Budget lacks initiatives to overcome energy crisis

The government has proposed an allocation of Tk34,819 crore to the power and energy sector for the FY 2023-24 budget without indicating any new way out to face the ongoing electricity and energy crisis.

The proposed allocation, which is 27% higher than the revised budget for FY 2022-23, merely guarantees energy security but perpetuates the current scenario of hours-long load shedding and shortage of gas in the industry.

Instead, it proposed specific duty on petroleum products which would ultimately make energy costlier for consumers. 

Besides, the finance minister also proposed bringing an amendment to the notice that allows coal import with rebate facility for power generation. The authorities concerned, who import coal for power generation, are not fully aware of how this proposal is going to impact them.   

Even though renewable sources are capable of providing least costly energy, no specific amount has been allocated to boost this part of energy against the increasing cost burden of fossil fuel.

Moreover, the proposed budget has no special indication of achieving the goal to meet 10% of all electricity production being sourced from renewables by the year 2030.

Levelling the proposed budget as a usual one, energy experts said emphasising on renewable energy was required as the government is not in a position to continue the power supply from fossil fuels-based generators due to severe shortage of foreign currency.

"With regular load-shedding due to coal shortage and lack of immediate supply of adequate gas, the authority should give priority to ensuring energy security through reliable sources such as renewable energy," said Climate and RE Finance Analyst M Zakir Hossain Khan, who is also the chief executive officer of the Change Initiative, a renewable energy research and advocacy farm.

"The government should make a special allocation for conversion to solar-based irrigation to ensure uninterrupted energy supply, and also reduce the duty on quality solar panels for small and large scale rooftop solar generation," he added.

Speaking to The Business Standard, Shafiqul Alam, an energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), said the proposed budget might worsen the subsidy burden and dependence on import.

He said, with the allocation for the upcoming fiscal year, the government could help steer the energy and power sectors away from the existing challenges.

"However, like previous years, this budget has allocated a significant amount for the power sector development without any indication for a specific way out," he said.  

"While the government has reaffirmed its commitment to achieving 40% clean energy by 2041, the impression is that no significant incentive is included for clean energy in the budget. Industries and business associations were looking for a significant reduction of import duties on rooftop solar accessories. However, a cursory analysis of the budget document shows that import duties are not reduced," he further added.

Shafiqul Alam said the government might still consider reducing import duties on rooftop solar accessories to a minimum level.

Dipal Chandra Barua, founder and chairman of the Bright Green Energy Foundation (BGEF), said the proposed budget seems a conventional one considering how it was delivered at a critical time.

"There is no narrative regarding solutions of the existing energy crisis which could be reduced by encouraging renewable energy," he added.