CPD presents to govt energy-sector overhaul plan

Scrap quick-fix power laws and capacity payment to cure crises and drain on public finance, policy think-tank CPD suggests while presenting to the interim government its energy-sector overhaul plan.

The Centre for Policy Dialogue (CPD) Sunday placed a package of reforms with an emphasis on repealing the 'Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010' and amending the Bangladesh Energy Regulatory Commission (BERC) Act 2003.

The private think-tank thinks significant upgrades are also necessary for government bodies like the Sustainable and Renewable Energy Development Authority (SREDA), which should be transformed into a fully functional authority led by a full secretary with specialised wings for solar, wind, and other renewable technologies.

The CPD also observes that necessary revision, amendment and formulation of acts, laws and rules should be the first and foremost step toward energy transition under the interim government, just installed through a student-mass upsurge.

"The 'Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010' is anticompetitive and bar going for competitive bidding," said CPD Research Director Dr Khondaker Golam Moazzem.

The CPD suggestions were made at a media briefing on 'Power and Energy Sector Reform Agenda for the Interim Government' at its office in Dhaka.

It mentions that The Special Provision Act was formulated in 2010 for two years and its tenure was previously extended several times. The cabinet approved a proposal in September 2021 extending its tenure for five more years until October 2026.

The special-provision law creates the path of "lobbying, favouritism and taking initiatives without proper considerations".

"Overall, the 'Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010' needs to be repealed immediately," the think-tank demands.

Dr Moazzem alleged longstanding poor governance, corruption, irregularities, and mismanagement plagued the power and energy sector.

Policies should include a fixed goal for reducing greenhouse-gas emissions, detailed plans for electrifying rural areas, and guidelines for Feed-in Tariffs (FiT) and sector-wise renewable energy diversification, he said explaining the CPD suggestions.

The policy watchdog pleads that the Public Procurement Act (PPA) 2006 and the Public Procurement Rules (PPR) 2008 should be immediately enforced to replace the quick-fix law, as it will increase transparency, reduce the risk of favoritism, and foster public trust in energy-transition projects.

They feel the urgency of revising the Integrated Energy and Power Master Plan (IEPMP) to ensure that the energy transition in Bangladesh's power sector is on the right track.

The Perspective Plan of Bangladesh (2021-2041) also requires revision to stay relevant and effective in the light of the energy transition.

"Some of the plan's key objectives, such as upgrading grid-based electricity- generation capacity to 56,734 MWs by 2041, are now seen as overly ambitious and potentially wasteful given current estimates of lower electricity demand," Dr Moazzem told the meet.

He pointed out that the 2023 amendments to the BERC Act significantly weakened the commission by stripping it of many of its institutional powers.

Previously, he said, BERC had broad authority, including conducting energy audits, standardizing equipment, introducing competitive bidding, issuing licences, and enforcing regulations on private entities.

However, the commission often struggled to enforce its responsibilities effectively.

The CPD calls for a major revision of the BERC Act to restore its former powers and ensure the commission can effectively regulate the energy sector.

To alleviate fiscal and financial pressures, it recommends that the government revise contracts with Independent Power Producers (IPPs) to adopt a 'no- electricity, no-pay' model sans capacity-payment clauses.

"This would involve withdrawing subsidies and avoiding further electricity-tariff hikes by eliminating capacity-payment provisions."

Additionally, the CPD suggests revising International Monetary Fund (IMF) conditionalities and reassessing the market-based pricing formula to create a fairer pricing system. The power sector should also prioritise decarbonization by promoting renewable energy.

The policy think-tank urges the interim government to begin the transition towards achieving a 40-percent renewable-energy target by 2041. This transition can be divided into five stages, with short- to medium-term activities outlined.

Present among others were CPD Senior Research Associate Helen Mashiyat Preoty and Research Associate Mashfiq Ahasan Hridoy.

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