Bangladesh Faces New Power Charge From India: What It Means for Electricity Imports
Bangladesh is currently facing a new charge on electricity imported from India. This new fee could slightly increase the cost of power. India has asked for an extra 0.005 Indian rupees per unit of electricity. The Ministry of Power, Energy and Mineral Resources is now seeking advice from the Finance Ministry.
The Power Division sent a letter to the Finance Division on August 18. It highlighted the need for a new agreement. This agreement, called a Settlement Nodal Agency (SNA) agreement, must be signed. It will be between the Bangladesh Power Development Board (BPDB) and India’s NTPC Vidyut Vyapar Nigam Ltd (NVVN).
A delay in signing this agreement could cause problems. It might disrupt the import of 1,160 megawatts (MW) of electricity. This power currently comes through NVVN. India’s Central Electricity Regulatory Commission (CERC) first suggested a higher charge of 0.01 Indian rupees per unit. However, BPDB requested a lower amount. CERC then reduced the charge by half.
Officials explained that the SNA charge is not part of the electricity price. Instead, it covers the costs of managing the electricity grid. It also helps settle cross-border power transactions. They believe this additional cost will not be very large.
Signing the SNA agreement will also make transactions easier. Power companies will not need to settle bills separately with each power plant. CERC introduced this SNA system to simplify how grid-related charges are handled. India uses this same charge for electricity traded with Nepal and Bhutan.
The proposed charge covers several operational costs. These include scheduling power supply at different times. It also includes collecting meter data. Further, it covers matching supply with consumption figures. Finally, it helps manage the electricity grid itself.
Bangladesh currently imports a total of 2,656 MW of electricity from India. These imports are under several contracts. The new SNA agreement mainly concerns 1,160 MW from NVVN. This includes power from NTPC, Damodar Valley Corporation, and Tripura State Electricity Corporation. It also covers some electricity from Sembcorp Energy India.
There is a separate agreement for 1,496 MW from the Adani power plant in Jharkhand. BPDB officials said that agreement already includes provisions for such charges. Therefore, a separate SNA agreement will not be needed for Adani power.
