600MW power outage can be cured overnight

Bangladesh currently reels from load shedding to the tune of around 2,000-3,000 megawatts of electricity daily as the demand far outstrips production, market-insiders say, although much of it can be healed readily.

Despite having the shortfall in electricity generation, state-run Bangladesh Power Development Board (BPDB) has kept six furnace-oil-run power plants, having the generation capacity of around 600 MWs, idle as the interim government has yet to decide on continuation of their operation under 'no-electricity, no-payment (NENP)' mechanism, they have said.

Officials think if such six furnace-oil plants got approval for continuing electricity generation under NENP, they would be able to contribute to reducing at least one-third of the load shedding without any immediate investment from the government.

"Of the peak-load power plants, these are most economical because they are the only plants among the 150 new ones that do not entail capacity payments," says a senior BPDB official.

"Operating these plants poses no financial burden on the government either," he adds.

Typically, load shedding occurs for only 2-3 hours per day, equating to 30 to 40 per cent of the time when additional power is needed. At this plant-load factor, the NENP plants are 8-15-percent cheaper than other high sulfur-fuel oil (HSFO)-based plants that require capacity payments, the official explains.

Load shedding primarily occurs during peak periods, and these HSFO-based plants are particularly suited to such scenarios.

Unlike coal- or liquefied natural gas (LNG)-based plants, which require longer startup times and have slower load- adjustment capabilities, HSFO-fired plants can be activated instantly, ramped up or down quickly, and shut down when demand decreases.

Continuation of such power plants is also needed to meet the mounting power demand, he suggests.

"Over the past several years, Bangladesh got almost all sorts of power plants as part of its energy diversification, resulting in overcapacity," says research director of the Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem.

To ensure the country's future energy security at affordable costs, he opines, the government now requires to streamline the energy sources.

The policy researcher suggests that the provision of capacity payment should be withdrawn from all the rentals and quick rentals and 'no-electricity, no -payment (NENP)' clause should be applicable to all of them.

Speaking in the same vein as  CPD's Dr Moazzem, president of Bangladesh Independent Power Producers' Association (BIPPA) Faisal Khan also opines for continuation of NENP mechanism to buy electricity from the HSFO-based power plants.

"The BPDB only pays for the electricity actually produced.  Since the project capital costs and loans are paid off during the initial power -purchase agreement (PPA), there is no requirement for capacity payment," he told the FE in support of the NENP method.

Power producers are motivated to maintain high operational efficiency to get optimal dispatch.

"This model can promote a more dynamic and competitive energy market. It will be good for Bangladesh to run expired plants in this model as the infrastructure is already available and no further capital expense is required," says the BIPPA top brass about the merit of kick-starting the laid-off units as an immediate cure for nagging outages reported from different corners of the country.

Sources have said despite having excess electricity-generation capacity, Bangladesh has been struggling to cope with an ever-growing demand, resulting in acute load shedding across the country amid sweltering heat, the rural areas being the worst sufferers.

Improper energy-mix and inefficient infrastructure, coupled with volatile foreign currency and global energy markets, pushed the situation in dire straits, market-insiders have said. They said riding on installations of around 150 new power plants, the previous 'authoritarian' government had declared 100-percent electricity coverage in March 2022 as the first country in South Asia.

But, unfortunately, after achieving such pride, the country started suffering from electricity load shedding again due to newer sort of challenges -primary energy crisis and the piling up of overdue payments against energy purchases by state-run entities.

Load shedding meddled on the very first year of achieving the feat as state-run Petrobangla had to stop purchasing liquefied natural gas  from international spot market due to skyrocketing of its price as high as a record US$70 per million British Thermal unit (MMBTu).

The Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) then relied more on privately owned high-sulfur fuel oil (HSFO)-run power plants to augment generation along with coal-fired power plants amid continuation of imports from neighbouring India, a senior BPDB official told the FE Saturday.

Again, during June 2023, when the countrywide load shedding intensified amid the shutdown of a number of coal-fired power plants, including the Payra 1,244MW coal-fired plant, due to coal scarcity caused from mounting overdue payments, the gas-fired power plants and HSFO-based power plants augmented generation to overcome the crisis, the official added.

Electricity generation from coal-fired power plants and HSFO-fired power plants and importation also ramped up over the past several months when gas-fired power plants were struggling to generate electricity due to short supply of the fuel caused from the shutting of operation of Summit LNG Terminal until September 11.

Market-insiders say continuation of such power plants is also needed to meet the mounting power demand.

According to latest official data of the BPDB, the country's annual electricity consumption soared by around 25 per cent over the past four years from around 70,534 million kilowatt-hour (MkWh) during fiscal year (FY) 2018-29 to 88,450MkWh during FY 2022-23 amid energy diversification.

Although the power-consumption figure of FY 2023-24 was not available, the BPDB official said it grew by around 8.0 to 10 per cent.

Despite increase in power consumption, contribution of natural gas in overall power generation declined to around 52 per cent during FY 2022-23 from 72 per cent during FY 2019-20. Contribution of HSFO-based power plants slumped to 21 per cent during FY 2022-23 from 27 per cent during FY 2022-23.

Use of expensive diesel-fired power plant continued to grow over the past several years as it reached 2.8 per cent of the country's overall power generation during FY 2022-23 from only 0.8 per cent during FY 2020-21.

Power import from India, including that of Adani's Jharkhand power plant, increased to 12 per cent during FY 2022-23 from 9.0 per cent during FY 2021-22.

Contribution of coal-fired power plants almost doubled to 11 per cent during FY 2022-23 from 6.0 per cent during FY 2021-22.

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