Private sector owns 59pc of planned renewable energy projects: Report

The private sector, owning 59pc of planned renewable energy projects in the country, charges a higher tariff for power purchase, said a new report.

According to the report, the private sector plays a significant role in the renewable energy sector, investing 62 per cent of the total funds.

Public investment in these projects amounts to USD 312 million, representing 23 per cent of the total investment, while joint venture investment of USD 212 million constitutes 15 per cent of the overall identified investment for renewable energy generation in the country, it added.

Change Initiative, an organisation working on renewable energy in the country, prepared the report titled ‘Follow the Renewable Energy Finance in Bangladesh,’ and shared its findings with the media on Thursday titled ‘Follow the Renewable Energy Finance in Bangladesh’

Private renewable energy projects are charging a higher tariff for power purchase, specifically at a rate of $0.13 /KWh. In contrast, public projects offer the lowest tariff rate ($0.10/KWh), the report highlights.

The joint venture projects charge tariffs higher than those of public projects, indicating a variation in pricing strategies across different ownership types.

The report emphasises the need for competitiveness in power purchase and transparency in tariff determination to attract more investment in renewable energy, as Bangladesh aims to generate 40 per cent of its electricity from renewable sources by 2041.

Currently, Bangladesh has installed 461 MW of renewable energy capacity, mainly from solar power, and plans another 4115 MW of projects in various development stages.

The report also criticises the policy shift favouring clean energy over renewable energy.

M Zakir Hossain Khan, climate finance expert and chief executive of Change Initiative,  expressed concerns that prioritising clean energy over proven renewable energy could create an unprecedented burden in Bangladesh in terms of safety, security, affordability, access to resources, and energy scarcity.

“Under no circumstances should the potential of renewable energy be nipped in the bud by undermining the jurisdiction of the Energy Regulatory,” he added, fearing that the tendency of making benefits through unreasonable tariffs will jeopardise the immense potential of RE expansion.

The majority of the renewable energy projects are unsolicited, initiated by developers without a competitive bidding process and often involve higher tariffs for both unsolicited and large projects, according to the report.

Tariff rates for renewable energy vary across different owners and capacities, with private projects generally charging higher rates than public and joint venture projects in Bangladesh.

In comparison, regulatory authorities in neighbouring countries have predetermined tariff rates based on size and publicly disclose detailed cost estimates and tariff rates of various projects, the climate finance expert added.

 “To build a smart Bangladesh, we must prioritise building a smart and green energy-dependent green future,” Khan recommends.

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