False dawn for power
The authorities hope the power sector would require lesser subsidy this year as the cost of electricity generation would come down a bit since they would be able to cut use of oil and increase use of gas, which is cheaper.
But Petrobangla that provides gas appears certain to fail to achieve its target set in August last year. Its Chairman is now making new gas production forecasts which would be nearly half of last year's projection, but experts say the achievements would be almost insignificant.
This implies that the Power Development Board would not be able to cut oil-based power generation as it plans or it would be compelled to go for heavy load shedding and would face heavy losses.
Due to persistent gas crisis that also triggered heavy load shedding, the government in 2009 opted for imported and costly oil-based temporary power projects while working on long-term low cost large power plants and increasing gas production.
This measure almost made load shedding history. But this also pushed up power generation cost to Tk 6 per unit from Tk 2.5 in 2009.
To adjust this difference, the authorities increased power tariff six times at both bulk and customer levels in the last four years, and significantly increased it.
But this increase did not cover the losses as the PDB still had to digest Tk 1.3 per unit loss. So the PDB also received hefty government subsidy in the form of loan every year. The subsidy stood the highest in 2011-12 and it came down noticeably the following year.
“This year we are looking at Tk 4,000 crore subsidy (which is Tk 1,100 less than that last year), because we are hoping that the power generation cost will reduce by 20 poisa per unit due to increasing gas-based power generation,” said a high official. He added that a number of contracts for oil-based rental power would expire this year.
But what if the Petrobangla fails to increase gas supplies? “In such a case, we will be compelled to go for liquid fuel once again and resort to some planned load shedding,” the official added.
Since last year, the PDB has been lucky due to cooler weather. “For instance we forecast a demand for 1,700 megawatts of power for irrigation during March-April. Due to cooler weather, the demand was just 1,200 MW,” he said, adding if this trend continued, the situation would not be too bad.
Petrobangla Chairman Hossain Monsur in August last year gave an updated forecast where he said 155 million cubic feet per day (mmcfd) of gas would be added by December (2012) and another 550 mmcfd by December this year.
But in reality the addition was only 55 mmcfd, and that too started only a few months back.
Talking to The Daily Star, the chairman said that between June and December this year, there will be another 330 mmcfd gas.
Experts, however, said given the serious under-performance in the sector, the increase would be a maximum of 150 mmcfd.
The chairman blamed Russian company Gazprom for the under-performance.
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