Shamim Jahangir: Bangladesh Power Development Board (BPDB) has incurred a loss of Tk 45.66 billion in first half of the current fiscal for selling power at tariffs lower than purchasing cost.
The government incurred a loss of Tk 2.49 per unit of electricity after purchasing it at Tk 5.17 for payment of 2,847,454,966kw power from private producers.
The government purchases power from rental, quick rental, independent power plants alongside importing power from India.
Rationing in supply of natural gas to gas-fired power plants from October, 2020 will also push the electricity production from costly oil-based power plants. It also increased the loss in first six month of the current fiscal year.
The government has cut LNG import due to rise in LNG price in the international market. The government is expected to resume the supply of natural gas from March subject to normalcy of spot market.
Besides, capacity payment of the private power plants also ate up the subsidy significantly.
“Electricity generation cost depends on fuel cost. But the depreciation of Bangladeshi taka against US dollar and a fall of power demand amid corona crisis have increased the cost of electricity,” state-run BPDB said in a letter to the Power Division on January 19, 2021.
The fixed cost of electricity has increased due to hike in gas price, the letter reads.
BPDB also continued electricity import from India at a higher price despite surplus electricity supply at home due to a sharp fall in demand amid the corona outbreak and winter season.
BPDB has recently received Tk 23.87 billion in July-September, 2020 from the finance division to minimise loss incurred in Q1 of FY21.
The BPDB has sought another Tk 14.27 billion from the finance division to manage the loss for the trade of electricity at lower tariff between October and November, 2020.
BPDB incurred a loss of Tk 80.17 billion last fiscal year due to costly power purchase.
In its letter, the PDB also expressed hope that the electricity generation cost will come down when the nuclear and coal-based power plants will come into operation.
Power Division, however, said Bangladesh’s power sector is back on track with a 15 per cent year-on-year rise in electricity demand as industrial production resumed in full-scale despite the coronavirus pandemic.
Power demand is expected to soar to some 14,000MW in the upcoming Boro paddy irrigation season, according to a government projection.
The demand for electricity during the period is rising more than 200MW compared to that of previous year. In fiscal year 2019-20, the demand was 11,977MW.
The country’s biggest irrigation period will start next month and end in May this year.