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Sunday, July 5, 2020

Retire rental power plants to save public money

THE government is unmoved to the call for immediate shutting down of rental power plants to relieve the nation from huge annual payment against growing overcapacity charges, which was Tk 90 billion in 2019. The call only grew stronger lately because of the economic fallouts due to the Covid-19 as experts predict a further fall in existing power demand while paying for huge overcapacity every year has no justification.
In May, the US-based Institute for Energy Economics and Financial Analysis reported that Bangladesh could use only 43 per cent of its power capacity, which was 19,630 MW in 2019. The Centre for Policy Dialogue also urged the government recently to phase out the rental power plants to avoid drainage of the exchequer for idle generation capacity. Such load is only forcing people to pay higher power tariff that the government can now increase several times in a year   as per a new law passed recently by the current parliament.
But State Minister for Power has however plainly ruled out retiring the rental power plants    before their contracts expire. Needless to say many powerful people in and around the government own such rental power plants-17 now in operation since 2009 and they can produce 1,090 MW though they have to retire by now. Meanwhile more mega plants are in the process of commissioning under joint ventures although such expansion plan is focused on promoting multi-nationals' interest at the cost of the national interest. Their local agents are operating within the government. We must say such policy must be reversed when more than half the existing capacity can't be used.
The country now produces 20,279 MW electricity while consumption varies at best around    9.000 MW in summer and 6,000 MW in winter. Most industries produce their own electricity. It is unbelievable that the budget for 2020-21 has earmarked Tk 26,758 crore to pay for idle capacity which could be better used otherwise to implement more urgent projects.  
Need no mention that a very powerful business quarter politically close to the government is exploiting the rental contracts to make windfall money using the unused capacity at high unit price. The power sector has become an open ground for money launderers and it must stop.