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Power outages cost $778m in lost industrial output

USAID report says loss gobbles up 11.5pc of GDP of Bangladesh

UNB, Dhaka
Power outages cost Bangladesh $778 million in lost industrial production a year, said the USAID (United States Agency for International Development) after a study of the country's electricity supply situation.
The USAID-sponsored study, titled "Economic Impact of Poor Power Quality on Industry, Bangladesh", observes that the loss translated into 11.54 per cent of the industrial sector GDP or 1.72 per cent of the national GDP in fiscal 2000-01.
Due to 94 per cent unplanned and 6 per cent planned outages, nearly 14 per cent of the industrial
sector's electricity demand could not be met by the utility organisations.
On average, the study report says, 64 per cent of the industrial installations have standby generation, mainly diesel-fired. "Assuming that the standby generation facilities are in operation throughout the gridsupply outages, the additional financial burden on the industrial sector is estimated to be about $4.5 million a year."
South Asian Regional Initiative for Energy (SARI/E) and Nexant jointly conducted the study for the USAID. The findings will be presented at a workshop here on October 7.
Under the study, investigation
was carried out using a detailed nationwide survey sample of industries consisting of 208 installations, covering main categories of industries contributing to the country's gross domestic product (GDP) growth.
"Although 95 per cent of the participating industries felt they overpay for the quality of power they receive, 50 per cent of the samples still would be willing to pay even more for higher power quality," said the US agency.
Also, more than half the sampled industries would have invested more in electricity-dependent industries if the quality of power supply were better. According to the study, industrial sector's losses attributable to unplanned electric power interruptions averaged $0.83 per kilowatthour while only $0.34 per kwh for planned outages. "Thus the unplanned interruptions result in economic losses that are nearly two and one-half times those of planned interruptions."
Further, voltage fluctuations can cause major problems in certain industries, such as manufacturing and chemicals, while others, such as wood and cork industries, are completely unaffected.
The study found the frequency of unplanned interruptions during the year 2001 having averaged nearly one interruption per day, lasting about 2 hours. By contrast, the number of planned interruptions is about one in two months, but each lasting about 7 hours.
The donor agency made a set of recommendations for improving the erratic power supply.
The recommendations include strengthening end-user participation in the electric supply industry, converting unplanned interruptions to planned outages, where possible, and introducing interruptible electricity traffic to industries that can absorb planned interruptions without serious disturbance to their production processes.