Power crisis--now and ahead

Unless the policy planners can identify the problems, then even with their best will people's suffering is bound to increase. If one industry remains closed for some reasons, a section of the people associated with the production and sales of the products are affected. But if a power plant remains closed for some reasons or power plants are not taken up for timely addition to meet the rapidly growing demand, the whole gamut of industrial and commercial activities are affected.

For a long period, development of power sector was dependent on multilateral and bilateral donors, who supported public sector enterprises until 1990. Since early 90's development of power sector was in a period of transition. The concept of private power (IPPs) in the form of BOO and BOT in early 90's was in a process of learning stage in Bangladesh. Due to this changed circumstances, no new investment from the development partners came through for power generation.

Due to high dependency on foreign loan for the development of power sector followed by high system loss and poor management, power supply situation continued to deteriorate. Some age old power plants were in the process of rehabilitation in order to regain the lost capacity and to avoid complete shut down. Due to the unilateral decision of the donors, the age old power plants could not be rehabilitated and new projects could not be taken up to meet the growing demand of the system. Power sector of Bangladesh in fact was passing through a period of difficulties. In this situation with an assurance that donors' suspension will be withdrawn on a condition that Dhaka Electric Supply will be separated. Consequently, Dhaka Electric Supply Authority (DESA) was created without looking into the consequences and without taking any preparation for running DESA effectively and efficiently. This was a wrong prescription on the part of the donors and major failure on the part of the recipients. DESA from the very beginning became the biggest defaulter in respect of payment of electricity bills to BPDB. Eventually, BPDB became financially more sick than before. DESA which serves the capital city and the adjoining areas plunged into severe crisis due to inefficiency and corruption. But the policy makers did not take any effective steps to put the new separated utility on right track for performance improvement and better customer service.

Creation of DESA was part of reform programme. About the reform, the World Bank in its development report once has written "... international assistance for state reform must go beyond one-size-fits all approach, or one based on donors' preferences rather than recipients' need. It must be based on clear diagnosis of the case at hand and of how reforms would fit into broader political and social changes going on in each country."

In reality, they do exactly opposite. Virtually, there was very little addition of generation capacity during the tenures of the democratic governments elected to run the country after the fall of Ershad regime.

As the power crisis was gripping the country, a good step was thought to make a breakthrough to minimise the power crisis through import of power through cross border power trade. Eastern part of India had surplus generation capacity, on the other hand, western side of Bangladesh had serious shortfall. Asian Development Bank was also interested to finance the cross border transmission system development without any precondition. A committee was formed with the directive of the Ministry to study about the import of power from eastern part of neighbouring India. There were exchange of visits between India and Bangladesh. However, after 1995 the study could not proceed further due to political disturbance in Bangladesh.

Meanwhile, the power supply situation deteriorated further and when the new government came to power, it was keen to take up the cross border trade issue in order to minimise the power crisis. The advantage was that, construction of short transmission line does not take much time. External finance was also available. This project was a great need of the hour for the benefit of the people. In fact, this was the best option as the rehabilitation works of the old power plants were in the process of implementation after withdrawal of suspension of loan by the donors. In this situation also, the power trade issue with India did not proceed further.

After approval of the National Energy Policy (NEP) and subsequently private power policy by the government in 1996, the door of the private power development was opened in Bangladesh. Eventually, three barge mounted power plants were installed on a first tack basis. This was followed by two large power plants; one Haripur 360 MW, and the other 450 MW. In the history of IPP development world wide, tariff of Haripur and Meghnaghat was one of the lowest in the world. These were unquestionably a great achievement in respect of addition of generation capacity in the power system of Bangladesh.

Without Khulna Power Company, the power supply situation of Khulna zone would have been much worse and far beyond our thinking. But we could not add any more power plants after this. South western zone could not develop due to the historical power crisis for decades. Industrial production hampered besides sufferings of commercial and domestic customers, sometimes without electricity and sometimes low quality electricity. This situation prevails more or less in the entire western zone of the country, but without any substantial progress in respect of addition of generation capacity.

Now gas is already in the west zone through BJMB and converted the Baghabari 71 MW from oil fired to gas fired one. This conversion has substantial impact toward minimising the operating cost of BPDB as well minimising the oil import of the country.

Now this is the proper time for the stakeholders of the western zone, civil society, professionals and the chambers to discuss gas utilisation in the western zone and extension of gas pipeline network to convert the oil fired power plants into gas fired ones. Our main objective would be maximum utilisation of gas resource and minimise dependency on oil import. Crude oil price is already about US$ 50/barrel in international market. It is likely that volatile situation will prevail in the Middle East in the foreseeable future. Any adverse situation will always affect our economy and we need to think about the energy security of our country when there are options to think.

If we depend on multinational donors, the conditional loan will have more adverse effect on our economy than providing benefit. Instead of that, we should try to develop some critically important projects from our own resources. This will bring confidence, as we have observed during the development of Shahjibajar 2x30MW gas turbine power plant and construction of 132 KV single circuit transmission line from Bara Aulia to Comilla.

Expansion of gas pipeline network in the western zone extending up to Khulna can be taken up as a national priority project. Some years back, steps were taken to utilise Shahbazpur gas field for power generation at Bhola, extension of gas pipeline to Barisal and Khulna. However this was not materialised. This project can be thought to be taken up as a private sector project and can be developed through solicited bidding. The gas pipeline extension up to Khulna can bring immense benefit to the entire people of the region, particularly the Khulna industrial zone; enhance power generation capacity in Khulna and Barisal besides the conversion of the existing oil fired power plants into gas fired ones.

The addition of generation capacity to meet the summer peak of the year 2005 is expected to be Shiddhirganj 210 MW, Tongi 80 MW and the private power, West Mount (Baghabari) 90 MW GT. Total 380 MW. On the other hand one unit of Ashugng 150 MW unit has to be overhauled. So the net addition in the system will be 230 MW. At present normally 3400 MW can be supplied during peak hours without any forced outage and with adequate gas supply. The maximum demand served so far was little over 3600 MW. As there is no adequate reserve margin in the system, so it is not possible to maintain the peak demand served once. Tongi 80 MW plant in fact will assist in improvement of voltage in Dhaka area. So in summer 2005, we cannot expect more than 3600 MW power at the generation level. On the other hand peak demand of the system will be about 4600 MW at the generation end. So, we clearly see a shortfall of 900 MW to 1000 MW during the entire summer peak. The system will naturally remain unstable with low voltage problem and widespread load shedding.

We don't see the addition of a single unit to meet the summer peak in the year 2006. Only the West Mount CC (Private) 40 MW is expected to be added to the system in the month of June, 2006. The demand of the system at generation level will be about 4960 MW with supply position of about 3700 MW at generation end. Though Ashuganj 4th unit will be back into the system, but the 5th unit has to go for overhaul. So, there will be a clear shortfall of generation capacity of 1200 to 1300 MW in the summer of 2006. The system will be more unstable, with chronic low voltage and widespread load shedding.

In the year 2007, the expected new addition of generation capacity to meet the summer peak is Barapukuria 250 MW coal fired power plant, Sylhet 100 MW GT and Fenchuganj 2x30 MW GT with a total addition of 410 MW. If effective steps are taken with clear financing plan and timely approval, then Chandpur 100 MW GT could be added to the system. Chandpur has a developed site with transmission facilities for evacuation of power. In an optimistic assumption, a total new generation addition of 510 MW can be achieved. However one 210 MW unit of Ghorashal has to go for overhaul resulting a net generation addition of 300 MW. On the other hand, summer peak of the system will be about 5370 MW at generation end against supply of 3900 to 4000 MW with a clear shortfall of 1300 MW to 1400 MW in the system. Unless larger unit size (450 MW CC) are immediately taken up for implementation, the situation will deteriorate further after 2007.

Adequate power supply naturally improves confidence of customers, particularly the industrial customers. It is necessary to follow the generation addition plan very closely. As the power system is always in crisis in meeting the peak demand, the slippage of addition of planned generation capacity by one year can create a situation which may be difficult to regain even if finance is available.

We have observed that power shortfall will continue to increase till the year 2007. If effective and immediate steps are taken for installation of larger unit like 450 MW CC with in public and private sector then only the situation may improve after 2007, not before. To improve the situation in the immediate future, some steps have to be taken as crash programme now as follows:

Installation of simple cycle, heavy duty gas turbine plants to meet the peak demand of the system: The units are to be installed in identified developed site and the unit size should not be less than 150 MW. Re-tendering process has to be avoided and evaluation, government approval, signing of contract, down payment etc. to be completed following a bar diagram strictly. The plants are to be developed with cash foreign exchange to same time.

Installation of capacitor bank in 132 KV substations to be taken up through proper study: This will minimise losses in the system and will allow more power to flow through the existing system and also improve the system reliability. Less time and resource is necessary for implementation of this kind of projects with multiple benefits.

A small good step of the government can bring immense benefit to the people. Similarly, for a wrong step people may suffer for years.

Mr Raziuddin Haroon, ex-Director of Bangladesh Power Development Board is Senior Energy Specialist, Bangladesh Unnayan Parishad.