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2017 in review: Power generation continues to grow, and so does price

  • Published at 12:22 am December 27th, 2017
  • Last updated at 01:09 pm December 27th, 2017
2017 in review: Power generation continues to grow, and so does price
Bangladesh’s power generation capacity was 4,942MW when the Awami League-led government took office in 2009. Over the years, the capacity has increased to over 13,000MW. With increased power production, the price was also raised many times, leading to dissatisfaction among consumers. But despite all the headway, people continue to suffer from regular power cuts. Retail electricity price was last increased by Tk0.35 per unit, or 5.3% on a weighted average on November 23. However, there were power cuts lasting six to eight hours on average every day during the summer. There was a daily demand for 12,000MW while the power generation was little over 8,000MW. The incumbent government has been successful in increasing power generation, distribution and transmission line, raising the number of power plants, increasing the number of consumers, and raising per capita power production capacity since 2009. According to the Power Division, the currently installed power generation capacity is 13,621MW but is only capable of producing 12,922MW because of reduced power generation capacity of some power plants. The government recently took initiative to set up 20 oil-based small-scale power plants of 100MW capacity each, instead of building larger ones to deal with load-shedding. Experts, however, say the move will raise electricity generation cost and directly contradict the government’s proclaimed policy of exiting oil-based power generation. A Power Development Board (PDB) official said with the upcoming election in mind, the government planned to generate about 2,000MW additional electricity by April 2018. “Power generation capacity has more than tripled from 4,942MW in 2009 to 13,621MW currently,” Mohammad Hossain, director general of the Power Cell, under the Power Division of Ministry of Power, Energy and Mineral Resources, told the Dhaka Tribune. “Fifty-four percent of the power is generated by the government, 41% comes from private sector and the remaining 5% are imported from India,” he said. Hossain claimed that around 83% of the total population has access to electricity, including renewable energy, and the per capita generation had increased to 433 kWh from 220 kWh. “We have the highest rate of solar home system installations in the world,” he said. “We have successfully implemented 100% electrification in 26 upazilas as part of the Electricity for all by 2018 programme.” He noted that the total transmission and distribution system losses had been significantly reduced to 12.19% from 16.85% during the incumbent government’s tenure. “We hope the under-construction oil-based power plants will go into operations within next June. Then the power cuts will be reduced,” the director general of the Power Cell said. Hossain said the government was prioritising new power connections and expansion of the electricity distribution line, mainly in rural areas. Dr Ijaz Hossain, a professor of chemical engineering at Bangladesh University of Engineering and Technology, said the under-construction small plants would only raise production cost. “Power generation is becoming expensive since costly power plants are being installed,” he pointed out. Meanwhile, the government’s plans to establish large-scale coal-fired power plants are making little or no progress. Despite low international oil prices, the economy is already struggling with the high costs of oil-based power. A unit from a gas-run plant costs less than Tk2 while per unit electricity from a diesel or furnace oil-run plant costs Tk14-18. PDB officials claimed that oil-based plants were at present an attractive option as the price of fuel oil was low in the international market. State-owned Power Development Board faced a loss of Tk41,521 crores in the last 10 years since the overall electricity production cost increased because the cost of oil-based electricity is higher to power produced by gas-based plants. The PDB had been selling electricity at lower prices to consumers after buying it at higher prices from the government producers. This has led to huge financial losses. Currently, the bulk and retail power prices are not synchronized. Also, the amount of electricity produced by oil-based plants has increased because of gas supply crunch.