Govt should pursue clean energy goals despite challenges: CPD

Regardless of the ongoing challenges, the government should not deviate from its clean energy goals as research has proved its brighter future, if compared to the financial and environmental costs of burning fossil fuels, said the Centre for Policy Dialogue (CPD).

The energy and power situation in the country is unlikely to improve in the next six months, said the think-tank yesterday while unveiling its quarterly review of the country's energy and power sector.

CPD Research Director Dr Khondaker Golam Moazzem said over the previous quarter Bangladesh has gone through an energy crisis. Load shedding, due to the outdated transmission and distribution system and an inability to import enough fuel as also payment dues, reflects a weaker energy security.

Meanwhile, there appeared to have been a U-turn from the clean energy transformation, he said, as the government still eyes 8,000MW new coal-based power generation capacity by the end of this decade that might hinder the national goal to have 40% of the consumed electricity from renewable sources by 2040.

Dr Moazzem said research suggests that both the financial and environmental costs of fossil-fuel based power generation would be going higher, especially for coal, in future while the cost of generating power from renewable sources is projected to sharply come down in future.

CPD Research Associate Helen Mashiyat Preoty, citing a Bloomberg report on Bangladesh's power sector, said the cost of generating one MW/h electricity from gas is $95 now and it would remain at $94 in 2030 and 2050 in the country.

On the other hand, the dirtiest fuel coal is costing $26 now to generate a MW/h electricity and would surge to $118 by 2030 as forecast by Bloomberg.

Solar power generation cost per MW/h is $113, including the cost of storage and it would sharply drop to $42 in seven years if Bangladesh keeps the current pace of solar adoption. By 2050, the cost would further halve to $21.

The government approved a billion dollar onshore wind power project's feasibility and that would cost $206 for a MW/h power generation now, $83 seven years later and $43 in 2050, said Bloomberg.

Mashiyat Preoty urged the government to reconsider its plan to prioritise hydrogen or ammonia as clean fuel options for power generation, citing their significantly higher costs compared to traditional fuels. Hydrogen, she pointed out, is four to five times more expensive than natural gas, while ammonia would cost seven to nine times more than coal.

Highlighting the incremental financial burden of the state due to the energy policy, implementation level weaknesses, the CPD placed emphasis on opting for better options.

For instance, Golam Moazzem, said the government seemed to be depending more on imported LNG, while the plan to explore and extract more local gas saw little progress.

Mashiyat Preoty said as part of the national solar drive, 13 solar projects with a total capacity of 267MW capacity were scheduled to be in operation by July this year and only one started on time with a partial capacity and nine were yet to start operations by the end of September.

Meanwhile a fuel-burning power plant scheduled to retire in April officially went off in August and might have been liable to capacity payment for the extended months.

The government paid over one lakh crore taka to the private sector power producers as capacity charge against the days of no power purchased from them over the last 12 years.

As of 30 September, over Tk35,000 in government payment to the power producers was due, while the Bangladesh Petroleum Corporation's dues to international suppliers amounted to $670 million.

An outdated and inefficient power transmission system is dragging the power sector down as evidenced in load shedding around the country, said the CPD.

Praising the government move on the renewable energy issue, the CPD also stressed a transparent and fair awarding of projects alongside improving the institutional capacity of government agencies dealing with renewable power.