FE Today Logo

BPDB keeping power plants idle on 'low demand'

Inept forecasts blamed as capacity payment counted

M Azizur Rahman | May 03, 2019 00:00:00

The Bangladesh Power Develop-ment Board (BPDB) is keeping idle plants with around one-third of the country's overall electricity generating capacity due to lack of demand despite the rise in mercury.

Subsequently, the state-run entity is counting payment of capacity charge to these power plant owners.

The BPDB has generated around 12,200 megawatts (MW) of electricity on April 29, the highest-ever in the country's history. But it kept plants with 5,992 MW generation capacity idle, which is around 33 per cent of the total installed capacity of 18,192 MW.

"This is the highest demand of electricity we have met so far," Khaled Mahmood, its Chairman, told the FE on Tuesday.

Some power plants were asked to suspend operations, and some others were placed under maintenance, he also said.

Although the plants are remaining out of operation, the BPDB is counting capacity payment to their owners, as the plants are ready to supply electricity.

Capacity payment is a sort of penalty, which the state agency is bound to pay to the power plants, if the government fails to purchase a certain portion of the electricity readily available from them.

Experts, however, said the demand-supply mismatch is the outcome of inefficient demand forecasts by the board as well as by the Power Division under the Ministry of Power, Energy and Mineral Resources.

In such a situation, people are not getting the maximum benefit of the significant increase in the country's overall electricity generation capacity over the past one decade, they added.

The countrywide electricity generation during the evening peak hours on Monday (April 28) was 9,840 MW, which is around 54 per cent of the country's total installed capacity of 18,192 MW.

Power generation during the off-peak hours (day-time power generation) on the day was 11,902 MW, according to the board statistics.

The BPDB kept the country's overall electricity generation below the halfway mark of the installed capacity during most of the winter season owing to a sagging demand. The electricity generation was one-third of the total installed capacity on some days.

The BPDB is the lone buyer of electricity from the power producers across the country. The state entity then sells the electricity to the distribution companies that supply it to the end-users.

According to the Power Division, the country's installed power generation capacity was 4,942 MW during 2009.

The total power generation capacity, including that from the captive power plants, owned by industry owners, and renewable energy, has reached 20,343 MW.

Over the past one decade, the installed power generation capacity increased notably, as a significant number of power plants, mostly oil-fired ones, were set up during the period.

Contracts on most of these power plants were awarded on the basis of unsolicited offers under the Speedy Supply of Power and Energy (Special Provision) Act 2010, having a provision of immunity to those involved with the quick-fix remedy.

The government also allowed private entrepreneurs to go for duty-free import of furnace-oil to run their power plants at a service charge of 9.0 per cent along with import cost as an incentive.

When contacted, Energy Adviser of the Consumers Association of Bangladesh (CAB) Professor M Shamsul Alam opined that the BPDB awarded many oil-fired power plants at the fag-end of the previous tenure of the incumbent government without calculating demand properly.

He also alleged that a vested quarter in power sector is playing foul with the government.

"The government should take action against the vested quarter with a firm commitment and resolve," he demanded.

Professor M Tamim, Pro-Vice Chancellor of the Brac University and an energy sector expert, demanded permanent shutdown of the age-old and inefficient power plants to reduce the government's loss in the power sector.

[email protected]

Share if you like