RE, Cost-Cutting Strategies Key To Sustainable Power Sector

Experts have urged the authorities concerned to take measures to increase renewable energy capacity and adopt cost-reduction strategies for streamlining the country’s distressed power sector.

- 

They made the call at the webinar “Power Sector Reforms: Roadmap for Sustainability”, organized by Energy & Power magazine on 22 December 2024, moderated by the magazine Editor Mollah Amzad Hossain. The event was based on the Institute for Energy Economics and Financial Analysis’s (IEEFA) recent report “Fixing Bangladesh’s Power Sector”.

Presenting the keynote, IEEFA’s lead energy analyst for Bangladesh Shafiqul Alam highlighted that the power sector’s installed capacity increased by more than 100% between June 2016 and October 2024. As the power demand did not keep pace with soaring generation capacity, Bangladesh’s power sector has the issue of overcapacity which results in capacity payments.

Alam added that amid a tepid power demand growth, the sector’s cost increased by 2.6 times against the revenue growth of 1.8 times, compelling the government to pay Tk 1,267 billion (USD 10.64 billion) in subsidy during the fiscal year 2019-20 to 2023-24. BPDB recorded a combined loss of Tk 236.42 billion (USD 2 billion) during the same period. Despite power tariff hikes thrice in 2023 and once in 2024, the subsidy recorded in the fiscal year 2023-24 was still a whopping Tk 382.89 billion (USD 3.22 billion).