Sponsors of the private solar mini grids urged for more incentive for survival of their businesses as they are lagging behind in tariff competitiveness compare to state sponsor renewable plants.
Leaders of Solar Mini Grid Association Bangladesh (SMGAB) made a request at a press conference at Dhaka Reporters Unity (DRU) on Wednesday.Latest technology of the solar power projects under state-owned plants cut the tariff to TK 9.00 per kilowatt hours whereas the private sponsors offer it at Tk 30 a unit due to high installation cost. Hence, these situations forced the mini grid companies far behind the competitiveness.
SMGAB President DM Majibor Rahman placed eight point demands for survival of their businesses while Mustak Ahmed, Ranajit Das Gupta and senior leaders attended at the press conference. DM Majibor Rahman said that the mini grid sponsors are experiencing severe hurdle for last couple of years as state-run Bangladesh Rural Electrification Board (BREB) and Bangladesh Power Development Board (BPDB) have been offering lowest tariff rate at the same location of their installations in islands, hills and other remote areas since 2017.
“Around 90 percent of their produced electricity remained unused as consumers have shifted to state-run REB and PDB due to lower tariff offers,” he said while expressing disappointment.
“At this point, 17 out of total 26 solar mini grids experienced severe fund crisis and many entrepreneurs hardly manage the plants through Infrastructure Development Company Limited (IDCOL) and banks loans.”
He said that the solar mini grid have already invested Tk 2 billion in last ten years.
“However, any companies yet to make profit,” he added. The government should fix liberal tariffs for survival of the sector with allocation of more incentive for mini grid, said Mojibur Rahman, also managing director at Solar Electro Bangladesh.The government adopted the concept of solar mini grid a decade ago to reach benefits of electricity through renewable energy from private sector to off-grid areas including island, hills and other remote areas where cabling is not possible. Since then, IDCOL gave license to 26 companies with shared business model with 50 percent investment of total equity.
According to solar power development programme guideline 2013, the state-run agencies have fixed tariff after assessing the total equity investment of private companies with 15 percent return.
However, the public companies are offering service at Tk 9 per unit. “We are compelled to offer per unit tariff rate at Tk 30 per due to costly investment of the renewable projects then,” Mojibur said.
Some 26 companies are supplying electricity to about two million of people living in island, hills and other hard-to reach areas with annual capacity of nearly 5 megawatt of power.