AN UNEVEN development of the power sector, riding on a wrong policy and supported by the now-repealed energy indemnity law, is more pronounced with a decline in the power demand since the onset of the winter. A low demand for power shows the abnormal extent of power overcapacity. About three quarters of the installed power generation capacity have remained unused since the winter set in. The current installed power generation capacity is 27.74GW while the minimum power demand on December 11 was only 6.77MW, suggesting a 75 per cent overcapacity. Even in the summer, when the demand for power is at its peak, the overcapacity hovers around 50鈥�60 per cent. What is ironic in the situation is that even with such overcapacity, the government cannot meet the demand as many power plants sit idle round the year while others produce only a portion of their capacity. What is problematic in the situation is that the government needs to pay the power plants capacity charge irrespective of whether they produce power. The government paid Tk 104,000 crore to 82 independent and 32 rental power producers in capacity charges in 2009鈥�22.
What the situation shows is that the Awami League government followed a wrong energy policy to channel public money into private pockets. The recently released white paper on the state of the Bangladesh economy that a government committee prepared has also highlights how the power sector was a hub of corruption. What the situation further shows is that the authorities did not follow a pragmatic course and invested heavily in increasing power generation capacity, without taking into consideration the growth in demand, transmission and distribution capacity. When a maximum of 15 per cent overcapacity is considered pragmatic, the authorities increased it to 60鈥�75 per cent. The Awami League government invested $33 billion in the power sector, increasing the power generation capacity by more than fivefold, but it was a lopsided development. For example, in 2021鈥�22, distribution lines increased by only 2.5 per cent while power generation capacity increased by 16 per cent, that too against a 2 per cent increase in demand. What has also compounded the situation is a steady decline in power demand in the industrial sector, where the demand is largely met with captive power produced independently by using gas at a subsidised cost. The supply of gas to captive power is also responsible for deteriorating the fuel crisis in the power plants generating power for the national grid.
It is high time the government attended to the paradox in the power policy and ensured a balance between overcapacity and demand. The government should also withdraw from the binding capacity payment agreement and expand the transmission and distribution lines to better use the power. The authorities should also review the agreements that the Awami League government made with power plants, many of which are believed to be bleeding the economy without benefitting the people.
