Reflection of the Power Sector in the 8th FYP

8th FYP should focus on rational demand projection, cleaner energy mix, rise in efficiency, and better quality of transmission and distribution in the power sector

The power sector of Bangladesh is increasingly facing challenges with regard to inefficiency, cost escalation, lack of cleaner energy-mix, poor quality of transmission and distribution and rising financial burden. Those challenges are likely to aggravate in the future and hence it is important to take lessons from that to ensure proper implementation of the 8th FYP. Improvement of transmission and distribution of electricity should be a major focus of the power sector during 8th FYP period. Focus should also be given on strengthening the capacity of implementing renewable energy projects, and both traditional and non-traditional renewable energy projects should get priority in the upcoming policy document.

These observations emerged at a virtual Expert Group Discussion titled “Reflections of the Power Sector in the Upcoming 8th Five Year Plan: Perspectives on Strategies and Initiatives”, organised by the Centre for Policy Dialogue (CPD). The discussion was held virtually on Thursday 24 December 2020. CPD’s Executive Director, Dr Fahmida Khatun shared the introductory remarks where she highlighted institutional reform in the power sector for developing a sustainable power and energy sector in the country.

At the virtual discussion session, CPD’s Research Director, Dr Khondaker Golam Moazzem made the keynote presentation. Dr Moazzem suggested that an alignment of the demand projection should be made by the upcoming PSMP 2021 with other policy documents will be highly important. The energy mix which is highly biased towards fossil-fuel should be gradually rebalanced with setting up renewable energy based projects. He also highlighted that 8th FYP should highlight appropriate mechanism to lessen the fiscal pressure, huge import payment and debt burden caused in case of different power sector related activities.

Mr Mohammad Alauddin, Chairman (Additional Secretary), Sustainable & Renewable Energy Development Authority (SREDA), Power Division, Ministry of Power, Energy and Mineral Resources, Government of Bangladesh, a panelist at the session stated that, to move to renewable energy, relying only on solar energy would not be enough. He suggested that more studies need to be conducted regarding opportunities of producing wind energy in Bangladesh. Echoing with CPD’s presentation, he put emphasis on institutional strengthening of the SREDA by increasing human resources.

Mr Mohammad Hossain, Director General, Power Cell, Power Division, Ministry of Power, Energy and Mineral Resources (MPEMR), Government of Bangladesh was present as another panelist at the session. He remarked that the high reserve margin of generation is due to the low demand of power in the COVID-19 scenario. He said that the government is taking due measures in addressing rising cost, inefficiency and higher financial burden on the power sector.

Dr M Tamim, Former Special Assistant to the Chief Advisor, Professor, Department of Petroleum and Mineral Resources Engineering, Bangladesh University of Engineering and Technology (BUET), Dr Ijaz Hossain, Professor, Department of Chemical Engineering, Bangladesh University of Engineering and Technology (BUET), Professor Dr M Shamsul Alam, Dean, Faculty of Engineering (FE), Daffodil International University, and Professor Chowdhury Md. Shahriar Ahmed, Assistant Professor and Director, Centre for Energy Research (CER) also joined the dialogue as panelists. Concerns over generation surplus in the power sector was also raised by the panelists. The panelists also suggested focusing more on transmission and distribution of electricity in the coming days.

The virtual session was followed by a Q&A session with the journalists from the print and electronic media.

While moderating the session, CPD’s Distinguished Fellow, Professor Mustafizur Rahman emphasised that the power and energy sector has now moved into second generation of problems where challenges have moved from concerns from generation of electricity to pricing and energy mix issues. He ended the Dialogue with a vote of thanks.