Improve planning and cut wasteful subsidies to increase funds to invest in improving power supplies and distribution
Saturday’s collapse of the national grid which saw power outages cut electricity supplies across the nation is an inevitable consequence of the lack of a proper strategy to deliver energy security.
While stop-gap rental plants and new power stations have helped generation capacity top 10,000 MW, the government still has to improve planning and co-ordination to secure future capacity.
The harm done to development and industry by the lack of secure power is enormous and is regularly cited as a major obstacle preventing businesses from increasing investment in the country.
Matters are made worse by subsidies which artificially keep the costs of gas, fuel oil, diesel, and electricity low. Such subsidies encourage wasteful use of these important resources and reduce the funds received by power companies to invest in improving capacity and distribution.
Although there have been some moves to cap subsidies, these have not gone as far as countries like China and India, whose governments have accepted that high energy prices are necessary to fund investment in new power plants and fuel resources.
Unless we alter wasteful policies, energy companies and the Power Development Board will continue to lack the funds and incentive to invest in improving power supplies and distribution.
We badly need reliable power supplies to create the jobs and improvement in living standards which Bangladesh needs to increase peoples’ resilience to the negative consequences of climate change.
This needs a co-ordinated approach to diversify energy sources and increase reliability. Stopping costly subsidies which waste scarce taxpayer funds and disincentivise investment in new power sources, is a must.
Source: Dhaka Tribune
