Focus shifting from vitality generation to transmission
The government has shifted its focus from power generation to transmission and distribution as the sector is fighting overcapacity even though individuals are yet to get a credible way to obtain electricity.
As a result of overcapacity, the united states has to spend a hefty amount to meet the price tag on unutilised electricity.
This prompted the federal government to allocate funds in the budget for another fiscal year for several large projects to increase the power transmission and distribution infrastructure.
Of the Tk 27,484 crore allocated for the energy, energy and mineral means ministry, the energy Division received about Tk 22,000 crore.
There have been no allocations for new projects for the generation system and only the ongoing plants have obtained new funds, said Mohammad Hossain, director-general of the Power Cell, an agency under the Power Division.
"Power generation is currently in surplus. So, the government has put focus on transmitting and distribution in the spending plan," he added.
Previously, about 80 % of the allocation used to go to the projects for generation and the rest for transmission. But for another fiscal year, about 60 per cent of the allocation will transmission and distribution projects.
Under the transmission and distribution assignments in the upcoming fiscal year, new distribution substations will be built, the old lines will be replaced with new ones, the wooden boards will be changed, and the capacity of transformers will be upgraded.
The Bangladesh Rural Electrification Plank (BREB) is defined to implement various distribution projects which will help reduce power outages in rural areas.
A job involving Tk 4,000 crore has been taken beneath the BREB to build up the distribution network.
The Bangladesh Power Production Board (BPDB), Dhaka Ability Distribution Business (DPDC), Dhaka Electric Source Company, West Zone Electric power Distribution Organization, and Northern Electricity Source Firm also got funds to modernise their distribution systems.
DPDC received Tk 3,051 crore from the Annual Development Program to expand and fortify the power program network. Beneath the project, the overhead electrical cables will go underground.
The government has produced allocations to develop the transmission system to evacuate electricity from the Rooppur Nuclear Power Plant and Matarbari and Payra power plants.
However, the budget for FY2021-22 is not based on the government intend to phase away rental and the easy rental power crops to lower the bills stemming from growing potential charges.
Khondaker Golam Moazzem, study director at the Centre for Coverage Dialogue (CPD), welcomed the higher budget for the transmitting and distribution systems.
"But, the transmitting and distribution systems have not got as many importance as they should have got, and the tendency to spend money on generation is continuing despite the overcapacity," he said. "For the lack of enough investment in the transmitting and distribution, consumers are experiencing vitality cuts across the country."
The 600-megawatt Matarbari ultra super-critical coal-fired power project was given an ADP allocation of Tk 6,162 crore and the Rooppur Nuclear Electricity Plant Tk 18,426 crore.
Although the allocation for the Rooppur plant falls beneath the science and technology ministry, it really is nonetheless for power generation.
"The allocation for generation continues to be higher than the funds set aside for transmission and distribution, which is disappointing," Moazzem added.
In line with the CPD, 62 % of the ADP outlay meant for the power sector went to generation.
The power sector is struggling with overcapacity. A lot more than 48 % of the generation potential remained unused on June 2. Consequently, BPDB requires a significant quantity of subsidy to meet its cost.
For another fiscal, the subsidy provided for the energy and power sector has remained unchanged at Tk 9,000 crore.
The subsidy will probably imply that the BPDB won't have to seek permission from the Bangladesh Strength Regulatory Commission to raise the power tariff. This is simply not desirable during the crisis, the CPD said in its budget evaluation.
Because of the inefficacy in the energy sector and overcapacity, the government has to pay out the capacity charges, forcing it to subsidise the sector.
"If they do not get the subsidy, they must increase the power tariff. If the easy rental vegetation and inefficient plants are phased out, this issue would be solved," Moazzem said.
"We expect a particular announcement from the energy ministry how these quick local rental power plants will end up being eliminated, the old plant life will come to be shut, and the brand new funding on coal-based electricity plants will get suspended," he added.
The government has a commitment to retire fossil-fuel based power generation and is moving towards clean-energy based power generation.
"But, the budget may make no such indication," Moazzem said.
Industry insiders say great overcapacity is undermining the government's success in the power sector.
At present, the installed capacity was 25,227 MW by June 3, according to the Power Cell. The utmost power generation on the day was 13,014 MW. In Bangladesh, the highest 13,792 MW of power was generated on April 27.
The costs of overcapacity were found to be 59 %, 46 %, and 49.8 % in June FY18, FY19 and FY20, respectively.
The highest overcapacity was recorded in January and March of 2020, at 63.3 % and 62.5 %, respectively.
The excess capacity in growing countries is approximately 10 per cent, according to the California-based Institute for Strength Economics & Financial Analysis.
The beneficiary protection of electricity has increased from 47 % in 2009 2009 to 99 % this season with per capita power consumption having a lot more than doubled simultaneously.
