Despite the extension of rental power plant contracts, the government’s multifaceted strategy demonstrates a proactive and balanced approach, ensuring immediate energy needs are met while progressing toward long-term, sustainable solutions
The Awami League, ahead of the 12th national parliament election, unveiled its 2024 manifesto, pledging to shut down rental-based and inefficient power plants while ensuring a continuous and reliable power supply. Sheikh Hasina, the president of the Awami League, presented the election manifesto in the capital on Wednesday, December 27, 2023.
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As outlined in the manifesto, the party emphasized the importance of sufficient, dependable, and affordable electricity for the comprehensive economic development of any developed or developing nation. The document highlighted the historical context, tracing back to 1972 when Bangabandhu established state ownership of all natural resources, including energy and mineral resources, to safeguard national interests against foreign exploitation. Notably, during the first Awami League government led by Sheikh Hasina from 1996 to 2001, significant strides were taken in the energy and power sector.
The manifesto also addressed the challenging period from 2001 to 2006, marked by rampant looting, mismanagement, and inefficiency under the BNP-Jamaat government, leading to a dire situation in the energy and power sector. Over the three terms of Sheikh Hasina’s government since 2009, the manifesto highlighted groundbreaking and revolutionary developments in the country, resulting in reliable electricity supply for industrial and commercial sectors. Furthermore, the commitment to ensuring electricity in every household, including rural areas, was underscored as a significant achievement of the Awami League’s governance. The government has taken many initiatives for the sustainable development of the power sector of the country.
Power Sectors’ Development Manifesto at a glance
Several commitments have been made in the manifesto for the development of the power and energy sector:
Scenario of the Rental and Quick Rental Power Plants
The government of Bangladesh, led by the Awami League since 2009, implemented a law in 2009 to establish quick rental power plants for swift power generation. This move aimed to meet the country’s growing demand for electricity. The legislation provided impunity to these institutions through parliamentary approval, ensuring fixed payments from the government even if the plants did not operate as per the law.
Under the Power Purchase Agreement (PPA), the Bangladesh Power Development Board (BPDB) will procure electricity from the plant at a tariff rate of US cents 5.7 per kilowatt-hour. While this rate is higher than that of base-load plants, it is essential to recognize the urgent need for energy solutions. In comparison, the government has successfully negotiated advantageous rates with other projects, such as the Summit-GE’s Bibiyana 450 MW gas-fired power project. In October 2021, the government approved a Power Purchase Agreement for a 660 MW base-load combined cycle plant, showcasing its commitment to diversifying energy sources. This move is crucial for ensuring a stable and secure energy future for the country.
The State Minister for Power, Energy, and Mineral Resources, Nasrul Hamid, defends the decision to extend contracts for rental and quick rental power plants, citing an “emergency necessity” caused by a gas shortage. Hamid highlights that these extended contracts won’t require government “capacity payments,” resulting in a significant 30-40% reduction in electricity costs compared to the original expense. This cost-effective strategy aligns with the government’s goal of managing the energy sector efficiently. Despite a surplus in power generation capacity, the government aims to meet immediate energy demands while exploring long-term, sustainable solutions. Measures like the “No Electricity, No Payment” provision ensure accountability, and the allocation of Tk 1205.40 crore for the extension of Precision Energy’s Ashuganj gas-fired rental power plant reflects strategic financial planning over five years. Overall, the government’s approach demonstrates a balanced and proactive stance in managing the nation’s energy sector for the citizens’ benefit.
Bangladesh’s Energy Sector Development Scenario
Upon assuming office, the AL government prioritized advancements in the power and energy sector, embarking on a journey toward renewable energy. Initiatives like floating solar plants, nuclear power plants, wind power plants, and offshore power plants are being implemented to propel sustainable development.
Since 1996, Bangladesh has successfully deployed over six million Solar Home System (SHS) units, complemented by numerous rooftop installations, solar-powered street lights, telecom BTS, and solar irrigation units. Private enterprises have also contributed by establishing off-grid small solar power plants, fostering the growth of renewable energy.
Foreseeing a substantial increase in solar energy adoption, the government’s swift measures to transition gradually to renewable energy are expected to play a pivotal role. This undertaking not only promotes regional economic development but also diminishes dependence on imported power, aligning with global efforts for environmental preservation. The impact of this initiative extends beyond North Bengal, sustaining regional commerce and employment.
To join the gigawatt club alongside China, India, and the UAE, Bangladesh is actively implementing plans for several massive solar power plants, including three with a 1,000MW capacity each. Notably, one such plant is under construction in Noakhali at Swarna Dwip, with Pacific Energy Group, LLC, in a joint venture with the Bangladesh Army Welfare Trust.
The Bangladesh Army’s 33rd Infantry Division has overseen the 370-square-kilometre island since 2013, implementing diverse development initiatives and establishing an exercise base. The government is presently reviewing or implementing major projects in Sreemangal, Moulvibazar (300MW), Mongla, Bagerhat, and Thakurgaon (both 200MW), according to sources from the Energy Ministry.
State Minister for Energy and Power Nasrul Hamid reported that Bangladesh presently generates 1,194 MW from renewable sources, but only 825.23 MW enters the national grid. As part of ongoing efforts, 1,262MW of renewable energy power plants are under construction through 30 projects, with an additional 8,668MW in the planning stages.
Conclusion
The Awami League’s 2024 manifesto outlines a comprehensive vision for Bangladesh’s energy sector, emphasizing the closure of inefficient power plants and a commitment to sustainable development. The historical context underscores the party’s dedication to national interests. Despite the extension of rental power plant contracts, the government’s multifaceted strategy demonstrates a proactive and balanced approach, ensuring immediate energy needs are met while progressing toward long-term, sustainable solutions. The ambitious plans for renewable energy projects signal a commitment to environmental preservation and economic growth, positioning Bangladesh as a key player in the global gigawatt club.
