Bangladesh Energy Regulatory Commission has asked Power Development Board and Power Grid Company of Bangladesh to form a committee involving independent experts to monitor whether the least cost plants are getting priorities in power generation.
The energy commission’s detailed order made public on Sunday also directed the authorities concerned to send quarterly reports to the commission based on the committee’s reports on implementing Merit Order Dispatch by the National Load Dispatch Centre, an entity of the grid company.
Based on the merit list provided by the power board every day, the load dispatch centre assigns priority to the plants for power generation.
The commission issued the order in the wake of severe criticism against the power board and the grid company that they had been assigning priorities to expensive power plants over the cheaper ones.
On November 23, the commission issued a brief order raising the retail prices of electricity by 5.3 per cent or Tk 0.35 per unit on average with effect from December 1, keeping the average price of bulk electricity unchanged at Tk 4.84 per unit.
In its order, the energy commission also asked the power board to prepare and implement least cost power generation expansion plan to reduce growing costs.
During a series of public hearing held between September 25 and October 4 on power price hike proposals, independent experts alleged that the utilities had violated the energy commission’s previous order to follow merit order dispatch to keep the country’s average power generation cost low.
The experts also alleged that the power board was forced to go for expensive options like rental power plants in power generation capacity expansion for vested quarters’ benefits.
Energy expert M Tamim, who was a special assistant to the chief adviser of a former interim government, however, censured the two directives of the energy commission and said that they would bring no result in reducing power generation costs.
He suggested creating an independent system operator to ensure merit order dispatch as recommended in the country’s Seventh Five Year Plan, instead of setting up a monitoring mechanism in the current system.
Least cost power generation or the merit order dispatch would only be implemented if the load dispatch centre is given autonomy or an independent entity is formed, explained Tamim.
He said that such an independent authority could play a role in location- and fuel-based power generation planning to ensure optimal use of resources and grid facilities.
M Shamsul Alam, energy adviser of Consumers Association of Bangladesh, refused to make comments on the matter as the energy commission had totally ignored their arguments during the public hearing.
The consumers association had showed during the hearing that the commission could reduce electricity price instead of increasing, he said.
The government’s policy to expand power generation capacity by rental plants and giving priority to the plants for generation mainly caused power price hike by 81.91 per cent, up from Tk 3.76 per kilowatt-hour or unit to Tk 6.84, in nine phases since March 2010 due to the government’s policy to serve vested quarters, said officials.