June 10, 2020 Read More →

‘Sorry state’ of Bangladesh power sector calls for increased investment in renewables

Financial Express:

The country’s power sector is facing a crisis because of excessive reliance on imported fuel including coal and liquefied natural gas (LNG). As a result, the price of electricity for consumers is often raised as financial pressure on the state-owned Power Development Board (PDB) becomes acute.

Ironically, new plants are being set up despite a dearth of demand, forcing large parts of the national power production capacity to remain idle. Numerous oil-based rental power plants are also in operation that necessitates hefty expenses on account of imported fuel. Many of them are inactive in the absence of commensurate demand, but the government is legally bound to pay them capacity charges.

This sorry state of the power sector has been highlighted in a recent study conducted by the US-based Institute for Energy Economics and Financial Analysis (IEEFA), which explored the Bangladesh electricity market and pros and cons of policies pursued by the government.

The report points out that only 43 per cent of the country’s power generating capacity was being utilised even before the onset of Covid-19 pandemic. The domestic demand for power has gone down further because of this calamity. As a result, PDB is compelled to pay huge capacity charges despite losses in revenue. The government had paid Taka 80 billion annually as subsidy to make up for losses and shortfalls in cash-flow even before the pandemic. 

[Helal Uddin Ahmed]

More: Need for a shift to clean energy options

Posted in: IEEFA In the News

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