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    How much is the power crisis? Where's the solution?

    Load shedding Bangladesh

    Before the 2008 elections, the power sector was the most important in the election manifesto given by the Awami League under the title 'Vision 2021'. The government had reached that goal, having completed 100% electrification, and before the success was announced in another election, ukraine's war broke out.

    Even though there are centres to generate more power than the country's demand, the lack of fuel is hampering production. The nearly lost load shedding is back with a gap of more than 10 per cent between demand and supply.

    After the government scrambled to give a huge subsidy to import gas, it started to take the initiative to move away from there.

    In order to reduce subsidies, fuel imports will have to be curbed. This has a direct impact on electricity production. And if the power supply is reduced, industrial production will be reduced.

    In both these crises there is no alternative to raising the price of electricity if it wants to retain production with subsidies again. If the price rises more than the current one, the mercury of the rising inflation will go up further. This will increase the cost of living and increase the pressure on the economy.

    All in all, the government has to deal with a complex situation. For the time being, after three months of 'difficult' situation, the coal-based plants are fully operational and the government is hoping to go back to a tolerable situation when imported electricity comes.

    Therefore, for the time being, efforts are being made to deal with the situation by keeping different places of the country without electricity at different times. Work is underway to determine how long there will be no electricity. The question is whether the home office can be opened and the working hours of the office reduced like the lockdown period?

    In the meantime, the government has requested to ban lighting and to complete all kinds of social events, including weddings, by 7 pm, to be restrained in operating the AC and to be frugal in the use of electricity.

    But are these steps enough to deal with the crisis? What is the depth of the crisis? At a time when the country's own gas production is decreasing day by day and the price of gas in the international market is rising due to the shock of the war, what other steps can the government take to deal with the situation?

    Asked what the way out of the current situation is, energy policy expert M Tamim told bdnews24.com: "There is not much way to make a transition at the moment. ”

    Load shedding has returned across the country as there is a shortage in power generation.

    However, he welcomed the steps taken by the government to deal with the situation for a temporary period.

    State Minister for Power, Energy and Mineral Resources Nasrul Hamid said, "We have set up the power plant. How can I run without fuel? You have to stay in the load shed for a while. ”

    He highlighted the instability that the Ukrainian war has created in the world's energy markets, which has also caused rich countries to suffer.

    Where is the crisis

    Bangladesh's 152 power plants, including 1,160 MW imported from India, and the total installed generation capacity, including captives, is close to 25,000 MW.

    In April, the highest power generation in the country was recorded at 14,782 MW. Since July 1, less than 1,500 MW of electricity has been generated due to the reduction of gas supply.

    At the meeting on Thursday, the advisor said the daily demand has now reached close to 14,000 MW. It is possible to reduce the demand to 12,000 MW through austerity. And if that is done, there will be load shedding of about 500 MW per day. This can be overcome through rationing.

    Currently, 51% of the electricity generated comes from gas-powered plants. The amount of gas required for these is almost close to the total gas produced in the country.

    According to PetroBangla, 2354 million cubic feet of gas was produced in the country on Thursday. In contrast, the demand for power plants was 2252 million cubic feet.

    Petro Bangla

    But PetroBangla industry, commerce, transport, fertilizer factory, residential gas supply is able to provide 40% of the demand for electricity.

    The alternative source of gas is now imported LNG. About 1,000 million cubic feet of LNG was being imported a day, which has been reduced by half.

    The gas supply has been reduced for electricity since July 1, after the import of LNG in the spot market was stopped. Load shedding has returned since that day.

    Why did LNG imports suddenly stop?

    Speaking at an event on Thursday, The Prime Minister's Adviser on Energy Taufiq-e-Ilahi Chowdhury said, "The price of LNG, which was $5 per unit, has now become $41. The $71 diesel has now risen to $177. Some media outlets, including Bloomberg, are predicting it to reach $600. ”

    It started importing liquefied natural gas (LNG) from August 2018 in view of the growing demand for gas. Since 2016, domestic gas production in the country has started declining. As the demand increased, LNG imports also increased.

    As production decreases in the country, the dependence on LNG naturally increases. Qatar and Oman have contracts to buy an average of 500 million cubic feet of LNG per day in the long run. This pricing depends on oil fluctuations.

    But as the demand continued to grow, Bangladesh decided to go beyond the agreement and buy high-value LNG from the spot market. That expensive LNG has now become a sore throat. Prices are rising in the spot market due to the gas crisis in the war market.

    The Minister of State for Power and Energy told bdnews24.com, "What I used to import from the spot market has suddenly increased by 3/4/5 times. This has greatly impacted the price. In long-term gas, however, our price did not have the same effect.

    "As the Russians threatened to shut down the gas, european countries started buying from the spot. Then the price began to rise. ”

    He said there was no crisis over gas supplies from Qatar and Oman as there was a long-term deal.

    Gas production in the country is declining.

    When the Awami League government took power, the annual production of gas in the country in the financial year 2009-2010 was 703.6 billion cubic feet (BCF).

    With the renovation of old wells, increasing production by installing compressors and the discovery of several new wells, production was steadily increasing from the financial year 2015-2016. The annual production that year was 973.2 BCF. That is, the average daily production of gas that year was 2673.62 million cubic feet.

    According to PetroBangla, annual production has started declining in the financial year 2016-2017. That year it dropped to 969.2 BCF. It fell to 968.7 BCF in 2017-2018, 961.7 BCF in 2018-2019 and 882.6 BCF in 2019-2020.

    According to the data on the company's website, the average daily production in the last financial year 2019-2020 was 2424.72 million cubic feet.

    As of July 6, the country's daily production of gas was 2,353.8 million cubic feet. That is, compared to the daily average production of the financial year 2015-2016, the production has decreased by 319.82 million cubic feet.

    Nasrul Hamid said, "Since 2009, we have been able to increase the production by 1000 million cubic feet by digging various wells. But what has increased is not a very large signal amount. Some of the 2,700 million cubic feet of local gas were found until 2018-19.

    "We used to import and meet the gap of 700 to 800 million cubic feet with a demand of 3,500 million cubic feet. But in the meantime, local production has come down from 2700 to 2300. We used to import 800 million cubic feet regularly. But over the past year, the price of this gas has jumped, especially after the war. Naturally, buying from the spot market had to be stopped. ”

    At a meeting chaired by the adviser on Thursday, Energy Secretary Mahbub Hossain said they plan to increase the country's gas by another 600 million cubic feet by 2025.

    "If the plan to increase our own gas supply, which Petrobangla is now taking, had been taken up 4-5 years ago, we would not have had to fall into the extreme deficiency that we are currently in," said Tamim. There, of course, Petrobangla and its companies have failed. ”

    Noting that Petrobangla has failed to keep gas supply at the level of 2016-2017, he said, "That's what they are doing now. Now they are saying that by 2025, they will give another 600 million cubic feet of gas.

    "But the plan to give 600 million gas was in 2016 itself. That's when they needed to take the initiative. ”

    Subsidies not price adjustments

    In the revised budget for 2021-2022, the expenditure on subsidies and incentives has increased to BDT 66,825 crore, which is 1.70 percent of the GDP.

    In the meantime, the government has to pay a subsidy of BDT 25,000 crore to import ALGs, according to the ministry.

    While the subsidy estimate in the budget for the current fiscal year has been increased further, the government is looking to cut subsidies on LNG imports.

    The Minister of State for Power and Energy said, "The import of LNG from the spot market should be stopped. The subsidy cannot be given so much. ”

    And the main reason for the increase in this subsidy is the huge gap between the purchase and sale of LNG.

    The state minister said, "If we sell gas at the price at which we are buying it, then it will not be possible for anyone to afford it.

    "If the spot and long-term contracts are purchased from these two markets, the price of gas per unit falls to BDT 59. And if you mix it with our gas, it is 28 tk. But we are giving gas to the power plant for BDT 5. Doesn't that make a difference to big money?"

    Will the government then opt out of the subsidy?

    Mr Tamim said, "The alternative for the government is to increase the price of electricity. There is a limit to subsidizing fuel purchased at a higher price. This limit has actually been exceeded. For the last 4-5 months, the government has also provided electricity with many subsidies and has not increased the price of electricity. ”

    But now if this continues, the professor feels that the government has no choice but to increase the price of electricity.

    "There are two options. Raising the price of an electricity. It can increase by about 35 to 50 percent. Another is to save electricity through load shedding without increasing the tariff. ”

    The advisor to the caretaker government led by Fakhruddin Ahmed said, "I hope that since the government has decided to load shedding, it will keep the tariff the same and not increase it. For this reason, the cost of living i.e. the pressure on inflation will be less. At least there won't be inflation due to fuel. ”

    Government looking at coal-fired power plants and imports

    The prime minister's adviser has voiced his hopes of improving the situation since September, mainly by looking at coal-fired power plants.

    "Many coal-fired power plants will be commissioned in September. Rampal's unit will be commissioned, one of Adani Group, a coal-fired power plant of S Alam Group will be commissioned. The power plant that is centered around the Big Puglia coal mine will increase production. As a result, there may not be an electricity crisis in the country after September. ”

    Though the 1320 MW power plant at Payara is operational, half the capacity of the plant cannot be utilised as the transmission line is not complete.

    The 1320 MW Maitree Super Power Plant at Bagerhat is also nearing completion of construction. The government has signed a 25-year power purchase agreement from adani group's 1600 MW power plant in Jharkhand, India.

    Half the power is coming from three units of 500 MW capacity due to shortage of coal in Barapukuria.

    The 1220 MW coal-fired plant in Chittagong is also scheduled to be commissioned by this year.

    Apart from this, the construction of 307 MW coal-fired power plant in Barisal is nearing completion. It is also scheduled to go into production in December this year.

    Frugality and industrial production

    To deal with the disruption in power generation due to the fuel crisis, recommendations will be sent to the cabinet department to take a number of steps, including opening of home offices, reducing office working hours, restraining the use of ACs, to counter the disruption in power generation due to the energy crisis, Toufique-e-Ilahi, adviser to the prime minister on energy, said on Thursday.

    On the same night, instructions were issued by the Cabinet Division not to illuminate various social events, community centers, shopping malls, shops, offices, houses in the country until further orders.

    In this situation, Taufiq Ilahi does not see an option but to be affordable for the time being.

    He said, "We sat down with all the distribution companies and those involved in the sector and analysed the situation thoroughly. As it is understood, the situation can be somewhat normalized only by being affordable in the use of electricity. ”

    However, priority will be given to supply in industrial and fertilizer production, Nasrul Hamid said.

    The demand for electricity increases by more than 5,000 MW from winter to summer. The main reason for this is the use of AC and fan.

    A PDB official said, "The difference in electricity demand in winter and summer is mainly due to increased use of fans and ACs in the heat. In the meantime, more electricity goes into the AC. ”

    Tamim said, "I can afford it. I will set the AC to 18 degrees and I will pay as much as the bill comes. But that's not the issue. Those who have AC should understand that people across the country are doing safar.

    "The additional demand of 4000/5000 MW in the summer is basically the load of AC/fan, which is called cooling load. The less it can be minimized, the better. The lower the load shedding will be. That's why people have to cooperate. ”

    Pointing out that in countries like Japan, Australia, India, there are disruptions in power generation due to energy, the Minister of State for Power said, "Our priority is in the fertilizer, in the primary industry, and in the house-to-house, shopping malls, they feel that there needs to be rationing. If they use less electricity, then our load will be less. ”

    M Tamim said, "The reduction in supply can lead to disruption in production in industrial factories. In that case, the government should be a little careful about the industrial sector or the industrial areas of the country, which we are saying, that the supply to the industrial areas is right during the day. ”

    Nasrul Hamid said, "But this situation will not last long. After two or three months, the coal power plants will come up. Rampal actually, in the entire system of pigeons, Adani's was actually in November, I think I went into alternative fuel. You don't have to rely on gas.

    "Being globally connected, if something is affected anywhere in the world, we will have an impact here as well. Those who depend on fuel imports are doing rationing. ”