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Electricity Reforms in
Bangladesh
Taifur Rahman
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Introduction
Goals 2020: Providing access to affordable and reliable
electricity to all citizensA long way to go Electricity coverage
43%
Per capita electricity consumption 165 kWh One of the lowest in
the world.
Pace of power sector development to beaccelerated.
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Reforms Overview
Reforms starting in 1977 Rural Electrification Board (REB)
created
70 large cooperatives (PBSs) established
Electricity Supplied to 7 million consumers out ofcountrys 9.7
million consumers in 2006.
Significant positive impact on poverty reduction andsocial
benefits to the rural people
Unbundling starting in early 1991 Creation of Dhaka Electricity
Supply Authority
(DESA) Didnt perform well.
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Reforms Overview (cont.)
High power Inter-ministerial Committeeon Power Sector Reform
in
Bangladesh (PSRB) constituted in 1993recommending Unbundling of
the sector according to
functional lines
Corporatization of sector entities Establishment of an
independent Regulatory
Commission.
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Reforms Overview (cont.)
Power Cell created under the EnergyMinistry in 1995
To drive power sector reforms and to promoteprivate power
development
Two companies created in 1996 Power Grid Company of Bangladesh
Limited
(PGCB)Dhaka Electric Supply Company Limited
(DESCO).
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Reforms Overview (cont.)
The National Energy Policy adopted in 1996 Sector unbundling
Private sector participation
Establishment of an Energy Regulatory Commission
Private Sector Power Generation Policy ofBangladesh was adopted
in 1996
Policy Guidelines for Small Power Plants (SPP) in
Private Sector approved in 1998.
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Reforms Overview (cont.)
Vision Statement and Policy Statement onPower Sector Reforms in
June 2000
Corporatization of Ashugonj Power Station in
2002Energy Regulatory Commission Act 2003
Creation of West Zone Power DistributionCompany (WZPDC) in
2003
Establishment of Electricity GenerationCompany of Bangladesh
(EGCB) in 2003.
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Reforms Overview (cont.)
Bangladesh Energy RegulatoryCommission (BERC) starting in
2004
Approval to convert BPDB into a HoldingCompany in January
2004
New company Dhaka Power DistributionCompany Limited (DPDC)
incorporated
in 2006Policy guideline for power purchase fromCaptive Power
Plants (CPPs) prepared in2006.
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Current Structure
Ministry of Energy and Mineral Resources
Energy and
Mineral
Resources
Division
Power DivisionBERC
Power
Cell
CEI BPDB PGCB REB DESA DESCO
IPP IPP
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Power Sector Scenario
Total generation capacity (June 2007):Total 5,269 MW
BPDB (government) 3,872 MW IPPs (private) 1,397 MW
Modes: Hydro - 230 MW Steam - 2688 MW
Gas Turbine - 1099 MW Combined Cycle - 990 MW Diesel - 238
MW
Per capita generation 165 kWh.
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Power Sector Scenario
(cont.)Development Plan: Installed Capacity
4,7106,441
17,765
9,666
14,525
0
5,000
10,000
15,000
20,000
1 2 3 4
Year
Capacity(MW)
2004 2007 2012 2020
New addition
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Power Sector Scenario
(cont.)Consumer base:Total consumers 10.42 million
Domestic - 8.50 %
Industrial (small) - 1.74% Commercial (small) - 2.15% Large
Industrial and Commercial - 5.89% Agriculture - 0.38% Others -
1.27%
DESA - 25.36% REB - 38.48% DESCO - 9.69% WZPDCL - 6.55%.
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Power Sector Scenario
(cont.)
0
20
40
60
80
100
Electrified
households(%
)
Year
Trends in Electrificatio
3 5.1 15.1 31 43 100
1976 1982 1991 2000 2007 2020
Target
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Regulation of Power
SectorBangladesh Energy Regulatory Commission(BERC) Act passed
in 2003
Establishment of as independent and impartialregulatory
commission to regulate energy sector.
Started functioning in April 2004 Objectives:
To frame rules and regulation to ensure transparency
in the management, operation and tariff determinationin
electricity, gas and petroleum sector.
To protect consumer and industry interest and promotecompetitive
market.
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Regulation of Power
Sector (cont.)Major functions of BERC: Issue, cancel, amend and
determine conditions of
licensees
Determine tariff safety enhancement Frame codes and standards
and make enforcement of
those to ensuring quality of service Resolve dispute between
licensees and and consumer
and refer those to arbitration if necessary.
Advise the Government regarding electricitygeneration,
transmission, marketing, supply distributionand storage of
energy.
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Regulation of Power
Sector (cont.)Autonomy and accountability of BERC Has been
questionable so far
Lot of expectation from the new leadershipPublic participation
Public hearing
Effectiveness questioned
Expected to be more effective under newleadership
No major regulatory decision so far.
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Conclusion
New 3-year Road Map for Power SectorReform (2007-2009) announced
last yearTo create an institutional foundation on which to
ramp, in a sustainable manner, the substantialinvestments needed
for the sector to properlysupport economic growth and reduce
poverty.
Main outcome expected: Further unbundling of electricity supply
into an
economically viable number of separate generation
anddistribution companies, and a single transmissioncompany
Good luck for the Road Map.
