CPD questions about necessity of power tariff hike

Staff Reporter :
The efforts of the Ministry of Power, Energy and Mineral Resources to raise power tariff is not understandable, said the Centre for Policy Dialogue (CPD).
The 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.
“It is not understandable that 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,” Dr Khondaker Golam Moazzem, CPD Research Director said it on Thursday while making a presentation on the interim report on the proposed ‘Integrated Power and Energy Master Plan (IEPMP)’ at CPD office.
Referring to the report, Dr. Moazzem said the total proposed amount of 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,” Dr. Moazzem said.
He 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. “The BPC is now making a profit of over Tk 30 per litre in selling the diesel,” he claimed.
Replying to a query, 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.
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.
Golam Moazzem 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,” he said.
“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.
RE has not been avoided in the proposed master plan, but it was ignored, he said.
Dr. Golam Moazzem said that the government ultimately wants to promote import of liquefied natural gas (LNG) through the proposed master plan while the RE did not get proper attention in it.