[ad_1]
The rising price of electrical energy offered by impartial energy producers (IPPs) and funds for conserving overcapacity within the system may end up in elevated energy tariffs in Bangladesh, says a brand new report by the Institute for Vitality Economics and Monetary Evaluation (IEEFA).
The electrical energy bought from IPPs accounts for greater than 50% of the Bangladesh Energy Growth Board’s whole working bills.
The IEEFA, in its report, beneficial Bangladesh to concentrate on grid funding and renewable sources slightly than switching from imported coal to imported liquified pure fuel (LNG).
A hike in tariffs, nonetheless, has been on the playing cards for some time.
Earlier in January, the Bangladesh Energy Growth Board (BPDB), in a proposal to the Bangladesh Vitality Regulatory Fee (BERC) requested for a bulk energy tariff enhance of as much as 64% to satisfy the growing price of energy era and purchases of imported coal, LNG and oil.
In accordance with BPDB information, within the 2020-21 fiscal 12 months, the company spent a complete of Tk50,435crore to generate and buy electrical energy from IPPs, rental and public crops, and in imports from India.
Of this, Tk27,737crore was spent on electrical energy from IPPs, a rise from Tk17,519crore in 2019-2020.
The numerous rise in the price of electrical energy purchases from IPPs has turn into a giant motive for the federal government subsidies to bail out the BPDB after its losses reached a report Tk11,780crore within the 2020-21 fiscal 12 months, up from Tk7,440 crore within the prior 12 months.
On the identical time, overcapacity is eroding the BPDB’s monetary standing. Capability funds reportedly elevated to Tk13,200crore within the 2020-21 fiscal 12 months.
This correspondent referred to as the BPDB chairman quite a few occasions, however he couldn’t be reached for feedback.
Capability utilisation could drop to only 38%:
With bigger coal IPPs underneath development and enormous capacities of LNG-fired initiatives deliberate, the BPDB’s IPP price is prone to enhance considerably, mentioned the IEEFA.
In accordance with the BPDB’s newest annual report, 12,967 megawatts (MW) will likely be added to the grid after development of a brand new plant and one other 19,651MW is anticipated by the tip of 2024-2025 fiscal 12 months.
Over the identical interval, solely 3,990MW of outdated capability is deliberate to be retired, in keeping with the BPDB.
On account of the massive capability additions, the general energy plant utilisation will drop to only 38% by 2024-2025 even when the facility era grows at a really excessive 12%.
The BPDB’s losses might also enhance spending on subsidies.
New energy grasp plan can carry reduction
The brand new Built-in Vitality and Energy Grasp Plan (IEPMP), funded by the Japan Worldwide Cooperation Company represents a possibility for Bangladesh to halt the development of deliberate LNG and coal energy crops and reset the planning to supply a financially sustainable energy system for the long run.
The grasp plan focuses extra on renewable sources of energy.
“Constructing home low price clear vitality capability would assist enhance the eroding monetary standing of the Bangladesh Energy Growth Board (BPDB) which is burdened by the nation’s capability over-expansion primarily based on imported fossil fuels,” mentioned Vitality analyst and creator of the IEEFA report Simon Nicholas.
“Any additional concentrate on imported unstable fossil fuels is a warning to vitality customers in Bangladesh. Additional vital and economically damaging energy tariff development is greater than possible.
“The brand new energy system grasp plan led by JICA shouldn’t name for elevated imports of fossil fuels, which can additional harm tariffs.
“Bangladesh vitality customers are liable to being requested to pay large tariff will increase to cowl shortfalls being skilled by the BPDB. This isn’t sustainable, and doesn’t deal with the foundation of the issue within the energy sector.”
Bangladesh has already suffered from publicity to the price-volatile world LNG market. The price of liquified pure fuel (LNG) soared to report highs in 2021, forcing Bangladesh to pay report costs. Analysts do not anticipate stability out there any time quickly.
Nicholas wrote that the upper renewable vitality ambition of SREDA and the Mujib Local weather Prosperity Plan should be mirrored within the new vitality and energy grasp plan.
“If Bangladesh needs to start out having fun with the advantages of low-cost renewable vitality as a lot of the remainder of the world is, the federal government’s formidable wind and photo voltaic targets have to be locked into the brand new IEPMP.”
[ad_2]
Source link