Power crunch: its impact on life and economy


FE Team | Published: July 20, 2022 20:28:57 | Updated: July 22, 2022 20:42:14


Power crunch: its impact on life and economy

The government finally had to go for rationing of electricity along with a series of other stringent measures to save fuel and foreign exchange. It is too early to say what impact it will have on people's life and the economy. So far as the prevailing electricity crunch in the country is concerned, there are two sides to the coin. One obviously is the sudden disruption of energy supply on account of the Russia-Ukraine war and the continuously rising prices of fuel oils due to increasing demand for those right from the post-pandemic ease of industrial production and economic activities. The other one is a lack of advanced plan for lessening overdependence on imported fossil fuels. So both arguments that Bangladesh is not alone to face the power crisis and that the age-old advice 'a stitch in time saves nine' was ignored and this has proved costlier than it would have been are tenable. It depends on from which angle one looks at the issue. But the fact is that the energy crisis can nullify much of the gains the country has achieved over the past two decades and even veer it off the course of Sustainable Development Goals.

In fact, consumption of electricity or energy decides the pace of a country's progress. This country had the bitter experience of severe power crisis and the incumbent government promptly made arrangement for production of electricity. It made good on its promise by even attaining the capacity for production of surplus power. But when the stopgap measures continued well beyond their desirable schedules, those only started bleeding the exchequer. The rental and quick rental power plants had to be paid and supplied with subsidised diesel and furnace oil whether the government purchased power from them or not. Had there been an equally prompt initiative to build a large power plant within a reasonable time, the waste of money could be avoided making the power sector financially sound.

In that case the authorities could not but enter into a long-term agreement with exporters of fossil fuels for supply of those. Even when the prices of fuel oils were record low, there was a chance of raising the stock or making advanced agreement. In case of thermal power plant, the locally produced coal could be used. Although, such power plants were falling out of favour in the post-Paris climate agreement, there is clear indication that desperation on the part of some countries at a disadvantage may lead them to revert to those plants if the war in Ukraine lingers further.

The best option, however, was to save the unnecessary expenditure on those idle rental plants and redirect the funds to construction of renewable energy plants. Solar and nuclear power, although still costlier, are likely to become cheaper if those are meant for mass production and over a longer period. Hydro and wind power are cheaper but these energy sources have largely remained unexplored here for reasons best known to the policymakers. This country is guilty of misusing its natural gas and wrong selection of companies was responsible for fires in at least two gas fields in Sylhet. Lessons should be learnt from those incidents and offshore exploration of gas and hydrocarbon should be expedited keeping an eye on the country's future need.              

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