The government has initiated a move to fix a benchmark tariff for electricity that can be added to the national grid from solar-based independent power producer (IPP) plants and rooftop solar systems.
“We are trying to fix a benchmark tariff considering expenditure of technology cost of renewable energy, its international market price, investment cost, inflation, current exchange rate, project operating and management cost, project life, capital return, government’s target and economic abilities,” Power Division Joint Secretary Siddique Zobair told the Dhaka Tribune yesterday.
Zobair, also a member of the Sustainable and Renewable Energy Authority (SREDA), said the fixed tariff will be applicable for a certain period and a certain capacity of electricity, after which the tariff will be re-fixed.
Two meetings have already been held on this regard, he said, adding that the issue would be finalised as soon as possible after another meeting.
SREDA was formed as a nodal agency to promote, facilitate and disseminate sustainable energy, covering both the areas of renewable energy and energy efficiency to ensure the country’s energy security.
About the concept of benchmark tariff, Zobair said the success of conventional electricity generation has prompted the government to take a similar move in the non-conventional renewable energy like solar and wind power.
Zobair said one of the substantial conditions of accepting any solar-based IPP plants and rooftop solar systems was for the private firm to have its own land to set up the solar plant. Because managing a clean and undisputed land emerges to be a big issue prior to setting up a solar plant as it needs a large piece of land, he added.
The electricity distribution agencies under the Power Division would buy electricity from these IPP plants and solar systems for the national grid on a long-term basis but the benchmark tariff would be fixed separately, the joint secretary said.
Currently, different ministries and departments, including the Power Development Board, the Rural Electrification Board, the Local Government Engineering Department, autonomous bodies like Infrastructure Development Company Limited and also the private sector are working on renewable energy projects.
The government had earlier announced a renewable energy policy and also plans to increase its share in power generation to 5% by the end of 2015 and 10% in 2020.
If the target is achieved, the country’s renewable energy production will go up to 650MW this year, while the total power production in 2015 is expected to be 13,000MW.