The Power Division fears a huge financial loss in 10 months in generation, transmission and distribution due to the impact of the coronavirus pandemic.
It is predicted the pandemic will lead to a Tk 35,407 crore financial damage to the power sector.
Nasrul Hamid, State Minister for Power, Energy and Mineral Resources, had asked the Power Cell to make an assessment of the corona effect on the sector recently. After his directive, Power Cell, a research and policy promoting unit of the ministry, came up with the estimate.
When contacted, Power Cell Director General Mohammad Hossain told Bangladesh Post, “initially we assess the power sector will face around taka 35,000 crore financial damage from March to December of this year.
However, it may change according to the situation that follows. The projection of losses will be submitted to the Prime Minister seeking financial assistance to recover the damage.”
An official said, of the total monetary losses, Tk 5,598 crore is estimated on the power generation side, Tk3,322 crore in transmission, and Tk17, 666 crore at the distribution level. At the same time, it would have to incur a TK 8,821 crore as tariff loss.
During this time of the previous year, the daily electricity consumption in the country was between 12,000 megawatts and 12,500 megawatts. The BPDB had projected that the demand would cross 14,000 megawatts this year.
However, the demand for electricity has reportedly dropped to 8,500-9,000 megawatts which is around 35 percent lower than the projection amid the nationwide coronavirus shutdown.
Due to the virus outbreak, the government has not been able to sell around 4,000 MW of electricity every day since the lockdown.
This shutdown and low demand have caused the BPDB to incur huge losses because it has no respite from paying the private power plant owners.
It also fears that if the situation further worsens, the current gap between demand and supply may rise further, leading to an increase in surplus in electricity generation and may push to stop more power generation plants.
"No matter what the situation is, we have to pay the capacity charge to the entrepreneurs while they could stop generation showing the "emergency situation clause" of the IPP contract. But, we have to make the capacity payments," the Power Cell official said.
Earlier, the Power Division estimated that it had already incurred a huge financial loss of over Tk 6,000 crore a year, due to surplus electricity generation.
The distribution companies cannot collect 65-70 percent of the electricity bills for March as the customers had to stay indoors due to social distancing restrictions and could not pay their bills on time.
They are also going to lose a large amount of money as the government has directed them not to impose any late fees on residential electricity bills for the February-April period.
Due to the financial crisis, these companies have failed to deposit the bulk electricity purchase bill to the BPDB.
“On the other hand, most of the power projects will be delayed due to coronavirus. There is a link between the delay in construction and the increase in project costs. Therefore, attention is being paid to how the development work can be done keeping the project cost as high as possible,” an official said.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid, in a recent teleconference with officials in the sector directed that important projects would have to be identified and rescheduled if necessary. He said the project needs to be completed to offset the losses and keep costs under control.
The junior minister said, "We have to keep an eye on the completion of all the works within the stipulated time. Therefore, it is necessary to make a list by deciding which projects need to be implemented now.”
According to the concerned sources, initiatives have been taken to implement 104 projects in the power sector and 32 in the energy sector. All the projects were running. But most of the work is now closed due to the outbreak of the coronavirus.
PGCB managing director Golam Kibria told Bangladesh Post, "Most of the projects are closed now. Work is going on in a very short range in some places. The government now wants to support us to start work. But the problem is that most of our contractors are foreigners. They have gone back to their countries. Those who are here also do not want to start work out of fear.”
'At the moment some work is going on in Baghabari and Khulna regions. But the speed of work that was in March, has stopped. We are trying to motivate the contractors and stakeholders. . We told them, we will ensure all types of support. We are thinking about how to get work done faster by following the hygiene rules,’ he added.
Currently, Bangladesh has a capacity to generate 19,633 megawatts (excluding captive power) of electricity from 136 plants. More than 50 percent of this comes from IPPs and rental plants.