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Unplanned expansion of power sector adds to power woes in Bangladesh

Published: 00:00, Sep 08,2019 | Updated: 23:45, Sep 07,2019

 
 

THE Power Development Board having given Tk 80 billion in capacity payment to private power plants in the 2019 financial year for not being able to use the power that the plants generate and three-fifths of the plants working as peakers to support base load plants suggest that development in the power sector has been mired in problems. One power plant has on an average been set up every month in the past decade, with 120 plants, at least 80 of which are private, set up since 2009, now taking the total power generation capacity to 17,840MW in addition to 1,160 MW imported from India. But the demand for power hovers around 9,000MW in the summer, which goes up to 1,2000MW in 7:00pm–11:00pm peak hours, and it drops even to 6,000MW in the winter. Although no figure on who many power plants sit idle is available, the Power Development Board, which runs on a deficit of Tk 80 billion, is reported to have paid Tk 80 billion out of the agency’s Tk 210 billion annual spending, which accounts for about 40 per cent, to such idle power plants in the past financial year. And the power board has kept paying a substantial amount of money in capacity payment to private power plants every year since 2012.

The deficit that the power board faces results, in many cases, from inefficiency, the absence of good governance and flawed measures. Yet the power board increases power prices on the excuse of meeting the deficit. But if the power board did not have to pay such a huge amount of money to private power plants for the power that the plants could generate but the board did not buy, the board could not have run on deficit. Over the decade, power production in the private sector far outpaced the production in the public sector, leaving the government not to have used half of the increased generation capacity. In a situation like this, while 9.6 million people of the total population of 160 million still, keeping to official records, live off-grid, consumers often complain of low voltage and power outages. This suggests that the government has only been keen on increasing power generation while left unattended issues such as the quality of power and transmission and distribution. Even after all this, 33 private and 16 public plants are under way; 21 private and 2 public plants are in the bidding and contract process; and 17 public power plants are in planning stages. The Power Development Board chair seeks to say that many power plants need to be set up to earn the confidence of businesses in the government’s intention to gear up industrialisation. But what is the rationale of having plants more than what are needed and paying them as the government cannot use the electricity that the plants can generate?

What has happened in the power sector, especially over a decade, suggests that it is not about meeting people’s demand for electricity but about advantaging some groups or gaining financial or political benefits. This is about waste of public money, too. In a situation like this, the government must rethink its power sector development policy and fish the power sector out of the great distress it has fallen in.

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