Bangladesh to import 1,000MW of renewable electricity from India: Nasrul

Highlights:

• MoU for renewable electricity import from India signed
• Steps underway to bring electricity from Nepal and Bhutan as well
• Govt wants to reach 10% renewable energy within 2025 and 40% by 2041
• Power price to be revised up twice this year
• Electricity supply to return to normal within three to four days
• Uninterrupted gas supply to resume from 15 July

Bangladesh will import 1,000 megawatts of renewable electricity from India, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said in Dhaka today.

A memorandum of understanding has already been signed and the electricity will be added to the national grid soon, the state minister said at a press conference at his Secretariat office.

Prior to the import of renewable energy from India, an agreement is in the works to bring 40MW electricity from Nepal this month, he said, adding that there are also initiatives to import electricity from Bhutan.

Bangladesh currently imports electricity generated from gas and fuel oil in India's Tripura on a government-to-government basis. Bangladesh also imports electricity from the coal-based plant of India's Adani Power.

The government is focusing on shifting to renewable energy from fossil fuel-produced electricity. It has set a target of reaching 10% renewable energy by 2025 and 40% by 2041.

Nasrul Hamid said one of the main reasons for the high prices of electricity, gas, and fuel oil is the high value of the dollar. "Until the dollar price stabilises, there is little possibility of a decrease in their prices. On the other hand, prices are also rising due to the government's plan to phase out subsidies," he added.

Nasrul said there is a significant gap between the cost of producing and selling electricity. This gap has widened even more due to the high value of the dollar, he said.

"The production cost for these power plants was calculated on the basis of an exchange rate of Tk79 per dollar. Currently, the exchange rate is Tk117 to the dollar. It is not just coal, the production costs of electricity in other sectors have also increased due to the high value of the dollar."

He said the government provides almost 50% subsidy on electricity. "Now, the government wants to move away from this subsidy. Therefore, price adjustments will be made. It has already been done twice, and it will be done two more times this year. Prices will be adjusted whenever the government decides."

The state minister said the price of fuel oil in Bangladesh is higher compared to the international market. "This is also due to the high value of the dollar. Even if prices drop in the international market, Bangladesh faces losses in pricing due to the high value of the dollar."

Nasrul said the government's goal is to supply 10% of the total electricity from renewable energy sources by 2025. "For this, 2,600MW electricity needs to come from renewable energy sources. Currently, about 450 megawatts are already being supplied."

He said to achieve the goal, letters of intent have already been issued for generating 2,500MW electricity from renewable energy sources. There is also a pipeline for letters of intent amounting to 6,000MW, Nasrul said, adding that all of these are investments in the private sector.

The government is collaborating with the World Bank to encourage private investment in renewable energy, he said. Through World Bank financing, infrastructure development for renewable energy power plants, establishment of operational lines, and setting up substations will be facilitated, said the state minister.

Due to Bangladesh's climatic conditions, solar panels can produce electricity for about 17% to 20% of the time, he said. 

"Therefore, plans are being made for wind power alongside solar panels. Efforts are underway to explore the possibility of generating wind power offshore. Work is also being done to bring the transmission system under a smart grid. Additionally, initiatives are in place to store electricity."

Nasrul said uninterrupted gas supply will resume from July 15. "Various reasons caused a shortfall in electricity supply last month. The Payra power plant has started operations. Within three to four days, the electricity supply will return to normal."

On March 10, Petrobangla, the government-owned national gas company, invited international tenders to appoint a contractor for oil and gas exploration in the Bay of Bengal. Interested oil and gas companies must submit their tenders by 1pm on 9 September.

The state minister said that the deadline will be extended further. However, he did not specify how long the extension will be.

He said 17 companies have already expressed interest, and six companies have purchased seismic survey data. "Many others are showing interest. For this reason, the deadline will be extended.