Captive power generation becomes a big burden

Al Amin :
Captive power generation has become a big burden for the country’s industry owners due to unreliable energy supply and abnormal gas price hike, insiders said.
They said there are around 46,000 industries in the country. Of these, 40,000 are small and cottage and the rest are large industries.
Most of the large industries have already installed captive power plants (using high capacity generators) due to the lack of uninterrupted power supply. These plants have been generating electricity from gas and diesel.
Industrialist said the captive power generation has become the lifeline of the country’s industrial sector as factories can run smoothly using uninterrupted power supply by captive plants.
Bangladesh Chamber of Industries (BCI) President Anwar Ul Alam Chowdhury Parvez said, “Large and medium industries are basically running by their own power generation by captive power plants. Besides, many of the small and cottage industries are also relying on captive power generation to run their production.”
He added, “The government had also encouraged the entrepreneurs to install captive power plants in their factories due to the energy crisis. Besides, the industrialists have made huge investment in it.”
“The supply and transmission system has not improved despite the government has brought the entire country under electricity coverage. That is why, the industrial sector is relying on captive power generation even though there are problems related to cost, low gas pressure,” Parvez further said.
“But power generation by captive power plants has become costly due to the unusual price hike of gas and oil prices,” he added, adding, “It also pushed up cost of factory production significantly.”
The government on Wednesday raised the retail price of gas by 14.5 percent to 178.9 percent for industries, power plants and commercial establishments in a bid to lessen its unsustainable energy subsidy.
From next month, the price of gas used

for power generation will be Tk 14 for each cubic meter, up 178.9 percent from the existing rate, as per the gazette notification from the ministry of power, energy and mineral resources.
For captive power plants and industries, gas will cost Tk 30 per cubic meter. The gas price hike would 150 percent for large industries, 154.7 percent for medium industries and 178.3 percent for small and cottage industries. For captive power plants, it would be an increase of 87.5 percent.
On August 5, 2022, the government hiked fuel prices by up to 51.7 percent, the highest in the country’s history.
Most of the industrial units use diesel-fired generators to produce power. The price of each litre of diesel was increased to Tk 114 from Tk 80.
The power generation capacity in the country is now more than 26,500 megawatts. The national off-grid generation capacity is around 3,500 MW, of which the captive capacity is around 2,800 MW, according to statistics.
Entrepreneurs said that the county’s power generation capacity is almost twice the demand now. Nevertheless, the industrialists are interested in captive power plants in the factories instead of national grid power because it is not uninterrupted and high cost of power generation.
“Captive power generation appears to be big burden for the industry owners due to unreliable energy supply and abnormal gas price hike,” said Mohammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA).
He said that the investment of $16 billion in the country’s primary textile sector is now at stake due to inadequate gas supply to the textile mills.
“Besides, the abrupt gas price hike caused huge financial burden of the industry owners. The announcement of gas price hike came at a time when we are facing numerous challenges due to the country’s ongoing energy crisis, caused by uninterrupted gas and power supply. The hike doesn’t guarantee any supply improvement either,” he added.