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BERC moves to frame FIT regulation to promote solar PV projects

BERC moves to frame FIT regulation to promote solar PV projects
March 12, 2017 admin
In Business, Finance, Tadring

The Bangladesh Energy Regulatory Commission (BERC) has moved to formulate a regulation to set the feed in tariff (FIT) in purchasing electricity from private solar rooftop PV projects by the government.
According to official sources, the move came against the backdrop of growing interest of the private sector sponsors to invest in renewable energy sector. “This has been a part of the government’s policy emphasis on promotion of private investment in development of renewable energy in both off-grid and on-grid areas. The government wants to create a mixed energy source for power generation,” said a top official of the BERC.
Admitting the BERC’s move, its Deputy Director Kamruzzaman said the regulatory body has already drafted a regulation and circulated it among the stakeholders to find their views on the issue.
“We’ve already received some opinions and observations from different organizations and individuals on the draft regulation,” he told the news agency.
The BERC official informed that the commission has a plan to convene an open meeting to discuss the draft regulation before finalizing it.
“Once the regulation is finalised, the tariff of solar PV projects will be determined on the basis of it,” he added.
The draft, obtained by the news agency, revealed that the tariff period for renewable energy power plants shall be 20 years which would be considered from its date of commercial operation.
“The tariff for renewable energy technologies shall be single-part tariff consisting of the return on equity, interest on loan capital, depreciation, interest on working capital and operation and maintenance expenses,” said the draft regulation.
At present, there is no specific policy to determine the tariff of the independent solar power projects which are known as solar IPP.
The private investors are setting up the rooftop solar PV projects with the government approval where the tariff is settled through negotiation. Taking the negotiated tariff into effect, the government buys electricity from the projects on case by case basis.
Kamruzzaman said when the FIT is settled under the regulation of the BERC Act, the private sector will find a legal basis to invest and the government will buy electricity at the settled tariff.
Officials said tariff of solar electricity is about Tk 30 per unit while the tariff of conventional electricity is below Tk 10. But when the FIT will be introduced on incentive basis, the solar projects will be commercially viable and more private sector investors will be interested to invest in the sector.
Under such FIT regulations, there will be a mandatory provision for distribution agencies to buy electricity from the solar project to bring rationality in the power generation.
Under the system, the people of the off-grid areas could get electricity at a lower tariff from the solar power projects, said the officials.

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