Meeting the power crunch
Thursday, 2 August 2007
Humayun Kabir
THE government has announced a nine-year long roadmap for attaining a proper match between power production and its demand. If all goes well as planned, then adequate power, and even some surplus, may be generated by the year 2015. But this is a far away date. What is desperately required is the fastest addition of power to the national grid. Establishing power plants after completing of all formalities including mobilisation of funds is a lengthy process and the question that had been asked frequently even by experts was whether some means was available to immediately supply some power to the national grid. A semblance of sufficiency in power production is badly needed to maintain the tempo of current levels of production in the various economic sector and to give power connections to new enterprises which are coming up. Indeed, the attainment of the current year's growth projection of the economy at 7.0 per cent is crucially dependent on augmentation of power supply that cannot wait.
Several solutions were suggested in the face of the power crunch such as buying power from neighbouring countries. But the same hit snags when it could be known that they may not have surplus power to sell or investments in transmission infrastructures and considerable time would be required to get such power supplied across the border. Renting of movable power plants was considered. Analysing and exploring all possible ways of getting ready power for the grid, it was found out that the best prospect for getting ready power involved tapping the power generation potentials of the captive power producers (CPPs). The CPPs are there in industries in different sectors which have established their own power generation capacities over the years in the face of worsening power supply positions from the public sector.
The CPPs have a combined generation capacity of some 1300 mw and much of it remains unutilised. They are, therefore, in a position to generate a good amount of power after meeting their own needs and feed the same to the national grid. No new investments in machines, equipment or land would be needed for this purpose. If the government only provides them with the reasonable incentive price to sell this power to it or decides to help in decreasing the generation costs of this power by subsidising the price of gas to be used by the CPPs, then it should be easily possible to get as much as 500 mw from the CPPs within a month or two. As it is, the government is buying power from other independent power producers (IPPs) at a price which is substantially higher than what was earlier offered to the CPPs. This was indeed a puzzle because the government should have done all it would in the power-starved conditions to augment power supply. The CPPs are getting demotivated from the persistence of government policies. The policies obviously need to be very conducive for a private-public partnership for augmenting power supply.
More concern-raising is the news that tendering process has started for the setting up of some rental power plants to supply some 260 mw to the grid by February 2008. The rental plants would be set up and operated by foreign firms. The tariff of these barge or skid mounted plants are expected to be very high. In 1997, when the Power Development Board (PDB) hired the services of such plants, it had to incur staggering costs of Taka 13 billion a year. The rental power plants will not supply power readily like the CPPs. They would supply only about half the amount of power compared to the CPPs and that too at significantly higher costs. In this situation the rationale for going ahead with the rental power plants scheme not clearly understood. In this situation, a rethink in favour of the CPPs at this stage is desirable. Meanwhile, a recent study showed that nearly 800 mw of electricity can be saved by using energy saving bulbs and devices at a cost of only Taka 1.75 billion. If that is really the case, such energy-saving measures deserve a dispassionate consideration for their operationalisation at the
earliest.
THE government has announced a nine-year long roadmap for attaining a proper match between power production and its demand. If all goes well as planned, then adequate power, and even some surplus, may be generated by the year 2015. But this is a far away date. What is desperately required is the fastest addition of power to the national grid. Establishing power plants after completing of all formalities including mobilisation of funds is a lengthy process and the question that had been asked frequently even by experts was whether some means was available to immediately supply some power to the national grid. A semblance of sufficiency in power production is badly needed to maintain the tempo of current levels of production in the various economic sector and to give power connections to new enterprises which are coming up. Indeed, the attainment of the current year's growth projection of the economy at 7.0 per cent is crucially dependent on augmentation of power supply that cannot wait.
Several solutions were suggested in the face of the power crunch such as buying power from neighbouring countries. But the same hit snags when it could be known that they may not have surplus power to sell or investments in transmission infrastructures and considerable time would be required to get such power supplied across the border. Renting of movable power plants was considered. Analysing and exploring all possible ways of getting ready power for the grid, it was found out that the best prospect for getting ready power involved tapping the power generation potentials of the captive power producers (CPPs). The CPPs are there in industries in different sectors which have established their own power generation capacities over the years in the face of worsening power supply positions from the public sector.
The CPPs have a combined generation capacity of some 1300 mw and much of it remains unutilised. They are, therefore, in a position to generate a good amount of power after meeting their own needs and feed the same to the national grid. No new investments in machines, equipment or land would be needed for this purpose. If the government only provides them with the reasonable incentive price to sell this power to it or decides to help in decreasing the generation costs of this power by subsidising the price of gas to be used by the CPPs, then it should be easily possible to get as much as 500 mw from the CPPs within a month or two. As it is, the government is buying power from other independent power producers (IPPs) at a price which is substantially higher than what was earlier offered to the CPPs. This was indeed a puzzle because the government should have done all it would in the power-starved conditions to augment power supply. The CPPs are getting demotivated from the persistence of government policies. The policies obviously need to be very conducive for a private-public partnership for augmenting power supply.
More concern-raising is the news that tendering process has started for the setting up of some rental power plants to supply some 260 mw to the grid by February 2008. The rental plants would be set up and operated by foreign firms. The tariff of these barge or skid mounted plants are expected to be very high. In 1997, when the Power Development Board (PDB) hired the services of such plants, it had to incur staggering costs of Taka 13 billion a year. The rental power plants will not supply power readily like the CPPs. They would supply only about half the amount of power compared to the CPPs and that too at significantly higher costs. In this situation the rationale for going ahead with the rental power plants scheme not clearly understood. In this situation, a rethink in favour of the CPPs at this stage is desirable. Meanwhile, a recent study showed that nearly 800 mw of electricity can be saved by using energy saving bulbs and devices at a cost of only Taka 1.75 billion. If that is really the case, such energy-saving measures deserve a dispassionate consideration for their operationalisation at the
earliest.