Inefficient captives are consuming valuable gas, power plants are sitting idle. With 1 million cubic feet of gas captives generate about 4 megawatts of electricity, while combined cycle power plants are capable of generating 6 megawatts of electricity with the same amount of gas.
That is, it is possible to get one and a half times more electricity with the same amount of gas. Yet, by installing power plants, imported gas is going to captives (producing electricity with their own generators) at high prices. In the 2022-23 fiscal year, a total of 9,724 million cubic meters of gas was supplied to power plants, while 5,310 million cubic meters were supplied to captives during the same period.
There has always been a cover-up about the number of captive power plants and the demand for gas. Petrobangla's gas production report states that on November 7 (2024), 891 million cubic feet of gas was supplied to power plants, while only 102 million cubic feet were supplied to captives. That is, one-ninth.
Although Petrobangla's production report provides such a report, the annual reports of the six companies responsible for gas distribution say otherwise. The gas sales statistics of the largest distribution company, Titas Gas, in its 2022-23 fiscal year report show that the company supplied 3,285 million cubic meters of gas to power plants that year and supplied 4,330 million cubic feet to captives. The report of the distribution company in the Chattogram region, Karnaphuli, also says that more gas was supplied to captives. In the 2022-23 fiscal year, 572 million cubic meters of gas were supplied to captives and 522 million to power plants. However, Jalalabad and Bakhrabad supplied more gas to power plants. The daily average of the six companies is 26.5 million (power plants) and 14.5 million cubic meters (captives). That is, more than half of the gas was used in captives.
Bangladesh Energy Regulatory Commission sources told Barta24.com that the generation capacity of captive power plants as of June 2024 has stood at 6,085 MW. Of this, 3,460 MW is gas-based. And 2,625 MW is diesel-based. BERC says the rate of establishment of captive power plants is on the rise. 47 licenses were issued in the 2020-21 fiscal year, 125 in the 21-22 fiscal year, 159 in the 22-23 fiscal year, and the latest 310 licenses were issued in the 2023-24 fiscal year.
The Power Grid Company of Bangladesh (PGCB) report dated November 7, 2024, said that out of the 59 gas-based power plants in the country, only 9 received full gas supply on that day. 33 power plants were completely shut down, and the rest were either under regular maintenance or partially producing due to gas shortage.
Petrobangla's report says that on November 7, 891 million cubic feet of gas was supplied to power generation. On that day, the demand for gas was 2,490 million cubic feet. There is a fear that this gas crisis will become more serious. Gas is available from domestic fields at a price of 1 taka per cubic meter. It costs about 71 taka to import the same amount of gas. When the price is high and there is no infrastructure, there is no opportunity to increase imports within 2 years.
To deal with this gas crisis, if the captive (3460 MW) gas is supplied to the power plant, there is an opportunity to get about 1600 MW more electricity.
On the captive issue, the industrial owners say that they are not getting uninterrupted power, so they have to invest extra and install captives. This is harming them. Even if there is load shedding for a few seconds, a huge amount of raw materials are wasted. If there is uninterrupted power, no one will go to captives. The Bangladesh Power Development Board (BPDB) says that the businessmen are telling only part of the truth. In 2012, the Q class was introduced with a guarantee of uninterrupted power. They were supposed to be provided with uninterrupted power through a special line. But due to the high price, not a single entrepreneur applied.
A letter from PDB submitted to BERC said that the distribution company is neglecting the efficient combined cycle power plants while supplying gas to captive power. On the other hand, the companies get a higher price by providing gas to captives, so they are more interested in providing it to captives instead of government power plants.
When more than half of the power plants are shut down due to lack of gas, the approval of captive power plants remains a surprise. There is an obligation to obtain prior permission from the Power Division to provide captive gas connections of more than 10 MW. To avoid that obligation, NR Group located in Jamirdia, Bhaluka Upazila, was given 24.92 MW captive with three different consumer codes during the previous government. In this way, many people got connections outside the rules.
The role of Titas Gas Transmission and Distribution Company (TGTDCL) and Karnaphuli Gas Distribution Company Limited (KGDCL) in the case of captive connections is more critical. Despite strict restrictions, the two companies have provided gas connections to hundreds of captives. Sometimes with the approval of the board, sometimes without the approval of the board. For a long time, the senior secretaries of the Energy and Mineral Resources Division were the board chairmen of the two companies. That is why others did not dare to speak out.
In addition to the wastage of gas in captives, the BPDB is facing a growing deficit due to the idle power plants. Whether the power plants are running or not, the capacity charge is about Tk. 1800 crore per month. As the production capacity increases, the amount of capacity charge will increase accordingly. Those concerned believe that this may lead to a crisis in the power sector.
BPDB plans to increase its gas supply by 40 percent by 2030. The government has set a target of generating 60,000 megawatts of electricity in 2040. Now that 100% electrification has been achieved, the only way to increase electricity consumption is industry. Industrialization is happening, but in reality there is no change in electricity demand. There has been concern for a long time that electricity consumption in industry is not as expected. The main reason for this is the mass installation of captives. If this is not stopped, many are afraid of all kinds of dangers. Shafiqul Alam, lead analyst at the Institute for Energy Economic Financial Analysis, told Barta24.com that combined cycle power plants are more energy efficient than captives. It is possible to generate additional electricity with the same amount of gas. Not only captives, gas are being used in boilers in many cases. Electric boilers are much more energy efficient. A plan should be taken to gradually exit captives.