Admittedly, power production in Bangladesh is an expensive affair. Many experts believe it was a fatal mistake to forgo the exploration of all known coal fields in Bangladesh when the government decided by around 2012 not to use this precious available reserve. While it's "dirty", not unknown to either India or China, it was deemed worth taking the health risks for the benefit of economic development. That economic development helped generate economic dividends that lifted millions out of poverty, expand industry, and most importantly, pay for the research with the renewables which are now being implemented in a significant manner in both these countries.
Bangladesh went the other way. Policymakers took the advice of good Samaritans who decried the use of coal and the advice of energy experts and sane industrialists fell on deaf ears. So, coal was out and yet when one looks at the successive power master plans of the country, coal-fired power plants featured large in the energy road map. Why? If the country was not going to use its own coal base, what was the point of building these massive coal-fired plants? What the line of thinking guided Bangladesh, where it would be at the mercy of foreign powers and geopolitics for the supply of energy sources?
The answer to that question is anyone's guess. So coal was out. Fine. Then came a similar inertia regarding exploration and development of the gas fields (on-shore and offshore). The better part of the last decade was totally wasted on following a ridiculous path of "self-reliance" and shunning of international enegy companies when it came to exploration. Only in name was this "self-reliance" mantra exercised. Again, over the duration of the precious decade that has been lost saw the general degradation of national exploratory agencies as their management passed from the hands of professionals to bureaucrats. There was no breakthrough in exploration. There was literally no movement in doing the multi-client survey of the Bay of Bengal and hence, the ground was set for the emergence of rental / quick rental power plants that would generate power using imported fossil fuels and the emergence of hugely expensive liquefied natural gas (LNG) as a crucial and growing part of the overall energy mix.
Today, the ghosts of failed past policies on energy have caught up with us. Media report it that oil-run power plants have become the backbone of electricity being produced in Bangladesh. By some estimates, cost of producing electricity from such plants is a few times higher than the electricity that is generated by natural gas. The widespread use of heavy fuel oil or HFO and / or furnace oil-run plants has turned finances upside down for the energy ministry. This goes on while gas and coal-fired plants remain idle. Gas because there isn't enough natural gas to spare and coal because the country doesn't have enough dollars to import it. To put all this into perspective, per unit of electricity produced by furnace-oil plant stands at Tk17, which is nearly three times that of a coal-fired power plant estimated at Tk6.0 per unit! Now, had the fateful decision to forgo development of own coal reserves not been taken 12 years ago, Bangladesh wouldn't be experiencing any of today's problems. Even after all the pain this failed policy of generating electricity through the most expensive fuels is abundantly clear, policymakers continue to milk consumers dry by raising power tariff. That is what is happening now and will apparently, continue to happen for the next three years? What will happen in three years, only God and policymakers know!
Then what measures does the government take to deliver the country from this hell of a situation? Policymakers are at liberty to set any price they want for electricity, but who will consume it? It's not a question of how many air coolers, washing machines, refrigerators are run at household level. Rather it's the industries' capacity to bear the ever-increasing cost of electricity. The chain effect of increasing cost of production is felt by everyone, except the government. The facts speak for themselves. According to a report carried in a leading national daily: "Furnace oil-run power plants account for about 23 per cent of the country's total power generation in the 2022-23 fiscal. Power production cost increased by 29 per cent to Tk 11.52 a unit during this period and use of furnace oil was one of the reasons for a rise in the production cost. According to PDB officials, if the production of oil-run power plants can be reduced by 10 per cent, at least Tk 90 billion can be saved." At the end of the day, what policymakers should be asking themselves is not how to increase tariff but how to reduce the cost of electricity generation.
© 2024 - All Rights with The Financial Express
