Stress on annulling provision of paying capacity payments to idle power plants

Speakers at a webinar demanded annulling the provision of paying capacity payments to idle power plants to keep down overall electricity generation costs and keep the national economy vibrant.

They also opined for a pragmatic forecast over the country’s power and energy demand to avoid keeping the ready power plants idle and help the business entrepreneurs chalk out time bound investment plans.

More than 40 per cent of the country’s power plants are now kept idle but the government is paying capacity payments as incentives, they opined.

They were speaking at the seminar titled, “Energy Crisis and Policies: Current Scenario and the Future,” organised by Economics Study Center (ESC) of Dhaka University Thursday night.

Moderated by Professor Dr M M Akash, chairman of Economics Department of Dhaka University and Dr Sayema Haque Bidisha of Economics Department of Dhaka University the webinar was addressed by Dr Ahsan H Mansur, executive director of Policy Research Institute (PRI), Dr Khondaker Golam Moazzem, research director, Centre for Policy Dialogue (CPD), and Dr Badrul Imam, honorary professor of Geology Department of Dhaka University.

The discussants also pointed out that the country’s oil and gas exploration works started slowing down over the past one decade when lobby for importing liquefied natural gas (LNG) started getting stronger in the country.

Expediting exploration for hydrocarbon is the only option to ensure the country’s future energy security, said professor Badrul Imam.

“The failure of our policymakers to make right decisions on time has led us to such scenarios,” he opined.

Lack of timely investment has also put us in an unpleasant position, said Mr Imam.

The country is at risk of ensuring the supply of natural gas and keep the economy momentum due to dwindling natural gas output, said Dr Ahsan H Mansur.

“To keep up with today’s world, we need to focus more on green energy,” he said adding, “new initiative to transform fuel-based irrigation pumps into solar-based pumps is also necessary.”

Importing solar energy from India can be a good but temporary solution, he said.

Encouraging rooftop solar, especially in industries is also necessary, said Mr Mansur.

Some 500 megawatt (MW) of electricity could be generated only rooftop solar is installed in the ready-made garment (RMG) industries alone, he added.

Using electric cars and trucks can eventually reduce the mass use of petroleum products, he said.

He also stressed fuels. But to make this massive change possible we will need to change the infrastructure and introduce some new rules.

But to keep up with today’s world, we need to focus more on green energy.

Also, the new initiative to transform fuel-based irrigation pumps into solar-based pumps, an exemplary event will take place.

Besides, importing solar energy from India can be a good temporary solution for us considering the circumstances.

Inflated and confusing projection over electricity demand is paying the country heavily as the government is paying billions of Taka every year as capacity payments to non-operating power plants, said Dr Golam Moazzem of the CPD.

Stressing the need for annulling the provision of capacity payments to power plants he said the country is now not in a position to carry out such ‘waste’ expenses.

 Paying capacity payments to power plants owners were logical during 2009-2010 when the country was lacking investments and entrepreneurs in this sector.

“But now we have a lot of entrepreneurs willing to invest in power sector,” Mr Moazzem added.

He suggested de-incentivising the existing hydrocarbon industries to promote the use of renewable energy in Bangladesh.

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