Newspaper the Dhaka Tribune reported this week that the government’s plan includes a gradual reduction in gas supply for on-site power users in order to divert the gas to public and privately-operated plants.
Bangladesh’s on-site power plants are estimated to use around 17 per cent of the total gas consumed in the country, generating a total of around 2.4 GW.
The country is in the midst of a gas shortage which is not expected to resolve until next spring at the earliest.
The decision to cut gas supplies follows a 2015 directive from Prime Minister Sheikh Hasina, after which state-owned utility Petrobangla stopped allowing new gas connections for on-site power plants.
Petrobangla Chairman Abul Mansur Md Faizullah was quoted as saying that “We have been on track to implement the prime minister’s directive. We have already stopped providing new gas connections”.
The move revises a 2008 policy which encouraged industrial users to set up on-site power plants. The policy resulted in a boom in on-site power which sector analysts say has resulted in substantial losses for the government, which subsidizes gas purchases for on-site power users.
The government has also decreed that the thermal efficiency of on-site plants must be increased to at least 60 per cent, ideally by converting the plants to cogeneration.
Dr Ijaz Hossain, professor of chemical engineering at Bangladesh University of Engineering and Technology, was quoted as saying that a decrease in gas supply would present practical and financial problems for on-site power plant owners.
“The owners will become dependent on a national grid that cannot supply uninterrupted power, which will directly hamper their production,” he said, adding that “converting every captive power plant to a CHP system is not feasible.”
Recent reports indicate that the country’s gas shortage is already affecting industrial on-site power users. Several news sites reported earlier this month that 350 textile manufacturing facilities had experienced disruption in production.