Protected by controversial laws, a fossil fuel business syndicate turned the power and energy sector into a hotbed of corruption and inefficiency, reducing the sector into the single-most important factor behind Bangladesh鈥檚 current economic challenges, said the Centre for Policy Dialogue on Sunday.
In a press briefing held at its office for advising reforms in the sector, the think tank said that the interim government should focus on expanding renewable energy capacity putting an end to the fossil fuel expansion spree.
Bangladesh鈥檚 current installed capacity of 28,098MW is enough to meet the country鈥檚 demand until 2030, the organization said, advising the government to use the time in hand to make green transition.
鈥楳ajor reforms are needed in key economic sectors, including power and energy, because of lack of competition, inefficiencies, lack of transparency and accountability, and dominance of big conglomerates in the government鈥檚 decision-making process,鈥� said its research director Khondaker Golam Moazzem while presenting the keynote paper at the press briefing in the morning.
Only 13 private companies own 55 power plants with the generation capacity of 12,690MW, the keynote paper showed, exposing the influence of big conglomerates in the power and energy sector.
The power sector deals occurred mostly under the 鈥楺uick enhancement of electricity and energy supply act, 2010鈥� without any competition and rather arbitrarily, inflating energy prices and loss of state-owned Bangladesh Power Development Board.
In 2022鈥�23, the Power Development Board鈥檚 loss stood at Tk 11,765 crore despite frequent tariff increases, the Centre for Policy Dialogue said. The immediate past government paid Tk 39,535 crore in subsidy and Tk 28,000 crore in capacity payment in the last fiscal year.
The outstanding payment to independent, rental and quick rental power plants until June stood at Tk 10,000 crore, while outstanding payment for import of power from India until August stood at Tk 5,736 crore.
鈥業rregularities in the power and energy sector and money waste were responsible for creating the economic instability,鈥� said Moazzem.
He said that the quick enhancement of electricity supply act should be immediately repealed and the Bangladesh Energy Regulatory Commission act be amended for setting things right in the sector.
The think tank also called for bringing major change in the leadership in the power and energy sector which during the 15-year tenure of the past government mainly protected fossil fuel interests.
Bangladesh鈥檚 current renewable electricity capacity is only 1,378MW.
It demanded amendment to energy laws to set a net zero goal and get rid of the projection of economic growth that it said was intentionally inflated to justify unabated fossil fuel expansion.
The installed capacity of 35,000MW would be enough to meet the demand in 2041, including reserve margin, said the organisation, adding that the past government had projected the power need in the year to be 58,000MW.
The Centre for Policy Dialogue had long been demanding amendment to the 鈥業ntegrated energy and power master plan鈥� to reduce its fossil fuel dependency, saying that the plan tucked away the use of gas and coal under the disguise of clean energy.
It also demanded amendment to the renewable energy policy incorporating a greenhouse gas emission reduction goal.
The Sustainable and Renewable Energy Development Authority needed strengthening, as at present it could carry out only six out of the 24 different types of activities it was authorised to carry out, said the organisation.
It further said the Sustainable and Renewable Energy Development Authority needed separate wings for solar, wind, hydro and other emerging renewable energy technologies.
There was scope for reducing the installed capacity by 6,677MW without having any major adverse effects on the electricity supply in the country, the centre said, adding that the reduction would greatly help with the country鈥檚 current economic crisis.
A total of 13 quick rental power plants out of total 16 are still in operation though they were supposed to be retired by 2023. Of the plants, two are still enjoying capacity payment, while 11 are operating under no electricity no payment condition.
The policy organisation estimated that 28 power plants with a generation capacity of 3,655MW could be phased out by 2030 after the expiry of their contracts.聽
It also accused the state-owned energy bodies of providing contradictory information.聽聽聽
The Bangladesh Petroleum Corporation particularly is extremely reluctant in releasing any information, it said, urging the interim government to set up a system that would compel all state-owned energy bodies to regularly release information.
Up to August 2023, the government paid the power plant owners around Tk 1.05 trillion in 14 years as capacity payments, which is paid using the allocated subsidy from the national budget.
Tk 40,000 crore, or 37 per cent of the total subsidies allocated in the new budget of 2024鈥�25 fiscal year is for the power sector.
The research organisation also demanded formation of a committee to investigate into the allegations of ghost bills charged to pre-paid meter users.
It demanded re-evaluation of financial statements of state-owned energy agencies, saying that the information discrepancy was indicative of foul plays, irregularities and corruption.
Power and energy contracts should also be reviewed, it said, to get rid of excessive expenses.