LNG injection offsets Tk 859cr PDB loss

The injection of liquefied natural gas (LNG) into the country’s energy mix has offset the loss incurred by the Bangladesh Power Development Board (PDB) significantly. According to the financial statement of the PDB, the organisation incurred a loss of Tk. 7,046 crore in financial year (FY) 2018–19. This was Tk. 859 crore lower than the loss incurred only a year ago i.e., in FY 2017–18, when Tk. 7,905 crore loss was recorded.

Experts said the loss in 2018–19 could have been lower if bulk shares of electricity had not been supplied to the Rural Electrification Board (REB). PDB General Manager (Commercial) Kawsar Amir Ali told The Independent that Tk. 4.80 was assumed to be the bulk price per unit of electricity when the projection was done for FY 2018–19.

“But we sold electricity at Tk. 4.77 per unit, which means we received three paisa less per unit of electricity. Because of this, the offsetting in our overall loss could not be more despite the injection of LNG into our energy mix,” Ali said. He added that about 50 per cent of the electricity is used by the REB, which pays the lowest price of Tk. 5.80 per unit.

“However, since the government’s vision is to supply electricity to every household across the country, the amount of electricity given to the REB will increase in the coming years. This means the price offset through the LNG injection cannot be increased,” Ali said.

During FY 2018-19, sales to the PDB’s own consumers as well as to the Dhaka Power Distribution Company (DPDC), Dhaka Electric Supply Company (DESCO), West Zone Power Development Company Limited (WZPDCL), and the REB stood at Tk. 7,332.97 crore, Tk. 5,593.58 crore, Tk. 3,399.83 crore, Tk. 1,689.11 crore, and Tk. 13,279.93 crore respectively.

According to Ali, the institution received an average supply of 1,300 mmcf of LNG during the last financial year in the power plants dedicated to producing electricity. He said the bulk price per unit of electricity has to be increased to Tk. 5.88. The PDB also needs to increase the electricity distribution cost to Tk. 1.05 per kilowatt, which is 23 per cent higher than the current rate.

According to the PDB data, there was a 7.26 per cent system loss in 2018–19 as the organisation sold 10,572 million units against 11,400 million units purchased from the power plants. But it has been projected that around 12,992 million units of electricity will be distributed in the region in 2020. To distribute this electricity, the PDB needs to increase its charges.

Justifying the price hike proposal, Ali said that a hike in the price of liquid fuel in the international market, devaluation of the local currency, and the recent increase in the price of gas would increase the PDB’s deficit.

A PDB factsheet, however, revealed that the present cost of per unit electricity production is Tk. 5.64 on an average, which previously was Tk. 6.16.

Ali thinks that the PDB’s decision to stop production at the high-cost fuel-based power plants has played a great role in cutting costs.

IK

 

LNG injection offsets Tk 859cr PDB loss

The injection of liquefied natural gas (LNG) into the countrys energy mix has offset the loss incurred by the Bangladesh Power Development Board (PDB) significantly. According to the financial statement of the PDB, the organisation incurred a loss of Tk. 7,046 crore in financial year (FY) 201819. This was Tk. 859 crore lower than the loss incurred only a year ago i.e., in FY 201718, when Tk. 7,905 crore loss was recorded. Experts said the loss in 201819 could have been lower if bulk shares of electricity had not been supplied to the Rural Electrification Board (REB). PDB General Manager (Commercial) Kawsar Amir Ali told The Independent that Tk. 4.80 was assumed to be the bulk price per unit of electricity when the projection was done for FY 201819. But we sold electricity at Tk. 4.77 per unit, which means we received three paisa less per unit of electricity. Because of this, the offsetting in our overall loss could not be more despite the injection of LNG into our energy mix, Ali said. He added that about 50 per cent of the electricity is used by the REB, which pays the lowest price of Tk. 5.80 per unit. However, since the governments vision is to supply electricity to every household across the country, the amount of electricity given to the REB will increase in the coming years. This means the price offset through the LNG injection cannot be increased, Ali said. During FY 2018-19, sales to the PDBs own consumers as well as to the Dhaka Power Distribution Company (DPDC), Dhaka Electric Supply Company (DESCO), West Zone Power Development Company Limited (WZPDCL), and the REB stood at Tk. 7,332.97 crore, Tk. 5,593.58 crore, Tk. 3,399.83 crore, Tk. 1,689.11 crore, and Tk. 13,279.93 crore respectively. According to Ali, the institution received an average supply of 1,300 mmcf of LNG during the last financial year in the power plants dedicated to producing electricity. He said the bulk price per unit of electricity has to be increased to Tk. 5.88. The PDB also needs to increase the electricity distribution cost to Tk. 1.05 per kilowatt, which is 23 per cent higher than the current rate. According to the PDB data, there was a 7.26 per cent system loss in 201819 as the organisation sold 10,572 million units against 11,400 million units purchased from the power plants. But it has been projected that around 12,992 million units of electricity will be distributed in the region in 2020. To distribute this electricity, the PDB needs to increase its charges. Justifying the price hike proposal, Ali said that a hike in the price of liquid fuel in the international market, devaluation of the local currency, and the recent increase in the price of gas would increase the PDBs deficit. A PDB factsheet, however, revealed that the present cost of per unit electricity production is Tk. 5.64 on an average, which previously was Tk. 6.16. Ali thinks that the PDBs decision to stop production at the high-cost fuel-based power plants has played a great role in cutting costs. IK