Bangladesh should prioritise the lowest-cost mix of primary fuels for electricity
generation and ensure timely payments to private producers to avoid supply risks,
said Imran Karim, chairman of Confidence Group.
In an interview with Just Energy News Editor Md Shamim Jahangir, Karim warned
that rising global energy prices, delayed payments to local producers and policy
uncertainty could undermine investment and disrupt electricity generation.
He also cautioned that prolonged geopolitical tensions, such as the Iran-Israel
conflict, could significantly increase Bangladesh’s energy import bill.
Cost-effective power generation
Md Shamim Jahangir:
How can Bangladesh make its power generation more cost-effective, particularly if
geopolitical tensions such as the Iran–Israel conflict continue?
Imran Karim:
The biggest burden on power generation is the cost of importing primary energy.
Therefore, we must prioritise the most cost-effective fuel mix.
Energy taxes also affect generation costs. Taxes are imposed on heavy fuel oil
(HFO), high-speed diesel (HSD), coal and LNG. Ideally, these should be excluded
when comparing costs, as they remain within the country, whereas fuel import
costs flow abroad.
We saw energy prices surge after the Russia–Ukraine war, and similar pressures
could arise from the Iran–Israel conflict.
For example, the government spent around $6-$7 billion on energy imports last
year. If the Iran-Israel conflict continues for three to four months, Bangladesh may
need an additional $3-$4 billion, putting further pressure on foreign exchange
reserves.