Coal-based power plants idle amid crisis, increasing load shedding pressure

❐ BD Digest Desk

The country’s power sector has come under renewed pressure due to international instability, pressure on energy imports and rising shipping fares. Despite the increase in demand with the onset of summer and irrigation seasons, production capacity is not being fully utilized. On the contrary, the crisis has been further intensified by increasing dependence on expensive fuel-based production by partially or completely shutting down relatively low-cost coal-based power plants.

According to the Bangladesh Power Development Board (BPDB), the average production cost per unit in private sector coal-based power plants is currently less than Tk 5. Yet 41 percent of the total capacity of this sector remains unused. In contrast, the cost per unit of gas-based power generation from imported LNG is more than Tk 30 and furnace oil-fired plants are hovering between Tk 27-28. Despite this cost disparity, financial pressure is increasing as the use of cheap sources in the production structure is limited.

Analysis of data as of April 6 shows that out of the 8 coal-fired power plants, only three are operating at full capacity. These are Rampal, SS Power and Barisal plants. The remaining plants are either partially or completely shut down for various reasons. As part of the Payra plant is closed for maintenance, its production has decreased. Similarly, as one unit of the Adani Group plant is closed, full capacity is not available from there either.

All three units of the state-owned Barapukuria power plant are closed for maintenance, resulting in no electricity being available from the 444 MW plant. On the other hand, the energy crisis is evident even among the large private sector plants. A large part of the capacity of the Matarbari plant remains unused; only 315 MW has been produced against a capacity of 1,150 MW.

The new 1,244 MW power plant in Patuakhali is also not being commissioned due to the coal supply crisis. This joint venture plant has been idle for a long time, rendering a large part of the overall production capacity ineffective.

In total, although the total capacity of coal-based plants in the country is 8,283 MW, 4,890 MW was produced on April 6. This means that almost half of the capacity remains unused. In the meantime, 1,083 MW of load shedding has been done at the production level, which has further increased to more than 1,500 MW at the consumer level, according to those concerned.

To deal with the crisis, the government is importing LNG from the spot market at almost double the price. However, at the same time, the unpaid bills of coal and furnace oil-fired plants are creating uncertainty in production. Private sector plants are losing interest in producing at full capacity due to lack of regular funding—which is directly affecting the power supply.

Several senior BPDB officials said that there is not enough preparation to increase production during this period of increased summer demand. If the temperature rises further, the load shedding situation could take a terrible turn by the end of April. According to them, due to insufficient subsidies in the power sector, production costs are not being covered, resulting in a delay in paying dues to private sector plants.

Those concerned say that the installation of cheap coal-based plants on the one hand and increasing dependence on expensive fuels on the other hand indicates a major inconsistency in the planning and management of the power sector. If the lack of coordination in energy supply, financing and production management is not eliminated, the risk of a more severe power crisis in the upcoming summer season cannot be ruled out.