CPD raises question about power tariff enhancement proposal

Centre for Policy Dialogue (CPD), a think-tank, has raised questions about the necessity of power tariff enhancement against the backdrop of the concerned ministry’s reported proposal for an allocation of Tk 56,860 crore as subsidy.

“We don’t understand why the Ministry of Power, Energy and Mineral Resources wants to raise power tariff at the retail level when it seeks such a huge amount as subsidy,” said CPD research director Dr Khondaker Golam Moazzem while making a presentation on the interim report on the proposed “Integrated Power and Energy Master Plan (IEPMP) on Thursday at CPD office, reports UNB.

Referring to the report, he said that of the total proposed amount, Tk 32,500 crore was sought for state-owned Bangladesh Power Development Board (BPDB) for power sector, Tk 19,360 crore for Bangladesh Petroleum Corporation(BPC) for petroleum import and Tk 5,000 crore for Petrobangla for LNG import.

“We don’t agree with a proposal of reducing subsidy by raising power tariff,” he said adding, Rather, the government should go for a phase out plan to retire the costly rental and quick rental power plants to reduce the cost of power generation.

The CPD research director said state-owned BPC is now making huge profit instead of incurring loss in its petroleum business after enhancement in fuel prices as the global fuel price is showing a declining trend.

He claimed that the BPC is now making a profit of over Tk 30 per litre in selling the diesel.

Responding to a question, he said the ministry sought such a huge amount as subsidy might be due to an inflated calculation.

CPD executive director Dr Fahmida Khatun also spoke on the occasion.

Appreciating the government’s initiative for adopting the Integrated Power and Energy Master Plan (IEPMP) , Dr Golam Moazzem said this has some positive and negative aspects.

"But despite that we appreciate the move as it has much more focus on renewable energy promotion than before,” he said.

He, however, said that the government is now shifting from its original target of generating 40 percent of electricity from renewable energy by 2041.

“We see a major change in the statements as they now say the target is “up to 40 percent” by inclusion of word “Clean Energy” instead of renewable energy,” he added.

He also observed the government was trying to shift from the coal-fired power’s phase out plan by introducing “Carbon Capture Technology”.

The developed world is now coming away from this technology because it is not environment-friendly as such technology is used to capture carbon from the coal-fired power plants.

He said the cost of solar and other renewable energy (RE) options is coming down globally and generation of 16,000 MW of electricity, which is the targeted 40 percent of total planned power generation, is very much possible. Many local and foreign investors are ready to invest in the RE sector.

“The RE technologies are getting cheaper day by day. The government should go for proven technology in this regard instead of unproven ones,” he said.

He also observed that the government ultimately wants to promote import of LNG (liquefied natural gas) through the proposed master plan while the RE did not get proper attention in it.

“RE has not been avoided in the proposed master plan, but it was ignored,” he said.