Bangladesh's power crisis has reached a stage where load-shedding is disrupting industrial production, increasing business costs and affecting services dependent on uninterrupted electricity. The fragility of the system became clearer after one of the two 800-megawatt units of Adani Power's Godda plant located in Jharkhand of India went out of operation following what has been described as a boiler-related "technical fault". The plant had only recently increased generation after weeks of reduced supply caused reportedly by coal-transport disruptions. With the unit down, electricity received from Godda fell below 750MW. At one point on Thursday (September 10), demand was above 16,000MW while the shortage crossed 3,500MW. So, a fault in one foreign power plant has exposed a much larger weakness of Bangladesh's power system: there is hardly any reserve left to absorb a sudden shock.
That raises questions about the 25-year Power Purchase Agreement (PPA) under which the Bangladesh Power Development Board (BPDB) purchases 1,496MW from Godda. Does the agreement contain any guarantee that Bangladesh will receive the contracted power without interruption? The publicly available PPA defines "Forced Outage" and contains a section on liquidated damages for scheduled maintenance and forced outages. It also provides for a performance security deposit. So, there are contractual safeguards. But a technical fault at a generating unit does not automatically mean Bangladesh can claim compensation. Much would depend on how the outage is classified, how long it continues, whether it exceeds allowable limits and what the agreement permits BPDB to recover.
What is striking, however, is the elaborate protection provided to the seller against default by the buyer. The agreement records a Government of Bangladesh guarantee for the payment obligations of BPDB and the Power Grid Company of Bangladesh. BPDB is also required to maintain letters of credit to secure capacity and energy payments. One wonders whether the protection available to Bangladesh against repeated failure of supply is equally strong in practice. This is why the government should officially explain the provisions applicable to repeated forced outages and inform the public whether BPDB has ever imposed liquidated damages on Adani for such interruptions.
Since the transaction is cross-border, the issue of legal redress has another dimension. But one should not confuse a commercial power purchase agreement with a treaty between two sovereign states. Bangladesh cannot simply take every technical breakdown at Godda to an international court as a violation of international law. The first line of remedy lies in the contract itself. Section 19 of the PPA provides a dispute-resolution mechanism, including arbitration under the Singapore International Arbitration Centre (SIAC). In fact, BPDB and Adani are already before that process over disputes concerning tariff calculations, coal pricing and payments. If a recurring outage amounts to contractual breach, BPDB can raise the matter through the same legal route. Bangladesh should use every contractual remedy available rather than treating disruption from a foreign supplier as something it has simply to endure.
But is the latest interruption political? BNP acting secretary general Ruhul Kabir Rizvi has publicly asked why technical faults are occurring repeatedly and whether sabotage or conspiracy might be involved. Such questions may be politically understandable, especially when the source of power is located in another country and relations between Dhaka and New Delhi have their own complications. But suspicion is not evidence. A boiler fault has first to be investigated as an engineering failure. At the same time, it would be naïve to pretend that cross-border energy dependence has no political dimension. Any essential commodity supplied from one country to another creates strategic leverage, whether or not that leverage is deliberately used.
The real problem, therefore, is not Adani alone. Bangladesh has created a power system with an installed capacity far higher than the electricity it can actually generate because many plants lack gas, coal or liquid fuel. Gas-fired plants alone have around 12,000MW of capacity, but generation has lately hovered below 5,000MW because of shortage of gas. Coal plants, too, are not operating at full capacity, while furnace-oil plants are costly and themselves dependent on imported fuel. Add to this around 2,500MW of electricity imported from India and a smaller amount from Nepal, and the vulnerability becomes obvious. The installed capacity on paper is not the same thing as secure power.
For the immediate crisis, the government has little choice but to operate available liquid-fuel plants where necessary, secure emergency fuel cargoes, clear legitimate dues to producers and allocate scarce gas according to national priority. Hospitals, water supply, telecommunications, export-oriented industries and other critical services cannot be allowed to go dark merely because the system has no contingency margin. At the same time, BPDB should maintain genuine reserve capacity so that the failure of one 700-800MW unit does not plunge large parts of the country into load-shedding.
For the medium and long term, however, emergency purchases are not an answer. The government has announced a plan to drill 150 gas wells by 2030-31 and expand LNG-import capacity. Domestic exploration is indispensable and should have been undertaken much earlier. But simply building more LNG terminals would again deepen dependence on an imported commodity, the price and physical supply of which can be disrupted by wars, shipping problems or turmoil in the Strait of Hormuz. Diversification should mean diversification of risk, not merely diversification of foreign suppliers.
Renewable energy, especially rooftop solar, should therefore be treated as part of energy security rather than only a climate obligation. The government is already looking for financing to add 3,000MW to 4,000MW of rooftop solar before next summer. That should be accelerated alongside battery storage, grid modernisation and industrial solar systems. Cross-border power trade should also continue, including hydroelectricity from Nepal and, in future, Bhutan, but no single foreign plant or country should become indispensable to the national grid.
The lesson from the present crisis is that Bangladesh cannot build its power security on excessive dependence on any single imported fuel, foreign supplier or cross-border power source. Energy security means having enough domestic resources, diverse imports, renewable capacity, reserve generation and enforceable contracts so that failure at one point does not paralyse the entire system. The government should address the present emergency with whatever resources are available, but its real task is to create such a power system where the next "technical fault" abroad does not become a national crisis at home.
