Tk 16,785cr paid in 9 months: Capacity charge for power

Tk 16,785cr paid in 9 months: Capacity charge for power

National Desk :    |    ০৬:৪৭ পিএম, ২০২২-০৭-২০

News desk :  The government paid Tk 16,785 crore in capacity charges to power plants in the first nine months of the last fiscal year for 22,118MW daily power generation capacity.

But the government had not been able to use more than 14,000MW a day during that period as the country's electricity demand was not higher than this. 

As per the government's agreement with power plants, the government has to pay "capacity charges" based on the plant's capacity and establishment costs, regardless of whether the power is bought or produced.

The current demand for electricity ranges between 14,000MW and 14,500MW, but the government is producing 12,000-13,000MW, leading to ongoing power outages.

The government continues to pay for that unutilised power when austerity has been prescribed across all spheres to cope with rising inflation at home and abroad.

The Bangladesh Power Development Board (BPDB), the country's sole electricity buyer, paid Tk 18,977 crore to 101 power plants in 2020-21 and Tk 18,123 crore to 102 plants in 2019-20.

The BPDB submitted this data to the parliamentary standing committee on power, energy and mineral resources ministry in a meeting yesterday.

he Daily Star obtained a copy of the submitted papers.

On Monday, the government shut down all diesel-fired power plants due to depleting fuel stocks, meaning 1,000-1,500MW remains unutilised daily but payment for the capacity continues.

The same day, the government also announced up to two hours of load shedding across the country.

Experts have suggested renegotiating capacity payments with power plant owners as the government is now struggling to cope with the decreasing forex reserves and capacity charges have to be paid in dollars.

In a report in February, the Institute for Energy Economics and Financial Analysis (IEEFA) said the government paid Tk 8,929 crore in "capacity payments" in 2019-20 and Tk 13,200 crore in 2020-21.

But these numbers were dwarfed by those provided by the BPDB in the meeting with the standing committee yesterday.

The subsidy package for the power sector was Tk 7,400 crore in the 2019-20 budget, Tk 8,900 crore in the 2020-21 budget and Tk 12,000 crore in the 2021-22 budget, but the capacity payments alone are greater.

NB: It's not our own news. collected from Internet :