Energy likely to be threefold costlier over next 10 yrs

Country's energy prices might see a threefold hike over next 10 years as the government opted for importing 'expensive' liquefied natural gas (LNG) from next year.

Such prediction came from an energy seminar held Saturday in the city's Bidyut Bhaban.   

The discussants, however, opined that upgrading the efficiency levels of equipment might come in aid to check the tariff rises.

The seminar, titled 'Energy Tariff and National Economy', was organised by the Forum for Energy Reporters' Bangladesh (FERB).

State Minister for Power, Energy and Mineral Resources Nasrul Hamid was the chief guest. Energy-expert Professor Dr M Tamim presented the keynote paper at the function moderated by FERB Chairman Arun Karmaker.

The speakers also stressed retiring inefficient power plants, including the age-old gas-fired ones, and augmenting overall electricity generation apace with demand to keep the energy prices at tolerable level.

Otherwise, the government would have to sit on overcapacity in terms of electricity generation, resulting in further hike in tariffs, they feared. The speakers suggested market-based pricing of energy in a transparent mechanism and avoiding the policy of popularising any particular type of fuel at the cost of others.

Speaking on the occasion Mr Nasrul Hamid said the government would ensure electricity for all citizens by 2018.

"But to supply electricity uninterrupted will take more time," he added. He said the government has moved to waive value-added tax (VAT) on LNG imports to keep price of the imported gas lower.

The government has already waived supplementary duty and import duty on LNG imports, he told the meet. Regarding government position on shifting policies on energy, he said, "We have to bring changes in our plans keeping pace with the global situation as the LNG and oil prices are declining in the world market."

The cost of coal-fired power will increase due to modern and latest technology used in plants and environmental impacts, he added.

Prof Tamim, also former special assistant to the chief adviser of caretaker government, said the energy subsidy to poor people must be continued. He said the fall in oil prices on the international market is benefiting the government as the average electricity-generation costs fell to Tk 5.55 per unit (1 kilowatt-hour) in the fiscal year 2015-16 from Tk 6.25 per unit in FY 2014-15.

Member of Bangladesh Energy Regulatory Commission (BERC) Mizanur Rahman said energy prices should always be kept in line with the purchasing capacity of the common people.

He, however, said electricity tariffs will increase if the price of primary fuel goes up. Energy adviser of the Consumers Association of Bangladesh (CAB) Prof M Shamsul Alam stressed ensuring transparency in awarding power plants and fixing tariffs.

There might be a deplorable situation if the government continues awarding private sector the power plants in 'unsolicited way,' he cautioned. The government would turn business-friendly instead of people-friendly and People's Republic will turn into 'business republic', Mr Alam added.

Research Director of the Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem alleged that the government was providing undue benefits to owners of rental-and quick-rental power plants by extending their tenure without lowering tariffs to an 'expected' level. He urged the government to go for installing more IPP and base- load power plants instead of short-term rental-and quick-rental ones to cut tariff rates.

Chairman of Bangladesh Power Development Board (BPDB) Khaled Mahmood said efforts have been taken to increase efficiency of power plants. "The old power plants would be phased out."

Power Cell Director-General Engineer Mohammad Hossain said that the government should have control over the energy prices to ensure energy security for all. Vice-president of the Bangladesh Independent Power Producers Association (BIPPA) Imran Karim urged the government to introduce efficient metering system and ensure smooth electricity supply to industries.

[email protected]