CPD for phasing out quick rental power plants by 2025

The Centre for Policy Dialogue (CPD) has recommended phasing out quick rental and inefficient power plants by 2025.

This proposal comes amidst Bangladesh's transition towards coal- and LNG-based power generation over the past decade, despite a growing focus on renewable energy and carbon emission reduction.

During a seminar titled "Challenges and Opportunities for Energy Transition in Bangladesh: A Citizen's Manifesto" held at the BRAC Center in Mohakhali on Wednesday, the think tank also underscored the importance of addressing the over-reliance on import-based energy and enhancing efficiency in power generation.

In a keynote presentation, Khandkar Golam Moazzem, research director at CPD, said most of the political parties in Bangladesh, except the Awami League, agreed to come out of the capacity payments, end the over-dominance of the existing fossil fuel-based energy system, promote energy mix and diversification, and reduce dependency on power imports.

At the seminar, presided over by CPD Executive Director Fahmida Khatun, Moazzem highlighted several key recommendations: revision of energy demand forecasts to ensure accurate planning and resource allocation, and implementation of energy payments in the local currency to mitigate the foreign exchange crisis.

The recommendations also include advocacy for competitive tenders for power plants to promote transparency and efficiency in procurement, reduction of tariffs on solar products to incentivise investment and adoption of solar energy solutions, and promotion of biogas as an alternative energy source to diversify the energy mix and reduce dependency on traditional fuels.

The CPD further called upon the government to devise comprehensive plans spanning short, medium, and long-term periods to facilitate the transformation of the energy sector.

It also suggested optimising energy resources, reducing environmental impact, and promoting sustainable development in Bangladesh's energy landscape.

This proposal aligns with broader efforts to transition towards cleaner and more efficient energy sources, emphasising the need for strategic planning and policy implementation to achieve these goals.

Tanvir Shakil Joy, a standing committee member on the power, energy, and mineral resources ministry, emphasised that achieving 100% electrification has been the biggest success of the AL government.

"The demand of the people is for electricity. They no longer want to wait for electricity or endure high production costs," he said. "While there may have been some mistakes, we are committed to addressing them."

He highlighted that the main obstacle to the promotion of renewable energy is the scarcity of land in the country.

Mohammad Hossain, director general at the Power Cell, underscored the necessity for a comprehensive approach to the power and energy sectors.

He emphasised that the government cannot abruptly shift its energy transition plan overnight.

M Tamim, professor and dean of the Chemical and Materials Engineering Faculty at the Bangladesh University of Engineering and Technology and former special assistant to the chief advisor, highlighted that the government could easily address a 3,000MW electricity shortage with daytime solar power, yet no such initiative is currently in place.

He further remarked that the existing plan entails the operation of 10,000MW coal power plants for the next 20 years.

Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis, expressed concern over the increase in the shortage of dollars in the country due to the import of electricity and energy.

He emphasised the need to enhance local gas exploration efforts to reduce dependency on imports.

Abul Kalam Azad, manager at ActionAid, highlighted the significant financial burden faced by the country due to electricity purchases from private producers and capacity payments. This emphasises the importance of optimising energy resources and reducing reliance on costly imports.

He said the country had to spend Tk52,000 crore on buying electricity from private producers and Tk17,000 crore on capacity payments during the fiscal 2022-23.

Md Shahriar Ahmed Chowdhury, director of the Centre for Energy Research at the United International University, and Hasan Mehedi, chief executive of the Coastal Livelihood and Environmental Action Network, also contributed to the discussion.