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Speakers at a virtual dialogue have urged the government to reduce dependency on ‘expensive’ oil-fired power plants to cut overall electricity generation costs and boost up national economy.
They also urged for deferring or annulling future coal-fired power plants to cope with ‘over capacity’ of the country’s overall electricity generation.
Local think tank Centre for Policy Dialogue (CPD) organised the event titled, “COVID-19: Power sector in national budget for FY2020-21– allocation priorities and alternate proposals,” on Wednesday.
State minister for the Ministry of Power, Energy and Mineral Resources, or MPEMR, Nasrul Hamid was the chief guest at the function chaired by the CPD Chairman Professor Rehman Sobhan.
CPD research director Khondaker Golam Moazzem delivered the keynote presentation.
In his keynote presentation Mr Moazzem said the government should renegotiate with independent power producers (IPPs) about the terms and conditions for different types of payments, including capacity payment.
He said Bangladesh has 40 per cent overcapacity power generation for which the government has to spend Tk 94 billion to pay the private power producers as capacity payment.
Generally, a country keeps 25 per cent reserve capacity for stable power supply and developing countries keep 10 per cent only, he said.
The overcapacity in generation will go up further if planned coal-fired power plant projects are implemented, he added.
The growing overcapacity and inefficiency in the power sector have been creating fiscal pressure on government, he said.
Such pressure has increased during COVID-19 period and will increase further in the post – COVID period, he added.
The COVID – 19 has provided an opportunity to revisit existing approaches, operations, management, cost and return of the ongoing power generation, distribution, transmission and related activities, said Mr Moazzem.
Former Special Assistant to the Chief Advisor professor M Tamim opined for a realistic forecast in electricity demand projection and stressed on reliability and efficiency levels of power plants to continue operations.
He also criticised the move to allow Bangladesh Energy Regulatory Commission, or BERC, to change tariff rates several times in a year.
It should be capped by two times in a year as the maximum, he suggested.
If such bill is passed by the parliament, then the consumers will lose the discourse to protect their rights, he said, adding, the regulator will have enormous authority to raise power tariff as many occasions as it wants.
Speaking as the chief guest Nasrul Hamid denied of having ‘over capacity; in electricity generation.
He said the country’s actual generation capacity is 16,000 MW against the demand of 15,000 MW.
But due to COVID-19, demand dropped and it now stands at 12,000 MW, he added.
It’s (electricity generation) is not over capacity, he said adding, had there were no coronavirus and economic zones developed timely, there would not have been any additional electricity generation.
Regarding coal-fired power plants, Mr Hamid, said generating electricity from coal-fired power plants will be reviewed.
He, however, said the under construction three coal-fired power plants at Payra, Matarbari and Rampal will be implemented as per the initial plan.
Of the three plants, first unit having 660 megawatt, or MW, capacity already came online, he said.
Oil-fired rental power plants have started retiring since last year, said Mr Hamid.
He, however, said the power system master plan will be reviewed to lay priority on developing LNG-based power plants instead of coal-fired power plants under the new reality arose after coronavirus situation.
Regarding the consumers’ frequent allegation on inflated electricity bills in recent days, he acknowledged that distribution companies did mistake in preparing bills as they had to prepare it on assumption basis due to the coronavirus situation.
Moderated by CPD Executive Director Dr Fahmida Khatun the seminar was also addressed by Power Cell director general Mohammad Hossain, former additional secretary and Sreda member Siddique Zobair, and President of Bangladesh Independent Power Producers Association, or BIPPA Imran Karim, East West University Professor Dr A K Enamul Haque.