PRESENTATION
ON
RURAL ELECTRIFICATION IN BANGLADESH
AND
TARIFFS-ITS IMPORTANCE ON
SUSTAINABILITY OF POWER SECTOR
SHAH ZULFIQAR HAIDER, PEng
General Manager, Noakhali PBS
Email. szhaider123@hotmail.com
Cell. +880-1552-307218
23 January, 2008
BRIEF INTRODUCTION OF RESOURCE PERSON

General Manager in Rural Electric Societies since 1989

Garrison Engineer/Staff Officer-Military Engineer Services

Expert-Energy, Infrastructure, Engineering, EE,RE, TQM etc

Training- O&M of Utilities from USA & TQM in Japan

Facilitator/Member-Nepal, India, China, Bangladesh etc

Publications at International level

Member:





Guide Point Global Advisors, USA
American Council for an Energy Efficiency & Economy
International Association of Engineers
Global Village Energy Partnership (GVEP), UK
Infrastructure-India network, etc.
OBJECTIVE OF THIS SESSION
1. To have an idea about Rural
Electrification programme of Bangladesh
2. Importance of Tariff
3. How to minimize Cost of electricity
4. Tariffs for sustainable Power sector
RURAL ELECTRIFICATION IN BANGLADESH
HOW IT STARTED . . .
 Bangladesh once Least developed country
 Provision of electricity constitutional right
 Electricity distribution was by state
 How to provide electricity to rural masses?
 Through Rural Electric Societies (RES)
or Palli Bidyut Samities (PBS)
 Rural Electrification turned it to a developing
country.
RURAL ELECTRIFICATION IN BANGLADESH
HOW IT STARTED...(continued)
 Rural Electrification Board (REB) formed
 REB helped form RES or PBS
WHAT IS RURAL ELECTRIFICATION PROGRAM?
To provide electricity to rural mass:
• No-loss-no-profit basis
• Sound financial basis & lowest cost
• Area Coverage Rural Electrification
• Poverty alleviation & minimizing disparity
Achieved through…
Efficient Management, TQM, Service/Training etc
AREA COVERAGE
RURAL ELECTRIFICATION PROGRAM
CONSUMER SERVICE
TOP MOST PRIORITY
CONSUMER – the only & main source of Income
Consumers GOOD LUCK for the organization
One Point Service (OPS) for the Consumers
The consumer submits his problem
OPS staff moves & gives solution to consumer.
PERFORMANCE TARGET AGREEMENT (PTA)
PTA executed between REB & RES
Rewards & Financial Penalty
Competition developed
The PTA Targets are . . .
1. System Loss
2. Accounts Receivable & Payable
3. Debt Service Coverage
4. Equity status
5. Annual Load Factor
6. Revenue per Km of line, etc.
OTHER FACTORS FOR SUCCESS OF
RE PROGRAMME
1. DEDICATION
2. MOTIVATION
3. VILLAGE ADVISORS
4. DELEGATION OF AUTHORITY
5. JOB DESCRIPTION
6. THE RES (PBS) BOARD
CONSUMERS’ PARTICIPATION IN PBS ACTIVITIES
CONSUMER
BOARD DIRECTOR
RES (PBS)
VILLAGE ADVISOR
CONSUMER
VILLAGE ELECTRICIAN
CONSUMER
CONSUMER
CONSUMER PARTICIPATION-BOARD
RES (PBS) DEMOCTARIC INSTITUTION
1. The RES/PBS divided in Areas-Elaka
2. Max 15 Board Directors
3. Selection through democratic process
4. Consumers Annual General Meeting (AGM)
5. Financial Balance Sheet and Accounts
6. Executive Committee
7. Lady Directors selection
TARIFF IN R.E PROGRAMME
No-loss-no-profit & Sound financial basis
Tariffs to support these concepts
Electric Extension on Revenue criteria
Line extension on Area Coverage basis
Power purchase rate=Actual cost of Power
Revenue from Electricity sale-main income
Financial picture of RES- Form 550
IS OUR TARIFF RATIONAL?
The concepts of R.E program are in conflict
Free Electricity (!)
Who will pay?
Lower Domestic vs. Higher Industrial Tariff
Profit by Industrial based cooperatives
What happens to Industries?
SUBSIDIES
Rich countries provide subsidy
Developing countries discouraged
Subsidies:
a. Lower electric bill- 50 to 100 KWH usage
b. Irrigation consumers
c. Subsidy to the Utilities
How long?
Who will pay?
COST OF ELECTRICITY

Cost & Tariff not in harmony

Cost of Electricity may be higher:

Higher Plant & equipment cost

Lack of expertise - Inefficient procurement

Improper planning, No Master plan

Inadequate remuneration

In efficient management, Lack of commitment

High losses & pilferage

Transparency & Accountability
HOW TO LOWER COST OF ELECTRICITY-1
Energy Efficiency (EE)& Energy Audit
Lower Generation cost & Improve Transmission
Plant Factor & Load Factor
Power Factor- Consumer to Generation point
Load management
Administrative cost & losses-reduce
Technical & Managerial skills
Reduction of Technical/Non Technical losses.
HOW TO LOWER COST OF ELECTRICITY-2
Reward, punishment
Transparency & Accountability
Minimum Political interference
Consumer awareness-misuse reduce & EE
Minimum Disconnected consumers
Minimum illegal consumers
Maximum New connection in existing facility
POWER QUALITY IMPROVEMENT
 Electricity - Service & again Goods
 Just in Time Product
 Improve Power Factor, minimum 95%
 Intelligent Power Factor controller
 Minimize Total Harmonics
 Standardize Electrical products
 Minimize GHG emission
 Phase balance, Voltage improve & Lines Clear
 Adequate grounding
POWER SUPPLY RELIABILITY
Europe - 99.95+% supply efficiency
 Load Management
 Market closure - evening
 Industries holiday staggering
 Peak hour heavy use restriction
 Multi Tariff/TOU/Prepaid meter
 Consumer education & motivation
 Demand side management
 Energy saving lamp & Electronic ballast
 Efficient equipment & Variable speed motor
 Industrial cooling, Technical losses reduce etc
METERING

Cash Box

Meters always best quality

Meters should read at lowest wattage

3 phase meters - 3 element

System adequately grounded

Multiple Tariff Meter - Demand management

Prepaid Meters

Tariffs vary for each cooperative

Tariff on geo - economic condition

No-loss-no-profit concept for tariff
RENEWABLE ENERGY
 Renewable energy expensive than Fossil fuel
 It should be cost effective & competitive
 Higher tariff will discourage it
 One time subsidy
 No alternate to expansion of R E
 Minimize GHG emission
PRIVATIZATION OF POWER SECTOR
 Why privatization?
 Government owned Utilities inefficiency
 Huge losses
 Lack of accountability
 Lack of commitment
 Privatization with sufficient protective rules
 Privatization is not transfer of Government
losses to private entity
NOAKHALI RES TARIFF
Sl. Category
KWH Slab
US Cent
Euro cent
1 Domestic
000-100
4.0
2.78
2 Domestic
101-300
4.1
2.85
3 Domestic
301-500
5.8
4.04
8.4
5.85
5 Commercial
7.3
5.08
6. Irrigation
4.1
2.85
7. Industry
5.7
3.97
8. Large Industry
5.6
3.90
9. Other
4.7
3.26
10 Cost of Electricity
5.5
3.83
4 Domestic
Above 500
NOAKHALI RES EXPENSES (%)
Tax
0.42
Depreciation
12.90
Interest on
loan
7.77
Administrative
3.84
Consumer
Selling
7.71
Operation &
Maintenace
4.72
Pow er
Purchase
62.64
CATEGORY WISE CONSUMPTION (%)
Industry
11
Irrigation
3
Others
2
Commercial
12
Domestic
72
INFRASRTUCTURE AND ENERGY
 Infrastructure:
Electricity-Generation-Transmission-Distribution
Energy- Conventional, Renewable, Gas etc.
Communication-Road, River, Train and Air
Telecommunication & Internet
Water supply
Rural Infrastructure.
(Accountability and Transparency)
COST AFTER MANAGEMENT
 Analyze cost
 Consumer mix and consumption.
 Formulate Tariff “No-loss-no-profit basis”
 If Losses exist, enhance Tariff or Subsidy.
 Analyze economic effect due to electricity
 If losses continue, analyze the whole system
CONCLUSION
 Cost of electricity up to consumer-Minimum
 Use Superior quality products
 Renewable, One time subsidy
 Human Resources Development
 Adequate remuneration
 Reward and Punishment
 Power Factor improvement
 Load & Demand Side Management
 Energy efficiency & Energy Audit
CONCLUSION … continued
 Reduction of losses
 Extensive motivation
 Minimum Political interference or influence
 Consumer education
 Pilferage proof good quality meters
 Infrastructure, Energy master plan
 Accountability and transparency
 Cost analysis for tariff fixation
 Subsidy as required
THANK YOU
FOR ATTENDING THE SESSION
SHAH ZULFIQAR HAIDER, PEng
szhaider123@hotmail.com
General Manager, Noakhali PBS
Q&A
We welcome your feedback . . .