Power supply woes likely this summer due to unpaid debts
NN Online:
The approaching summer may bring one of the most challenging power supply situations in recent years, as the government grapples with outstanding payments owed to independent power producers, gas suppliers, and foreign lenders.
According to official sources, the Bangladesh Power Development Board (BPDB) owes Tk 43,473 crore to various independent power producers (IPPs) and Petrobangla for electricity and gas purchases.
Of this amount, Indian Adani Group is set to receive Tk 10,309 crore, while local IPPs are owed approximately Tk 16,000 crore, reports UNB.
Joint venture power plants, including Payra and Rampal, are awaiting Tk 10,000 crore, and Petrobangla is due Tk 7,164 crore.
Last summer, peak electricity demand reached 17,200 MW, but the government managed to supply only around 15,500 MW on average, leaving a shortfall of 2,000-2,200 MW.
With an estimated 6 per cent annual growth in demand, the Bangladesh Independent Power Producers Association (BIPPA) projects that electricity demand will rise to 18,232 MW in the coming summer, spanning March to September.
But the BPDB has yet to release an official demand-supply forecast for the upcoming season.
BIPPA warns that if the government fails to clear outstanding dues, the country could face a shortfall of 3,500-4,000 MW in electricity production.
BIPPA President David Hasanat cautioned that unless at least part of the Tk 16,000 crore owed to IPPs is paid, it will be impossible to open letters of credit (LCs) to import the necessary fuels for power generation.
A senior BPDB official, speaking on condition of anonymity, claimed the actual dues to IPPs are lower than reported, as the government recently paid Tk 8,000 crore to private power producers through bond issuances and other methods.
He said the government is prioritising full-scale generation from coal-based power plants this summer, as coal-fired electricity is currently more cost-effective than using imported gas, furnace oil, or diesel.
According to BPDB data, the per-unit generation cost at furnace oil (HFO)-based power plants, which have a capacity of 6,442 MW, is around Tk 16.40. In contrast, coal-based power generation costs less than Tk 8 per unit, while imported gas-based power generation costs approximately Tk 18 per unit.
“Our focus will be on maximising production from coal-based power plants with a capacity of 5,108 MW, followed by local gas-based plants using gas supplied by Petrobangla,” the official told UNB.
Energy expert Dr M Tamim supports the government’s strategy to fully utilise coal-based power plants to address the power crisis in the coming summer.
“In this case, the government must make an extra effort to clear the dues of coal-based power plants to ensure uninterrupted coal imports for continued power generation,” he told UNB.
Besides, Dr Tamim suggested that the government maximise gas production from domestic fields to generate power from the 12,441 MW gas-based power plants.
Due to gas shortages, the government typically generates a maximum of 8,000 MW from gas-based plants.
According to BPDB statistics, Bangladesh’s total grid-based installed power generation capacity stands at 27,820 MW, with an additional 4,000 MW in captive power, which is off-grid and used by industries.
Of this, power generation drops to 11,000 MW in winter and rises to around 15,500 MW in summer.