Bracing for another difficult summer

Bracing for another difficult summer

With the end of winter and a steady rise in temperature, the demand for electricity has started increasing just before the onset of summer. The demand primarily goes up due to the extensive use of electrical fans and airconditioners. The higher demand for electricity remains in the months between March and September. The peak demand during this summer is projected to be around 16,500 megawatts (MW) as against the country's total installed power generation capacity of around 22,700MW.

However, the country had a bitter experience in the second half of last year when consumers across the board witnessed severe load-shedding due to a substantial cut in power generation. The government had to suspend power generation in some plants due to the shortage of energy, mainly gas and fuel oils. It had been meeting the energy demand more or less up to the satisfaction of the consumers until the first half of last year by importing primary energy. But the import dependence proved not to be sustainable as the international energy market started getting volatile due to the war in Ukraine. Economic activities across the world got momentum following the Covid-19 pandemic, already pushing up the demand for energy and their prices to some extent.

Bangladesh has been able to absorb the shock until then, but the situation went beyond its control when the prices started hitting record highs due to the prolonged war. The rising import expenditure put pressure on the budget by way of ballooning subsidies, followed by the suspension of importing liquefied natural gas (LNG) from the highly-priced spot market as well as generation in some plants and rationing supplies. The fast depletion of foreign exchange reserves added fuel to the fire, deepening the crisis. The government, however, passed the price pressure to an extent on to the consumers by raising the energy prices on a few occasions.

The power subscribers did not experience frequent load-shedding during the immediate past winter season. The power utilities had been able to maintain a balance between demand and supply, facing not many complaints about power cuts. In addition to lower winter demand, power supply from the Payra coal-based power plant at full capacity contributed a lot.

However, it cannot be said if the upcoming summer demand could be served with the new plants, including the one at Rampal, coming online and resuming LNG imports from the spot market. There is every possibility that the ongoing US dollar crisis would hold back the authorities concerned to spend less on energy imports. They would be compelled to limit imports, which may result in a power generation that would fall short of demand. Although the import prices of energy presently remain almost stable at their high levels, there is every possibility of further hikes as the Ukraine war is prolonged. Latest projections by different international research bodies offer no hope that the prices would fall soon. The cash-strapped private power producers would not be able to contribute much unless they get their due bills released.

Thus, the utilities would have to struggle especially when they will have to meet the occasional rise in the demand for power during the upcoming irrigation season and the holy month of Ramadan. Taking all the downsides  into account, it is highly unlikely that the demand for power during the upcoming summer could be met. In the best-case scenario, according to experts, 13,500-14,000MW of electricity would be possible to supply during this season against the demand for around 16,500MW. The authorities would have hardly any option to make up for the gap during this short period. All the plans they have are mid-to long-term ones. However, an aggressive campaign to develop a switching-off habit may greatly help save electricity.

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