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The Bangladesh Sustainable and Renewable Energy Association (BSREA), an organisation representing solar power plant owners, has demanded a guaranteed tenure of at least 20 years for investors before any Merchant Power Plant (MPP) is shut down or its contract is cancelled.
The association also sought compensation for “deemed generation” when power cannot be supplied to the grid due to faults in distribution companies (DISCOMs), as well as priority for renewable electricity in grid dispatch.
BSREA made the demands in a written statement at a public hearing on MPP guidelines and tariffs organised by the Bangladesh Energy Regulatory Commission (BERC) at the International Mother Language Institute auditorium in Dhaka on Sunday (August 23).
BSREA President Mostafa Al Mahmud presented the statement at the hearing, which was attended by BERC Chairman Jalal Ahmed, commission members, solar sector entrepreneurs and other stakeholders.
According to the association’s proposals, investors should be guaranteed a fixed tenure of at least 20 years before any MPP is shut down or its contract cancelled. It said legal and policy protection was necessary to safeguard long-term investments.
BSREA also proposed a tripartite Service Legal Agreement involving the Ministry of Power, Energy and Mineral Resources, project developers and investors.
The association said power cannot be supplied to the grid when feeding or distribution substations become non-functional due to faults at DISCOMs, even if an MPP is ready to generate electricity.
In such cases, it demanded compensation for “deemed generation”, arguing that entrepreneurs continue to bear fixed costs and financial liabilities even when generated electricity cannot be delivered to consumers. The association said investors should not be held responsible for failures in the distribution system.
As merchant power generation is still at an early stage in Bangladesh, BSREA proposed setting the open-access tariff at 0.50 for the first five years to encourage private investment. It also sought quarterly post-payment collection arrangements.
At the hearing, BERC’s technical evaluation committee recommended a tariff of Tk6.48 per unit for solar merchant power plants.
The committee estimated the net fixed asset value at Tk326.08 crore and working capital at Tk44.72 crore, putting the total rate base at Tk370.08 crore. Based on a proposed return rate of 8.96 per cent, the return on investment was estimated at Tk33.22 crore.
The committee proposed a total revenue requirement of Tk59.57 crore against net generation of 9.18 crore units.
BSREA also demanded priority for renewable energy in grid feed-ins. It proposed allowing up to 100 per cent of unused surplus electricity to be supplied to state-owned utilities.
The association further called for transmission losses to be shared between the Bangladesh Power Development Board (BPDB) and the government and for parity in customs duties and taxes.
It also proposed measures for energy management and loss adjustments under open-access systems, including direct grid connections for MPPs operating at 132 kV or higher voltage.
