Energy Bangla

The government plans to open power market allowing private entrepreneurs to play in electricity generation, transmission and distribution.
To make the power market open, the government included a provision in a draft law which is now set to be placed before the parliament to replace the 105-year old law, said officials.
‘In a bid to create an open market for power sector, the government will establish the power market and single buyer of electricity,’ according to the draft law approved by the cabinet on August 8.
Function of the power market and single buyer of electricity will be regulated by the rules, it said.
Besides, the government is trying to streamline the organisational structures of the state-run agencies to facilitate open market practice in power sector, they said.
‘We are trying to develop the power sector favourable for private entrepreneurs to improve quality of services through competitiveness,’ state minister for power, energy and mineral resources Nasrul Hamid told New Age.
The private entrepreneurs will be allowed in power transmission and distribution across the country, he said.
With a very few exceptions, until now, private companies are only allowed to generate electricity with a compulsion to sell the output to the state-run Power Development Board and the Rural Electrification Board under power sales/purchase agreement.
Until now, only two private companies could sell electricity directly to retail consumers.
Power supply directly to the consumers will be expanded after the proposed law is enacted, said officials.
Consumers Association of Bangladesh energy adviser M Shamsul Alam, also an electrical engineering professor, said that the government’s move would ultimately create a monopoly market for one or two local companies as it did in private sector power generation.
It could be feasible for a big power market like India which has more than three lakh megawatt installed capacity for power generation, he said.
Besides, he said, Bangladesh was not ready to deal with open market practice in power sector.
Meanwhile, power generation and distribution services are being withdrawn from the Power Development Board in phases.
It is a long-term reform programme prescribed by the World Bank for the country’s power sector, said officials.
In the first phase, generation, transmission and distribution of electricity would be separated which has almost been done, they said.
Being prescribed by the World Bank, the government between 1977 and 2012, created six power generation companies including a joint-venture company, one power transmission and four power distribution companies splitting the PDB.
With a beginning in 1998, private sector companies now supply approximately 56 per cent of the total electricity supplies.
When asked, Nasrul Hamid said that the government had plans to create at least three more power distribution companies splitting PDB.
He said that there would be more power generation companies splitting PDB as it would either be a holding company of all public sector companies or only be the single buyer of electricity from all power generation companies in public as well as private sectors.
He also said that the private sector should also be given the job of power transmission for different regions.
Nasrul Hamid claimed that the new structure would be able to ensure better output and services.
Besides, he said that the public sector was not enough to deal with the emerging power market in the country.