-PDB’s debt Tk 50 thousand crore
-3 plants are coming, capacity charge to increase
-Summit Group charged highest capacity charge
-From FY 2008-09 to 2022-23 PDB’s loss Tk 1L 60K 963cr
Bangladesh Power Development Board (PDB) has not been able to pay the dues of private power plant owners for two years. Till now more than Tk 50 thousand crore are due. Annual losses have exceeded 50 thousand crore Tk. In this background, the government is issuing bonds, but the situation is not improving.
Analysts said this is due to more power plants than demand. Capacity charges are payable even if power is not purchased from additional capacity centers. In the last financial year, the power plant owners had to pay Tk 17 to 20 thousand crore capacity charge. However, new power plants are being built and old plants are getting older. New and more projects are being taken up.
According to Center for Policy Dialogue (CPD) data published last March, the rate at which electricity generation capacity has increased, the consumption has not increased. In FY 2021-22, production capacity increased by 16.04 percent, while customers increased by 6.35 percent. In that report, research director Khandkar Golam Moazzem said that the government has to spend more money than necessary because of the high production capacity. The government has to adjust electricity prices repeatedly to meet the high production costs. Production cost increases due to power capacity charges.
Those concerned said that according to the Power Sector Master Plan-2016, the electricity demand in 2024 was estimated at 20 thousand 129 MW. According to that, the production capacity is supposed to be 24 thousand megawatts with 20 percent reserve margin, currently there is 26 thousand 844 megawatts. That is, the country has an additional power generation capacity of 9,000 megawatts.
They said that the reality is different than the grand plan. The power department has recorded the highest demand in summer this year at 17,800 MW, although the highest production so far is 16,477 MW. Due to this excess production capacity, the government has to pay more money as capacity charge. It has increased the production cost of electricity; PDB losses increased.
Sources related to the sector said that the Power Sector Master Plan, which was revised once in 2018, said that it is necessary to have a reserve margin at a fixed rate to ensure uninterrupted and robust power supply. However, unplanned and aggressive capacity building can increase reserve margins and create additional pressure on the country's economy. According to the Integrated Energy and Power Masterplan prepared in 2023, the excess capacity (reserve margin) of electricity in the 2030s will be 30 percent. And before 2040, additional capacity is unlikely to come close to 20 percent.
Unique Group's 584 MW and Summit's 583 MW power plants at Meghnaghat in Narayanganj have not started functioning properly due to insufficient gas supply. Another gas-based power plant of 718 MW capacities is being set up by India's Reliance Power and Japan's Jera located nearby. It will also be commissioned soon subject to availability of gas. Those concerned are skeptical about whether these centers will run properly in the country's gas crisis. Because, to run these three centers at full capacity, 320 million cubic feet of gas will be required per day. Of this, 190 million cubic feet of gas is required daily for Summit and Unique power plants. Reliance's power plants require 13 crore cubic feet per day. Without gas, the power plant will not work. However, according to the contract, the entrepreneurs will get the capacity charge.
According to the information provided by the Minister of State for Power Nasrul Hamid on the capacity charge in the Jatiya Sangsad last September, in the last three terms of the Awami League government, 73 IPPs (independent power producers) and 30 rental (operated on rent) power plants were given capacity charges of about Tk 1 lakh 5 thousand crore till June 30. Among them, Summit Group has charged the highest capacity. The company has received rent for 9 power plants about Tk17 thousand 610 crore. USA's Agrico International received a capacity charge of Tk 8,310 crore for seven centers. United Group has taken capacity charges of Tk 7 thousand 758 crore against six centres. This charge will increase due to new power plants.
In the last 15 years (FY 2008-09 to FY 2022-23), PDB has calculated a loss of Tk 1 lakh 60 thousand 963 crore. In the last two fiscal years (2021-22 and 2022-23), the company suffered a financial loss of Tk 84 thousand 191 crore. In the financial year 2008-09, PDB posted a loss of only Tk 828 crore. In the financial year 2022-23, it has increased to Tk 51 thousand 300 crore.
PDB is unable to pay dues to private power plant owners. The arrears have exceeded 50 thousand crores. To deal with the situation, the government has decided to issue a bond of 25 thousand crore Tk against these debts. Already, 10 thousand 591 crore bonds have been issued in favor of 28 banks last February. A new bond issue of Tk 7000 crore has been decided. The electricity department also held a meeting with the state minister of finance before Eid.
An official of the electricity department said that since the cash payment cannot be made, special bonds are being issued.
More power plants are being sanctioned within the additional capacity. Mymensingh City Corporation is going to build a 6 MW power plant from waste and garbage and two largest 400 MW solar power plants in the country at Jamalpur and Chittagong. In 20 years, the government will spend Tk 18 thousand 413.2 crore to buy electricity from these three centers. These three centers will be established under the Ministry of Power, Energy and Mineral Resources. The Cabinet Committee on Public Procurement has recently approved the projects. DP Clean Tech UK Limited and Impact Energy Global Limited consortium will set up the 6 MW waste-to-power plant at Mymensingh City Corporation. The price per kilowatt has been fixed at Tk 23.21. Bangladesh and foreign joint venture Cell-GTech Power will construct a 300 MW solar power generation project on 902.35 acres of land in Jamalpur's Islampur. The price per kilowatt has been fixed at 11.10 taka. A 100 megawatt power plant will be built in Chittagong's Banshkhali by a joint venture between Bangladesh and Hong Kong, a private consortium of Huiheg Wing Power Limited Hong Kong and Jupiter Energy. The price per kilowatt has been fixed at Tk 13.481.
The government has extended the contract with Summit Power's three gas-based power plants of a total of 111 MW at Ashulia, Madhavadi and Chandina by five years.
Electricity Secretary Habibur Rahman said that the demand for electricity is increasing by 10 to 12 percent every year. Power plants will be needed to meet this demand. Many power projects have been sanctioned earlier, they are coming into production in phases. And most of the projects that are being approved are solar power projects. He said, to reduce PDB's losses, the price of electricity has to be increased, there is no alternative.
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