Subsidy on power generation likely to increase further
Government is still struggling to keep the cost of electricity production at minimum rate as it has failed to reduce dependency on high cost liquid fuel based power plants.
"Power subsidy rose to Tk 3,612.47 crore in the 11 months of the 2016-17 Fiscal Year due to the purchase of costly electricity from rental and quick rental power plants but unfortunately we are still looking forward to install liquid fuel run plants," a frustrated senior official told the Daily Observer on Monday.
Despite the subsidy came down remarkably compared to the government budgetary allocation of Tk 5,500 crore so far but it is likely to increase further in the current fiscal year as the government plans to purchase liquid fuel based power plant further, he added.
He said the government has already instructed the BPDB for initiating another 3000MW liquid fuel based plant by March next year.
The BPDB has already projected such additional revenue earning by evaluating the proposed power tariff, the official said. The power tariff is now Tk 6.92 per unit considering 5 per cent VAT and the billing rate is Tk 6.73 per unit.
Power tariff from the gas-fired power plants ranges between Tk 2.0-Tk 3.5 per unit, but it costs between Tk 13 and Tk 23 per unit from the oil-fired rental plants.
However, the Power Division has initiated negotiations with a team headed by power secretary Dr Ahmad Kaikus, over the unsolicited proposals for generating power based on furnace oil and diesel. The target is to start production before the national elections, scheduled to be held towards the end of 2018.
n May, 2017, the BPDB incurred loss of Tk 554.39 crore for selling electricity at the subsidized rates largely due to costly power purchase from rental, quick rental and import of electricity from India.
From November to April, the government incurred loss of Tk 1383.99 crore while another Tk 1674.09 crore calculated loss between July and October in the last fiscal year.
Last week, Prime Minister Sheikh Hasina approved the generation of 3,000 MW of fuel-based power before the national elections. Following the PM's approval, it has been decided that diesel and furnace oil-based rental and quick rental power plants, capable of producing 1,000MW-1,500MW of power, would be set up by independent power producers (IPPs). Moreover, 500-MW furnace oil-based power plants would be set up by government-owned power generation companies.
Another 1,000-MW furnace oil-based power plant would be granted through open tenders. The BPDB will arrange everything to implement these projects.
The BPDB has already projected such additional revenue earning by evaluating the proposed power tariff, the official said.
From November to April, the government incurred losses of Tk 1383.99 crore while another Tk 1674.09 crore loss calculated between July and October in the last fiscal year.
Taking the advantage of the government's dependence on private power plants, the owners of the rental and quick rental power plants have been pushing for extending the tenure of the costly plants by 10 to 15 years.
Meanwhile, PDB has already extended the tenure of some rental and quick rental power plants.