Govt mulls over awarding a dozen solar projects

The government is planning to award around a dozen solar-based power-plant projects as it has received lower tariff rates in tenders compared to all such previous facilities.
"We got better tariff rates in the tenders and are expecting to award those as soon as possible," Adviser for the Ministry of Power, Energy and Mineral Resources Fouzul Kabir Khan told The Financial Express Monday.
He said the tenders to implement solar power plants across the country were floated to cut prices from the previous ones.
"These plants will help ease the growing dependency on fossil fuels to generate electricity," said Mr Khan, adding, "They would also help diversify the country's energy sources."
"Solar-based projects are now our priority," he added.
After taking office, the interim government held up around three dozen solar projects which were initiated during the previous Awami League regime and awaited the final nod from the authorities.
The previous government had issued letters of intent (LoIs) in favour of the plant sponsors under the now-defunct Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 (amended 2021).
But no implementation agreements (IAs), power purchase-agreements (PPAs), or land-lease agreements (LLAs) were signed with the project sponsors.
"Instead of awarding the projects, we floated tenders to get lower tariff rates. After receiving that, our targets have been achieved," said Mr Khan.
"The average bidding tariff is less than the previously issued LoIs against three dozen solar projects," a senior official of the Bangladesh Power Development Board (BPDB) said.
In the latest tenders, the BPDB received tariff rates of 7.89 US cents per kilowatt-hour (1 unit) for the solar plants to be built in northern Bangladesh.
The rates are around 24.31-percent lower than those of 10.42 US cents for the similar projects that achieved LoIs during the previous government.
Also, the BPDB received tariff rates of 7.95 US cents per unit for the plants to be built in the Chattogram region.
The rates are around 34.33 per cent lower than those of 12.10 US cents for the similar LoI-winning projects during the Awami League rule.
The BPDB got tariff rates of 8.88 US cents per unit for the plants to be built in the Mymensingh area.
The rates are around 10.58 per cent lower than those of 9.93 US cents for similar projects during the past regime.
Moreover, the BPDB received tariff rates of 9.06 US cents per unit for the plants to be built in the Sylhet region.
The rates are around 8.31 per cent lower than those of 9.88 US cents for the similar LoI-winning projects during the previous government. The BPDB has not yet opened tenders for the plants to be built in the Khulna and Dhaka regions.
The tariff rates of the plants in these regions that obtained LoIs during the previous government were 9.98 US cents and 10.00 US cents, respectively.
The tender tariffs for the solar projects are lower than the energy costs of some other conventional fossil fuels, including furnace oil and those running on re-gasified liquefied natural gas (RLNG), as well as previous solar plants that are operational.
After implementing the tendered solar projects, the overall cost of electricity generation will reduce, especially during daytime, sources say.
"The government should award these solar projects immediately and also ensure that they are executed in time," says energy expert Professor M Tamim, vice-chancellor of Independent University, Bangladesh (IUB).
The government will be able to avoid capacity charge by awarding the solar projects as they do not have the capacity payment provision, he adds.

Azizjst@yahoo.com