Deciphering the Root of Load-shedding & Energy Crisis -A Al Mujahid

The current announcement regarding electricity load-shedding can be considered as an indication of future crisis in the overall economy of Bangladesh.

Coal reserves in the country are 310 million tons. The market price of which is now around 400 USD per ton. A new government was elected in 2008. The newly elected government focused on the power generation system. Now the power generation capacity has reached 25,000 MW, but as of last April, the peak demand for electricity is around 15,000 MW. This means that we still have several thousand megawatts more power generation capacity right now. However, we are getting to know in various media that the government is making an agreement to purchase more electricity from neighboring India. At such a time, the government’s announcement of electricity load shedding is causing serious concern. This declaration means import dependence of fuel for power plants. Energy crisis is forcing the government to walk the path of load shedding. Gas and oil prices in the international market have reached the highest levels in history.

An attempt to sell gas was immediately undertaken after the 2001 government came to power. Domestically, that effort was thwarted by the then opposition. After that, coal production was emphasized in the country. At that time, the political agitation in the country also intensified around the open pit coal production system. Some prominent people within the country started the movement to protect the oil and gas port, creating a strong opposition within the country. As a result, almost all those capable of extracting gas at sea turn their backs. Various organizations were formed under the name of protection of oil and gas ports. In their activities, a serious crisis was created with the production of oil and gas as well as energy.

From 2001 to 2006, the government faced strong opposition to all measures related to oil, gas, and coal production. The government of that time could not effectively take any steps to develop the energy sector.

After coming to power, the next government took rapid steps to increase the capacity of the power sector. This move gives almost open scope to the private sector to invest and recoup its dividends appropriately. From the period after 2009, strong criticism continued. The government’s spending skyrocketed as companies were allowed to generate this electricity through the massive contracts.

The contract was initially signed for three years. It was a very surprising deal, producing and delivering for three years without any company ever recouping its profits or investment. Any industry does not recover its investment unless it takes at least 10 years. In such a situation, the decision to renew it continuously after three years at first was heavily criticized.
According to the terms of the agreement, the government was mainly responsible for the supply of energy to the power generation companies. Due to those agreements of that day, crisis has been created in the country today. The country is now facing a serious crisis in power generation due to failure in energy supply. There is no indication that the crisis will be resolved in the near future. The announcement of load shedding has been forced by the government.

Continuous load shedding has been going on for the past few months. This load-shedding is done unannounced, causing industries to suffer in two ways: one, their production is disrupted; Two, unannounced load shedding in ongoing production systems has the risk of wasting all the raw materials being processed in the factory. Unannounced loadshedding is causing major disruption to production in mills.

Due to unavailability of necessary fuel for power generation, despite having 25,000 MW production capacity, 13-14,000 MW power generation capacity is not available as per the demand. The announcement of 25,000 megawatts is a bit political because in reality no generation capacity above 17,000 has ever been built.

As a result of the long-standing political division over the energy sector from 2001 to 2006, the next government undertook a master plan for the energy sector, which unfortunately intensified the crisis in turn.

At that time, the coal mining of the country was declared abandoned. Even after 310 crore tonnes of coal is stored in the five coal mines of Dinajpur, it is said that coal should be saved for the next generation. Today the market price of coal per metric ton in the international market is around $380. No new offshore gas extraction agreements have been signed to date. Because apart from the ongoing corruption cases related to the contracts, the opposition of the oil and gas port defenders to the awarding of the contract to foreign companies, relying only on BAPEX, the country is facing a deep crisis today.

On the one hand, inflation caused global commodity prices to rise, causing an economic crisis. Besides, the way the energy crisis is unfolding today, it seems that we will face more difficult realities in the coming days.

We do not have any clear direction to get rid of the current crisis in our country. On the one hand, our trade deficit is increasing rapidly due to the increase in the import prices of various products, on the other hand, if we have to spend more money on energy, it will create a deep economic crisis as a whole. To get rid of this, the government has focused on introducing rationing system in power generation.

Meanwhile, the production capacity in the main textile sector of the country has come down to 70 percent as a result of reduced gas supply. The question now is how these factories will survive in the coming days with 70 percent production even with their overall costs remaining the same.

It is clear from the current crisis that the strategy adopted by the fuel sector has created a substantial crisis. Instead of increasing energy flows themselves, import dependence has plunged the country into deep crisis today. Import dependence was accepted today it is time to assess its responsibility. If one million tons of coal is extracted in the country, it is possible to produce up to ten thousand megawatts of electricity. A matter of great sorrow and regret.

The government should now shun the path of political division and adopt a political path of compromise and create a national unity to take steps to extract the country’s coal, increase gas supply and find new gas fields.