Why waste so much money in the name of capacity charge?

That’s not the way to go if we want to make power affordable to all

It seems that the deal that Bangladesh Power Development Board (BPDB) had signed with India's Adani Power back in 2016 is going to cost Bangladesh dearly—because we will not only have to pay a high price for the electricity produced by them using coal, but will also have to pay a high "capacity charge" to the company, even if we cannot use the electricity produced by them.

As per the agreement with Adani Power, it was supposed to supply 1,496 MW of electricity to Bangladesh for 25 years starting from December 2021. But now that the plant is all set to start its operation from August this year – after a six-month delay due to pandemic-induced disruptions – the BPDP is not ready to buy electricity from them because the Power Grid Company of Bangladesh (PGCB) has not been able to prepare the infrastructure needed to import it. The result is, the BPDB would have to pay a whopping Tk 1,219.1 crore in capacity charge for four months till December, by which time our transmission lines may be partially ready for import.

The question that naturally arises is: Why has the PGCB not been able to get the infrastructure ready within the stipulated time (December 2021)? A more pertinent question is: Why did the BPDB sign the deal with the Indian corporation in the first place, knowing that it would use costly coal to produce electricity? Why didn't they go for importing renewable energy which is not only environment-friendly but also low-cost and sustainable?

Reportedly, Bangladesh will have to pay more than Tk 1 lakh crore to the Adani coal power plant as a capacity charge over the 25 years. With this money, we could have built three Padma bridges, according to a study done by the Bangladesh Working Group on the External Debt and Growthwatch. Moreover, the power from Adani Godda will be 56.2 percent more expensive than other imported power, as the study has found.

At a time when the people of the country are struggling to meet their day-to-day expenses due to rising inflation and inequalities, such wastage of public money in the name of buying power is totally unacceptable. More so when the prime minister herself has urged people to take austerity measures to go through this tough time. While people will definitely do what they can to cope with the situation, the government should also make sure that public money is not wasted on projects that have long-term detrimental effects on our economy. It must ensure that the money is instead used to serve struggling citizens.


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