BANGLADESH

The government plans to hand over majority of power generation responsibility to the private sector by 2016.

Chairman of state-owned Power Development Board (PDB) A S M Alamgir Kabir said on Sunday the government-run power plants now account for 56 percent of the country's total generation and the private plants the rest.

He told : "According to the plan, the government-run plants will generate only 42 percent of the total demand by 2016 while private plants will supply the rest 58 percent."

Energy experts apprehend a disaster in the sector in such a situation when PDB will increasingly be dependant on private sector generation and the government has to spend more on electricity subsidy.

PDB moved proposals twice to the Bangladesh Energy Regulatory Commission (BERC) to raise electricity prices -- both wholesale and retail -- in the current year as it buys high-priced electricity from the private plants.

Alamgir Kabir said: "Private power plants, which are based on fuel, are hiking prices because of increasing production cost. PDB is forced to purchase electricity from them as generation fell in the government-run plants for insufficient gas supply."

As a single buyer, PDB purchases electricity from both government and private power plants and sells it to the distributing agencies.

In its proposal to BERC, PDB said average supply cost for a unit of electricity rose to Tk 4.15 in 2010-2011 fiscal year from Tk 2.62 in 2009-2010, but PDB is still getting only Tk 2.81 per unit.

It said thanks to increase in number of oil-based power plants, electricity supply cost will rise to Tk 4.86 per unit in 2011-2012.

Energy expert and Chittagong University professor M Shamsul Alam told: "If the plan is implemented, electricity sector will be depending more on the private plants. As a result, subsidy in the sector will also rise."

He said a disaster might happen in the sector in such a situation.

After assuming office in early 2009, the present government announced plans to add 14,773 megawatts of electricity—6204MW from the government-run plants and 8569MW from the private plants—to the national grid by 2016.

Under the plan, 775MW power was added to the national grid last year -- 225MW from state-run plants and 520MW from private plants -- and this year another 2450MW power -- 1107MW from government plants and 1343MW from private plants -- is supposed to be generated.

The plan says 1901MW electricity -- 582MW from government plants and 1319MW from private plants -- will add to the national grid in 2012, another 2174MW -- 1040MW from state-run plants and 1134MW from private plants -- in 2013, 2323MW -- 1270MW from state-run plants and 1053MW from private plants -- in 2014, 2350MW -- 450MW from government plants and 1900MW from private plants -- in 2015 and 2800MW -- 1500MW from state-run plants and 1300MW from private -- plants in 2016.

The government has been giving priority to the power sector since its coming to power in Jan, 2009.

In last two and a half years, the government signed agreements to set up 50 new power plants and meantime 18 units commenced operation.

When the government assumed office, total electricity generation was 3276.5MW. Since then 2284MW of electricity added to the national grid.

On Aug 29 this year, the country made a record by producing 5244MW of electricity.

The present daily demand for electricity is estimated at about 7000MW, implying that the generation shortfall is 2000-2500MW.