Bangladesh increases its power purchase from India and reduces its fuel oil consumption as the demand for electricity rises
Industry officials and analysts report that Bangladesh is increasing power imports from India as well as the output of fuel oil-fired plants to try and meet its rising electricity demand. The country faces a shortage of gas and maintenance costs for coal power plants.
Government data revealed that power imports from eastern India's Adani Power coal-fired plants rose by 70% during the seven-month period ending in July, and they helped to meet most of the growing demand.
The country's electricity demand was largely met by natural gas in the decade ending in 2020. However, due to the lack of gas infrastructure and the need to reduce costs, the country increased its power imports as well as local coal-fired production.
Adeeba Khan, Director of Summit Power in Bangladesh, said: "It is about cost-effectiveness. Gas is needed for the fertilisers industry. However, cheap electricity can come from other sources such as fuel oil."
Her company runs 12 power plants that run on gas and fuel oil.
Khan, speaking on the sidelines at the APPEC Conference, said that there was a shortage in gas for electricity production and problems with evacuation. He added that it would be difficult to see a resurgence of gas-fired power generation in the "near future".
The Bangladesh Power Development Board's (BPDB) senior official said that many gas-fired plant were not operating at full capacity due to technical problems related to pressure, and coal-fired output was lower because of maintenance outages.
The government had few options. "To avoid blackouts they turned to Adani's energy, which was available in large volumes," said the official who requested anonymity because he wasn't authorised to comment on the issue.
BPDB has not responded to requests for comment.
Data from the government showed that imports increased to 15.4% in the first seven month of this year from 9.5%, and fuel oil-fired electricity rose to 12.6% annually from 11.9%.
When power demand began to rise since March, the Institute for Energy Economics and Financial Analysis in Bangladesh had to increase fuel oil-based electricity generation and imports.
The share of coal-fired power in the domestic output has fallen from 30.1% to 26.2%.
Kpler data showed that the South Asian country increased its LNG imports by 24% during the seven-month period ending in July. According to data from the government, however, gas-fired electricity generation has decreased by 1.2%. (Reporting from Sudarshan Varadhan in Singapore, and Ruma Paul Bangladesh; Additional reporting provided by Lucas Liew. Editing provided by Clarence Fernandez.
(source: Reuters)