Bangladesh sets new power tariffs for slow solar developers

• Government of Bangladesh is dissatisfied by slow development of a number of photovoltaic projects and is establishing new power tariffs associated with solar production cost reduction.

Bangladeshi government is going to reduce power tariffs as a result of a few solar ventures not commissioned in due time.

Of the 23 solar plants ordered for construction, only four have been developed. Generation capacity of the installations range from 3 to 20 megawatts, they are located in the following districts: Teknaf, Panchagarh, Kaptai, and Jamalpur. Even the purchase agreements signed by the government for 11 plants totaling 685MW doesn’t speed up the process. In addition, 12 more projects totaling 760 megawatts have been ordered. 

The officials are canceling orders for two projects of 250MW total capacity since most of the permission agreements have already or almost expired but there is still not much progress on the project development.

Tariff revision 

All of this has made Ministry of Power revise the tariffs accepted in purchase agreements. The new prices take into consideration the production cost reduction compared to the one at the time of original PPAs. Thus, there were agreements signed for selling price of $0.18 per kilowatt-hour, while the new deals indicate the tariff of $0.0749. 

Solar and Renewable Energy Association explains the project delay by a number of challenges the local developers face. Among them the association names lack of land as well as difficulties related to transmission line establishment and fund securing. President of Bangladeshi SREA confirms the necessity to raise tariffs, at the same time noting that local solar developers should get more support from the government.