warranting an immediate government action. While the law — the Quick Enhancement of Electricity and Energy Supply Act 2010 the tenure of which has been extended in phases until 2026 — has all along safeguarded actors and their action in the sector by keeping them above the customary law, what happened under the protection of the law has had two major implications of creating a situation to increase power bills and giving more subsidy in the sector. Rental power plants have also become expensive because of the use of expensive diesel and furnace oil and the capacity charge entitlements laid out in the power purchase agreements by way of which the government pays the plants for the installed power capacity that the plants do not produce. Heavy fuel oils were four times more expensive than gas and 37 per cent more expensive than coal in producing a unit of electricity in 2023. The average power generation cost in oil-fired plants was about Tk 23 a unit against the average power system cost of Tk 11.5 a unit. Some oil-fired plants even spent Tk 40 on producing a unit of electricity.

The Awami League government — which extended the lifetime of the rental power plants three times their recommended efficient operating life and paid them about Tk 330 billion in 2009–2023 — has paid in all the power producers Tk 1,000 billion since 2009 in capacity charge for the power not produced, thus, transferring public money into private hands without being questioned. Rental and quick rental power plants have also been blamed for mounting losses of the Power Development Board which in 2023 stood at Tk 435.39 billion. The action in the power sector that could not be questioned, however, increased the installed generation capacity from 5GW in 2009 to more than 28GW as of June, but more than a half of the capacity could not be used and was not required. The authoritarian government of the Awami League did not heed what experts have said all these years. In the changed political context after August 5, when the Awami League government was overthrown, it has, therefore, become imperative for the interim government to assess the power and energy situation and establish the generation capacity that the country would need to meet all its needs, which should include the standard level of power overcapacity, and then do away with the remaining overcapacity that the government has so far paid for. The government should do away with rental power plants and the burden of power overcapacity associated with such plants.

Whilst the government must take early steps to do away with the burden of power overcapacity after a thorough assessment of the reality on the ground, including the needs and the capacity that should logically be there, it must also repeal the indemnity law and hold to account all the actors and their action that have pushed the power and energy sector to such a pass.

News Link: Govt must do away with burden of power overcapacity