Future Power Sector Master Plan (PSMP) should place emphasis on reducing the excess installed capacity in a phased approach to avoid any mismatch between demand and supply, says the Centre for Policy Dialogue (CPD).
It should also attach importance to transitioning to clean power by gradually phasing out the use of fossil fuels and rental power plants, the think tank further stated while putting forward its recommendations regarding the new power and energy master plan at a virtual dialogue held on Thursday.
Dr Khondaker Golam Moazzem, research director of the CPD, said the master plan should be drafted based on an advanced method for estimating the demand forecast and taking into account the weaknesses of earlier methods.
In his presentation entitled "Proposed Power System Master Plan (PSMP): Challenges of Projecting Rationale Electricity Demand", he also pointed out several weaknesses of the existing master plan that include supply-demand mismatch, faulty longer projection, and questionable GDP estimates.
The CPD held the dialogue as the Ministry of Power, Energy and Mineral Resources has initiated the process of drafting the new PSMP and has signed an agreement with the Japan International Cooperation Agency (Jica) in this regard.
The existing master plan and the previous plans were prepared by Jica, which have been criticised for various limitations including weak demand-side analysis.
The plans predicted that there will be a demand for 13,300-megawatt electricity in 2019-2020 and suggested building up the generation capacity.
Following the master plan, the power division has increased the capacity to 20,383 megawatts over the year. But 37.71% of that capacity has remained unused and increased the government's expenditure in the form of capacity charge.
Participating in the panel discussion, Dr M Tamim, professor of petroleum and mineral resources engineering at the Bangladesh University of Engineering and Technology (BUET), observed forecasting electricity demand based on GDP growth was the main weakness of the previous master plans.
"None of this GDP elasticity and population models that have been used for the last three master plans has been correct. There is a huge inconsistency between GDP growth and power demand growth."
Urging the policymakers not to be executively ambitious and rather focus on targets which are achievable.
Talking about going to renewable energy sources, he said, "The planning for renewables has to be technically viable where we have to consider the grid situation and frequency adjustment."
"Small share of renewables in the energy mix will not be a problem for grid adjustment. But if it is 20GW or 50% of the total capacity, then it will require a smart grid," he added.
Imran Karim, president of Bangladesh Independent Power Producers Association (BIPPA), talked about the cost of cross border electricity import and discriminatory policy for measuring private power plants' efficiency.
"In cross border energy contracts, we should not only consider the cost per unit of electricity but the cost to reach the electricity to the substations also has to consider what the local power producers do," he said.
Talking about the discriminatory policy for measuring private power plants' efficiency, he said, "The authority always takes a soft stance when it comes to the efficiency of the public power plants compared to private plants."
He recommended that a unique standard be set for both public and private plants for measuring efficiency.
Speaking as the special guest, Japan Ambassador to Dhaka, Naoki Ito said some important elements have to be taken into account in formulating an energy master plan in keeping with economic growth, climate change and inclusiveness of energy excess.
"In the next master plant, we should be more aware of climate change on a priority basis," he added.
In the panel discussion, Anu Muhammad, an economics professor at Jahangirnagar University, questioned appropriateness of appointing a foreign agency like Jica to formulate the master plan.
He said "There might be a conflict of interest as the Japanese company is engaged in the power sector. The Japanese agency will prioritise its benefits in the master plan."
"Why have we given the task to a foreign company? Do not we have the capacity to formulate the master plan?" he questioned the authorities concerned.
Talking about excess power capacity, he said, "This is happening because the government has been taking power projects only to satisfy multinationals. Had the projects taken for people's interest, such a situation would not have happened."
Mohammad Hossain, director general at the Power Cell of the Power Division, also spoke at the dialogue.
Professor Mustafizur Rahman, distinguished fellow at the CPD, presided over the discussion while Dr Fahmida Khatun, executive director at the CPD, delivered introductory remarks.
Among others, Dr Ijaz Hossain, professor of Department of Chemical Engineering at Buet, Mohammad Alauddin, chairman at Sustainable and Renewable, Energy Development Authority and Dr Md Shahriar Ahmed Chowdhury, assistant professor and director at the Centre for Energy Research spoke as panellists at the discussion.