UK's largest generator of electricity is British Energy, that produce around one fifth of the electricity that UK requires. British Energy is also one of the largest suppliers of electricity to the UK's industrial and commercial sector. The British Energy was established in 1995. The older generation of nuclear stations remain in the public sector. British Energy is the holding company of British Energy Generation Ltd and British Energy Generation (UK) Ltd which together own and operate seven AGR stations and one PWR station. In 1996 the company was sold. During June,1999, British Energy bought the retail electricity and gas supplier SWALEC based in Wales in an effort to become an integrated generating and retail company that provided 6% of the England and Wales electricity supply market. British Energy bought the 2,000 MWe EggboroughHYPERLINK "http://en.wikipedia.org/wiki/Eggborough_Power_Station" coal fired station from National Power in 2000 to provide a more flexible power production facility to reduce penalty charge risks from the New Electricity Trading Arrangements introduced in March 2001. The purchase of Egg borough occurred at the peak of the market for power stations, and in 2002 the value of the station was written down by half. In 2001, the company in Ontario, Canada was the major partner to become the licensed operator of the Bruce Nuclear Generating Station, in taking on the operating lease.
Sources: www.british-energy.com [Accessed on 17/05/2010]
COMPANY STRATEGIES:
British Energy intends to develop a position at the heart of the country's new nuclear generation. They remain focused on improving the long-term reliability of its power stations:
Achieve world class operational safety and excellence
Improve our financial stability
Pursue life extensions for our stations
Position for new nuclear build
British energy corporate strategies:
Vertical integration
Diversified generation
Financial strategies:
Maintain strong balance sheet
Have variable dividend policy
Choose long term debt to avoid liquidity crunches
BUSINESS MANAGEMENT STRATEGIES:
Privatizations:
On 15 July 1996 the company was privatised by flotation. Thus, with the exception of three special shares and residual shareholdings held by the United Kingdom Government, British Energy was owned by private sector investors after privatisation. It was reclassified in the National Accounts as a private non-financial corporation at this point. At the time of privatisation British Energy owned and operated six nuclear power stations in England and two in Scotland. All of these power stations have continued to be owned and run by British Energy. Following privatisation, British Energy acquired assets in the USA and Canada, all of which have subsequently been disposed of. In the United Kingdom, British Energy acquired, in 1999, the retail supply business of South Wales Electricity (subsequently sold in 2000) and, in 2000, the Egg borough coal-fired power station. British Energy Generation (UK) Ltd owns and operates the two nuclear power stations in Scotland: Hunterston B and Torness. Other subsidiaries include Eggborough Power Ltd, which owns and operates the coal-fired power station, and British Energy Power and Energy Trading Ltd.
Sources: www.statistics.gov.uk/britishenergy. [Accessed on 23/05/2010]
Re-structuring:As part of the financial re-structuring, the sale to a consortium
Of Canadian investors was announced in December 2002 with the sale being completed in February 2003.The Company announced its revised target nuclear output for 2004/2005 in its statement dated 30 July 2004 to around 61.5 TWh. Following consideration of the programme of works at Hartlepool and Heysham 1 and the expectation that those stations would not return to service until late in the calendar year 2004, the Company announced on 18 November 2004 that it expected nuclear output of 59.5 TWh in the financial year ending 31 March 2005. In 2007, a 7-year partnership agreement with DoosanHYPERLINK "http://en.wikipedia.org/wiki/Doosan_Babcock_Energy" Babcock Energy was entered by the British Energy to provide technical, engineering and operational support across all British Energy sites. The agreement is worth around £550 million and secures up to 800 jobs in Scotland and the rest of the UK.
Sources: http://www.british-energy.com/documents/q3_05.pdf[Accessed on :21/05/2010]
RISKS AND RETURNS:
The company at first approached the British government for financial aid when it has been in financial trouble since 2002. Wholesale energy prices declined at that time, as a result, relaxations on the Climate Change Levy has been failed to obtain. , and renegotiations of its back-end fuel costs with BNFL, as well as issues with a number of its reactors (resulting in much capacity being offline during critical periods of the company financial crisis) and a failure to complete a timely sale of its joint-venture share in Amergen . Parties to the resulting talks included bondholders, significant but unsecured creditors, power purchase agreement counterparties, and a group of secured creditors known as the Eggborough banks, because they provided financing for the purchase of the Eggborough coal-fired power plant in 2000. The plan that resulted from these talks would nearly eliminate any equity interest by existing stockholders, as the firm's creditors waived over £1bn of debts in return for control of the company. Shareholders would receive only 2.5% of the shares of the new company. However, a hedge fund, Polygon Investment Partners LLP announced in July 2004 that it has an alternative plan, and it has since sought to block the government's negotiations. The European Commission approved the UK government's investment on 22 September 2004, of over £3 billion in the restructured firm.
Sources: http://news.bbc.co.uk/1/hi/business/7632853.stm.[accessed on 21/05/ 10].
SOURCES OF FINANCE:
Internal Sources: Traditionally, the major sources of finance for a limited company were internal sources:
Personal savings
Retained profit
Working capital
Sale of assets
External Sources:
Ownership Capital
Ordinary shares
Preference shares
Non-Ownership Capital
Debentures
Other loans
Overdraft facilities
Hire purchase
Lines of credit from creditors
Financial structures of four well known British companies
Grants
Venture capital
Factoring and invoice discounting:
Factoring
Invoice discounting (Jones, M. 2006)
Financial performance of British Energy:
A summary of the financial performance of the British Energy group for the five years ended 31 March 2008 is shown in Table-1.
Financial performance of British Energy, 2005 to 2008
FINANCIAL PERFORMANCE SUMMERY (TABLE-1)
Year
ended
31 March
2008
£m
Year
ended
31 March
2007
£m
Year
ended
31 March
2006
£m
2 July
2004* to
31 March
2005
£m
Results
Revenue
2,811
2,999
2593
499
Operating profit
507
794
635
69
Profit before tax
538
796
599
60
Net profit
335
465
430
41
Dividends on ordinary shares
140
---
---
---
Balance Sheet
Net assets
4,982
2,647
2,101
1,621
Net current assets
1,542
1,287
810
456
Nuclear liabilities (discounted)
5,512
5,469
5,237
5,143
Capital expenditure
207
235
220
35
Net funds/(debt))
798
674
218
(220)
Ratios
Dividends per ordinary share (p/share)
13.6
---
---
---
Basic earnings per share (p/share)
35.4
81.5
75.9
7.3
Adjusted earnings per share (p/share)
29.6
48.2
33.3
2.6
Sources: http://report08.british-energy.com/financial%20summary.aspx.[accessed on 25/05/ 10].
MAJOR CORPORATE FINANCIAL DEVELOPMENTS OF BRITISH ENERGY:
Under the British Government's restructuring programme the Nuclear Liabilities Fund (NLF) acts as a creditor and liability receiver for British Energy Group. In return, a mechanism was put in place whereby NLF can carry out a cash sweep of the organisation whereby it claims 65% of British Energy's available cash flow each year; on top of a fixed annual contribution. British Energy is allowed to borrow up to £700m under the arrangements, with the NLF providing £275m. The British Government is also assuming liabilities worth between £150m and £200m p.a. over the next ten years, which will help reduce British Energy's nuclear fuel liabilities. The present fuel liabilities run until 2086. Despite its financial problems and government help with its fuel liabilities, British Energy's Chief Executive claimed, on 20 June 2006, that nuclear power stations would be economically viable without government guarantee or subsidy if the operation of the energy market was changed. The British Government's interest in British Energy is managed by the Department for Energy and Climate Change Department of Energy and Climate Change (DECC). The restructuring of British Energy has been subject to three National Audit Office reports; in May 1998, February 2004 and March 2006. In 2007 the House of Commons Public Accounts Committee reported on the restructuring. They noted that the taxpayer has been left to underwrite large liabilities, revalue at £5.3 billion, while creditors who would have received little on liquidation received bonds and shares worth £3.9 billion in 2006. They also noted that British Energy may now lack an incentive to reduce the eventual liabilities falling to the Nuclear Liabilities Fund. British Energy's vision statement is "to be the world's leading nuclear energy company."
Source: http://www.worldlingo.com/ma /en/British Energy/1.[accessed on 24/05/ 10].
Key Dates of British Energy:
1996: British Energy, listed on the London and New York stock exchanges, is privatized.
1997: British Energy forms AmerGen 50-50 joint venture with PECO (later Exelon) in order to acquire nuclear power plants in the United States.
1998: Nuclear Electric and Scottish Nuclear are combined to form British Energy Generation.
1999: AmerGen acquires Three Mile Island, Clinton, and Oyster Beach nuclear power plants in the United States; the company begins a diversification drive into non-nuclear-based power sources.
2000: The Company buys a coal-fired power plant in Yorkshire for £340 million.
2001: The Company acquires a 17-year lease for eight nuclear power plants at Bruce Power facilities in Lake Huron, Ontario; the company announces plans to build a 600 megawatt wind farm in a joint venture with Amec in the Hebrides Islands, off of Scotland.
2002: A slump in wholesale energy prices leads British Energy into financial trouble; the company approaches the Government for help.
2004: British Energy restructured with UK government investment of £3 billion.
April 2005: Nuclear Decommissioning Authority formed to clean-up Britain's ageing power plants.
January 2006: The British government launches its Energy White Paper which states that the construction of new nuclear power stations will be the best way to reduce carbon emissions.
July 2006: The government announces it is selling part of its interest in British Energy.
July 2006: French company EDF and Germany's Eon announce they are considering teaming up with British Energy for a multi-billion pound contract to build the next generation of nuclear power stations in the UK.
May 2007: Secretary of State for Trade and Industry Alastair Dowling announces sell off of up to 450 million shares in British Energy.
May 15, 2008: British Energy meets to consider takeover approach from EDF, which involves Centrica, the owner of British Gas.
July 2008: Government gives go-ahead for eight new nuclear power stations in the next two years
July 24, 2008: EDF "edging closer" to clinching the £11 billion takeover as Centrica resumes talks to buy a stake of 25 per cent if the deal proceeds.
August 1: 2008: EDF backs out, causing chaos for British energy plans
Sources:http://business.timesonline.co.uk/tol/business/industry_sectors/utilities/article4440432.ece.[accessed on 22/05/ 10].
British Energy is the part of EDF Energy:
British Energy delisted from the London Stock Exchange on 3 February 2009 and was the part of EDF Energy. The combination of EDF Energy and British Energy forms one of the UK's largest energy companies. Britain's plans for a new generation of nuclear power stations received a major boost when French energy giant EDF finally agreed to buy British Energy in a £12.4bn deal. The combined business is the UK's biggest producer of electricity and together provides power to a quarter of the country's population. With a current installed capacity of around 16.5GW, it supplies gas and electricity to over 5.5 million business and residential customers from their nuclear, coal and gas power stations, as well as combined heat and power plants and wind farms. EDF Energy and British Energy together employ nearly 20,000 people at locations across the UK. The combined companies are part of EDF S.A., one of Europe's largest power companies.
Source: http://www.british-energy.com/
INFLUENCED BY DIFFERENT ISSUES AND TRENDS:
British energy has been influenced by different trends and issues.
European energy markets and EU regulatory and competition policy: A major impact on the UK's energy markets and consumers has been made by the European energy markets and EU regulatory and competition policy.
In order to protect the interests of UK market participants and all consumers, the UK's regulators carry an important role in energy market in structuring the development of European policy.
Sources:http://www.parliament.uk/documents/upload/british-energy.pdf. [accessed on 21/05/ 10].
All independent generators experienced serious financial difficulties:
British Energy has on a many occasions expressed concerns to Ofgem regarding the developments in market structure and in particular the significant increase in vertical integration and market power within the sector. During this time due to unsustainable low wholesale prices that occurred, all independent generators experienced serious financial difficulties over a three year period prior to 2004. However, during this period the large VI Groups largely reported healthy results continuously in domestic supply on the back of uncompetitive high margins. Indeed, domestic tariffs rose during this period without ever noticeably reflecting the significant fall in wholesale prices. This is contrary to the two year period that followed where wholesale prices recovered with price rises filtering through to domestic customers very quickly as large increases in domestic tariffs were implemented by all the major vertically integrated domestic suppliers. Since August 2006 wholesale prices have again fallen sharply yet only one supplier has announced a specific cut in its prices. At the beginning of August, INVESCO, the largest shareholder of British Energy which played an instrumental part in ruining, accepted the sweetened offer. An Approval is still need by the British Energy's shareholder and appropriate competition authorities for the deal, but the government owning 36% stake in the firm, supported it.
Sources: http://www.parliament.uk/documents/upload/british-energy.pdf.[accessed on 23/05/ 10].
Different views from the different political parties: The outgoing (liberal) Labour government is strongly pro-nuclear, with a major initiative for building ten new power plants in the immediate future -- albeit with a clear statement of "no subsidies" The (ingoing) coalition majority Conservatives are likewise strongly climate-change-oriented (in contrast to conservative platforms in other countries, e.g. the US). E.g. they propose strengthening the carbon price, moving in the direction of a carbon tax by instituting a price floor. Liberal Democrats have long opposed any new nuclear construction. Conservatives, by contrast, are committed to allowing the replacement of existing nuclear power stations provided they are subject to the normal planning process for major projects and provided also that they receive no public subsidy. Sources: The Guardian, 1 April 2009
STAKE HOLDERS: STAKEHOLDERS INTERESTS ON BRITISH ENERGY:
Concerning the business, British Energy wants to be identified as a leading and distinguished point of reference on energy policy. In order to understand the stakeholders' views, they maintain dialogue with different organisations and report these when they plan their business activities. Their engagement with key stakeholders - shareholders, employees and customers - reflects the emphasis we place on safety and sustainability. It helps us to build trust, demonstrate transparency, formulate strategy and policy and improve our operations, products and services.
Sources:
http://www.edfenergy.com/sustainability/performance-report/stakeholders/our-stakeholders.shtml.[accessed on 24/05/ 10].
Political institutions and the regulator:
To understand the business better and to form the policy environment, they engage with political and regulatory stakeholders in which they operate.Focusing on three important themes: security of supply, change in climate and affordability, they engage with Parliamentarians who signify constituencies or have an interest in energy policy within our geographies. They aim to improve understanding on both sides and to explain how we can help them provide support for their constituents. Regarding the 2008 Energy, Climate Change and Planning Acts, in 2008 they participated in a Business and Enterprise Select Committee examining the operation of the energy markets and gave information to MPs.
Sources:http://www.edfenergy.com/sustainability/performance-report/stakeholders/our-stakeholders.shtml.[accessed on 24/05/ 10].
Customers and Suppliers
For the customers, it is priority to provide appropriate products and services for these groups. For identifying and providing assistance to customers for extra help, they have trained their customer service advisors and metering agents. To ensure that they met best practice and response effectively to customer concerns, they work closely with consumer organisations such as Consumer Focus and Consumer Direct. They ensure that they handle their operations in line with their ethical supply chain business principles, as such; they work with their suppliers and business partners.
Source:http://www.edfenergy.com/sustainability/performance-report/stakeholders/our-stakeholders.shtml [Accesed on 16/05/2010 11pm]
The Government's interest in British Energy
British Energy was owned publicly until 1996 its privatisation through a stock market flotation. In 2005 after helping British Energy to achieve a solvent restructuring, the Government achieved a financial interest in the business once again by following a sustained declination in its financial position. The Government agreed to provide assistance because the Company was of national strategic importance. On 9 September 2002 the Government offered British Energy a credit facility of £410m against which it could borrow. The facility allowed British Energy to continue trading while it resolved longer-term issues. The facility was intended to be short-term, to be made available while analysis of British Energy's financial position was undertaken, and was initially made available until 27 September 2002. However, on 26 September 2002 it was extended to 29 November 2002, and raised to £650m. The facility was later extended until 9 March 2003, remaining at £650m. A further extension, until 30 September 2004, was obtained on 7 March 2003 but the credit facility was reduced to £200m. The Shareholder Executive, which was created in 2003 to improve the Government's performance as a shareholder, had responsibility for monitoring British Energy's financial and operational performance and for advising on decisions to sell the Government's interest.
Sources:http://www.statistics.gov.uk/about/methodology_by_theme/bec/downloads/BE_article.pdf[accessed on 24/05/2010]
CORPORATE GOVERNANCE:
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled. This is the relationship between company directors and the company's stakeholders. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management, and the board of directors. Other stakeholders include employees, customers, creditors, suppliers, regulators, and the community at large. Corporate governance is a multi-faceted subject. (Dignam and Lowry 2006)
The corporate governance debate:
In recent years, there has been considerable concern in the UK about standards of corporate governance. While, in company law, directors are obliged to act in the best interests of shareholders, there have been many instances of boardroom behaviour difficult to reconcile with this ideal. The committee on the financial aspects of corporate governance, chaired by Sir Adrian Cadbury, was set up by the financial reporting council, the stock exchange and the accountancy profession. Its brief was to examine and make recommendations on the roles of executive and non-executive directors and authorizes. Other reports on corporate governance have been issued since Cadbury, the latest being Hampel report. The main difference is that the emphasis is moving away from a set of rules towards applying the broad principals of governance in a more flexible way that encourages business prosperity These principles of good governance, which apply to all listed companies from 1999 onwards, are summarized below:
Directors and the board
Directors' remuneration
Relations and shareholders
Accountability
(Pike and Neale ,1999 , P.16)
British energy corporate strategies:
Vertical integration
Diversified generation
REGULATORY BODIES:
Ofgem (economic and pricing policy);
FSA (banks and funding providers)
Financial Reporting Council (for accounting standards in UK)
OFGEM:
Ofgem has made significant improvements in its effectiveness and working practices over the last three to four years. This has predominantly been brought about by the adoption of the Better Regulation Principles.
Ofgem's principal objective is to 'protect the interests of [GB] consumers wherever appropriate by promoting competition'. Furthermore, Ofgem has significant powers under the Competition Act 1989. It has conducted a number of inquires under the legislation with a view to protecting consumers from potential abuses of competition legislation. Thus Ofgem has the duty and the regulatory tools to protect the interests of the public. However, it is its interpretation of its duty that shapes its approach and agenda.
Ofgem demonstrate that it is withdrawing from direct regulation of competitive markets (leaving this to be regulated under competition legislation) and focussing instead on regulation of the monopoly businesses.
Ofgem closely monitor/review the wholesale and supply markets with a view to examining the effects of vertical integration on competition in these markets and whether this is, or is not, in the public interest
Sources: http://www.parliament.uk/documents/upload/british-energy.pdf .[accessed on 21/05/ 10].
Financial Reporting Council (FRC)
Initially, the FRC was established in 1990 to promote good financial reporting through its two subsidiaries, the Accounting Standards Board (ASB) and the Financial Reporting Review Panel (FRRP). However, the US accounting scandals led the UK government to review regulation in this area giving the FRC an expanded and more active role. The Financial Reporting Council (FRC) is a unified, independent regulator which aims to promote confidence in corporate reporting and governance. In pursuit of this aim its six objectives are to promote:
high quality corporate reporting
high quality auditing
high quality actuarial practice
high standards of corporate governance
the integrity, competence and transparency of the accountancy and actuarial professions
its effectiveness as a unified independent regulator
(Villiers C ,2006 , P.43)
FSA (banks and funding providers):
The FSA is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000 (FSMA). They are accountable to UK Treasury Ministers and through them to the Westminster Parliament. We are operationally independent of Government and are funded entirely by the firms we regulate. FSMA gives us four statutory objectives:
maintaining confidence in the financial system;
promoting public understanding of the financial system;
securing the appropriate degree of protection for consumers, taking into account the general principle that consumers should take responsibility for their decisions; and
Reducing the extent to which it is possible for a business to be used for a purpose connected with financial crime.
FSA:
The FSA's response to the economic crisis
The availability and cost of credit
Changes and restructuring within the sector
Scottish firms regulated by the FSA: Of the 27,436 firms regulated by the FSA (6,407 of which are European Economic Area Authorised firms1 based in Europe), 1309 are registered in Scotland.
Weakness of FSA
Growth of significant global imbalances over the last decade
Increasing complexity of the securitised credit model
Rapid extension of credit and falling credit standards
Property price booms
Increasing leverage in the banking and shadow banking system
Underestimation of bank and market liquidity risk
Sources: www.fsa.gov.uk/pubs/other/turner_review.pdf .[accessed on 23/05/ 10].
The Bangladesh Rural Electrification Board (REB)
The Bangladesh Rural Electrification (RE) Program was founded with a Presidential Ordinance in October 1977 that established the Rural Electrification Board (REB) as the semi-autonomous government agency reporting to the Ministry of Power Energy and Minerals Resources, which was responsible for electrifying rural Bangladesh. Since its inception, the purpose of the program has been to use electricity as a means of creating opportunities for improving agricultural production and enhancing socio-economic development in rural areas, whereby there would be improvements in the standard of living and quality of life for the rural people. Enormous changes have occurred in areas all across rural Bangladesh due to people having access to electricity.
sources;http://www.reb.gov.bd/about_reb.htm. [accessed on 26/05/ 10].
Development plans:
Rural electrification is one of the major components of overall infrastructure, implementation that has been identified by development plans of Bangladesh. Bangladesh Power Development Board (BPDB) carried out the electrification program that was mainly limited to urban centres. Two consulting firms of USA were engaged by the Government of Bangladesh to carry out a comprehensive study on rural electrification in Bangladesh. The firms studied all related issues and recommended a sustainable rural electrification program. The Board is a statutory Government organization mainly responsible for implementing countrywide rural electrification. Electrification in Dhaka is maintained by two different entities names Dhaka Electric Supply Authority (DESA) and Dhaka Electric Supply Company (DESCO). Beyond the capital, the Power Development Board, Rural Electrification Board, Power Grid Company of Bangladesh and Rural Power Company Limited, operate at different levels to ensure power supply to the subscribers. Each company has its own procedures, forms and tariff plans for both domestic and commercial subscribers. Customers can also enquire about bill and can place complaints if required. DESCO also provides regular schedule for load shading for the metropolitan area of Dhaka.
sources;http://www.reb.gov.bd/about_reb.htm.[accessed on 23/05/ 10].
The role of REB:
Ensure peoples participation in policy formulation in a democratic way.
Provide reliable and sustainable electricity to the rural people at affordable price.
Improve economic condition of the rural people by using electricity in agriculture, cottage and agro based industry.
Improve living condition of rural peoples.
Bring about entire rural Bangladesh under RE program or an area coverage basis.
sources;http://www.reb.gov.bd/about_reb.htm.[accessed on 23/05/ 10].
A brief on rural electrification programme: History of rural electrification in Bangladesh
Bangladesh Power Development Board (BPDB) is responsible for distribution of electricity in most of the areas in Bangladesh except Dhaka Metropolitan City and its adjoining areas under DESA and DESCO, areas under West Zone Power Distribution Company Ltd (WZPDCL) and some of the rural areas under Rural Electrification Board (REB). At present only 47% of the population is served with electricity and the per capita electricity consumption is only 156Kwh (fiscal-2009) which is one of the lowest in the world. In order to mitigate the demand shortfall, the present Government has, as the reports said, recently taken the following measures:-
Approved a project to build ten "peaking power plants" costing Tk72.03 billion (7203 crore) which will produce 830MW of power by end 2011
Approved a project costing Tk 10.25 billion (1025 crore) to modify and renovate the units #3,4 and 5 of the Ashugonj Power Plant Complex which were built in the late 70's and early 80's.
Approved bids of two companies for four power plants of a combined capacity of 270MW which will use furnace oil and will come on stream by June 2011.
Sources: http://www.thefinancialexpress-bd.com/more.php?news_id=
97794&date=2010-04-17.[accessed on 26/05/ 10].
In addition to the above, concrete steps and some intervening measures have been/are being, taken. These include:
Importing LNG from Qatar to offset the gas shortage;
Actively considering installing nuclear power plants through Russian assistance which involve a time span of over 10 years for building;
Importing electricity from India, Nepal, Bhutan and Myanmar;
Erection of transmission lines from Bahrampur in West Bengal to Bheramara in Kushtia to allow importation of 250MW of electricity from India;
Shutting down some fertiliser factories and diverting gas for power generation
Rationing the use of air conditioners in private homes/offices; and,
Encouraging use of alternate sources of energy i.e. solar energy, bio-fuel etc
Sources: http://www.thefinancialexpress-bd.com/more.php?news_id
=97794&date=2010-04-17.[accessed on 26/05/ 10].
PRIVATIZATION:
In 1996 the government of Bangladesh (GoB) adopted Private Sector Power Generation Policy (PSPGP) to encourage private sector in generating of electricity to promote economic growth. Through a document titled "Policy Guidelines for Enhancement of Private Participation in the Private sector, 2008" the GoB encouraged public private partnership (PPP) and allowed the private sector to
1) To set up commercial power plants
2) to supply electricity at tariff rates to the distribution licenses determined by the Bangladesh Energy Regularity Commission (BERC).
Certain practical steps should be taken by the GoB under the direct oversight of the Prime Minister, in order for Bangladesh to get out of this miserable situation.
Some such measures can be enumerated here:
Allow any existing industrial unit/units/groups/clusters of factories manufacturing facilities to import power generation plants for their own establishments based on diesel, HFO up to generating capacities of five MW to 50MW.
Any existing levies/duties/ charges on these diesel/HFO-powered plants that are to be imported on a "returnable" basis, should not be imposed/applied. Naturally, appropriate checks and balances would have to be in place to avoid any misuse of the intended purpose. Such measures will enable to, at least, carry out the production by the industrial units which currently are now being hampered.
Ensure timely completion of the approved power projects if necessary through monitoring by special "Task Forces" of the approving Ministry.
Accelerate the bidding processes and issuance of work orders for projects that are currently in the pipeline and these should be put under a monitoring system as stated above.
Inviting all spectrums of stakeholders connected with the power and energy sectors, an international conference on "Power & Energy" should be convened in Dhaka urgently. The world renowned event management companies/managers should preferably handle this. If properly managed and participated by professionals or experts, the outcome of this event would give solutions in the medium to long term periods. This will enable the policy-makers to strategies for the next 10-15 years and this would be the key to achieve "millennium development goals"
Sources: The financial express (April-17, 2010)
Conclusions:
In 2002 the financial collapse of the nuclear generation British Energy PLC doesn't "prove" that nuclear power is unworkable in a liberalized power market. Mainly nuclear generation combines high operational leverage with high financial leverage that arises from the long term liabilities as such the combination is certainly risky. For risk management price volatility is a big challenge and liberalized power markets behave much like other commodity markets. Except catastrophe risk that is borne by governments under international treaty automatically, none of the risks in nuclear power is unique. By mismanaging the risk by British Energy itself, it results in costly financial restacking. But against nuclear power his should not be taken as evidence. The "new" British Energy company, floated on the London Stock Exchange in 2006, has a much more appropriate financial strategy and is paying the attention to the operational risks of the being British reactions. Investors understand the company better and the shares, while volatile, trade successfully like another power company.
