Load shedding from Tuesday, shopping malls to close at 8pm
Power sources believe that the constraints would last for the next four months until winter relieves some pressure on electricity demand
One-hour load shedding, halting electricity production at all diesel-run power plants and closing shops and markets by 8pm daily are set to become the new realities of Bangladesh.
These come as part of the government's austerity measures, hinted at earlier, in order to reduce foreign currency spending by limiting energy consumption.
As part of the measures, there will be load shedding for the next one week, which may rise, in every area across the country, shops and markets will remain closed and diesel-run plants – which provide some 2.79% of the country's electricity – will stay shut till further notice.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid made the announcement at a briefing at the Secretariat on Monday afternoon, saying, "After a week of observation, the amount of load shedding may be increased or decreased from the next week. Shutting down diesel-run power plants and keeping petrol pumps closed for a day every week will reduce fuel import by 20%."
Keep updated, follow The Business Standard's Google news channel
As part of the measures, places of worship have also been asked to turn off their air-conditioners when it is not prayer time.
Authorities, however, could not specify when the country will overcome the crisis.
Power sources believe that the constraints would last for the next four months until winter relieves some pressure on electricity demand.
Along with the general consumers, the government measures of daily load shedding and power plant shut-downs will deal a massive blow to industries, especially private power producers, textile and apparel sectors and fuel retailers.
Imran Karim, president of the Bangladesh Independent Power Producers' Association (BIPPA), told The Business Standard that diesel power plants' shutdown is going to hit their business operations but there were no alternatives to accepting the present situation.
"We are having a tough time following the devaluation of Taka against the dollar and the fuel price hike in the world market. However, this time we are not thinking of business and profit, rather we are thinking of the state's interest," he said.
He said there was no alternative to hiking electricity and fuel prices as many countries have done so. But Bangladesh is not going in that direction, so it decided to reduce consumption to save energy.
Mohammad Nazrul Haque, president of the Petrol Pump Owners Association, told the media that they will follow whatever decision comes from the government.
Earlier, following a meeting at the Prime Minister's Office, Energy Adviser to Prime Minister Sheikh Hasina Tawfiq-e-Elahi Chowdhury and State Minister for the Ministry of Power, Energy, and Mineral Resources Nasrul Hamid said diesel-run power plants production suspension will create a shortage of 1,000-1,500MW of electricity.
Tawfiq-e-Elahi Chowdhury said, "The moves come aiming to reduce the government's expenditure on power generation. Plants using diesel to produce electricity will suspend operations from today [18 July].
"This will create a shortage of 1,000-1,500MW of electricity. Area-wise load-shedding will be in place for 1-2 hours every day."
Comparing the current crisis with a "war-like situation", he said, "Shops will have to close down at 8pm.
"Stern action will be taken against those defying these directives. Besides, mosques and other religious places have been asked not to use air conditioners except for during prayer times. Government office hours will be shortened and meetings will be held online."
Echoing the same, Nasrul Hamid, said, "Customers will be notified in advance about the load shedding schedule. Steps will be taken so that vehicles use less fuel."
At present, the fuel cost of per unit diesel-run electricity is around Tk30 while the furnace oil-fired electricity costs Tk16 and gas-run electricity costs Tk1.5 to Tk2.
Nasrul Hamid said, "Diesel consumption reduction will be a large amount of foreign currency which would be a big matter."
He also said the government has asked to close shops and markets at 8pm daily as part of its measures to save electricity amid the global fuel crisis.
"The power division in association of law-enforcing agencies will monitor the issue and punitive actions will be taken if anyone keeps their shops open after that time," he said.
"These measures, forced by the Russia-Ukraine War, are not long-term. We have to be cost-effective. Industries and businesses are priorities when it comes to electricity supply."
Dhaka, along with the rest of the country, is now bracing for more frequent power cuts. Power generation has decreased by an average of 2,000MW per day.
The situation is even bleaker outside the capital.
The most affected districts are in Mymensingh division, while load shedding has also increased in Chattogram, Sylhet, Rangpur, Thakurgaon, Rajshahi, Gaibandha, Lalmonirhat and Dinajpur, Habiganj, Moulvibazar, Sunamganj, Noakhali, Feni and Chandpur.
Bangladesh Power Development Board (BPDB), Chattogram Southern Region said it will release a detailed schedule regarding load shedding in Chattogram and surrounding areas on Tuesday.
Rezaul Karim, chief engineer of BPDB Chattogram southern region, said, "We started working on making a load shedding schedule immediately after receiving the government instructions. However, we hope to finish the detailed load shedding schedule by Tuesday afternoon."
Power disruptions are not rare in countries around the world that have all been hit by the gas crisis following the Russia-Ukraine war. Most are turning to proper load management.
Energy experts said a proper and planned load management of the current energy supply could lessen the suffering of the people.
Proper load management is the only way to deal with the current gas and power supply cuts as no other visible initiatives are being taken.
Gas prices in Europe and Asia surged more than 60% in the weeks since an important liquified natural gas facility in Texas temporarily shut down. Gas prices have soared since the start of last year, jumping as high as 700% in Europe.
Germany said the gas shortfalls could trigger a Lehman Brothers-like collapse, as Europe's economic powerhouse faces the unprecedented prospect of businesses and consumers running out of power, Bloomberg reported.
The main Nord Stream pipeline that carries Russian gas to Germany is due to shut down on 11 July for ten days of maintenance, and there is a growing fear that Moscow may not reopen it.
According to the data provided by the Bangladesh Power Development Board (BPDB), about 51.49% of the country's electricity comes from gas, while 18.90% comes from furnace oil, 14.98% from coal, 0.56% from hydro sources, 0.37% from renewables, and 10% is imported.
Officials at Petrobangla said that the only remedy is meeting demand when fuel price falls in the global market.
At present, the country imports around 91% to 92% of its fuel demand while the rest is sourced from local gas fields in the form of condensate, a bio-product of gas.
The BPC says it has to open 16 to 17 LCs worth around $560-696million each month to import refined and crude oil.
In the 2020-2021 fiscal year, diesel-run power plants consumed around 1.43lakh tonnes of fuel while the total diesel usage in the country was 45.97 lakh tonnes.
How the world is coping with energy crisis
The European Union energy ministers will sit in an emergency meeting later this month to work out ways to keep utility services working and help Europeans keep their houses warm and illuminated in the next winter just months away.
Energy worries mount there amid fears of complete shutdown of Russian gas supply and colder-than-usual winter given the extreme climate behaviours being experienced in many countries.
Forward electricity contract price in Germany surged 750% to $352 per megawatt hour and taxpayers are to bear the cost either in hiked rate or higher taxes to be adjusted later. Electricity and gas companies in Germany, France and the UK are asking for government's cash help and loan guarantees to run their business.
The energy crisis may cost Europe $200 billion or more, estimates a Bloomberg opinion piece that urged the EU to decide on a big energy savings programme, including a public campaign to support it. It also requested European nations to share whatever little amount of gas that will be available.
However, China appears well-prepared to avert the last-year-like power crisis that forced many factories to shut and households suffered severe blackouts.
Strict "zero-Covid" policy measures have slowed Chinese growth to 0.4% in the second quarter this year compared to last year. So China is serious about its energy supply as this year the country witnessed record high temperatures with heat alerts in major cities.
It has built up a good stock of coal, oil and gas with increased purchases mainly from Russia and then from Iran defying western sanctions on those countries to stay safe from global energy market turmoil.
China gets 60% of its electricity from coal, whose prices soared to record high. But the country has eased domestic mining restrictions and is considering withdrawal of Australian coal ban apart from hugely buying Russian coal, according to Bloomberg.
China imports 75% of its oil and 40% of gas. Despite high dependence on imports, it is benefiting from discounts on Russian oil and long-term contracts that kept gas prices lower. Domestic prices of petrol, diesel and electricity have been capped to protect consumers from the energy price shocks.
The Economist quoted Chinese top planning authority asking power companies to keep at 15 days' of coal in stock.
