Improving summer power supply: Govt pays half the subsidy power ministry needs

The Finance Division last week disbursed Tk 1,500 crore in subsidy against the power ministry's demand for the immediate release of Tk 3,000 crore to boost electricity supply during the summer months.

The latest disbursement takes the amount of subsidy to Tk 18,799 crore so far this fiscal year. The government allocated a Tk 35,000 crore subsidy for the power sector for the current fiscal year to ensure uninterrupted electricity supply.

However, this move will not help the Bangladesh Power Development Board (PDB) improve the electricity supply significantly as the problem in opening letters of credit (LCs) to import furnace oil stemming from a shortage of dollars is another reason for the insufficient power supply.

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More power plants than needed

The PDB is now enforcing 1,500 megawatts loadshedding a day. Many rural areas are experiencing daily eight to 10 hours of power outages, according to PDB officials.

Senior officials of the ministry and the PDB will hold a meeting today with the representatives of independent power producers (IPPs) to discuss ways to boost power production.

In a meeting with Finance Minister Abul Hassan Mahmood Ali in early April, State Minister for Power and Energy Nasrul Hamid and senior Power Division officials requested the finance minister to disburse Tk 3,000 crore from the Finance Division. The finance minister agreed to release about Tk 1,500 crore as cash support.

Finance ministry officials said they will release more funds next month.

PDB has been enforcing loadshedding, particularly in rural areas, since the end of the Eid holidays due to an increased demand amid the ongoing heatwave across the country.

As of 9:00pm yesterday, PDB produced 15,527MW of electricity against the demand of 16,650MW. Of the produced power, 7,400MW came from gas-based power plants, about 4,100MW from coal-fired plants and about 3,100MW from furnace-oil based plants.

Though the country's liquid fuel-based power plants have a combined capacity of around 6,000MW, the PDB cannot produce more than 3,500MW due to a shortage of fuel.

On April 22, the PDB produced an all-time record 16,233 MW. However, the figure dropped later.

"We don't have enough liquid fuel. Besides, the liquid fuel-based power plants are not designed to run round-the-clock. That's why we need to enforce loadshedding in parts of the country," said Mokammel Hossain, a member of PDB.

State Minister Nasrul Hamid will sit for a meeting today with the representatives of the Bangladesh Independent Power Producers Association (BIPPA).

Faisal Karim Khan, president of BIPPA, yesterday told The Daily Star that they would discuss how to enable IPPs to procure more furnace oil to boost power generation in future.

"The independent power producers cannot procure enough furnace oil due to the banks' inability to open enough LCs because of shortage of dollars, which is beyond our control. So, we are seeking solutions from our regulator [Power Division] and the customer [PDB]," he said.

Asked about the collection of arrear bills from the PDB, he said different IPPs are in different stages. "The PDB was supposed to clear all the arrear bills until December last year."

This fiscal year, the government issued bonds worth Tk 10,599 crore to IPPs, according to Power Division data.

The power ministry officials earlier this month said about $2 billion is needed in the current fiscal year to clear the dues of all the companies concerned and also for their working capital to supply uninterrupted electricity. Half of this $2 billion would be spent on clearing dues of India's Adani Power and US energy giant Chevron, which is producing gas from Bibiyana, a major gas field in Bangladesh.

The rest of the amount will be used to pay the bills of purchasing liquid fuel, liquefied natural gas and coal for power generation.