Participants in a dialogue in the city on Sunday said that without setting up a policy for sustainable energy and power sector development, Bangladesh has started its journey towards energy transition, these unplanned journey is likely to failed to comply with required allocation for energy sustainability and energy transition.
They said Bangladesh power and energy sector is passing a challenging period which needs proper fiscal, budgetary and policy planning with regard to generation, transmission and distribution of electricity and generation, transmission of domestic gas along with transparent bidding process to cut burden from the mass shoulders. The speakers urged the government to abolish the controversial "Special Power Sector Act," describing it as anti-people and the root cause of many irregularities in the power and energy sectors.
In their analysis of the current years budget, they observed that without proper planning, allocation, implementation, and monitoring, achieving both energy sustainability and transition will be unattainable.
These insights were shared during a dialogue organised by the Centre for Policy Dialogue (CPD) at the BRAC Centre Inn in the city on Sunday.
Distinguished discussants included Dr M Tamim, Professor of Petroleum and Mineral Resources Engineering at BUET and former Special Assistant to the Chief Advisor of the caretaker government, Mohammad Alauddin, Rector of the Bangladesh Power Management Institute, Professor Dr M Shamsul Alam, Energy Advisor of the Consumers Association of Bangladesh (CAB), Hasan Mehedi, Chief Executive of CLEAN (Coastal Livelihood and Environmental Action Network).
The event was honoured by the presence of A K Azad, Member of Parliament, as the special guest and Mohammad Hossain, Director General of Power Cell under the Power Division, as the guest of honour.
In his presentation, Khondaker Golam Moazzem, Research Director of the CPD, remarked, "The budget for the power and energy sector needs to be structured with a focus on energy sustainability and energy transition. Without proper planning, allocation, implementation, and monitoring, achieving both energy sustainability and transition will be impossible."
Khondaker Golam Moazzem presented a paper titled "Power and Energy Sector in the National Budget FY2025: Can the Proposed Measures Address the Challenges?" He argued that the proposed budget for the power and energy sector for 2024-25 fails to allocate the necessary resources for ensuring energy sustainability and transition.
The Centre for Policy Dialogue (CPD) has highlighted several critical gaps in Bangladeshs current energy budget, noting that while some electoral commitments are included, many significant promises are not reflected.
These omissions include the retirement of rental and inefficient power plants, the import of hydropower, and the development of a smart grid.
The CPD emphasised that the budget lacks necessary fiscal measures to address crucial issues such as the phase-out of fossil fuels, the retirement of quick rental power plants, the cessation of capacity payments, and the incentivisation of renewable energy through fiscal policies.
"We observed a tendency to overlook the expansion of renewable energy-based power generation," stated the CPD. They called for increased budgetary allocation to accelerate the expansion of renewable energy and recommended that renewable energy-friendly fiscal and budgetary incentives be proposed and implemented.
The paper underscored the importance of upgrading the transmission and distribution system to integrate renewable energy effectively into the national grid. Although the finance minister has proposed a special allocation of Tk 100 crore to promote the development and use of renewable energy, the CPD noted that while this amount is modest, it is a positive step towards reducing the countrys reliance on carbon-intensive energy sources. They also appreciated the focus on improving the distribution and transmission network of domestically drilled gas. However, the CPD warned against the heavy reliance on imported Liquefied Natural Gas (LNG), pointing out that this could make Bangladesh vulnerable to fluctuations in global prices and geopolitical tensions. The budget proposes a subsidy allocation of Tk 7,000 crore for LNG imports in FY25, an increase from Tk 6,000 crore in FY24. The CPD argued that this funding would be better directed towards exploring domestic gas resources.
The CPD called for an end to funding for new fossil fuel-based power generation. They urged the government to commit to phasing out old, inefficient, and costly fossil fuel power plants by not renewing their contracts.
They also recommended measures to reduce load-shedding and to increase the budget for drilling new gas wells.
Dr M Tamim, a former energy advisor, criticised the ad-hoc and project-based approach currently employed in the energy and power sector. He pointed out the frequent policy shifts over the years: "In 2005, we declared that 100 per cent of plants would be run by gas. By 2010, we shifted to a plan to extract coal with a 50:50 gas-coal ratio. These changes occurred because we lacked reliable data and revised these highly technical issues without adequate expertise."
Dr Tamim advocated for the immediate repeal of the Special Power Sector Act and called for transparency in the bidding process within the power and energy sector. He argued that such transparency would help lower energy prices and contribute to a more stable and sustainable energy future for Bangladesh.
Taking part in the discussion, Dr. Shamsul Alam, Energy Adviser of the Consumers Association of Bangladesh (CAB), stressed the necessity of energy justice. He highlighted that it is the peoples right to access energy, and the government must ensure it is provided at an affordable price with reliable supply. "Currently, there is no authority to examine the pricing issues properly. Authorities can impose whatever rates they want. People should reclaim their right to ensure energy justice in their daily lives," he added.
Member of Parliament AK Azad, who is also an entrepreneur, shared his struggles with load-shedding despite having installed captive power plants in his industries. "My plants require 52 MW of electricity, of which they produce 40-45 MW. I rely on the grid for the rest. Nowadays, we experience 7 to 8 hours of load-shedding daily.
If this continues, no progress can be expected. Subsidies, incentives, or formulas are ineffective because we lack transparency and accountability," he said.
In his concluding remarks, Dr Khondaker Golam Moazzem, Research Director of the CPD, pointed out, "Even with increased electricity prices and government subsidies, the Power Development Board (PDB) will face substantial losses." He described the governments plan to produce 60,000 megawatts of electricity by 2041 as overly ambitious, suggesting that a target of 35,000 megawatts, including a 25 per cent reserve, would be more realistic.
"Electricity generation currently falls short of demand due to distribution and transmission limitations. This results in load-shedding despite a surplus of electricity, while substantial payments are made as capacity charges for power plants," Dr. Moazzem explained, attributing rising electricity bills to these inefficiencies and PDBs projected losses.
Dr Moazzem also criticised the operations of the Bangladesh Petroleum Corporation (BPC), pointing out inconsistencies in their financial reporting. "The BPC shows losses at the beginning of the year but claims profits by the end. The methodology they use to determine oil prices needs scrutiny," he said.
Advocating for a greater shift towards renewable energy, Dr. Moazzem called for a reduction in the use of fossil fuel-based power plants, describing them as "environmentally harmful and expensive." He criticised the governments increasing reliance on imported fossil fuels, advocating instead for a focus on domestic gas exploration.
Dr Moazzem also urged the government to invest in developing a smart grid system and improving transmission and distribution lines to ensure a consistent and uninterrupted power supply. Despite the increase in capacity, load-shedding remains a problem in the country, with an average of 1,100 MW of load-shedding during the summer.
He noted a lack of clarity in the budget regarding the power and fuel sectors, leaving the public uncertain about the governments plans.
MP AK Azad also commented on the recent price increases, purportedly to guarantee a supply of uninterrupted electricity and gas. However, he observed that load-shedding has not decreased, questioning the effectiveness of these measures.
