UNB, Dhaka :
Although large renewable energy projects, especially solar schemes, are being taken in both public and private
sectors in line with the government’s power sector mega plan, the delay in introduction of ‘feed-in tariff’ or FIT may discourage the potential investors, according to industry insiders .
They feel that the introduction of FIT is essential for creating confidence among investors for development of the sector, or else, they may pull out at one stage.
Feed-in tariff or FIT is kind of subsidy which is provided to reduce the production cost of renewable energy. Under a feed-in tariff, eligible renewable electricity generators, including homeowners, business owners, farmers and private investors, are paid a cost-based price for the renewable electricity they supply to the grid.
This was first introduced in Germany to encourage investors to produce solar energy. So far, 80 countries have introduced feed-in tariff, but Bangladesh lags behind though it is
encouraging green energy.
The government has planned to generate at least 10 percent of the required power from renewable energy by 2020. It now produces 165MW of power from renewable energy sources, which is about 2.2 percent of total electricity produced in Bangladesh.
The Power Division is now in a process to award contracts to set up 220MW solar power plants in private sector, according to official sources. They said the Bangladesh Energy Regulatory Commission (BERC) has recently finalised the draft of a law to introduce FIT as a mandatory provision for the renewable energy producers and electricity distribution agencies.
Asia Foundation, a regional non-government body, has provided financial and technical support to the regulator for preparing the draft FIT provision, proposing to fix Tk 13 per unit for solar power which could be provided to the grid under a long-term contract of over 20 years.
BERC also took stakeholders’ opinion in finalising the draft. The proposed provision has also been posted on BERC website to get public opinion.
Now, the final draft of FIT is going to the Power Division to accommodate government views. “We’re planning to send the FIT draft to the Power Division as part of BERC’s legal obligation,” said its member Dr Selim Mahmud.
He, however, informed that standard tariff is yet to be finalised although Tk 13 is proposed. He said once Berc receives the Power Division’s opinion, the regulating agency then will send it to the Law Ministry for legal vetting.
According to Mahmud, the entire process may take a little bit of time to formally announce the FIT as a legal provision. Once the Law Ministry’s clearance is received, BERC will issue a gazette notification to make it a law.
Power Ministry joint secretary and member of Bangladesh Sustainable and Renewable Energy Development Authority (SREDA) Siddique Zobair said promulgation of any tariff related regulation is absolutely the jurisdiction of Berc.
“If they move for any provision, Power Division stands ready to extend its support,” he said adding, both the Power Ministry and SREDA will take measures to enforce the FIT for the renewable energy producers as well as power distributing agencies.
He informed that once the FIT regulations are in place, the Power Division will move to enforce the power distribution utilities to buy a certain percentage of electricity from renewable energy producers to promote the green energy across the country.
Dr Mohammad Tamim, the head of Petroleum and Mineral Resources Engineering at Bangladesh University of Engineering and Technology (BUET), said there has to be an obligation for power utilities to buy power from renewable energy producers.
“Advancements in renewable energy will be difficult without a feed-in tariff scheme in place, he said, adding, “Big plants are unlikely to be set up if they can’t operate commercially.”
Munawar Misbah Moin, managing director of Rahimafrooz Renewable Energy, the largest firm in solar power generation, said the government has to come up with regulations that will help it attain goals and encourage the private sector to invest. “The regulations need to be simple, clear and transparent.”
Although large renewable energy projects, especially solar schemes, are being taken in both public and private
sectors in line with the government’s power sector mega plan, the delay in introduction of ‘feed-in tariff’ or FIT may discourage the potential investors, according to industry insiders .
They feel that the introduction of FIT is essential for creating confidence among investors for development of the sector, or else, they may pull out at one stage.
Feed-in tariff or FIT is kind of subsidy which is provided to reduce the production cost of renewable energy. Under a feed-in tariff, eligible renewable electricity generators, including homeowners, business owners, farmers and private investors, are paid a cost-based price for the renewable electricity they supply to the grid.
This was first introduced in Germany to encourage investors to produce solar energy. So far, 80 countries have introduced feed-in tariff, but Bangladesh lags behind though it is
encouraging green energy.
The government has planned to generate at least 10 percent of the required power from renewable energy by 2020. It now produces 165MW of power from renewable energy sources, which is about 2.2 percent of total electricity produced in Bangladesh.
The Power Division is now in a process to award contracts to set up 220MW solar power plants in private sector, according to official sources. They said the Bangladesh Energy Regulatory Commission (BERC) has recently finalised the draft of a law to introduce FIT as a mandatory provision for the renewable energy producers and electricity distribution agencies.
Asia Foundation, a regional non-government body, has provided financial and technical support to the regulator for preparing the draft FIT provision, proposing to fix Tk 13 per unit for solar power which could be provided to the grid under a long-term contract of over 20 years.
BERC also took stakeholders’ opinion in finalising the draft. The proposed provision has also been posted on BERC website to get public opinion.
Now, the final draft of FIT is going to the Power Division to accommodate government views. “We’re planning to send the FIT draft to the Power Division as part of BERC’s legal obligation,” said its member Dr Selim Mahmud.
He, however, informed that standard tariff is yet to be finalised although Tk 13 is proposed. He said once Berc receives the Power Division’s opinion, the regulating agency then will send it to the Law Ministry for legal vetting.
According to Mahmud, the entire process may take a little bit of time to formally announce the FIT as a legal provision. Once the Law Ministry’s clearance is received, BERC will issue a gazette notification to make it a law.
Power Ministry joint secretary and member of Bangladesh Sustainable and Renewable Energy Development Authority (SREDA) Siddique Zobair said promulgation of any tariff related regulation is absolutely the jurisdiction of Berc.
“If they move for any provision, Power Division stands ready to extend its support,” he said adding, both the Power Ministry and SREDA will take measures to enforce the FIT for the renewable energy producers as well as power distributing agencies.
He informed that once the FIT regulations are in place, the Power Division will move to enforce the power distribution utilities to buy a certain percentage of electricity from renewable energy producers to promote the green energy across the country.
Dr Mohammad Tamim, the head of Petroleum and Mineral Resources Engineering at Bangladesh University of Engineering and Technology (BUET), said there has to be an obligation for power utilities to buy power from renewable energy producers.
“Advancements in renewable energy will be difficult without a feed-in tariff scheme in place, he said, adding, “Big plants are unlikely to be set up if they can’t operate commercially.”
Munawar Misbah Moin, managing director of Rahimafrooz Renewable Energy, the largest firm in solar power generation, said the government has to come up with regulations that will help it attain goals and encourage the private sector to invest. “The regulations need to be simple, clear and transparent.”
