Energy Woe Deepens

Power cut invokes old memories
As oil price brings miseries.
Energy deal may not be sound
For few boots on the ground
As bad times may raise worries.

Dhaka has nowadays become city of frequent power cut. In my neighborhood, power cut at measured intervals sometimes lasts more than 2 hours. The situation is worse outside Dhaka,where power cut lasts more than 7 hours. This is the fallout of high oil price, stemming from the ongoing war in Ukraine. In addition, strong dollar complicated the problem by raising the import cost.Currently Bangladesh produces 12500 megawatts of electricity daily against the demand of 14500 megawatts. (Source: Daily Prothom Alo,Jalani Sonkot Berechhey,Sorboccho Load shedding(Energy Crisis Deepens,Power Cut Becomes Awful ),Mohiuddin Ahmed,P-1,October 11,2022).

Industrial production slowed down due to frequent power cuts.As fertilizer production gets top priority, LNG and subsidies go to produce food and fertilizer. Higher fuel cost also makes private power producers to slash their production.

LNG being the cheapest source of fuel has also been touched by the rising fuel price.Luckily, the price has come down to a tolerable level in international market,yet 57 powerplants have yet to see their production in full swing. Before the election of 2018,government inked deal with Qatar and Oman for long-term LNG supply. Being a substitute for oil ,LNG also witnessed unusual hike in its price following the volatile oil market. As more countries include LNG in their energy menu,LNG price shoots up. Qatar turned down Bangladesh’s urgent request of sending extra LNG. Instead the country stressed that it would consider such request after 2025.So our energy deals is not securing our energy needs.

Russia on the other hand has made it clear that it wants the repayment of Rooppur Nuclear Powerplant in ruble. It would further raise the cost of repayment as the payment has to be converted into several currencies(first yuan then to ruble). It is still undecided who will bear the extra charge for this multiple conversion.However, Russia is determined to complete the powerplant in time. When it will come into operation, it will tremendously help the irrigation system of Bangladesh. Currently, 4.215 million[*] hectares of land are irrigated by shallow and low-lift pumps(Source:BER 2019). These pumps intensively consume diesel. If we somehow manage to run the pumps with the electricity from nuclear power then we will save lots of money. This year alone,FY 2022-23,govt allotted Tk 83000 crores of subsidy,a large part of which will be spent on diesel and fertilizer subsidy. Previous year,govt spent TK 56000 crores on diesel and gas subsidy.

Significant part of our gas goes to electricity generation(40.80%). And the gas-run powerplants account for more than 55% of electricity. Continuous supply of gas could boost our electricity production and give our industry a competitive edge as gas is cheaper than diesel and furnace oil.

Our energy and food security should reflect our own interest. It should not be based on other’s whims or unreasonable demands. In the past,we witnessed how our energy deals flawed us in times of need. It is not wise to compromise our energy security by committing to send few boots on the ground and to comply demands of a tiny section of our society. Any energy deal should be based on pure economic terms and advantage our economy gains from such deal.Sweat and blood in exchange for few petrol dollars in a war that our people do not want is the least desirable thing in light of national interest. And such interest is well protected in the hands of the representatives who have people’s mandate to say the last words. Let the Parliament be the place to finalize such policies instead of closed door under-the-table deals that only doom the people and the country.

[Note: *This piece has been updated on October 21,2022 at 9:40 am Bangladesh Standard Time(BST)."42.15 hectares" is substituted with "4.215 million hectares".]