‘Tariff transparency needs for renewable energy investment’
Staff Reporter :
More competitiveness in purchase and transparency in tariff determination is urgently need to attract more investment in renewable energy sector in Bangladesh, a recent findings showed.
The findings from the newly released report from Change Initiative on ‘Follow the Renewable Energy Finance in Bangladesh’ were published on Thursday.
The report highlights the key points on progress and challenges until 2023 of Renewable Energy adoption and practices. Bangladesh has a target of generating 40pc of its electricity from renewable sources by 2041.
As of the publication of the report, Bangladesh has installed 461 MW of renewable energy capacity, mainly from solar power, and has planned another 4115 MW of projects in various stages of development.
During COP28, country leaders of 123 nations including Bangladesh agreed Global Renewables and Energy Efficiency Pledge, committing to a collective goal of tripling global renewable energy targets to double the global average annual rate of energy efficiency improvements from about 2pc to over 4pc by 2030.
They also committed to prioritizing energy efficiency as the ‘first fuel’ in policy, planning, and major investment decisions.
The Change Initiative Study revealed the inconsistency in Renewable Energy targets, inequitable approval of Renewable Energy projects in terms of potential of solar radiation and exaggerated tariffs in Renewable Energy projects.
One recent policy shift in Bangladesh promotes ‘Clean Energy’ over ‘Renewable Energy.’
Nevertheless, renewable energy, including solar, wind, and biomass energy, are a safer and more reliable technology within the current scope of this report.
Within the context of Bangladesh, these additional the ‘Clean Energy’ sources remain unproven, unreliable, and expensive supply driven.
Prioritizing clean energy over proven renewable energy could create unprecedented burden in Bangladesh in terms of safety, security, affordability, access to resources, and energy scarcity.
IEPMP 2023 has unnecessarily created scope for unexpected economic pressure as well as input dependent energy security.
The report further analyses the ownership, finance, tariff, and implementation of renewable energy projects, highlighting the role of the private sector, the need for transparent and efficient procurement, and the variation in pricing strategies.
According to the report, the private sector plays a significant role in the renewable energy sector, owning 59pc of the planned projects and investing 62pc of the total funds.
Public investment amounts to $312 million, representing 23pc of the total investment while joint venture investment of $212 million, makes up to 15pc of the overall identified investment for renewable energy generation in the country.
According to M Zakir Hossain Khan, Climate Finance Expert and Chief Executive of Change Initiative, ‘Bangladesh’s sustainable progress in dealing with the climate crisis depends on building a nature-based, cost-effective and sovereign renewable energy-based economy.
Under no circumstances should the potential of renewable energy be nipped in the bud by undermining the jurisdiction of the Energy Regulatory Commission and looting immoral benefits through unreasonable tariffs.
This tendency will jeopardise the immense potential of RE expansion.’
