Bangladesh’s electricity crisis has deepened despite a substantial increase in power prices, with load-shedding once again becoming a major source of hardship, particularly in rural areas. Shortages of gas and coal, mounting unpaid bills owed to power plants and the high cost of running oil-fired generators have combined to put fresh pressure on the national power system.
Wholesale electricity prices were raised by an average of 19.85 per cent in June, while retail prices increased by an average of 16.68 per cent. Yet the Bangladesh Power Development Board (BPDB) still owes power plants nearly Tk50,000 crore. The financial strain has made it increasingly difficult to secure electricity from generating plants when demand rises.
According to data from the BPDB and Power Grid Bangladesh PLC, the country’s maximum load-shedding has exceeded 3,000 megawatts for several consecutive days. By 8pm on Monday, the highest recorded shortfall stood at 3,757MW, compared with 3,671MW a day earlier.
Bangladesh has total installed generation capacity of around 29,000MW. But installed capacity does not mean that the same volume of electricity can always be generated. At the time of the highest shortfall on Monday, demand stood at 16,262MW, while supply was only around 12,500MW. A significant portion of the country’s generating capacity was therefore unavailable or could not be operated at the required level.
The shortage of natural gas remains one of the main constraints. Gas-fired plants are currently producing less than 4,000MW, while officials say it may take several more days for gas supplies to improve.
Oil-fired plants provide another potential source of emergency generation, but operating them continuously is expensive. Their output is increased after evening demand rises in an effort to keep load-shedding within manageable levels. Production is then reduced after midnight to contain costs, which can result in renewed power cuts during the late-night hours.
Coal-fired plants have consequently become one of the BPDB’s principal sources of dependable generation. Yet coal supplies have also been disrupted. At the Payra power plant in Patuakhali, maintenance on one unit caused generation to fall by roughly half from 2 August. Efforts to restore higher output began on Sunday night. The plant is owed more than Tk9,000 crore, and there are concerns that coal supplies could be disrupted from next month if outstanding bills are not settled on time.
Another coal-fired plant in Patuakhali has also reduced generation because of inadequate coal supplies. Meanwhile, the Adani power plant in Jharkhand, India, cut production from 7 August after storms and heavy rain disrupted coal deliveries.
The BPDB held an online meeting with power plants on Monday afternoon to address the situation. Payra was instructed to increase generation and was supplying around 800MW in the evening. The Adani plant was also asked to raise output, although officials said coal-based facilities could not immediately increase generation by a large margin.
The Adani plant has indicated that coal supplies are expected to return to normal between Tuesday night and Wednesday morning.
BPDB member for generation Md Zahurul Islam said the combined impact of inadequate gas supplies and reduced coal-based generation was putting considerable pressure on the system. He said oil-fired plants were being operated more extensively in the evening to limit load-shedding, but their use was reduced after midnight because of the high cost of generation.
Rural communities bearing the brunt
The disruption is being felt far more severely outside the capital. The two Dhaka distribution companies, Dhaka Electric Supply Company and Dhaka Power Distribution Company, have not faced a major supply deficit relative to demand. The situation is markedly different in several distribution areas outside Dhaka.
The Bangladesh Rural Electrification Board and associated rural distribution networks supply electricity to a large proportion of the country’s villages. Their available supply has fallen significantly short of demand, leading to longer and more frequent power cuts.
Feni illustrates the problem. According to BPDB and rural electrification data, electricity demand in the district is around 140MW, while the average daily shortfall is approximately 30MW. The shortage is affecting households as well as businesses and industrial establishments.
A food-products manufacturer in Feni reported that load-shedding accounts for roughly 35 per cent of its daily production time. The interruptions have disrupted production schedules, machinery operation and the management of workers’ hours. The local rural electricity authority estimates that its supply deficit in the district is around 15 per cent.
The present crisis also reflects longer-term weaknesses in the power sector. Electricity prices have been raised repeatedly over the past decade and a half, with wholesale prices increased 12 times and retail prices 14 times. At the same time, substantial generation capacity was added without always ensuring adequate and reliable fuel supplies.
Some power plants have also remained underused for extended periods while payments relating to capacity and other contractual obligations continued to create financial pressure. This has contributed to a system in which installed capacity can appear plentiful on paper while actual generation remains constrained.
BPDB officials believe the latest price increases may take around two months to produce their full financial effect. The additional revenue will not immediately reach the board’s accounts. They expect the revised tariff structure eventually to slow the accumulation of new arrears and allow existing debts to be settled gradually.
For consumers, however, immediate relief depends largely on restoring gas and coal supplies. The extent to which expensive oil-fired plants can be used will continue to depend on fuel costs and the BPDB’s financial position.
Rainfall may temporarily ease pressure on the system by reducing electricity demand. But without a lasting solution to fuel shortages and the financial difficulties confronting power generators, Bangladesh could face renewed and potentially severe pressure on electricity supplies when demand rises again during periods of intense heat.
