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The government has increased the power generation capacity to 20,000 MW from only 5,000 MW over the past 11 years. Yet the power sector is passing through an embarrassing situation as the demand is not growing as expected. The industrial sector is largely blamed for the poor demand growth of electricity. The large industries are meeting their demand from captive power generation with low cost options instead of comparatively expensive, unreliable and poor quality grid power. As a result, the sector is maintaining a surplus capacity. The peak summer demand did not cross even 13,000 MW while in this winter it is only around 8000 MW. It resulted in substantial surplus of power. So, the government has to keep idle many power plants, mainly the ones brought into operation as a contingency measure to confront the power crisis it inherited from the previous government. As per the condition, the government now has to pay capacity charge to the idle power plants. This must causes discomfort to the government – it has to adjust the loss through increasing power tariff. The government will have to ensure quality, reliable power supply at a cost less than the captive power to jack up the demand for grid power.

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