Power generation cost soaring on rise in international fuel prices Craving for costly oil-fired plan

[Nilgiri]

@idune @Nilgiri Recent price hikes are in part according to govt's shift from subsidy based pricing policies to market based ones. Remember I told before, govt's vision is to open up the energy market to open market system in the long run. And regarding big power projects delays; Well, the reality is before us to see for ourselves. We started from "zero". We have huge deficiencies in both bureaucratic and public administration (India was there once!). On paper things may look easy & straight forward, but the reality is completely different. Land acquisition hurdles, bureaucratic issues, corruption, funding issues, technical capability issues and so on (India was there too!). Beauty of AL govt is that they got realistic plans, vision & also quite good approach to it. Very recently Sheikh Hasina told that we all going to get smart grid system where people could add unused electricity from their home solar (online solar system) to the local grid. Just remember, as a LDC & a country started at "0" not so long ago, we have thousands of issues everywhere. We should learn to take PRIDE in what we have achieved so far.

Is there targetted subsidy now at least? I mean market price is going to push out the base consumption BD needs to improve socioeconomically given its driven by those that already are well off. Full subsidy is bad, but there exists market failure too (so need to target that specifically with say ID card and business regulations regarding SME)....there needs to be the right nuance for pricing of this basic good (electricity).

The multiplier effect from basic electricity and energy access in India for example using Aadhar+bank account (for targetted direct subsidy, known as DBT) is helping those that need it without badly breaking the national piggy bank (i.e general subsidy that goes to the biggest users who are rich already) like it used to.

 

[mb444]

Wrong and Wrong.

Awami league having 41% of power generation capacity on rental power plants running on expansive oil is a disaster; that is the main point. How did you missed that? On top of that, awami league defying PDB efforts and kept this rental power plant looting scheme alive for 10 years. Bangladeshis witness 10 time rate increase. These looting scheme plants were suppose to be temporary but now going to be even longer and more in numbers so people will have to pay for awami looting.


BD does not get any discount nor always buy future contract. There are good amount that get bought by tender process that Bangladesh hold. Besides, future contract from open market does not include any discount. Dont't blabber something that you have no clue about.

Oil price is sensitive to geopolitical situation and conflict. Saudi intervention in Yemen and Yemen attack on oil rich region (along with other ME situations) recently drove oil price close to $60. There is potential to go even higher.

Dude .... you do not buy oil via tenders. Oils are traded openly. And no BD have not bought at the open market rate since the gulf war. BD buys futures as a part of course.

In terms of oil powered power plant I get what you are saying. BAL needs to make the most of while they can cause when they fall they are not getting back up.

 

[bluesky]

@idune, whatever you say about power plants, will be accepted only by @Nilgiri.

 

[Nilgiri]

@idune, whatever you say about power plants, will be accepted only by @Nilgiri.

And thats why India (me) and BNP style forces (idune) will win in the end. BAL suppresses truth, never admits to its lying and despicable corruption and that never stands in the long run (unless BD people truly are that weak, in which case, they deserve to be stuck where they are for eternity).

How much you bleed for it is up to you lot. Hopefully its a good amount....so you can outdo your best previous claimed achievement of 3 million....and this time have some actual good evidence to show for it.

 

[Dot]

@Nilgiri Govt is largely opening up electricity market to open pricing system. In case of Fuel (diesel), we still need some miles to go. Govt wants to maintain some price cushion to the farmers. Govt realizes subsidies are too much inefficient in the end. They have a committee formulating on how best to open up the energy market (electricity is the early phase). We have already seen the Well-beings associated with these price adjustments. More questions are being raised on efficiency levels on both production and distribution; by general public and govt also started addressing them. Under subsidy bad things may remain hidden for a long period. In Bangladesh general people are very rational nevertheless.

 

[Nilgiri]

@Nilgiri Govt is largely opening up electricity market to open pricing system. In case of Fuel (diesel), we still need some miles to go. Govt wants to maintain some price cushion to the farmers. Govt realizes subsidies are too much inefficient in the end. They have a committee formulating on how best to open up the energy market (electricity is the early phase). We have already seen the Well-beings associated with these price adjustments. More questions are being raised on efficiency levels on both production and distribution; by general public and govt also started addressing them. Under subsidy bad things may remain hidden for a long period. In Bangladesh general people are very rational nevertheless.

Look I agree general subsidy is bad (inefficiency and opportunity cost wise especially). But in this day and age why not look to use the national ID card of BD for direct subsidy transfer (of a certain quota amount) of only those that most need it. You will be surprised how little % they made up of the general subsidy (given largest consumers who are rich/middle class benefit from it)....yet how much good you can do (that was intended with the general subsidy in first place).

You cannot leave the poor and fledgling industry (SME etc) behind by allowing 100% market price (again distorted by biggest already richest consumers) there. It will simply kill any structural inertia in the base economy...every paisa of that BD needs it to hedge beyond the RMG twilight that is coming.

Market failure and how to more precisely target it must be the BD govt intention rather than doing black and white analysis on the issue and choosing one or the other extreme solely.

 

[Dot]

Look I agree general subsidy is bad (inefficiency and opportunity cost wise especially). But in this day and age why not look to use the national ID card of BD for direct subsidy transfer (of a certain quota amount) of only those that most need it. You will be surprised how little % they made up of the general subsidy (given largest consumers who are rich/middle class benefit from it)....yet how much good you can do (that was intended with the general subsidy in first place).

You cannot leave the poor and fledgling industry (SME etc) behind by allowing 100% market price (again distorted by biggest already richest consumers) there. It will simply kill any structural inertia in the base economy...every paisa of that BD needs it to hedge beyond the RMG twilight that is coming.

Market failure and how to more precisely target it must be the BD govt intention rather than doing black and white analysis on the issue and choosing one or the other extreme solely.

It won't be outright black & white. Full implementation of Smart NID is not done yet, would be done in a short span. Currently govt is eyeing on reaching full electricity coverage all over the country, specially to off-grid remote areas. Hope in a few years that would be done too. Then the challenge would come to provide quality and affordable electricity. Diesel uses would be reduced in the medium-long run, since diesel motors are inefficient against electric motors and better techs are coming online.. Farmers currently get subsidised fertilizers, seeds & loans. With human discretion at play, in a third world region, huge market failures prevail. Hope things will be more transparent and fair.

 

[bluesky]

@idune, you and all your lies have been exposed. Read the part of an essay on the subject Quick Rental Power Plant (QRPP). Read how the QRPPs have contributed in the growth of national GDP. I have quite exposed your crafty mind.

"Growth Impact of Quick Rentals"

"At the aggregate level, the estimated relationship between GDP and electricity generation shows that an extra economic output (value added) within the range of Tk. 46 million to Tk. 107 million (at constant 1995/96 prices) is generated for every one MkWh increase in electricity supply in Bangladesh".

"This implies that in the fiscal year 2011-12 alone, the contribution of additional electricity generated by the QRPPs to the GDP has been between Tk. 23,312 crore and Tk. 54,226 crore at constant 1995/96 prices, which are equivalent to between Tk. 52,093 crore and Tk. 121,168 crore at 2011-12 prices".

"Obviously, nonavailability of electricity from the QRPPs, along with lower GDP growth and reduced sectoral output, would have reduced the export growth rate and created adverse impact on other macroeconomic and sectoral indicators including employment and poverty reduction".