Renewable energy sector gets a boost

Much to the delight of the countrymen, the government has started working to bring necessary reform to the energy sector as is evident from the annulment of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 that has earned the notoriety of being a 'black law' for giving immunity to deals suspect of gross financial anomalies under it. It may be remembered that the High Court on November 14 declared the immunity provision (Section 9) of the law 'illegal and unconstitutional'.

According to an FE report, the interim government has also unveiled a plan that includes transition from the indemnified Independent Power Producers law that allows only private-to-public electricity business to a mechanism called merchant power plant policy that provides for business-to-business electricity trade. This transition is expected to boost the highly critical development of renewable energy sector.

It is known to all that the greenhouse gases emitted from burning of fossil fuels are responsible for global warming and its adverse impacts on earth's climatic condition. Although green energy from renewable sources is universally recognised as a way out of global warming, the Hasina government had a different idea. It gave lip service to green energy mainly for its self-aggrandisement. This is why instead of 10 per cent of power-mix target by 2025, Bangladesh has achieved a meagre 3.2 per cent installed capacity and 1.8 per cent generation capacity. These prove the past government's lack of seriousness about renewable energy.

Power, energy and mineral resources adviser of the interim government Muhammad Fouzul Kabir Khan revealed on Saturday that the government is working out a new renewable-energy policy with provisions for helping the sector flourish. Nullifying the previous government's false claim about shortage of land and fund, the energy adviser informed that the policy in the offing will not only facilitate funding but also provide vital infrastructures like installation sites and connection to the transmission line. Private renewable energy producers will be able to use these facilities in exchange for a minimum charge. Under the policy of business-to-business electricity trade, the producers will have to find their own customers while the government will purchase a minimum 10-20 per cent of power from such plants. A salient feature of the coming policy is that it will bring an end to the previous government's informal loan approval during lunches or dinners without going through rigorous evaluation and at the same time will ensure offering renewable power generation contract through open tender so that genuine businessmen get the opportunity without having to grease the hands of the high-ups. Meanwhile, as an additional encouragement, the tax exemption for renewable energy-based power plants has been extended up to 15 years. According to the FE report, the power plants starting commercial production between July 1, 2025 and June 30, 2035 will be eligible for the tax benefits.

However, to achieve the target of 30 per cent renewable energy by 2030, the key challenge will be mobilisation of finance amounting to Tk876.57 billion for the next six years. But stakeholders consider mobilisation of fund possible through what they term a comprehensive mechanism including budget allocation, tax exemption and long-term soft loan from public and private financial institutions. Banks' reluctance to providing fund for the green energy promotion should also be removed to facilitate development of this important sector.

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