said that due to the use of low-quality equipment, their operation and maintenance costs are also high. A few power plants have good quality equipment. The average cost in them falls below that of PDB. But most of the power plants are in poor condition. It has a high-capacity charge. Because of this, the cost of power generation in the private sector is falling.
According to the information, in the fiscal year 2021-22, 1,596.41 crore kilowatt hours of electricity has been generated in the centers of PDB. In this, the fuel cost is Tk 3,489.58 crore and the O&M cost is Tk 305.18 crore. Apart from this, fixed expenses including salaries and allowances were Tk 4,219.90 crores. That is, the total cost is Tk 8,014.66 crore. In this, the average cost of power generation in PDB centers was Tk 5.02.
In that financial year, 1,478.05 crore kilowatt hours of electricity was generated in the centers of other government companies except PDB. In this, the fuel cost is Tk 2,706 crore and the O&M cost is Tk 2,645,700 crore. And the fixed expenses including salaries and allowances were about Tk 5,043 crores. That is, the total cost is Tk 7,013.75 crore. In this, the average cost of power generation in other government centers was Tk 4.75.
On the other hand, 4,547,670,000 kilowatt hours of electricity was generated in the private sector company centers in the fiscal year 2021-22. The fuel cost was Tk 36,752.43 crore and the O&M cost was Tk 1,549.58 crore. And the fixed cost i.e. capacity charge was Tk 13,700.74 crore. That is, the total cost is Tk 5,202.74 crore. In this, the average cost of power generation in private centers is Tk 11.44.
According to this, the production of PDB has increased by 9.20 percent and the average cost has increased by 52 percent in the last financial year. And the production of other government centers increased by 6.5 percent. However, the average cost increased by 44 percent. The main reason for this is the abnormal increase in fuel costs. In the last financial year, PDB’s fuel expenditure increased by around 123 percent and other government centers increased by 110 percent. However, despite the decline in production in the private sector, energy expenditure has increased by 17 percent. Although during this period the production in the private sector decreased by more than four and a half percent. However, the average expenditure in the private sector increased by 27 percent.

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