Experts at a discussion on Sunday suggested reducing duties on renewable energy equipment, strengthening power transmission lines and increasing government support for the renewable energy sector boost.
They made the remarks at a discussion on the ‘Renewable Energy in the Upcoming Budget: Expectations and Reality’, organised by the Centre for Policy Dialogue, a local think-tank, and Dhaka Stream, an online media outlet, in the capital Dhaka.
The prime minister’s finance and planning adviser, Rashed Al Mahmud Titumir, said that the energy structure built by the ousted autocratic Awami League regime could not be dismantled overnight, while the sector had been held hostage by a number of businesses.
Without naming the businesses, the adviser said that many deals made in the past had placed the energy sector in servitude for 25 to 30 years.
This is also holding back the reform programme and forcing the government to pay a huge subsidy, he said.
Md Khalid Mahmud, a programme associate at the Centre for Policy Dialogue, who presented the keynote paper, said that energy subsidy bills soared to Tk 62,000 crore in the 2024–25 financial year from Tk 35,000 crore in FY 2023–24 due to capacity charges for an installed capacity of about 30,000 megawatts against a peak summer demand of 18,000MW.
In FY26, ending in June, the projected energy subsidy cannot be contained within Tk 37,000 crore amid rising global energy prices caused by the Middle East war.
Noting that the new government was currently engaged in ‘firefighting’, the adviser expressed hope that an actual reform programme would begin with the new budget, in which plans for generating more power from renewable energy would be made clear.
Moderated by CPD research director Khondaker Golam Moazzem, the discussion was participated, among others, by the prime minister’s adviser on posts, telecommunications and information technology, Rehan Asif Asad, General Economics Division member Monzur Hossain, Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem, The United International University’s Centre for Energy Research director, Shahriar Ahmed Chowdhury, Dhaka University associate professor Moshahida Sultana and Bangladesh Power Development Board director Mohammad Moniruzzaman.
The keynote speaker also said that the country’s total installed renewable energy capacity stood at 1,745 megawatts, accounting for only 5.3 per cent of the overall installed capacity.
Of the total renewable energy capacity, 1,366MW is on-grid, while 378MW is off-grid.
Solar power dominates the renewable energy with 83 per cent share.
Highlighting the country’s huge potential for renewable energy, the keynote speaker suggested reducing duties on renewable energy equipment, strengthening power transmission lines and increasing government support.
Rehan Asif Asad said that discussions had been taking place to cut duty, but renewable energy faced challenges because of land scarcity.
Focusing on the rapid expansion of electric vehicles, he said that the availability of electricity and charging stations had to be ensured.
The BKMEA urged the government to curb harassment by customs officials in importing renewable energy equipment.
Moshahida Sultana observed that the government seemed reluctant to dismantle the nexus in the energy sector.
‘The fossil fuel lobby is so strong that the government is effectively locked in by private power producers,’ she added.
The previous political regime projected to enhance renewable energy by 10 per cent by 2020 but failed while the present government has set a target of 10Gigawatt power from solar energy by 2030.
Monzur said that the expansion of solar energy would be possible when it would be connected with the national grid.
He also said that funding options from the bond and capital markets should be explored to address the shortage of funds.
