Home Power & Energy Wholesale power prices up by 118 pc in 14-yr
Power & Energy - January 31, 2024

Wholesale power prices up by 118 pc in 14-yr

90 pc at consumer level

Farhad Chowdhury : The government of Awami League for four consecutive terms began in 2009. From the beginning, the government took up the challenge of bringing electricity to people’s doorsteps. After overcoming that challenge, hundred percent of people in the country are now covered by electricity facilities. In the last 14 years, the improvement is visible in all indicators of electricity generation and distribution. The government’s allocation of money to this sector has also increased several times on the basis of priority.
The demand for electricity is increasing with increasing population and housing in the country as the number of power plants has been increased in the last 14 years to increase the production to meet the demand, on the contrary, the number of consumers has also increased manifold. Along with the increase in production and demand, the price of electricity has also been increased. The government is thinking of increasing the price one more time.
According to the data of the Power Division of the Ministry of Power, Energy and Mineral Resources, 125 new power plants have been installed in the country from 2009 to 2024. In 2009, the total number of power plants in the country was 27. It has increased to 152 now at that time the production capacity of the power plants was 4,942 MW. At present, the power generation capacity of the country including captive and renewable energy is 29,727 MW Accordingly, in the last 14 years, electricity production in the country has increased by 24,785 megawatts
At that time, the highest electricity production in the country in one day was 3,268 MW on January 6, 2009 After that, the last peak production was on April 19, 2023 The amount of electricity produced that day was 15,648 MW Besides, the transmission line has increased from 8 thousand km to 14,960 km in the last 14 years Meanwhile, grid sub-station capacity (MVA) has increased from 15,870 to 66,150 MVA. Even though electricity was not imported at that time, the government decided to import electricity keeping an eye on the needs of the people In view of that decision, now 2,656 MW of electricity is imported
The amount of electricity distribution line has also increased during the discussed period 14 years ago where the power distribution line was 260 thousand km, now it has increased to 643 thousand km. As part of the success of the government’s plan to deliver electricity to every home, hundred percent of the people in the country have now come under electricity facilities
Per capita power generation capacity has also increased in the last 14 years In 2009, per capita electricity generation (kWh) was 220, now it has increased to 620, including captive and renewable energy. During this time, the number of customers has increased from two lakh 34 thousand to four lakh 73 thousand. In the fiscal year 2008-09, the power distribution system loss was 14.33 percent, but it has reduced to 7.65 percent.
As there has been improvement in all the indicators of power generation and distribution, at the same time, the government’s allocation in this sector has also increased several times. Annual Development Program (ADP) in power sector in 2009 was Tk 2,677 crore. In the financial year 2023-24, the ADP allocation for this sector has been estimated at Tk 35,440.45 crore.
The people concerned in the power department say that the government’s plan to deliver electricity to people’s homes and the timely decision with additional allocation considering the priority of the power sector has made progress in this sector.
As electricity production and demand has increased in the last 14 years, electricity prices have increased more than a hundred times. In the last 14 years, electricity prices have increased 9 times in the country. Meanwhile, the price of electricity has increased by 118 percent at the wholesale level and 90 percent at the consumer level. In February 2020, wholesale electricity prices were increased by 8.39 percent. At the same time, retail prices were increased by 5.3 percent. The new prices came into effect in March of that year. Later, another round of wholesale prices were increased in December 2022
The government’s executive order last January 12 last year announced the increase in electricity prices at the consumer level. At that time, in a related notification of the Ministry of Electricity, Energy and Mineral Resources, the electricity price of Lifeline customers using zero to 50 units at the level of residential customers was increased from 3 taka 75 paisa to 3 taka 94 paisa per unit, and the electricity price of zero to 75 unit users was increased from taka 4 per unit to 4 taka 19 paisa. 40 paise per unit for users from 76 to 200 units, 5 per unit increased from 72 paise to 6 paise per unit, 201 to 300 units increased from 6 paise per unit to 6 taka 30 paise, for 301 to 400 units increased from 6 paise per unit from 34 paise to 6 taka 66 paisa, for 401 to 600 units from 9 taka 94 paisa to 10 taka 45 paisa and the electricity bill of residential customers consuming more than 600 units has been increased from 11 taka 49 paisa to 12 taka 3 paisa per unit.
According to the data, the government has given subsidy of Tk 42,893 crore in the financial year 2022-23. However, the government is under pressure to meet the conditions of the International Monetary Fund (IMF) to reduce subsidies in the energy and power sector. Meanwhile, the government has promised to increase revenue to the agency as well as rationalize expenditure and subsidies. In view of this, in December last year, the IMF approved the decision to waive the second tranche of the loan for Bangladesh.
A report of the organization then said that the Bangladesh government has planned to withdraw subsidies on all types of energy products and for this a formula-based price adjustment system will be adopted. It will be implemented by March 2024. Apart from this, Bangladesh has also promised to the IMF to adjust the price of electricity to reduce the subsidy of the power sector and not to include the capacity charge during the renewal of power plant contracts.
The government is thinking of gradually reducing the subsidy in the power sector. In continuation of this, after the 12th parliamentary elections, the price of electricity may be increased again to face the challenge of economic pressure. A decision in this regard is expected to come soon from the policy-making stage of the government. This new price adjustment may start in March However, it has been reported that it is planned to increase the price of electricity gradually
Senior Secretary of Electricity Department. Habibur Rahman told that there are plans to produce 40,000 megawatts by 2030 and 60,000 megawatts by 2041. We are working so that the next generation does not fall into power shortage
Regarding the price increase, he said, there is a plan to increase the price of electricity, but it is not possible to say when it will be increased
Inflation is already rising, energy experts say,The price of goods in the market is also high If the price of electricity is increased again, it will affect all sectors of the economy Prices of all types of products may increase. In this, the government will face a new challenge in controlling commodity prices. The life of ordinary people will be more difficult.
Energy advisor of Consumers Association of Bangladesh (CAB) Professor M Shamsul Alam told that unreasonable and unfair expenses have been added to the electricity sector at various times. That cost increase has led to increased supply costs and shortages. Again, subsidies have increased and prices have increased to accommodate the deficit. We have calculated that an additional expenditure of Tk 40,000 crore has been added annually. Such a situation has arisen by attracting uncompetitive investment and making such developments. Unless the power sector is freed from unreasonable and unfair cost additions, cost and subsidy hikes will continue and are inevitable.
Bangladesh University of Engineering (BUET) energy expert professor Dr. M. Tamim told that common people will be the most affected if the price of electricity increases. Because the price of products of all the production companies dependent on electricity will increase. In the past, BERC (Bangladesh Energy Regulatory Commission) was informed before increasing electricity prices. The organization used to organize public hearings. Then there was an opportunity to argue about increasing the price. Now there is no chance Nothing is reported about these things
Emphasizing on reducing the cost of production without increasing the price of electricity, he said, without increasing the price of electricity, there should be a plan to reduce the cost of production through proper management. Because, if the price increases, the common people will have to bear the cost.

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