According to a report by Reuters, Singapore is the event’s location being discussed. According to a Reuters government data analysis, Bangladesh is experiencing its most severe electricity shortage since 2013. This is attributed to unpredictable weather patterns and challenges in financing fuel imports, compounded by declining foreign exchange reserves and currency devaluation.
The power minister of a South Asian country, which has a population of 170 million people, has cautioned that power outages may persist in the upcoming days. This warning comes as the country braces for more heatwaves and approaches the peak power consumption months of July to October.
According to a Reuters analysis of power grid data, Bangladesh, the second-largest exporter of garments in the world after China and supplies global retailers such as Walmart, H&M, and Zara, had to reduce power supply for 114 days during the first five months of 2023.
The duration above is contrasted with 113 days throughout the year 2022.
According to data from the Power Grid Co of Bangladesh, power cuts have been extensively prevalent during late evenings and early mornings. Residents and small businesses have reported unanticipated power outages lasting 10-12 hours.
According to the data, there was a 25% supply deficit compared to Monday’s demand.
According to data analysis, the supply deficit increased to an average of 15% during the first week of June, almost three times higher than the average 5.2% shortfall observed in May.
According to government data, supply shortfalls are primarily attributed to fuel shortages.
As per the daily report on the website of the national grid operator, approximately 25% of the 11.5 GW gas-fired power plants and roughly 66% of the 3.4 GW coal-fired capacity were non-operational on Monday due to insufficient fuel.
As per the operator’s report, a significant proportion of the 7.5 GW power plants that rely on diesel and fuel oil could not function due to fuel scarcity, exceeding 40%.
In late April and early May, the state-owned petroleum company of Bangladesh communicated with the power ministry, expressing its incapacity to pay Sinopec (600028. SS), Indian Oil (IOC.NS), and Vitol for fuel supplies. The reason cited was a scarcity of U.S. dollars and a significant reduction in fuel oil reserves, which was deemed alarming.
During the 12 months ending in May, the currency of Bangladesh, the taka, experienced a decline in value of more than 16%. Additionally, the country’s dollar reserves decreased by 33%, reaching a seven-year low in April.
According to the data, there has been an increase in power output from coal and liquid fuels, which has led to a decrease in gas-fired power generation. As a result, the average power costs have increased.
The decrease in the proportion of natural gas utilized in power generation during 2022 was attributed to the depletion of domestic reserves and the absence of enduring contracts with international providers. However, the share of natural gas in power production has experienced an increase in recent months, coinciding with a decline in liquefied natural gas prices.
A 15-year agreement for liquefied natural gas (LNG) has been recently established between the nation and QatarEnergy.
According to the data, the nation with limited renewable capacity maintained a consistent level of power imports, which accounted for less than 10% of the total supply.
The percentage of coal dependency for power generation in Bangladesh increased to more than 14% during the initial five months of 2023, which is higher than the approximately 8% recorded throughout the entire year of 2022. Additionally, the proportion of fuel oil and diesel in the country’s generation mix increased in 2022 to the highest level observed in more than ten years.