Blackouts return as Bangladesh feels first stirrings of energy crisis

On Sunday, State Minister for Power, Energy Mineral Resources Nasrul Hamid took to social media to express his regret over recent disruptions in the country's power supply.

In a status on his verified Facebook account, he wrote, "Power generation is being hampered due a shortage of gas. This is disrupting power in many places. Electricity generation will be back to normal if gas supply is normalised."

The post quickly amassed 9,000 reactions. For many in the capital, frequent power outages have been thought of as a relic of the past, something confined only to speaking about in rosy tunes of the days spent under candlelight.

The day after, the DPDC, the state-owned company responsible for supplying power to parts of capital Dhaka, sent short messages to its clients apologising for their "unintended load-shedding" in some parts of their distribution area in the city.

The DPDC is getting less electricity supply than it needs due to a lack of gas supply, it said, stating their helplessness.

What has so far been believed to be a localised power cut due to temporary grid failure or technical glitch has now turned into the first stirrings of an energy crisis. 

It is not just a load-shedding the consumers were used to a couple of years ago: It is a generation shortfall from lower-than-required supply of gas to power plants.

The scourge is back, the reminiscing no longer required.

A pandemic, a war, Europe's sudden shift, historically low global inventories and unpredictable temperatures have also meant that the scourge could stay here a bit longer, even increasing in its intensity.

Energy markets across the world are feeling the pressure of all these adverse indices coming together. Warmer weather in Asia, including Bangladesh, has meant even more power consumption than before.

Rising liquefied natural petroleum (LNG) prices in the world market have not only reduced power generation, but its supply is low enough that many stoves have also stopped burning.

From homes, to shops to factories – everything and everyone can already feel the effects.

The government has also been unable to buy LNG from the spot market - where Bangladesh gets the bulk of its supplies - due to rising prices, with LNG price per unit crossing the $40 mark while it was last bought for $25.

As a result, supply has dropped by 30%.

Similarly, due to the rise in fuel prices, oil-fired power plants are not also not functioning at full capacity, resulting in load shedding.

According to Petrobangla, the state-owned oil company, the daily demand for gas is 370 crore, while only 275-280 cubic feet has been supplied in each of the last two days.

If more LNG is not bought, the supply of gas cannot be increased.

Furthermore, if Russian gas producer Gazprom's proposal on Monday to expand its rouble-for-gas scheme for pipeline gas to include LNG gains momentum, then global gas supplies will be further stressed.

Bangladesh supplied its highest 12,100MW during peak hours on 22 June. Currently, due to the gas crisis, power plants with a total capacity of 3,500 megawatts (MW) remain unused.

An official of the Rupantarita Prakritik Gas Company Limited (RPGCL) said three LNG cargo shipments arrived from the spot market last month. Following this, 75-80 crore cubic feet per day had been supplied. But since Sunday, supply has been declining and 50 crore cubic feet is being supplied, he said.

Compounding the problem is the fact that Bangladesh doesn't have any long-term LNG purchase agreement with any country. Even if one was to be made now, its effects could only be seen years later.

Bangladesh's current predicament is one shared by many other countries.

A decade ago, Pakistan had shown the foresight to take steps to insulate itself from energy price shocks, making massive investments in LNG and signing long-term contracts with suppliers in Italy and Qatar.

Now some of those suppliers have defaulted while others have turned to the more lucrative European markets, eventually forcing Pakistan to pay nearly $100 million to procure a single LNG shipment from the spot market, a record for the cash-strapped nation. Now, 12-hour blackouts have become common in the country.

In Sri Lanka, public offices were asked to turn off air conditioners. On 2 March, the crisis-hit nation announced nationwide seven-and-half hour daily power cuts, the longest in 26 years, prompting widespread protests.

India, too, is witnessing the worst power outages – two to eight hours - in over six years, owing to dwindling coal supplies and extreme heatwave.

In January, US investment bank Goldman Sachs' analysts warned that Europe could see its stored gas fall below record lows seen in 2018 if a cold snap were to hit the region.

5-10 hour blackouts making comeback

Dhaka, along with the rest of the country, are now bracing for more frequent power cuts.

Power generation has decreased by an average of 2,000 MW per day.

Most of the gas-fired power plants have to be shut down, while private power plants are also on the brink due to rising global oil prices.

Since Monday, load shedding has taken place in different parts of the capital four or five times.

In some parts such as Bashundhara Residential Area, Baridhara, Kathalbagan, Mohammadpur, Mirpur, Jatrabari, Badda, Keraniganj and Savar, reports have emerged for 4-5 hours of power outages.

The Dhaka Power Distribution Company (DPDC) on Monday supplied 300 MW less than its demand of 1,600 MW. DESCO, another distribution company in the capital, reduced its supply by 150 MW.

DPDC Managing Director Bikash Dewan confirmed that load shedding was being done to reduce customer suffering.

The situation is even bleaker outside the capital.

Officials of the Bangladesh Rural Electrification Board, the country's largest power distribution company supplying power outside Dhaka, said supply fell by 851 MW on Monday.

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.

Rezaul Karim, chief engineer of the Power Development Board, Chattogram South, said, "Due to low supply from the main grid line, a shortage of about 300 MW of electricity is being created every day."

In Barisal's Patuakhali and Jhalokati, customers are not getting electricity for seven to 10 hours a day.

Tahmina Parveen Shyamoli, an entrepreneur from Bogura and director of Shyamoli Hotel, said power outages were happening 10-15 times a day, with five minute to hour long durations. As a result, the hotel's refrigerator, AC and TV could soon be out of order.

Industries counting losses, again

In the industrial area of ​​Bogura in North Bengal, the daily demand of electricity is 82MW. But on Monday, only 42MW was supplied.

Greatwall Ceramics, the country's largest ceramic company based in Gazipur, has drastically reduced production.

Md Shamsul Huda, vice-president of the Bangladesh Ceramics Manufacturing and Exporters Association and managing director (MD) of Great Wall Ceramic, said the factory was closed for 15 days in June due to poor gas pressure, but the crisis had intensified further this month. Instead of three shifts, the factory was now running on a single shift only.

Entrepreneurs in various sectors including readymade garments, ceramics, rods and cement are claiming that they are reducing shifts and closing units due to the gas crisis.

Shovon Islam, MD of Sparrow Group, said the gas crisis had worsened in the last five to six days, forcing the purchase of diesel to keep production running normally. For this, Shovon said he was incurring an additional cost of Tk10 lakh per day.

Data found showed at least five factories in Narayanganj were getting between 0-2 gas pressure.

Leaders of the Bangladesh Textile Mills Association, an association of textile mill owners, even held a meeting in the capital's Gulshan to decide what steps to take.

Khorshed Alam, chairman, Little Star Spinning Mills Limited, said they would meet the state minister for power, energy and mineral resources to find a quick solution to the issue.

Our Chattogram, Rajshahi, Bogura, Dinajpur, Noakhali, Cumilla, Laxmipur, Satkhira, Sylhet and Savar correspondents contributed to this report.