Electricity tariffs may rise to a 'tolerable' high as the government moves to ensure uninterrupted power supply to consumers and as its generation cost rises, says a minister.
Many countries in the world are now facing difficulties in keeping the tariffs lower due to the soaring energy prices amid the ongoing Russia-Ukraine war, State Minister for Power, Energy and Mineral Resources Nasrul Hamid told a 'Meet the Press' programme at Bidyut Bhaban in Dhaka on Tuesday.
Forum for Energy Reporters Bangladesh (FERB) and Bangladesh Power Development Board (BPDB) jointly organised the function marking the 50th founding anniversary of the BPDB.
The Bangladesh Energy Regulatory Commission (BERC) recently conducted a public hearing on a demand for tariff hike of bulk electricity and the BERC decision in this regard remains pending. The BERC also held a hearing on proposals for gas-tariff hike, but has yet to announce any decision.
Amid these price-hike proposals, businesses protest the government moves and remark that any raise in prices at this moment would be 'suicidal'.
Speaking as chief guest, the state minister said the government is gradually coming out of the short-term and 'expensive' oil-fired power plants to reduce the overall electricity-generation cost.
The tenure of several oil-fired power plants has recently been extended under a mechanism of 'no electricity, no payment', and the government will purchase electricity from these units only when it is required, the minister said.
The average electricity-generation cost would come down once the baseload coal-fired plants, including those of Rampal and S Alam, come online by next year, he told his audience, adding that the Rooppur nuclear power plant will also start generation by 2024.
Mr Hamid also criticised the recent comments by the businesses that the tariff hike would be 'suicidal' and their demand not to raise the tariffs of power and natural gas.
In response to the demand of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) for shutting down the much-talked-about rental and quick-rental power plants, he said they should not be concerned about the types of power plants. They (businesses) should talk about uninterrupted and quality power supply at affordable price.
"It would not be fair if the fabrics merchants talk about power plants from which we would get electricity," he said on a note of dissatisfaction, adding that the businesses should not advise about the "DOs and DON'Ts" rather they should talk whether the power-supply situation has improved or not.
Mr Hamid also turns down any possibility of buying crude oil from Russia as the fuel specifications do not match the country's requirements.
Turning to the current challenges, he was sceptical about ensuring uninterrupted power supply within the next five to six years as it would require a huge sum of investment. The entire power distribution-and transmission lines as well as the substations would have to go underground, and it is very expensive, he says.
He thinks it would take around Tk 140 billion to ensure uninterrupted electricity supply only at Uttara. The government would have to think about the returns from such huge investment, he adds.
BPDB chairman Mahbubur Rahman and FERB chairman Shamim Jahangir also addressed the function, moderated by FERB executive director Rishan Nasrullah.
The BPDB chairman said the country's overall electricity generation was only around 500 megawatts (MW) when the BPDB was founded 50 years ago, and now it increased fiftyfold to around 25,500MW.
The BPDB has been working on ensuring uninterrupted and quality supply of electricity at affordable rates, he said, making it clear that affordable does not mean lowering the tariffs.
