Bangladesh

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Power, Energy Sector Budget

A third to go for idle power plants

Emran Hossain | Published: 00:45, Jun 12,2020

 
 

Finance minister AHM Mustafa Kamal on Thursday proposed Tk 26,758 crore for the Power Division and the Energy and Mineral Resources Division in the budget for the 2020–21 fiscal year with a third of the allocation proposed to be used as capacity payment to the idle power plants.

The allocation proposed is 4.7 per cent of the Tk 5.68-lakh crore total budget outlay and 12.4 per cent of the development budget fund.

Though Bangladesh can use less than half of its available power generation capacity the minister in the new budget proposed to continue to invest in increasing the power generation capacity manifold.

The minister did not come up with any plan to cut rental power plants which power experts have long been blaming for unnecessarily burdening the power sector, necessitating frequent power price hikes.

In his budget speech, Mustafa Kamal said that the government was committed to pursuing its mega plan to generate 60,000 MW by 2041 with the current generation capacity at 24,000 MW.

‘Currently, 48 power plants with a combined generation capacity of 16 thousand 875 megawatts are under construction, and the signing of agreements for the construction of 12 more power plants with a generation capacity of 2 thousand 785 megawatts are under process,’ said the minister.

There are 22 more power plants to be established in the near future, said the minister.

He said that the government was determined to turn Payra, Maheshkhali and Matarbari regions as power hubs though environment experts repeatedly warned against their environmental consequences.

He said that the construction of the 2,400 MW Nuclear Power Plant in Rooppur was progressing well.

‘This is an unrealistic budget which aims to make up for losses from excessive power generation through subsidies,’ said Consumers Association of Bangladesh energy adviser Shamsul Alam.

He said that the government proposed to use Tk 9,000 crore as subsidy in the new budget.

‘If the government took into account the reformations proposed in the power sector it would easily have saved Tk 12,000 crore a year,’ he said.  

Mustafa Kamal said that the import of power from India would continue while a new agreement was signed with Nepal for importing more power from that country.

Regarding renewable energy, he said that the government planned to expand on solar energy as the country currently sourced 628 MW from renewable energy.

The minister said that the length of the power transmission lines was increased to 11,119 circuit kilometres and that of the distribution line to 5.60 lakh kilometres.

Speaking on the government promise to ensure 100 per cent electrification by the end of 2020, he said that 257 upazilas were already electrified while 153 other upazilas were on the way to be.

The minister said that the BAPEX had so far drilled 28 wells as the government was determined to boost gas exploration and the number of wells would be increased to 108 by 2021.

Energy expert Badrul Imam said that the minister gave exaggerated estimates apparently in a bid to get media coverage.

In the past 20 years, he said, the BAPEX could not drill more than two wells a year.

‘The gas exploration plan discussed in the budget can never be achieved,’ emphasised Badrul Imam.

The minister said that the government would continue pursuing land-based LNG terminal at Matarbari to ensure an uninterrupted gas supply to power plants.

Badrul Imam said that the government rather needed to re-plan its power generation than spending more on it.

Last year, the government spent Tk 26,154 crore on the power and energy sector.

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