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Dhaka Sunday,  Feb 28, 2021

Electricity prices to drop for industries!

Rafiqul Bashar

The price of electricity for industries is to be dropped. However, those who will opt for the low price power won’t get any gas for their captive power plants.

The government is taking such initiatives to utilize more power in the industrial sector and at the same time discourage consuming natural gas in the captive power plants of the industries.

A committee from the Power Division of the Ministry of Power, Energy, and Mineral Resources (MPEMR) has recently made some recommendations including this price cut policy of electricity for the industrial sector.

Sources from Power Division informed that the committee has recommended an average reduction of TK 0.67 per unit of electricity for the industrial sector. The committee also recommended ensuring an uninterrupted power supply by installing a separate network of transmission and distribution lines if needed.

The committee recommended lowering the price of 230 kV power to TK 7.23 per unit from the current price of TK 8.36 per unit. Also, the committee suggested lowering 132 kV power prices to TK 7.28 from the current price of TK 8.36, 33 kV power price to TK 7.38 which is currently TK 8.41 and 11 kV power price to TK 7.48 from the current price of TK 8.40.

Proposed Price:

Voltage     Proposed Price   Current Price

                                              (Tk/unit)

230 kV              7.23               8.36

132 kV              7.28              8.36

33 kV               7.38              8.41

11 kV                7.48              8.40

The committee claimed that the consumption of gas in industries will go down if the price of electricity is lowered for the industries. Thus, the power price cut will enable the government to allocate 10 crore cubic feet of more natural gas to the power generation sector in the fiscal year of 2020-21. The abundance of gas created by the lowering of power price will also lower the electricity generation cost, claimed the related sources.

The committee also claimed that to attract industrial customers, the price of power should be lessened as well as uninterrupted and quality electricity should be provided. To provide quality power to the industries, the transmission, and distribution companies should differentiate the power lines. To materialize the idea within the next 20 months, the concerned authority needs to take a specific action plan at the moment and a project should be initiated in this regard on an urgent basis, says the committee.

* Industries won’t get gas for captive plants if they opt for low-priced power

* Recommendation on lowering the price by Tk 0.67 on avg.

* Separate Transmission & Distribution lines for the industrial sector

* Investment on captive power plants means a waste of money

It needs to be ensured that the Industrial customers, who will take this proposed low-cost electricity from the grid will not get gas for their captive power plants. Both the Power Division and the Energy Division of the MPEMR should work in a coordinated manner to ensure- no more gas providing in the captive power plants in the future.

According to the committee, the installed power plants may remain idle, if the government continues to supply gas to captive power plants. On the other hand, the cost of setting up captive power plants is huge, which is a financial burden for the industry owners. Therefore, continuing investment in captive power plants means investing in the same sector twice, which can be considered as a waste of investment.

According to the data on electricity consumption provided by the Power Division, in the last 10 years, the percentage of electricity consumption in the industrial and the agricultural sector has declined compared to the other conventional sectors. In 2010, around 37 percent of the total electricity was utilized in the industrial sector, and in 2019, the usage dropped to 29.54 percent. Though the industry sector has seemingly lowered the utilization of electricity comparing to the other conventional sectors in the last 10 years, the overall consumption was actually increased in the same timespan. The commercial sector utilized 9 percent of the total power back in 2010 which became 12.11 percent in 2019. Residential customers consumed 48 percent of power in 2010 and in 2019 it became 53.31 percent. The agricultural sector utilized 5 percent of the total electricity in 2010 which became 2.18 percent in 2019.

Energy and Power experts say that the country’s power generation capacity has increased by a margin in the last decade while the percentage of comparative consumption in the industrial sector and the agricultural sector have decreased. However, if proper initiatives were taken at the right time, industrial production could be increased and economic development would take place.

Bangladesh Energy and Power Research Council (EPRC) sources informed that the Power Division is not only working on increasing power utilization in the industrial sector but it’s also taking initiatives to enhance the overall demand for power across different sectors. In the running year, the top demand for power was recorded as 14,757 MW and the demand is expected to reach 16,823 MW in the upcoming year. In 2025, the demand would reach 25,952 MW and it would reach 37,024 MW within 2030, claimed the sources.

Tawfiq-e-Elahi Chowdhury, the energy advisor to the prime minister said that the government is now working intending to provide uninterrupted and quality electricity. The next major step would be to involve customers and private stakeholders. Strategies are to be defined to ensure uninterrupted and quality power supply. This plan will be implemented as a pilot project in the Gazipur area after collecting relevant data from that region. EPRC is already collecting data in this regard, he added.

Power Division has marked some 65 industrial hubs or zones having a load capacity of 200 KW or above across the country. These industrial hubs have a collective power demand of 2,820 MW. Of these, 32 industrial hubs scattered around the capital city Dhaka have a combined demand of 1,289 MW.

 

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