Cross-border exchange of electricity with India soon

The government is considering a plan to enter into a cross-border exchange of electricity with India through the Indian Energy Exchange (IEX), Indian media reports.
"Joining the exchange can help each party to trade according to their demand and supply position at a given time. However, senior government officials from both countries are engaged in a dialogue to work out the formalities to make the plan happen," said The Times of India.
Bangladesh has spent Tk 18,128 crore on purchasing electricity from India and paid about Tk 6,000 crore as the fixed cost for power plants that have never been used in the seven years since the import has start. The cross-border electricity import from India has increased almost fourfolds since the electricity import from the neighbouring country began in 2013-14.
Bangladesh is currently importing 1160 MW of electricity from India, about 86 per cent or 1000 MW of the current import capacity of 1,160 MW is subject to the payment of fixed cost, popularly known as capacity charge, a payment guaranteeing return on the investment whether or not power is used.
"Bangladesh is not yet a part of IEX, we buy Indian power on a contract basis. Nepal and Bhutan buy and sell electricity across borders with India through the IEX," State Minister for Power, Energy and Mineral Resources Nasrul Hamid told the Daily Observer on Thursday.
"Yes, a dialogue has been initiated between the two countries to work on it," he added.
"Bangladesh is considering import of hydro power from Bhutan and Nepal via India as our North Bengal is still suffering for low voltage and electricity crisis. We need to feed the
region. However, it is in a very premature stage to comment on it, he did not focus on pricing issue as it is at 'a premature stage'."
Bangladesh Power Development Board's data said the import is set to increase by 138 per cent to 2,760 MW in the next years and the government is planning to increase it by another 226 per cent for meeting a 15 per cent of its demand for 60,000 MW by 2041.
"It will not be easy for Dhaka to opt for cross-border exchanges because the plan is being resisted by private producers who fear losing a part of their market, informed sources said," the newspaper writes.
The exchange mechanism would initially focus on thermal power supply from India. But the cross-border mechanism also offers an opportunity to Bangladesh to use more green energy in the future," it writes.
Indian power is a low-cost alternative to electricity produced in Bangladesh using coal and diesel. The government in Dhaka is paying a high subsidy by purchasing power from private generating companies who use diesel, quoting a senior Indian government official (on condition of anonymity) it said.
The ongoing crunch in the supply of crude after the Ukraine war has also raised questions about whether the diesel-based electricity generating firms would continue to obtain sufficient supplies and also afford the increased prices. This is another reason why cross-border electricity flow appears attractive to Bangladesh, the Time of India writes.