Capacity payment, LNG import bill seen key challenges in 2020

Capacity payment and import bill of Liquefied Natural Gas (LNG) will be the major headache for the country's Energy and Power Sector in 2020 as the government failed to address both the issues in proper manner in the calendar year of 2019.
"For meeting the country's energy demand for 22,000 MW from 4000 MW plus, the government could have installed a power plant almost every month in last one decade but it has failed to do so.
Because of the failure the state-owned power Development Board (PDB) had to face a deficit of TK 8500 but pay TK 15,000 crore as capacity payment (capacity payment is the amount of money that the government is to pay to the power plants sitting idle because of no electricity demand) in 2019 for the power plants it started in 2012, M Shamsul Alam told the Daily Observer.
Shamsul Alam, Energy Adviser to Consumers Association of Bangladesh on Tuesday said, "Half the increased capacity remains unused inflating the public expenditure for the power sector while people are to face increased tariff rate due to this unplanned power generation plan."
Former Energy Adviser Dr M Tamim said the government is spending about Tk 35 for each cubic metre of imported LNG while the cost of locally produced gas is only about Tk 5.
"So it focused on increasing tariff but we need energy to run the sector smoothly. We should establish a mechanism to avoid the price shock," he said.
"We need to spend around $US 4 billion to import LNG along with plus $US 3 billion diesel and other liquid fuel � so the price of energy will go up more and more in future," he said.
Bangladesh started importing LNG from August last year to alleviate energy      shortage largely caused by the depletion of domestic reserves, no new discoveries and rising demand.
BERC increased gas tariff in July 2019.  Gas tariff for power plants has been increased by 40.82 percent, for fertiliser factories 64.21 percent, for Compressed Natural Gas users 7.5 percent, for captive power plants 43.97 percent, for industries 37.89 percent, for tea estates 44.20 percent, for commercial users 34.98 percent and for households using burners on metres 38.46 percent.
The government is now planning to increase power tariff by February 2020 to offset the deficit of the sector.
Over the last 10 years, the private sector power generation capacity grew faster than the public sector with 7,853MW produced by the private plants against 6,536MW produced by the public ones.
In the 2018-19 fiscal year, over Tk 8,000 crore of PDB's Tk 21,000 crore annual spending was spent as capacity payment, according to the PDB statistics.
Electricity is essential to industrial production, transportation, commerce, SME, irrigation and hence the creation of jobs, essential health and education services, enjoying TV, pc and other modern equipments and to maintain all these in proper manner we need to increase power generation rapidly as our target is to make the country a developed one by 2040, said  State Minister for Power, Energy and Mineral Resources.
"However, we are thinking about exporting power in Nepal and north-eastern part of India, he said.
PDB said about 32 private and 16 public power plants are under implementation at the moment. The PDB is also processing contracts and biddings for 21 more private and two more public power plants.
Shamsul Alam added that 60 per cent of the power plants installed in the country were peakers. Small power plants are operating only at peak hours to meet high electricity demand. He wondered why it is like that!
Unsolicited offer and unusual delay, irrational cancel of the bid process and unwanted intervention are also to blame, he said.
"We need good governance and energy sector to ensure the people's right."