THE likely increase in the losses of the Bangladesh Power Development Board by almost 200 per cent in 2025 suggests a deplorable absence of measures to amend the power policy, which is burdened by, among others, an abnormal level of overcapacity and an absurd capacity charge system. Energy experts, at a discussion organised by the Centre for Policy Dialogue on the national budget placed in the parliament on June 6, once again criticised the unwillingness of the authorities to set the power policy right. The keynote paper presented at the discussion says that the loss of the Power Development Board is likely to increase by 196 per cent in 2025 and that there is no budgetary measure in the proposed budget to address the flaws in the power policy. In 2024鈥�25, the BPDB鈥檚 loss is projected to be Tk 18,106 crore, despite retail tariff hikes several times in the recent past and the payment of subsidies. The BPDB鈥檚 loss stood at Tk 6,117 crore in 2023鈥�24. Such losses are incurred by the power development board largely because of the flawed power policy, burdened by an abnormal level of overcapacity, an absurd capacity payment system, an overreliance on imported gas and coal for power production and a disinclination towards renewable energy.
The country鈥檚 power overcapacity is over 50 per cent. Such an overcapacity means that over half of the installed power capacity is not used, and it bleeds the economy as the power plants are entitled to a capacity charge 鈥� a payment that the government must pay whether or not electricity is produced. Since 2009, the government has paid Tk 104,000 crore to 82 independent and 32 rental power producers in capacity charges, as the minister of state for power said in parliament in September 2023. The amount is almost the amount of loss incurred by the PDB since 2009. Another major flaw in the power policy is the overreliance on imported gas and coal for power production. The government has continued to ignore the calls for gas exploration, even though it could make power production less costly. Since 2009, when the government resorted to rental and quick rental power plants under the protection of an indemnity law, it has invested about $33 billion, including about $1 billion in capacity charges, but could not even ensure uninterrupted power supply. What is also problematic is that when the government publicises that it has given regular subsidies to the loss-incurring PDB, it has, in reality, given very little subsidy that could help consumers. The government has publicised a large amount of loan given to the PDB as subsidies.
The authorities must, therefore, immediately revisit the power policy, make a course correction and set the policy right. The authorities must phase out fossil-fuel-based power plants, scrap expensive power purchasing deals with capacity charge entitlements, lessen overcapacity problems and improve transmission and distribution networks. The authorities must also cancel the controversial Quick Enhancement of Electricity and Energy Supply Act, which appears to be the heart of the problem.
