Power outages feared in oncoming summer

The growing uncertainty over fuel import and payment of arrears to private power plants have raised the spectre of load shedding across Bangladesh in the upcoming Ramadan and subsequent summer, sector-insiders say.

Unlike in the previous year, different areas across the country already have been experiencing load shedding, although not severely, during the ongoing winter, they point out.

With the holy month of Ramadan only less than a month away and peak irrigation season approaching, the clients fear severe outages in the coming summer if the power plants remain idle then.

Officials have said the state-run Bangladesh Power Development Board (BPDB) has struggled to make payment to the power-plant owners over the past two years since the start of local currency's devaluation following the outbreak of Russia-Ukraine war in February 2022.

The financial situation of BPDB has only worsened since then with its payment backlog to different clients rising to around Tk 400 billion until November 2024.

The power board currently owes around Tk 160 billion to different power producers, of which Tk 100 billion is payable to furnace oil-fired plants alone and Tk 60 billion to other plant owners.

"We did not get any payment from the BPDB over the past one and a half months against our electricity sales," president of Bangladesh Independent Power Producers Association (BIPPA) David Hasanat told The Financial Express.

The plant owners are struggling to import furnace oil for fund constraints and commercial banks' refusal to support import with favourable letter-of-credit (LC) margins, he laments.

"Until last year, we could import furnace oil with only 10-percent LC margin but this year the bankers are seeking 100-percent LC margin," Hasanat said.

Under this tight financial situation there is no alternative but to get the arrears to continue furnace- oil import for electricity generation, he added.

He makes a strong plea that the government should pay at least Tk 25-30 billion as soon as possible so the plant owners can import furnace oil and generate electricity to contribute to meeting the demand in the holy month of Ramadan.

It would help in maintaining electricity supply from the furnace oil-fired power plants at least for one month.

The BIPPA chief mentions that the power-plant owners have incurred a loss of around Tk 55 billion over the last couple of years only due to devaluation of the local currency against the US dollar.

Market-insiders fear the overdue payments to coal-fired power plants might also lead to unprecedented load shedding in the upcoming summer.

Apart from lower-than- expected power generation in furnace oil-fired power plants, overdue payments to coal-fired power plants also led to unprecedented load shedding last year, a senior BPDB official says.

Operation disruptions to the country's largest coal-fired power plant-Payra 1,244-megawatt plant - for failure to import the fuel for dollar dearth had worsened the deteriorated power-supply situation during the last peak  summer, he adds in his implicit forewarning.

Chances of ramping up electricity generation from gas-fired power plants during the coming summer are also slim as the prospect of importing a higher volume of liquefied natural gas (LNG) than the current amount is almost impossible as the country is already re-gasifying around 900 million cubic feet per day (mmcfd) of LNG, which nears the peak of the capacity, says a senior Petrobangla official.

Currently, Petrobangla is supplying around 750mmcfd natural gas to power plants against their overall demand for 2,420mmcfd, according to official data.

During summer, Petrobangla might ration gas supply to fertiliser factories and other consumers but that too won't exceed 1,200mmcfd for power plants, which is only half the plants' requirement, but the highest volume of natural gas allocated by the corporation for power plants, the official says.

"The country will have to face serious trouble if the plant owners refrain from generating electricity over non-payment issue," energy expert Prof M Tamim told The Financial Express.

He thinks the government does not have alternative to relying on the conventional fuel to generate electricity.

Renewable energy like solar power only has the capacity to supply electricity during daytime, said Mr Tamim, who is also Vice-chancellor of International University of Bangladesh (IUB).

The government is trying to ensure maximum electricity generation during the coming winter, says, a senior official of the Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR)

He says efforts are there to ensure payment to the plant owners.

"The government recently paid around Tk 10 billion to the BPDB to help make payment to the power-plant owners," says the official.

Sources have said Bangladesh experienced the longest heatwave in a single year during the last summer, recording the highest temperatures in the past five decades, causing the deaths of dozens of people from heat-strokes.

Schools and colleges and some universities were shut during the severe heatwaves to save vulnerable students from the health dangers of extreme heat.  

According to official data from Bangladesh Meteorological Department (BMD), the South Asian country started experiencing mild heat-wave in the northwest from the first day of April, which went from scorching to severe and very severe with the passing of days, and had persisted until May 5, before showering with rain.

The country previously recorded 25 days of heat-wave as the longest spell on record - during the summer of 2014, according to BMD data available since 1948.

Bangladesh generated its record-highest volume of electricity and re-gasified maximum amount  of LNG to face the sweltering temperatures during the heat-waves last year.

Bangladesh Red Crescent Society activated its early action protocol for heat-waves for the first time in the country on April 28 as a consequence.

Amid the severe heat-wave, the capital, Dhaka, recorded its highest temperature in 54 years, reaching 40.7 degrees Celsius on April 28th, 2024, according to the BMD.

Bangladesh recorded the highest temperature in 50 years at 43.8 degrees Celsius in the southwestern Jashore district on April 30, according to the BMD.

Over 42 degrees Celsius is considered very severe heatwave, while between 40-41.9 degrees Celsius is considered severe and 38-39.9 degrees Celsius moderate, while 36-37.9 degrees Celsius mild in Bangladesh, according to the Met office.

At least 15 people died from heat-strokes during the heatwaves between April 22 and May 5, according to the Directorate General of Health Services (DGHS).

The DGHS started recording heatstroke-related deaths for the first time in Bangladesh on April 22.

Bangladesh generated its record-high electricity at 16,477 MWs on the evening of April 30, 2024, according to the national load dispatch centre (NLDC) of the state-owned Power Grid Company of Bangladesh (PGCB).

Despite the high generation of electricity, the country experienced power outages and load shedding across the country with particular intensity in rural areas, as demand soared significantly in the scorching summer heat.

The NLDC data revealed that the country underwent a shortfall of 3,196 MWs at 2 pm on April 29, 2024 amid the sweltering heat.

Azizjst@yahoo.com