June 12, 2020 Read More →

Weak transmission and distribution systems hamper expanded Bangladeshi generation capacity

The Daily Star:

In the wake of a demand crunch for electricity and gas due to the pandemic, the government has cut the spending on power and energy for fiscal 2020-21 as it has allocated Tk 26,758 crore for these sectors — 4.6 percent down year on year.

Finance Minister AHM Mustafa Kamal in his budget speech yesterday said Tk 24,853 crore would be allocated for the power sector while the energy sector would receive Tk 1,905 crore.

The total allocation for power and energy in the current fiscal year is Tk 28,051 crore.

The country currently has a power generation capacity of 24,000 megawatts, which is enough to bring the entire population under electricity coverage. But the government cannot utilise its generation capacity to the fullest due to the weak transmission and distribution systems.

Even before the pandemic, the government used to pay Tk 9,000 crore as capacity charges to the rental power plants that remained idle due to the low demand of electricity, causing a hike of electricity price for consumers, said Ohio-based Institute for Energy Economics and Financial Analysis in a study recently.

The demand for power has fallen further following the outbreak, but the subsidy allocations for power and energy sectors — Tk 9,500 crore and Tk 9,000 crore respectively — remained unchanged in the proposed budget. 

[Fazlur Rahman]

More: Poor power demand, poor allocation

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