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Discard rental, inefficient power plants, repeal indemnity act

Feb 14, 2024

| FE REPORT | The Financial Express

Experts echo CPD recommendations for remedying energy woes.


Those quick-rental and inefficient power plants that are not yet on the existing 'phase-out' list should be discarded by 2025 and the indemnity act be repealed to heal Bangladesh's energy woes. Independent think-tank Centre for Policy Dialogue recommended Wednesday and experts at its meet echoed the views at a time when the country faced with a two-pronged problem of fuel shortages and forex crunch impeding gas import.


In particular, the CPD recommends immediate repeal of the indemnity law or The Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 to promote competitive and fair market in the sector. A unified and integrated energy policy should be incorporated with renewable energy at the core of the power and energy plan with unified targets, according to the analysis report framed by the CPD.


The think-tank presented the report at a seminar titled "Challenges and Opportunities for Energy Transition in Bangladesh: A Citizen's Manifesto" at the BRAC Centre Inn Auditorium in Dhaka. Dr Khondaker Golam Moazzem, research director of CPD, made the keynote presentation at the seminar, presided over by its Executive Director Dr Fahmida Khatun.


Mr Golam Moazzem said a reduction in overcapacity of power generation is missing from the Awami League's election manifesto announced before the January 7th general election. He notes that most of the political parties in Bangladesh, excepting the ruling Awami League, agreed to come out of the capacity payment and end the over-dominance of existing fossil fuel-based energy system, and go for energy mix and diversification and reduction in the dependence on power import.


"But it is missing in the Awami League's election manifesto," he told the meet about the urgency of energy transition. Awami League lawmaker Tanvir Shakil said achieving the goal of cent-percent electrification of the country has been the biggest success of the AL government. "The people don't want to wait for electricity anymore and don't want to see the cost of production," he said, adding: "There might be some mistakes, but we're trying to come out of those."


He finds scarcity of land in the country as the main hindrance to promotion of renewable energy, which is eco-friendly. Power Cell Director-General Mohammad Hossain said the power and energy sector has to be looked at in a holistic approach. "The government cannot overnight shift its plan to move for energy transition." Professor and Dean of Chemical and Materials Engineering Faculty of BUET Dr M Tamim said the government could easily offset 3000-megwatt electricity shortage with daytime solar power, "but there is no such plan".


The current plan 10,000 MWs of coal power plants will be running for next 20 years, the energy expert told the meet. Lead energy analyst of the Institute for Energy Economics and Financial Analysis (IEEFA) Shafiqul Alam said import of electricity and energy is leading to an increase in the shortage of dollars in the country. "We need to enhance our exploration effort of local gas to reduce dependency on imports." Manager of ActionAid Abul Kalam Azad mentioned that the country had to spend Tk 520 billion in buying electricity from the private producers and Tk170 billion in capacity payment during the last financial year (FY2022-23).


The CPD proposed short-medium-and long-term plans for power and energy sector to help government to formulate new plan for energy security. Among the short-term proposals are revising demand forecast, making payment for fuel in local currency, competitive bidding for power plants and regular financial reports from the energy-related institutions. The CPD suggests fuel purchases to be done through hedge funds and at a long-term fixed price. And spot-market commissions from fuel purchases should be eliminated, in order for a relief from fuel-forex crunch. Also says the policy think-tank that the government should streamline land-acquisition process and government khas land should be used for renewable energy as a mid-term plan.


The mid-term plans also include incentivizing integrating large-scale solar panels, virtual power- purchase agreements for small power plants, setting an import cap on fossil fuels and establishing a one-stop service for investors. Also suggested is an independent budget for BERC be allocated to enable them to invest in renewable energy projects. Encouraging private tech company investment, allocating adequate budget, removing bureaucratic barriers, and promoting independent operations for SREDA are stressed for future policy-adoption process.


Among others, Md Shahriar Ahmed Chowdhury, director of Centre for Energy Research (CER), United International University (UIU), and Hasan Mehedi, chief executive of Coastal Livelihood and Environmental Action Network (CLEAN) also spoke at the event. The speakers said the government must reduce dependence on import of power and primary energy. Or else, the power and energy sector would not get rid of continuous losses.


News Link: https://thefinancialexpress.com.bd/economy/insurers-with-good-records-to-be-allowed-to-sell-through-banks

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