Was Adani’s Power Supply Cut Planned?

A. M. M. Bahauddin>

At a time when the country is facing a severe power shortage and more than 3,000 megawatts of load shedding is being imposed every day, Adani Power has reduced its electricity supply to Bangladesh. An 800-megawatt unit of Adani Power’s 1,600-megawatt power plant in Godda, Jharkhand, India, has been shut down. As a result, the plant’s total generation has fallen below 750 megawatts.

According to reports, the unit suddenly developed a boiler-related problem on September 11, forcing it to stop generation. Earlier, on September 2, Adani Power said that coal supplies to the Godda plant had declined due to congestion on India’s railway network and restrictions on coal transportation.

There had already been that electricity supplies from Godda to Bangladesh could be reduced at any time on the pretext of lower coal supplies. That concern has now proved true, although this time the reason given is not a shortage of coal but the “boiler incident.”

Observers have raised a reasonable question: Did the unit really stop generation because of a boiler-related problem, or was it shut down deliberately? They believe the incident took place the day after Prime Minister Tarique Rahman decided not to visit India. According to them, the move could be an expression of India’s diplomatic dissatisfaction.

It is particularly worth mentioning that Adani’s Godda power plant was built specifically to supply, or sell, electricity to Bangladesh. A 25-year agreement for this purpose was signed in 2017.

Under such cross-border electricity agreements, it is the supplier’s responsibility to quickly arrange essential alternatives if the supply is disrupted. However, there has been no report so far of Adani or the Indian government taking such measures.

It may be recalled that Adani’s electricity supply has been a major burden for Bangladesh from the beginning. The electricity price is high, and the terms of the agreement were not favourable to Bangladesh. Instead, they were favourable to Adani and, by extension, India.

Reductions in Adani’s electricity supply from time to time have become a common occurrence, with no effective way to seek a remedy. In addition to the high electricity price, Bangladesh has also faced increased coal prices and an unfair capacity charge.

The latest report of a government review committee said that the price of Adani’s electricity is 39.7 percent higher than that of the nearest private competitor. Overall, Bangladesh is paying 50 percent more than a reasonable market price. As a result, Bangladesh has to bear an additional cost of around $400 million to $500 million every year.

According to a Reuters report, based on the latest full unit-based calculation, Bangladesh purchased around 8.16 billion units of electricity from Adani in the 2023-24 fiscal year. The average price per unit was Tk 14.87, bringing the total cost to around Tk 12,100 crore. During the same period, the average price of electricity purchased from other Indian suppliers was Tk 9.57 per unit.

This means the price difference between Adani’s electricity and that supplied by other providers was Tk 5.30 per unit, or around 55 percent. If the electricity Bangladesh purchased from Adani in the 2023-24 fiscal year had been bought at the price charged by other Indian suppliers, the total cost would have been Tk 7,805 crore.

In other words, Bangladesh had to spend an additional Tk 4,300 crore in just one fiscal year.
Energy experts Professor M. Tamim and M. Shamsul Alam have described the agreement with Adani as one-sided and imbalanced. Informed circles in Bangladesh are in favour of cancelling the agreement.

One reason is that the agreement is unfair and exploitative. With the amount Bangladesh has to spend additionally every year, the country could build new power plants or solar power plants with the money saved over several years. The second reason is that it is not wise for any country to become dependent on another country for electricity. This is especially true when the other country is a neighbouring country such as India.

Power security is extremely important and urgent for every country. Without electricity, daily life, production, the use of technology, development and prosperity are impossible. Therefore, Bangladesh must ensure electricity self-sufficiency at any cost. It is unfortunate to say that the previous fascist government did nothing to ensure energy security or power security. It also failed to take any meaningful steps to ensure gas security.

The important sectors of energy, electricity and gas were deliberately made dependent on imports or foreign sources. We are now paying the full price for that policy. Electricity in Bangladesh is generated using several primary fuels. These include gas, coal, furnace oil and diesel. As gas is a domestic resource, the country has a large number of gas-fired power plants. However, as domestic gas reserves have declined, Bangladesh has also had to import gas to operate power plants.

Coal ranks second after gas in terms of electricity generation, followed by furnace oil and diesel. Although Bangladesh is believed to have large reserves of oil and gas, no effective steps were taken to explore and extract these resources. The same applies to coal. Despite having sufficient coal reserves underground, no effective initiative was taken to extract them.

If effective measures had been taken in the past to explore and extract oil, gas and coal, the country would not have faced the fragile situation it is experiencing today. Reports say many gas-fired power plants have stopped generation due to a shortage of gas.

Many oil based power plants are also idle because of a lack of fuel. Coal based power plants have reduced generation because of coal shortages. At the same time, incidents of power plants shutting down because of technical problems have also increased.

BNP Acting Secretary General and Prime Minister’s Adviser Ruhul Kabir Rizvi has raised questions about this situation. When he asks whether the shutdown of power plants is due to technical faults or sabotage, we cannot simply dismiss the question.

I hope the relevant authorities will arrange a thorough investigation into the matter. There is a huge gap between the country’s installed power generation capacity and its current output. We are unable to produce even half of the installed capacity.

There is also a gap of at least 3,000 to 3,500 megawatts between demand and generation.
The biggest task now is to determine how generation can be increased and, at the very least, how the country’s daily electricity demand can be met.

The government is playing an active role in this regard. The Prime Minister himself has said that the gas and electricity crisis will no longer exist within a short period. However, the government must always remain alert to whether any quarter or group is deliberately trying to worsen the crisis.