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Capacity charges for idle power plants, theft in the name of system loss, wastage and reliance on imported gas and fuel without exploring alternatives are major causes of high energy costs, speakers said during of a dialogue yesterday.
The Center for Policy Dialogue (CPD) organized the event titled “The Energy and Power Sector in the National Budget for FY 2022-23” at a hotel in the city.
The CPD urged the government to allocate more in the budget to the transmission and distribution of electricity, rather than its production.
Although the country has reached the milestone of 100% electrification, people are far from having access to affordable and uninterrupted electricity. The government should focus on exploring alternatives due to rising gas and fuel prices in the international market, the CPD said.
CPD Director of Research Dr Khondaker Golam Moazzem in his keynote address said that payment for capacity to private sector power plants including lease and quick leases has risen to 26,505 crore Tk in FY 2022 vs. Tk 5,600 crore in FY 2018.
“It would be Tk 31,600 crore for the financial year 2023. This capacity payment obligation has forced the government to increase the electricity tariff,” he said.
Moazzem mentioned that the country’s excess electricity – which has been termed as breeder capacity – increased to 10,764 MW in 2021-22 from 8,231 MW in 2020-21 with a jump to 42.12% from 37.37. %.
The current total power generation is 25,556 MW and the highest generation was 14,782 MW on April 16 this year.
He also said that the length of transmission lines increased by 5.5% in fiscal year 2022, while distribution lines only increased by 2.5%, which is the main reason for the increase. poor load management.
On the other hand, the unit cost has increased over the years. It increased by 11.8% from 5.91 Tk/kWh to 6.61 Tk per kilowatt-hour in FY2022 compared to FY2017.
The increase in the cost of generation in IPP plants by 14.6% and 11.1% in public plants led to an increase in the average cost of generation.
Capacity payment, use of expensive fuel-fired power plants, quick-lease power plants, low efficiency, and obsolete power plants are some of the reasons for the high unit cost.
Professor de Buet and energy expert, M Tamim, said: “On the one hand, we buy 150 to 180 million cubic feet of gas per day on the high-priced international spot market. On the other hand, only At Titas – the largest gas distributor company – at least 150 million cubic feet are stolen every day.”
“Why don’t we block the loopholes? In the gas sector, the system loss should not be allowed up to 0.25% for the leak. How could Titas allow a loss of up to 7- 8%?” He asked.
Tamim said the country should aggressively pay attention to the development of the primary energy sector.
Former AU geology professor Badrul Imam said the recent technical fault in the Bibiyana gas field shows the unsheathed situation of the country’s gas sector.
“Four or five wells in the field remained closed for a few days and the crisis was felt across the country. More than 50% of the gas came from Bibiyana. We need to explore more gas fields,” he said.
He said that in the past 25 years, only 25 to 26 wells have been drilled while there are huge gas and oil prospects in the country as it is the largest delta in the world.
“Most private companies import fuel oil. They charged Bangladesh Power Development Board Tk 92 per litre, while liter of oil costs Tk 72-74 if government imports fuel oil through Bangladesh Petroleum Corporation” , said Professor Shamsul Alam. , senior vice president of the Consumers Association of Bangladesh.
“Government could save Taka 8,100 crore in a year if it imports oil by BPC,” he added.
Power Cell Managing Director Mohammad Hossain, who was the special guest at the dialogue, said the capacity charge is nothing but the cost of the investment.
“When a private owner constructs a power station and the Bangladesh Power Development Board (BPDB) is the sole purchaser, he has to pay demurrage if he is unable to purchase power from the power station. “, did he declare.
Professor M Tamim and Imran Karim, Chairman of the Bangladesh Independent Power Producers Association (BIPPA), echoed the CEO of Power Cell.
They also claimed that there was no overcapacity in the country. Although the government mentioned the capacity to be over 25,000 MW, the actual capacity is 16,000 MW.
The dialogue was chaired by CPD Executive Director, Dr. Fahmida Khatun.