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Power output squeezes to one-third of capacity

Fallout from gas crisis, wintry chill

M AZIZUR RAHMAN | January 16, 2024 00:00:00

Electricity generation in Bangladesh tumbled to around a third of the overall capacity for scarcity of natural gas amid sagging winter demand.

According to State-run Bangladesh Power Development Board (BPDB), the countrywide electricity generation during the day peak hours on January 14 (Sunday) hurtled down to 8,914 megawatts, only 33.63 per cent of the country's total installed power-generation capacity of 26,504mws.

Generation during evening peak hours Monday increased a little, to 10,286mws, or 38.80 per cent of the total installed capacity.

A senior BPDB official says natural gas crisis is limiting power generation to the tune of around 4,500mws as state-run Petrobangla is supplying only around 793 million cubic feet per day (mmcfd) of gas, which is only around 35.40 per cent of the overall demand for 2,240mmcfd for power generation.

More than two and a half dozen gas-fired power plants are now shut for gas shortage, according to Petrobangla.

Sources have said domestic natural gas production has plummeted to a decade-low amid continuous depletion of output and lax move to ramp up extraction, resulting in less-than-expected supply of the fuel for power production.

Production in industries slows, many gas-fired power plants lie down and transport fuel runs short, with their cascading adversities.

Bangladesh has currently been producing around 2,040mmcfd natural gas on average from all of its gas fields, including those operated by international oil companies (IOCs), far below the overall average production during 2012 of around 2,200mmcfd, according to official data available with Petrobangla as of January 15.

The country's existing overall natural-gas production, including imported liquefied natural gas (LNG), also stands below the overall production during 2015, industry-insiders said.

Bangladesh is currently producing aroun2,564mmcfd gas, combined with 500 mmcfd regasified imported LNG, according to the latest data.

On the contrary, the country's overall natural-gas output only from local gas fields during 2015 was around 2,700mmcfd.

"Over the last one decade Bangladesh has launched only one bidding round, and that too was for only three deep-water blocks," energy-expert Prof M Tamim told the FE Monday, tracing the root of the crunch.

"Although Posco-Daewoo was awarded one deep-water block - DS-12 - after the bidding, the South Korean oil-and gas-exploration company withdrew in 2020 by emptying the block," he said.

State-run Petrobangla, the government's main entity for oil and gas exploration, also did not pay much heed to the country's overall oil- and gas- production issue, said Mr Tamim, who was the chief of the Ministry of Power, Energy and Mineral Resources (MPEMR) during the previous caretaker government.

"I now see no quick fix to ramp up the country's natural gas production from the local gas fields," says another energy expert, Prof Badrul Imam.

It is the outcome of mounting dependence on imported LNG instead of enhancing natural-gas output, he says about how the country is being made import-dependent in this particular case.

"The government didn't do much to increase natural gas output from local fields even after 2018 when it started importing expensive LNG," regrets Mr Alam, a Geology professor at Dhaka University

So far, the government has made arrangement for importing threefold higher volume of LNG from 2026 to the tune of around 9.0 million tonnes per year and doubling the number of floating storage and regasification units (FSRUs) to four, he lamented.

Market-insiders have said the natural gas crisis is affecting all sorts of consumers, resulting in cut in industrial output and abject sufferings of the commoners.

According to the BPDB statistics, the country's overall electricity generation during day peak hours in winter one year ago was around 6,644 megawatts.

Electricity generation during the evening peak hours last winter was 8,479mws.

Sources say with the increased electricity-generation capacity, the BPDB will have to count skyrocketing capacity payments to owners of the idle power plants.

Capacity payment is a sort of penalty, which the BPDB is bound to pay to the power-plant owners if the government fails to purchase a certain portion of the electricity readily available.

According to the Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR), the country boasts an installed power-generation capacity of 4,942 megawatts, as of 2009.

Over the past one and a half decades, the installed capacity of power generation has increased significantly, 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 remedies.

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 costs as an incentive, said a senior official of the Power Division.

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