Proposed power master plan to create more idle capacity, add to subsidy burden: CPD

Over reliance on the gross domestic product for power demand estimation in the proposed Integrated Power and Energy Master Plan (IEPMP) will again increase the excess reserve capacity ratio, adding a financial burden on the power sector.

The observation was made in the media briefing on Thursday dubbed "Draft Integrated Power and Energy Master Plan (IEPMP): Can it Achieve Clean Energy Targets?"

At the event, Centre for Policy Dialogue Research Director Dr Khondaker Golam Moazzem said the forecasted electricity demand was "overly ambitious".

In the interim report of the IEPMP, JICA, the consultant of the masterplan, forecasted the electricity demand will be 29,257MW by 2030 and 91,879 megawatts (MW), considering a GPD growth of 7.2% and 6.5%, respectively.

Moazeem said even the highest demand in 2022 was 14,792MW.

He said there had been a substantial mismatch between the demand and supply in the power and energy sector, as the excess reserve capacity in November 2022 was as high as 60% against the total installed capacity of 22,608MW.

Due to keeping excessive capacity idle in the system, the Bangladesh Power Development Board (PBDB) incurs huge annual losses, which are covered by subsidies.

In the 2020-2021 fiscal year, the government disbursed Tk 11,777.91 crore to the BPDB as a subsidy, the agency's data shows.  

Despite that, the demand projection still promotes a high reserve margin of 30% in 2030 and 25% in 2040, said Moazzem.

He added that the upward revision of the reserve capacity is not encouraged while we bear the burden of excess installed capacity.

Talking about the renewable energy reflection and focus in the upcoming integrated master plan, he said, "Renewable energy has not been avoided in the proposed masterplan, but it was ignored."

Instead, the government is now shifting from its original target of generating 40% electricity from renewable energy by 2041, which was committed during the COP 26 conference, he added.

The commitment of 40% renewable has been shifted to 40% of clean energy that also includes coal and other hydrocarbon-based energy mixes with advanced technologies, he said.

Moazzem also observed the government was trying to shift from coal-fired power's phase-out plan by introducing a "Carbon Capture Technology."

The developed world is moving away from this technology because it is not environmentally friendly.

He said the cost of solar and other renewable energy (RE) options is coming down globally and the generation of 16,000MW of electricity, the targeted 40% of total planned power generation, is very much possible.

Many local and foreign investors are ready to invest in the RE sector.

"The RE technologies are getting cheaper day by day. The government should go for proven technology in this regard instead of unproven ones," he said.

In the concluding remark, CPD Executive Director Dr Fahmida Khatun said energy availability is not the only energy security issue; affordability and sustainability are also important. 

"Energy and power is a sector where interest of some internal and external group lays. So, in formulating a masterplan for such a sector, internal and external interest should be avoided as it is a strategic element for economic development," she said.

Talking about the government initiatives to implement carbon capture technology and carbon storage, she said those shouldn't be adopted as they are already obsolete in the developed world.

Among others, the policy think tank's research associates Helen Mashiyat Preoty, Shiyan Sadik and programme associate Moumita A Mallick spoke at the programme.