In the recent years Bangladesh has experienced booming economic growth, rapid urbanization and increased industrialization.
Hon’ble Prime Minister Sheikh Hasina has declared the ‘Vision 2021’ to turn Bangladesh into a middle-income country by 2021 and ‘Vision 2041’ to be a developed and prosperous Bangladesh by 2041. In 2009, when the AL-led government assumed the office, the nation was suffering from chronic power supply crisis.
The average power demand at that time was about 6,000 MW while power generation capacity of the country was less than 5000MW. Eight to ten hours load- shedding in summer days was causing unbearable miseries. Now the generation capacity has increased more than 16,000 MW which is very much at par with the capacity as declared in the ruling party’s election manifesto.
Achievement during 2009-2017
The government of the People`s Republic of Bangladesh is working relentlessly to materialize the `Vision 2021` of the Honorable Prime Minister Sheikh Hasina. Power Division is committed to provide 100% access to electricity to the people of the country by 2021. In 2009, the access to electricity was 47% which is now 83%. It is expected that 100% electricity coverage would be possible much before 2021. In line with the `Vision 2021`, Power Sector’s vision has been set to ensure reliable electricity to all at an affordable price by the year 2021.
The government has taken and implementing comprehensive action plan for the development of power sector. As a result, the rise in economic growth, the growth in the industrial sector, and rapid progress in urbanization has been achieved. The demand for electricity is increasingly snowballing. In the year 2015-2016, 1586 MW of power was added to the national grid.
The progress of electricity generation is also reflected in comparison to the surge in per capita electricity consumption and in the number of subscribers. What was achieved between1971-2009, has been achieved and tripled in the last nine years by the present government.
Achievement at a Glance
The comparative power sector scenario is given below:
No. of Power Plants
Generation Capacity (MW)
Maximum Generation (MW)
System Loss (T&D)
Per Capita Power Generation (kWh)
Total Consumers (Lakh)
Access to Electricity
* Including captive
Initiatives taken during 2009-2017
During the nine years tenure of the government a good number of new initiatives have been taken which has resulted a landmark achievement in the power sector.
Cross Border Electricity Trade (CBET)
Power exchange through regional cooperation has been commenced during this period. Import of 660 MW electricity from regional grids from India has started through CBET. By 2021, plan has been taken to further import 3,500 MW of power through regional cooperation.
High Voltage DC (HVDC)
The first ever 400kV- HVDC line has been established to import 500 MW power from Baharampur, India through Bheramara, Bangladesh grid interconnection. The 54.7 ckt-km 1113 MCM double circuit line has been established in 2013 to transmit electricity by converting into high voltage DC from AC and then converted into 230kV AC at the Bheramara station.
Grid Tied Solar Power
The first grid-tied solar power plant in Bangladesh has been installed at Sarishabari in Jamalpur with a capacity of 3MW.
Solar Mini Grid
Hon’ble Prime Minister has inaugurated 400kW Solar Mini Grid in Saskhai Bazar of Sulla Upazila in Sunamganj District on December10, 2017, through video conferencing. It is the largest solar mini grid project in the country and one of the largest solar mini grid in the world. The project is providing power to the marginalized rural population of the remote haor areas in Sunamganj district covering around 1000 households providing grid quality electricity from solar power. As part of off-grid electrification, distribution of solar home system, solar mini grid, micro grid programs have been taken by the government. So far, 45 million solar home system (SHS), 10 solar mini grids have been installed in off-grid rural areas. Government has a plan to install 60 million solar home system and 50 solar mini-grid system by 2018 to cover about 10% of total population.
Government has undertaken 13 mega projects in co-operation with India, Japan, China, Malaysia, South Korea and Singapore to set up coal-based power plants. The primary work of establishing a total 5,925 MW power plant in the public and private sectors is underway. It is expected that the first mega project of Payra 1300MW will come into operation in April 2019.
Prepaid Metering System
Pre-paid metering system has been introduced nationwide aimed at ensuring easier bill payment with hundred percent collection of electricity bill. About seven lakh pre-paid meters have been installed till date and another twenty-seven lakh meters would be installed within next June 2018. After installation of these pre-paid meters virtually there is no accounts receivable of pre-paid consumers. Moreover, due to introduction of pre-paid meters, system loss has been reduced significantly and also demand at consumer level reduced.
ICT in Power Sector
In order to establish good governance through increasing the quality of customer service, increasing efficiency, transparency and accountability, the Power Division has taken and implemented digitalization of the sector. In addition to on-line power connections and bill payment systems, PMIS and complaints management system have also been introduced. A comprehensive website of the Ministry of Power, Energy and Mineral Resources has been developed, which is playing important role in social communication and promotion.
Government has decided to develop underground distribution system in major cities of the country. The aim is to provide the facility of modern cities with an advance electricity supply system. The government owned power distribution company DPDC and DESCO have adopted several plans to establish underground distribution substations and supply lines to switch to modern-country’s practice of having underground power-distribution system.
Public-Private Partnership (PPP) in Transmission
The government has decided to implement electricity transmission projects under PPP for the first time. It may be worth mentioning here that government initiated IPPs in 1997 during the first term of the Hon’ble Prime Minister Sheikh Hasina.
The Sustainable and Renewable Energy Development Authority (SREDA)
SREDA was established in 2012. The aim of the establishment of SREDA is to promote renewable energy, energy efficiency and to mitigate risks associated with natural calamities stemming from global warming in Bangladesh.
Bangladesh Energy and Power Research Council (EPRC)
EPRC has been established to provide the platform to attract experts worldwide, and help to create in-country expertise through scientific collaboration. It will strengthen and mobilize research capabilities at universities, public/private research organizations, and industry practitioners as well as assist individual entrepreneurs to develop applicable technologies and systems for the development of the energy and power sector of Bangladesh.
Bangladesh Power Management Institute (BPMI)
BPMI has been incorporated aiming to capacity building of the power sector and create efficient manpower for both public and private sectors. BPMI campus will be set up in the suburb of Keraniganj on 25 acres of land of the Bangladesh Power Development Board (BPDB). The organization has started its functioning last year.
(1) Domestic Gas Depletion
Bangladesh was largely dependent on domestic gas for electricity generation while almost 96% generation was from gas in 2009. At the moment domestic sources of gas are becoming increasingly unreliable. Bangladesh plans to increase reliance on coal-fired power generation. Under the proposed PSMP 2016, 60%-70% of electricity generation will be dependent on imported electricity or imported fuel (LNG).
(2) Grid Stability
Transmission capacity in Bangladesh is not growing fast enough to cope up with power generation, resulting in supply bottlenecks in important commercial corridors (such as Chittagong and Comilla). And unexpected outages, like the November 2014 country-wide blackout, perpetuate concerns about the security and stability of the country’s power grid. Power system frequency in Bangladesh varies routinely on normal days between 48.9-51.2 Hz and can go as low as 48.7 Hz and as high as 51.5 Hz under contingency. This is a major impediment to system reliability and also causes a severe economic loss including our-of-merit dispatch.
(3) Distribution Bottleneck
Present capacity of distribution lines in Bangladesh is about 420 thousand kilometers and sub-station capacity is about 20 thousand MVA. Remarkable success achieved during last nine years. But the present distribution infrastructure is not enough to ensure quality, uninterrupted and reliable electricity for all by 2021. Huge number of distribution lines and substations will need to be constructed to meet the vision 2021 of the government. But project financing, up-gradation of existing infrastructure, timely implementation of project, conversion of overhead system into underground system, implementation of smart grid and prepaid metering system and ERP are the major challenges.
(4) Land availability
A key constraint in Bangladesh electricity-generation development is land availability, be it for coal mining, thermal power generation, utility-scale solar or hydroelectricity. Bangladesh has one of the highest population densities in the world. The World Bank estimates 59% of Bangladesh’s total land is arable, and 11% is forested. With 66% of the population still based in rural areas, this is a key constraint that requires careful management.
(5) Off-Grid Electrification
The vision of the government is to ensure quality and reliable electricity supply for all by 2021 but the main challenge for achieving this target is the electrification of off-grid areas of Bangladesh, where expansion of national grid is highly expensive and time consuming. To overcome this barrier government has taken initiatives to electrify the off-grid rural areas, remote islands and hill tracts by the development of renewable energy resources.
Steps to Overcome the Challenges
(1) Fuel Diversification
Natural gas is the main fuel for power generation in Bangladesh. But the natural gas is depleting day by day. Recognizing the importance of primary fuel for generation of electricity, the Government of Bangladesh has diversified the fuel mix for power generation. Government has a plan to gradually use coal, LNG and other available fuel for power generation besides gas. To ensure energy security, government has prepared PSMP-2016 considering gas, coal, LNG, liquid fuel, duel fuel, nuclear and renewable energy resources. Government has also taken initiatives to import power from neighboring countries.
(2) Free Governor Mode of Operation (FGMO)
Potential remedy of grid stabilizations is with the simplest primary governor control scheme. A set of trials with FGMO with limited number of generating units was conducted to stabilize the system frequency with encouraging results. Simple but effective and useful measures like these can provide enormous relief to the Bangladesh system and paves the way for it to grow rapidly over the coming decades. These experiments are also highly relevant for a number of other developing countries experiencing similar issues to systematically explore frequency control measures.
(3) Augmentation in distribution
An integrated power distribution programme has been undertaken to increase the distribution network in order to bring 100% population under electrification as well as improving the customer service.
To ensure reliable, quality and uninterrupted electricity for the people of Bangladesh a strong distribution network is essential. The present capacity of distribution lines and substations are not adequate enough to provide uninterrupted electricity supply to the consumers. Besides, construction of 159km of new lines augmentation and modernization of existing distribution system is required. For this reason, government has taken following programs in distribution sector:
Conversion of overhead system into underground system.
Implementation of smart grid system.
Implementation of pre-paid metering program.
Replacement of overloaded transformers.
Renovation and overhauling of distribution lines and sub-stations.
Expansion of distribution network.
Bangladesh can look forward to a continued period of strong economic growth and development. The power sector should play a critically important role underpinning sustainable development.
A cost-effective long-term investment program that prioritizes clean energy, smart grid and energy efficiency. Increased electricity imports would best serve the country in terms of energy security in comparison to heavy reliance on fossil fuel imports. Through successful implementation of the power sector plans, reliable energy supply will no longer remain just a dream.
These will facilitate achieving the Sustainable Development Goals (SDGs) and also establish Bangladesh as an example for development all over the world as we have shown in achieving the Millennium Development Goals (MDGs).
The development of power sector will not only elevate Bangladesh to a higher status but also upsurge productivity which will boost the economic advancement of Bangladesh.
Engr Mohammad Hossain, Director General of Power Cell, Power Division.
Bangladesh`s entrance into the prestigious league of nuclear power nation
November 26, 2017 Sunday 10:36 AM By Dr. Mohammad Shawkat Akbar
I would remember this day-November 04, 2017-as one of my most memorable days ever. Our hard works and determinations have paid fruits as in this Design and Construction License ceremony of Rooppur Nuclear Power Plant; we receive the license for unit-1 of the power plant.
I extend my sincere gratitude to the organiser, Bangladesh Atomic Energy Regulatory Authority (BAERA ) for organising the Design and Construction License ceremony timely. It is obviously an important event in the history of nuclear power programme of Bangladesh.
This will be written in the pages of history as a moment of pride for us as for the first time Bangladesh has obtained the Design and Construction License for Rooppur NPP with VVER-1200, ASE-2006 reactor and have entered into the prestigious league of nuclear power nation.
This license has permitted us to start the construction of country’s first nuclear power plant, the Rooppur NPP. After receiving the Design and Construction License, the first concrete pouring ceremony for unit-1 of Rooppur NPP will be held in the presence of the Honorable Prime Minister Sheikh Hasina on November 30, 2017.
Bangladesh Atomic Energy Regulatory Authority has granted this Design and Construction License following a thorough evaluation of the preliminary safety analysis report (PSAR), some other extensive and specific documents concerning Rooppur NPP site safety, Rooppur NPP technology and its safety systems, construction methodology and organisational matters submitted by the applicant, Bangladesh Atomic Energy Commission (BAEC).
Developing licensing process and assessment of PSAR documents and other technical documents is a complex and challenging task, but BAERA has taken that challenges and has established the licensing framework; granted the Siting License of Rooppur in June 21, 2016, performed assessment of the PSAR documents, various technical and safety documentations of Rooppur NPP and finally has granted the Design and Construction License in a short period of time.
We are grateful to BAERA Chairman Dr Naiyyum Chowdhury for his leadership in this regard and to Honorable Science and Technology Minister Architect Yeafesh Osman, Principal Coordinator of SDG Affairs of Prime Minister`s Office Abul Kalam Azad and Science and Technology Secretary Md Anwar Hossain for their constant support and guidelines. I am grateful to my project personnel, BAEC and contractor for timely preparing and submitting the relevant documents and information to BAERA and time to time consultation with BAEAR.
I would love to term this ceremony as an announcement to our nation about the readiness of Bangladesh in constructing Rooppur NPP and also a notification regarding the safety assurance of Rooppur NPP construction site. The Rooppur NPP will be constructed at the site as required by the legislation and the International Atomic Energy Agency (IAEA) guidelines.
The design and construction license is authorizing BAEC to use the project site for construction of the unit-1 of the Rooppur NPP with VVER-1200, AES-2006 design.
The Design and Construction License establishes the requirements and conditions for performing the activities related to construction of the foundation plate under the reactor building, construction of main buildings and structures of the Rooppur NPP unit-1, construction of auxiliary buildings and structures of the unit-1.
I am happy to understand that based on the regulatory approach of the Design and Construction License, BAERA along with TSO will make independent audits and inspections conformity assessment to confirm that all the equipment and components of Rooppur NPP will be manufactured following the approved design and working documentations, industry and quality standards and proven engineering practices.
We believe that along with BAERA, my project authority will establish a robust procurement, inspection, and auditing processes during manufacturing of the equipment in Russian Federation and construction and erection activities at Rooppur NPP site.
As a project director of Rooppur NPP, I am confident that all activities under this present Design and Construction License will be performed strictly complying the terms and conditions of this license as well as international standards and IAEA recommendations.
We are assuring that the objective of the principle-1 of the IAEA Fundamental Safety Principles which states that “the prime responsibility for safety must rest with the person or organisation responsible for facilities and activities that give rise to radiation risk” will be fulfilled by us and we will build a safe and secured NPP at Rooppur according to the construction schedule and within the budget.
Dr. Mohammad Shawkat Akbar, is a nuclear scientist andProject Director of the Rooppur Nuclear Power Plant.
‘Challenges of hydrocarbon exploration and mining in Bangladesh’
September 22, 2017 Friday 11:31 AM By Dr Badrul Imam
Development of petroleum and mining sectors are fundamental to a healthy growth of energy and power sectors, the main drivers of the economic development of a nation.
In both counts Bangladesh falls short of its true potentials. The country is yet to unearth its true natural gas prospects. Also a significant coal reserve based in the north Bengal remains undeveloped.
A robust petroleum and mining development program and a qualified national work force may significantly change if not reverse the notion of almost total dependence on imported fuels in the next decade as envisaged in the master plan.
Considering the growth of gas demand it is reasonable to suggest that the country will run out of its present gas reserves in a decade.
However, geological interpretations suggest that significant gas resources are yet to be discovered in the country in the onshore and offshore areas. Bangladesh has not reached a mature stage of petroleum exploration and all of its gas discoveries are found in simple conventional plays i.e. anticlinal traps in the eastern fold belt in the country.
There remains an area of untapped gas plays known as stratigraphic plays which are theoretically distributed all over the country but hardly explored. Furthermore the unconventional plays like thin bed plays, synclinal plays, tight sand plays, over-pressured plays are areas which have very good geological prospects but little explored.
Some of these kind of prospects are proven by the successes in adjacent Tripura state of India which is geologically same as eastern Bangladesh.
The offshore Bangladesh is the least explored area. The Indian part of the Bay to the west of Bangladesh sea and the Myanmar part to the east, both have registered significant gas discoveries in the last ten years.
Specially the Rakhain offshore basin of Myanmar lying adjacent to the south eastern offshore area of Bangladesh has large and recent gas successes. Considering the fact that the offshore Rakhain Basin and SE offshore Bangladesh belong to single geological entity, gas prospects in the Bangladesh part should be equally bright.
The above discussion leads to the conclusion that the remaining gas prospects of Bangladesh has been underplayed at recent time. On the other hand the planning and implementation to build up infrastructures and logistics for costly LNG have been overly played.
It is understood that import of LNG to tackle the running gas crisis is justified in the face of no alternative available immediately. But the merit of planning major dependence on imported and costly LNG for a long term is certainly questionable.
This will inevitably give the economy a major shock as the power and industrial products generated will be costly and may not be sustainable.
Bangladesh has significant mineable coal reserves stored in four coal fields in the north Bengal. The total in situ coal amounts to an estimated 2000 million tonnes in these coal fields. Only one coal field, Barapukuria has been developed and produces coal at an annual rate of 1 million tonne per year.
Because of the fact that the coal fields lie underneath fertile agricultural land in a thickly populated area and the fact that inherent hydrological problem make open cast mining difficult, the present government’s stand of not to develop open cast mining seems reasonable.
But these coal fields may be developed by underground mines. The recovery of coal by underground mining may be optimized by state of art technology. This will certainly reduce the dependence on imported fuels and will promote self reliance make better economic sense.
At the same time developing a dedicated national expert work force to take the challenges of petroleum and mining development activities is vitally important. Expanding and increasing the institutional capabilities are prerequisite to achieve that goal.
Dr. Badrul Imam is an energy expert and professor of Geology of Dhaka University.
Coal as a primary source of energy towards energy security of Bangladesh
August 25, 2017 Friday 9:27 PM By Reshad Md. Ekram Ali
State-owned Geological Survey of Bangladesh (GSB) entrusted with the responsibilities of deciphering the geology of the country, exploring geological resources (except oil and gas), all sorts of geological and geophysical mapping, environment and urban geology and geo-hazard studies.
Important geological resources discovered by GSB are Coal. Limestone, Hard Rock, White Clay, Glass Sand, Peat, Heavy Minerals and Construction Aggregates (sand and gravel).
Coal Reserve of Bangladesh
GSB played an important role in the coal discovery of the country through systemic survey. Coal reserve of the country are listed in the following Table.
Table: Coal Reserve of Bangladesh
Table: Quality of Coal in Bangladesh
The coal is low sulfur bituminous coal. Gross calorific value between 11,000-12,500 (btu/lb)
Silent Features of Coal in the World
Coal is actively mined in 70 nations, with 85% consumed within the country in which it is produced. Only 15% of coal is traded internationally. The ability to readily transport coal by ship, barge, rail and truck, without the need for pipeline infrastructure, contributes to coal’s supply stability.
Coal also has the unique advantage of being able to be stored on-site, providing weeks or even months of fuel supply at the power plant. This important characteristic contributes to grid reliability, resiliency and reduces fuel supply bottlenecks.
Most of the world’s coal exports originate from countries which are considered to be politically stable, including the U.S., reducing the risk of supply interruptions. Consider, by contrast, that over 53% of the world`s natural gas reserves are controlled by Russia, Iran and Qatar, while more than 50% of the world’s oil reserves are located in the Middle East.
Coal provides 30% of global primary energy. It is used to generate 41% of global electricity. It is also used to produce 68% of the world`s steel and is a key source of energy in energy-intensive industries, such as aluminum and cement production.
Use of Coal in Power Generation
Coal is widely used in the power generation worldwide. Coal based power plants provide over 42% of global electricity supply. There are 400 coal-powered electric plants are present in the United States.
As the world prepares for the Paris climate change talks later this year, moving to renewable sources of energy is a key part of many countries’ plans to reduce greenhouse gas emissions. However, in 2012, 40.4% of all electricity production worldwide still came from coal.
China produces the most electricity from coal by a long margin-3,785 TWh, more than twice as much as the US in second place. India, Japan and Germany complete the top five. Bangladesh has only one Barapukuria coal-based power plant in Dinajpur.
Prospect in Bangladesh using coal as the source of energy
With the looming gas crisis, Bangladesh is gradually shifting its primary energy focus from gas to coal. The government is taking full-fledged efforts to identify cheaper and more reliable alternatives like coal. Government has a plan to produce 20,000MW of electricity by 2021 as per Vision 2021. Bangladesh has only Barapukuria coal-based power plant in Dinajpur having 250 MW capacity (two units).
Third unit of Barapukuria coal-based power plant in Dinajpur is underway to add 275 MW to the national grid by 2018. The Rampal power station is a proposed 1320 MW coal-fired power station at Rampal Upazila of Bagerhat District in Khulna, Bangladesh.
The Matarbari Power Plant is a proposed 1,200 MW coal-based power plant to be built in Moheskhali Upazila of Cox’s Bazar District. The Payra Power Plant is a proposed 1,320 MW coal-based power plant to be built in Kalapara Upazila of Patuakhali District.
Bangladesh has sufficient and proven reserve of coal especially in Northern parts of Bangladesh which is around 3 Billion Ton equivalents to heating capacity 37 TCF gas. With the present reserve Bangladesh can produce-
250 MW electricity daily require yearly 0.65 million tones of coal to run a Thermal Power Plant
5000 MW electricity daily require yearly 13 million tones of coal to run a Thermal Power Plant
25% recovery from Barapukuria, Phulbari, Khalashpir and Dighipara coal fields
562 million ton of coal can produce 5000 MW of electricity daily for about 44 years
562 million ton of coal can produce 10000 MW of electricity daily for about 22 years.
Advantage of Coal is as source of energy
The reasons are listed below:
Cheapest source of energy. It is by far cheaper than nuclear, natural gas, oil.
Coal also provides a stable source of energy (no Arab oil embargoes, no sudden scarcity like you experience with natural gas)
Coal provides many jobs. Unlike other forms of energy (nuclear, natural gas, oil, hydroelectric), coal provides many jobs in removing coal from the earth, transporting it to the utility, burning it, and properly disposing of coal ash.
Coal can be mined and burned with little environmental impact. There has been tremendous strides in environmental responsibility with mining coal and burning coal.
Coal energy is an affordable energy source because of the coal’s stable price compared to other fuel sources
Coal is easy to burn
Coal produces high energy upon combustion.
Improvements in the Efficiency of Coal based Power Plants
Supercritical and Ultra supercritical Technology
New pulverized coal combustion systems – utilizing supercritical and ultra-supercritical technology – operate at increasingly higher temperatures and pressures and therefore achieve higher efficiencies than conventional PCC units and significant CO2 reductions. Supercritical steam cycle technology has been used for decades and is becoming the system of choice for new commercial coal-fired plants in many countries.
Research and development is under way for ultra-supercritical units operating at even higher efficiencies, potentially up to around 50%. The introduction of ultra-supercritical technology has been driven over recent years in countries such as Denmark, Germany and Japan, in order to achieve improved plant efficiencies and reduce fuel costs.
Integrated Gasification Combined Cycle (IGCC)
An alternative to achieving efficiency improvements in conventional pulverized coal-fired power stations is through the use of gasification technology. IGCC plants use a gasified to convert coal (or other carbon-based materials) to syngas, which drives a combined cycle turbine.
Fluidised Bed Combustion
Fluidized Bed Combustion (FBC) is a very flexible method of electricity production – most combustible material can be burnt including coal, biomass and general waste. FBC systems improve the environmental impact of coal-based electricity, reducing SOx and NOx emissions by 90%.
Pulverized coal combustion systems
Producing electricity in coal power plants can take place in a number of ways with varying degrees of efficiency. In conventional coal-fired plants coal is first pulverized into a fine powder and then combusted at temperatures of between 13000C to 17000C. This Technology accounts for 97% of World Coal plants with more than 40 percent efficiency.
Carbon Capture and Storage (CCS)
Carbon Capture and Storage (CCS) technology can capture up to 90% of the carbon dioxide (CO2) emissions produced from the use of fossil fuels in electricity generation and industrial processes, preventing the carbon dioxide from entering the atmosphere. Furthermore, the use of CCS with renewable biomass is one of the few carbon abatement technologies used in a `carbon-negative` mode actually taking CO2 out of the atmosphere.
Way Forward-Opportunities and Hopes
New technologies with time eco-friendly mining could be possible even at greater depth.
Coal bed Methane
Underground Coal Gasification
Improvements in the efficiency of coal-fired power plants can be achieved with technologies
Coal Bed Methane (CBM)
CBM is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, Australia, and other countries.
The term refers to methane adsorbed into the solid matrix of the coal. It is called `sweet gas` because of its lack of hydrogen sulfide. The presence of this gas is well known from its occurrence in underground coal mining, where it presents a serious safety risk. Coal bed methane is distinct from a typical sandstone or other conventional gas reservoir, as the methane is stored within the coal by a process called adsorption.
India’s Director General of Hydrocarbon has approved the drilling of more than 100 CBM wells that cover the next four years will involve total investment of $150 million. India’s CBM reserve estimated at 16 TCF.
Underground Coal Gasification
Underground coal gasification (UCG) is an industrial process which converts coal into product gas. UCG is an in-situ gasification process carried out in non-mined coal seams using injection of oxidants, and bringing the product gas to surface through production wells drilled from the surface.
Only in the case of the Soviet Union in the 1960s was UCG pushed forward into full production at a handful of plants in remote areas. Only one plant in Uzbekistan continues to operate. In the rest of the world sporadic attempts at testing of UCG over the last few decades have generally ended very badly. 24 UCG licenses approved around Britain Swansea Bay likely to be site of first tests.
Presently, innovations of new technologies and eco-friendly management of resources create opportunities to develop these earth resources in Bangladesh in win-win situation with the community for the betterment of the economy of the country as well as society through generation of direct and indirect employment
Coal is the cheapest and most abundant source of energy. Unlike with natural gas or oil, there is very little chance of coal being scarce as it is plentiful all over the world. Coal reserves are estimated to be around a million tons and is expected to be available for consumption for the next 200 years.
Because of its high reserve, low costs, coal can be the main primary energy source of Bangladesh towards energy security, countries like India, South Africa, China, Philippines.
Reshad Md. Ekram Ali, Director General of Geological Survey of Bangladesh
UNESCO withdarws objection against present Rampal Power Plant location
July 10, 2017 Monday 9:25 AM By Saleque Sufi
A press release issued by the Ministry of Foreign Affairs Bangladesh revealed on 6 July 2017 revealed of UNESCO withdrawing its much talked about controversial objections about Rampal Power Plant (RPP) in its location.
The Ultra Super Critical Technology using High Efficiency Low Emission (HELE) power plant location is 14 Km away from the outer periphery of Sunadarban Mangrove forest and about 70 Km from the region earmarked as world heritage.
The press release states, “The World Heritage Committee of UNESCO has withdrawn its earlier objection to the construction of Rampal power plant project at its current location. It has also spared the Sundarbans from being relegated to the List of World Heritage in Danger. The decision was made at the 41st session of the World Heritage Committee being held in Krakow, Poland. A high level inter-ministerial delegation led by Dr. Tawfiq-e-Elahi Chowdhury BB, Adviser to the Prime Minister on Power, Energy and Mineral Resources Affairs is participating in the meeting to defend Bangladesh`s position. “
RPP is 1,320 MW ultra-super critical technology (USC) adopting High Efficiency Low Emission (HELE) type imported coal based power plant under implementation by BIFPCL, a BPDB, Bangladesh and NTPC, India Joint Venture company. In the wake of major depletion of discovered gas resource which provided the fuel for power Bangladesh government adopted imported coal as the preferred fuel for power generation.
Given the complexity of mining own coal it chose imported coal as preferred option. Rampal was selected as the most suitable site for its location beside Poshur river and having enough sparsely habited fallow land.
Moreover, the prospect of massive industrialization in Southern Region of Bangladesh following the completion of Padma Multipurpose Bridge and proximity of Mongla Export Processing Zone were also among the reasons for choosing the location. Considering the proximity of echo sensitive Sundarban mangrove forest Government was additionally careful about adoption of technology and use of coal for the plant.
The EPC tender document prescribed for adoption of HELE type Ultra supercritical technology, use of less polluting low sulfur, low ash coal, incorporation of FGD, Low NOX burner , ESP , Dry Ash Collection method for mitigating SOX, NOX, Mercury and Ash emissions .
Comprehensive ETP has been incorporated in the design for neutralizing effluents before release and 2-degree Celsius temperature difference has been prescribed between intake and off take of water. Water Recycling is also in the design for minimizing the water use. A fully covered coal storage facility is also in the design. Covered handyman type coal carrier would transship and transport coal from Panamax type mother vessels anchored in the deep sea.
A 275-Meter-high Chimney for letting out much less than prescribed minimum emissions is also provided for. About 200 plant engineers and operators would live inside the plant area. If they are not affected there cannot be any reason why uninformed academicians and non-technical persons are worried about eco system and bio diversity of Mangrove forest at safer distance. It is a pity that such persons are treated as Energy Expert in certain Bangladesh media.
All these above were explained in many different ways by experienced professionals in response to uninformed concerns raised by a section of academicians and civil society. These groups with the patronage of international anti coal NGOs in social media and print media continued their propaganda avalanche.
UNSECO also possibly got concerned.Earlier in 2016, a Reactive Monitoring Mission from UNESCO recommended relocation of Rampal power plant considering its likely impact on the Sundarbans. Unfortunately, the report of the committee reflected almost entirely the position of a self-styled Oil Gas Protection Committee (OGPC) of Bangladesh instead of relying on Government assurances. UNESCO observations were duly responded.
The 41st session of the World Heritage Committee being held in Krakow, Poland discussed the matter on Wednesday 4 July where a high powered Bangladesh team clarified its position and commitments for safeguarding environment.
The 21-member World Heritage Committee decides on whether a cultural or natural site should be inscribed on the World Heritage List, monitors the state of conservation of the inscribed heritage sites, and can place a site on the World Heritage in Danger if found that the site is not being properly managed by the concerned State.
After a long deliberation, the Committee endorsed Bangladesh`s decision to construct Rampal power plant at its current location with necessary mitigation measures.
The Committee in its decision also welcomed a number of steps taken by Bangladesh since 2016 to ensure conservation of the Sundarbans World Heritage Property. At the request of the Committee, Bangladesh agreed to undertake a Strategic Environmental Assessment (SEA) of the South-West region of the country, including the Sundarbans.
The session of World Heritage Committee is still not over. The decision of the committee is expected to be officially announced within weeks of conclusion of the meeting. Unfortunately quoting the working paper of the meeting dated 19 May 2017 some vested quarter is still trying to confuse people. That document which some persons are referring to
WHC/17/41.COM/7B, Paris,19 May 2017 does not reflect the discussion and decisions of the meeting held on 4 July, 2017. There is no reason for any one getting confused at all.
Works of RPP is proceeding smoothly after Indian EXIM Bank providing loan to BIFPCL. The EPC Contractor BHEL India has started the work and the Commercial operation of the plant is expected within 48 months meaning sometime in 2021.
Those who thinks coal will soon be discarded as preferred fuel must note that a recent study by Australian Government engaged specialist committee revealed that High Efficiency Low Emission technology using modern coal power plants would cost much less than renewable energy –Solar, wind or any other power generation option.
Australia is going to go for such plants replacing the existing ageing coal plants. Coal would continue contributing as major fuel for base load power generation in the world well into foreseeable future.
We were always confident that UNSECO or any international organisation would come to senses when they get all information and documents from responsible Government representative.
From our past proven practical experience and having extensive discussions with RPP executives, site visits we were convinced that RPP designed as planned, constructed and operated according would cause no harm to Sundarban. We hope theoreticians and agitators would refrain from creating further controversies about high priority national project.
At the same time, we would also expect that Government also engages a high powered national committee to monitor the activities of the project. The project team also needs qualified Bangladeshi professionals alongside Indian Counterpart. Bangladesh lacks expertise for managing operation of Ultra Super Critical Technology using power plants.
Saleque Sufi is an energy expert.
‘Crude oil price create maximum utilization scope’
May 17, 2017 Wednesday 12:54 PM By Rezaul Kabir
Energy is the most important object for development of a country and petroleum is the key source of energy generation as well as revenue generation for development of a nation.
Internationally crude oil price comes down to about US$28/barrel at mid 2015 and maximum price was US$125/barrel at early 2012.
It is fluctuating around the benchmark of US$50/barrel since late 2015 to till date. Bangladesh has no crude oil production field at this moment except condensate the byproduct of natural gas and local demand is mostly fulfilled by importing crude oil.
Through import of crude oil country is losing huge amount of foreign currency and by keeping oil price at higher level Government get rid of subsidy in this sector and additionally it is generating surplus revenue for them.
According to recent data of state-owned Petrobangla consumption demand of natural gas is about 3500 mmcfd where as total production is about 2700 mmcfd, shortage is about 800 mmcfd.
Among this total production about 38% of natural gas is used for power generation, 6% is used for fertilizer as off season and other 56% is used for different industry, CNG and household purpose.
Bangladesh has total recoverable reserve about 13.5 trillion cubic feet (tcf). The present consumption rate of natural gas may reduce the total reserves drastically and so far it may last for 10-15 years from now. Though have a vast unexplored offshore area of Bangladesh which is highly potential for hydrocarbon.
As low international price of oil government might think of reducing oil price locally in view to increase the use of crude oil in different arena which may insist to reduce the use of natural gas for some energy user like motor vehicle and in production of power.
It’s now proper time to change the raw materials from natural gas to crude oil for energy generation as the international oil price is at low level as well as it may help to save our natural gas. Increase use of crude oil ultimately helps to minimize the production of natural gas as well as may prolong the consumption period of natural gas.
There is no scope of increasing international crude oil price within the next five years and it will be within the bench mark of US$45-60/barrel as because the oil production is still surplus in OPEC (Organization of the Petroleum Exporting Countries) and other oil exporting countries.
Even after cut the production of crude oil by OPEC countries the price is still fluctuating around US$50/barrel. Since 2016 USA increase the production of fracking shale oil and this year USA increase the drilling rig operation around 15%, meaning the increase of crude oil production which may affect the oil price to be at lower.
It might keep the oil price within the bench mark of US$45-60/barrel supposed to be standard for international oil market and may continue this price till 2022. The production rates of fracking shale oil is considerably higher and continue for longer period than a normal oil field (sandstone reservoir) as shale is the source rock for oil and gas. Besides most of the oil producing country is now thinking to reduce production cost through preferring the exploration of fracking shale oil and oil reserves at shallow depth.
On the other hand the world is now seeking alternate energy source like solar energy, nuclear energy and wind energy etc and some countries have wide extent use of alternate energy source and day by day increasing all over the world.
It also means that the growth of petroleum (oil) demand will be lower slowly following the next 10-20 years and the demand of crude oil is turning downtrend. Thus the oil exporting countries and international oil companies is now thinking of production cost considering oil price at around US$50-60/barrel and recalculate their production cost to keep as low as possible favoring return to drilling operation as oil and gas industry is now in big crisis.
From the above justification the prediction here, has no possibility of increasing crude oil price more than US$60/barrel in near future or even could be lower considering the extensive innovation of alternate energy source and fracking shale oil.
Figure: Crude oil price graph of last two years
Bangladesh might take this opportunity through maximum use of crude oil by creating a vast marketing scope in the entire applicable sector and earn good revenue.
For this government may think to reduce oil price at minimum level by keeping minimum profit margin and it will also reduce the production cost of byproduct materials, may create a vast crude oil market and accelerate the economic growth of country. Through marginal profit and huge marketing it may create large revenue at end.
There will be great advantage for the nation that it will reduce the use of natural gas and longer the consumption period of our valuable asset, also replace energy raw materials from natural gas to crude oil and Bangladesh will turn into a developed country.
Rezaul Kabir is a petroleum geologist and an international oil & gas exploration specialist.
Appraisal of Chevron’s asset in Bangladesh
March 19, 2017 Sunday 8:08 PM By Rezaul Kabir
Chevron is one of the leading oil and gas exploration and production company in world.
They have a big discovery of onshore gas field in Sylhet region of Bangladesh and producing and meeting demand almost 58% of total daily consumption of natural gas generally pronounce their role behind energy efficiency in Bangladesh.
It also indicates the rich hydrocarbon reserve area of Bangladesh is under directive of Chevron and earns good revenue from this resource.
Chevron is now thinking to sell their business part and Bangladesh is enthusiastically interested to purchase the share value for the proven recoverable underground natural gas reserves in allocated blocks of Chevron.
Chevron has three pronounced discovery fields in their allocated blocks like Bibiyana, Jalalabad and Moulvibazar.
Bibiyana is the largest reserve holding 7.6 trillion cubic feet (Tcf) gas and among this reserve it has already been exhausted and consumed 3 Tcf, now expected remnant reserve is around 4.6 Tcf.
In Jalalabad have reserve of about 2.2 Tcf and extracted and consumed gas is about 1 Tcf, remains reserve around 1.2 Tcf.
In Moulvibazar has no remarkable reserve any more. Normally, about 20-25% of total reserve might be unrecoverable. A producible gas field may decline formation pressure slowly after withdrawal 50% of proven reserve as well as the production rate will also be lower.
It may need further renovation work to increase the volume of production that may also increase the well production cost.
It has already been extracted gas 40% at Bibiyana and 45% at Jalalabad. Both of the fields are very much close to stage of formation pressure depletion for pay zone under production. For such well if have available pay zone not in production track might be valuable.
In view of purchase the asset valuation is most important and estimation of cost for any invisible asset is quite difficult. Reserve of underground natural gas is invisible and it’s only predictable assessment on reserve.
So how much authentic the estimated reserve of Chevron as the total value of asset is depending on this reserve. As production sharing contract (PSC) Chevron may supposed to have share only on the remaining proven recoverable reserve and may estimate total cost of Chevron’s share as existing economic conditions.
All the surface setup by Chevron is subject to zero value as the cost is already recovered and the owner of all surface facilities is The Peoples Republic of Bangladesh. I do highlight some points here below on hydrocarbon reserve.
Reserves are defined as those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward. Estimated recoverable quantities from known accumulations which do not fulfill the requirement of commerciality should be classified as contingent resources.
The definition of commerciality for an accumulation will vary according to local conditions and circumstances and is left to the discretion of the country or company concerned. However, reserves must still be categorised according to the specific criteria of the SPE (Society of Petroleum Engineers)/WPC (World Petroleum Council) definitions and therefore proved reserves will be limited to those quantities that are commercial under current economic conditions, while probable and possible reserves may be based on future economic conditions.
In general, quantities should not be classified as reserves unless there is an expectation that the accumulation will be developed and placed on production within a reasonable timeframe.
It is recognised that all petroleum-initially-in-place quantities may constitute potentially recoverable resources since the estimation of the proportion which may be recoverable can be subject to significant uncertainty and will change with variations in commercial circumstances, technological developments and data availability.
A portion of those quantities classified as unrecoverable may become recoverable resources in the future as commercial circumstances change, technological developments occur, or additional data are acquired.
Figure: Resources Classification Framework.
It has been circulated that Chevron has sold their share to a China Company in that case price estimation will not be issue for Bangladesh if Government accepts their decision.
However, if have any scope for Bangladesh to purchase this asset might have steps very carefully on asset evaluation. Need to mention here US based Unocal sold their total worldwide asset to Chevron at only US$18.5 billion in 2007 and Unocal’s business in Bangladesh was also very small part of this sell.
Through careful and precise estimation of asset value it will be good and beneficial decision for Bangladesh to purchase this hydrocarbon rich region.
Rezaul Kabir is a petroleum geologist and an international oil & gas exploration specialist.
How sustainable are energy sources for Bangladesh?
February 24, 2017 Friday 12:27 PM By Dr. Badrul Imam
Bangladesh stands at a turning point of major change in its energy and power sectors. This is a change from a long drawn indigenous natural gas based mono-energy status to one with multiple energy mix that will include natural gas, LNG, coal, cross boarder power, nuclear, solar and fuel oil.
Most of the above energy will be imported and therefore the country will also change to predominantly import dependent for its energy sources. How resilient are these energy sources or how sustainable are these for Bangladesh?
Bangladesh has been for a long time, fueling its homes, its industries, it power plants with indigenous natural gas available at $2 to $3 per unit from national and international oil companies (IOCs) respectively.
LNG from the international market will land at $8 per unit for now and its price is likely to go up to $14 per unit or even higher depending on the upward moving oil price in future. It is perhaps a good policy to introduce limited LNG to make up for the present gas deficit for an immediate solution to gas crisis.
But introduction of large volume of LNG for long period of time into the Bangladesh gas grid may have a risk of price shock by raising the cost of electricity, industrial products or the household gas use.
How would the purchasing power of the people play against the LNG induced raised gas price is a question the economists will answer perhaps.
An alternating option of tackling the gas crisis is to go for rigorous gas exploration. Unfortunately exploration remains at its minimum for almost a decade now.
Less than 10 exploration wells have been drilled over the last ten years, and this is anything but a serious program under any standard.
Therefore no significant addition to the gas reserve could be made. The present remaining reserve of 13 Tcf gas would run out in about a decade should an average consumption of 1 to 1.5 Tcf per year is taken.
However, geological analyses suppose that significant new gas could be found by further exploration specially in the offshore.
The deep offshore area is yet to see a single drilling and considering the fact that the Myanmar offshore area adjacent to the maritime boundary with Bangladesh has seen significant gas discoveries lately, the prospects of similar gas finds are expected at the Bangladesh side of the Bay of Bengal.
Coal has been in the back yard in the energy mix in Bangladesh to this day with only about 2% contribution as fuel for power generation.
However, the large scale coal based power hubs being planned and implemented are going to change the power skyline in near future. It is projected that coal contribution in power generation will increase from 2% today to 35% in about a decade.
Traditionally Bangladesh has a low carbon footprint in the world stage and the above increase in coal consumption is unlikely to change that considering the way coal is being consumed in many other countries including neighboring India and China.
But large scale coal use near ecological sensitive areas like the Sundarbans, the world’s largest mangrove forest, makes certain coal projects in Bangladesh controversial. There has been unified protest by the national and international environmentalist and experts against the Rampal coal fired power plant being built close to the Sundarbans.
Solar energy has a very small share in the present energy mix in Bangladesh, less than 2 %. Yet in one count solar has a success story. Bangladesh hosts the fastest growing solar home system (SHS) in the world with 60,000 SHS units being installed per month.
Cumulative SHS account for about 450 MW power, a small fraction of total power generation capacity of 15,000 MW in the country, but its contribution is enormous in socially uplifting millions of people by raising their standard of living by providing solar electricity who would never have grid electricity.
Lighting off-grid home by solar is one thing and providing energy feed to a large mass of people aspiring for rapid industrialization is different.
This is a bigger challenge. Government targets to generate 10% of its power by solar by 2021, a target most observers believe will not be fulfilled considering the pace of developments of the solar projects.
Rooppur was originally planned for a 150 MW nuclear power plant. The merit of establishing a 2,400 MW plant instead, have been judged by many as too hasty a job for which the country has no technical experience of its own.
Controversy over the disposal of radioactive spent fuel has made an additional concern for Bangladesh nuclear power project.
Bangladesh has entered into cross border energy trade for the first time with notable success. Bangladesh began power import from India, 500 MW from west Bengal and 100 MW from Tripura in 2015 and 2016 respectively with options of further increasing the amount in near future. Bangladesh has a target of 8,500 MW of cross border power import by 2030 according to the revised PSMP 2016.
There are three areas of hydropower generation which Bangladesh may target for future power import – Bhutan, Nepal and Arunachal Pradesh India.
Bhutan has a hydropower potential of 30,000 MW, only 5% of which has been developed. Bhutan has been a power trading partner with India for several years and presently export about 70% of the its 1500 MW hydropower to India after meeting domestic consumption.
Under an agreement with India an additional 10,000 MW of electricity will be developed and exported to India by 2020. The financing of Bhutanese hydropower installation by India who buy the same power make a win-win situation for both India (a source of power) and Bhutan (a source of revenue).
Nepal has a hydropower potential of 40000 MW, but has a generating capacity of 1000 MW with a peak demand of 1385 MW. India has several large hydropower projects on construction and plan to make Nepal meet its demand and import the surplus.
Interestingly public and private investment has emerged as a new practice in cross border power trade like Nepal’s Arun III (900 MW), Upper Kurnali (900 MW) and Marsyangdi (600 MW) under construction projects.
The point to make here is that there are cross boarder energy trade running between India-Nepal and India-Bhutan on bilateral agreements and the future potential of these are huge.
Bangladesh should also open up its power trade in a large scale with Bhutan and Nepal, taking India on board for multi lateral agreement.
The SAARC Framework Agreement for Energy Cooperation, signed in Kathmandu summit in 2014 would facilitate electricity trade among the SAARC countries.
This has created an opportunity for the member countries to import or export electricity through bilateral or multilateral agreements.
Bangladesh missed an opportunity of having a reliable supply of cross border pipeline gas when it rejected the India-Bangladesh-Myanmar tri-nation gas pipe line proposal in 2005.
If Bangladesh had entered into a negotiation it could have availed part of the offshore gas from Myanmar going to India via pipeline through its territory. The much talked about TAPI (Turkmenstan-Afganistan-Pakistan-India) or IPI (Iran Pakistan-India) trans-national gas pipeline projects are yet to take off and their implementation are intricately related to political and military strategy.
Bangladesh should join the club of TAPI or IPI projects for a long term gas security if and when these projects are materialized.
Dr. Badrul Imam is an energy expert and professor of Geology of Dhaka University.
Is energy-subsidization fostering energy crisis in Bangladesh?
January 23, 2017 Monday 10:43 PM By Muntasir Murshed
Energy, in this contemporary era, is considered to be one of the utmost important inputs which is tapped in production of all goods and services in an economy.
Thus, its contribution to the economy as a whole cannot be denied. In addition, the concept of energy security, whereby a minimum sustainable supply of energy is to be made accessible to a broader segment of the society, is brought under the lime light.
Moreover, clean and affordable energy access across the globe has recently been enlisted in the seventeen Sustainable Development Goals (SDGs) declared by the United Nations. Thus, energy and its sustainability should be a matter of priority when it boils down to adoption of public policies that are in line with economic development of underdeveloped nations in particular.
However, provision of energy subsidies may hamper attainment of energy security in countries that are striving to embrace development in the near future.
Energy price is considered to be a crucial macroeconomic determinant since it attributes to widespread economic activities. Thus, sudden changes in energy prices may affect an economy adversely if adaptive measures are not taken in due time.
The effects of changes in energy prices on real economic activities can be understood from both demand and supply side channels. As per the demand side is concerned, a rise in energy prices is synonymous to a fall in demand of other goods and services by a household.
This happens because as price of energy increases and there is less scope for reduction in minimum energy consumption, the household is forced to reallocate its fixed disposable income from non-energy to energy expenditure.
On the flip side of the coin, the supply side hinges on the argument that as energy prices goes up, the cost of production of goods and services go up as well. As a result, producers are compelled to cut down on their output levels and operate at below capacities which in turn have a negative impact on supply of goods and services in the economy.
Developing energy-importing countries like Bangladesh are vulnerable to world energy price shocks. For instance, Bangladesh imports oils from developed nations in order to generate electricity, the most important form of energy used in the nation.
As a result, a surge in world oil prices is likely to raise input costs for industries in Bangladesh which eventually may lead to fall in outputs and a simultaneous rise in domestic price levels. It has been acknowledged worldwide that higher oil price may eventually lower income levels in underdeveloped nations. Thus, in order to protect the economies from such shocks the governments in the less developed countries resort to provision of energy subsidies, artificially keeping energy prices low.
Although such measures to combat the atrocity of energy price shocks are required to some extent, provision of subsidies in the energy sector usually generate negative impacts on the economy which in the long run can even outweigh the nominal short run benefits.
Subsidizing energy prices is considered to be a crucial policy tool amongst governments of developing countries and at times such policy moves are also stimulated by political motives.
Energy subsidies in Bangladesh are both directly and indirectly extended to producers and consumers whereby the subsidies lower the cost of energy inputs and raises revenues for the producers while it also reduces the price paid by the end consumers as well.
In Bangladesh, energy subsidies are specifically provided in the form of direct subsidies, equity injections, artificial fixation of retail energy prices, natural gas purchase, concessional power sector loan financing from national budget, preferential tax treatments, and distribution channel subsidization.
Government intervention in the energy sector can depress macroeconomic indicators within an economy. Thus, the governments in the developed nations purposively abstain from intervening into the associated markets letting energy prices automatically adjust by responding to the market forces of energy demand and supply.
Conversely, in developing countries like Bangladesh, the government intervenes into the market subsidizing energy prices and keeping it below the market price which in turn mitigates competition within the energy sector.
Energy subsidies depress economic growth and development via numerous channels. Firstly, provision of subsidies in the energy market distorts energy equilibrium energy prices whereby the prices set do not reflect the true costs.
Due to this absence of cost-reflective price, there is usually inefficient and over-use of energy which is contradictory to economic growth attainment. Moreover, over consumption of imported fuels at subsidized prices may also lead to deterioration in the nation’s balance of payments and cannot alleviate the nation’s dependence on such imported fuels.
For example, following world oil price hike in the 1970s the Bangladesh government decided to reduce the use of imported liquid petroleum products for its electricity generation and to replace it with indigenous natural gas.
In order to do so, the government subsidized natural gas price and offered it, at a price that was below the supply cost, for electricity generation. Although such a step reduced electricity generation costs by one-sixth of the imported oil-fired electricity costs, it ensured adverse consequences on the nation’s natural gas reserve.
This was because of the absence of cost-reflective price of natural gas whereby excessive amount of gas was used to generate electricity. As a result, the nation is currently facing acute gas shortages and its natural gas reserve, at the current usage and exploration rates, is likely to be exhausted by 2031.
Had the market price of natural gas reflected the true cost, its usage would have been efficient which would have ensured a sustainable natural gas supply for a longer period of time. An acute natural gas shortage stifles the power plants and forces them to produce below their installed capacities.
In addition to this, provision of excessive subsidies in the energy market also creates disincentives for investment in the energy sector and also holds back energy infrastructure development goals. This is because low energy prices would mean lower profits for energy producers who are price takers and cannot charge prices higher than that set by the government.
With sustainable energy and its security in focus, investment in the energy sector is the most important macroeconomic tool which requires utmost attention. No stones should ideally be unturned in boosting energy sector investments but provision of subsidies may well work against such an agenda.
Moreover, energy subsidies also hamper energy resource diversification drives. Transition from use of non-renewable energy to greater use of renewable energy is a tested solution to attainment of energy security in developing countries like Bangladesh.
However, subsidization of prices of traditional energy resources makes sure that the price of renewable energy stays at a relatively higher level compared to the non-renewable energy price. As a result, fuel diversification, etc are overlooked putting the nation’s energy security to the sword.
For instance, per unit cost of electricity produced from solar power is way less than that produced by imported oils. However, commercial transition from oil-based electricity generation framework to solar power requires hefty investments especially in the form of research and development.
With energy prices being artificially kept low, such investments do not seem to be worthwhile for power producers and as a result energy diversification stays limited only on pen and paper. An indirect negative impact of energy subsidy is possible crowding out of growth enhancing public spending. In Bangladesh, the total amount government revenue spent on energy subsidies was around 1.9 billion US dollars by the end of the fiscal year 2013 which is almost 1.6% of the nation’s GDP.
In addition, the shares of energy subsidies on the government’s total development expenditure and total tax revenues have also experienced rising trends. Therefore, if these subsidy payments were channeled to be invested in other growth enhancing sectors like health, education, etc then the nation would have not only benefitted more in terms of economic growth, but would have also been at a better position in terms of attainment of energy security.
Underscoring the necessity of achieving energy security and ensuring a sustainable supply of energy to be accessed by the future generation, it is ideal for the government of all developing countries to gradually reduce and get over the provision of energy subsidies for greater macroeconomic benefits.
An energy subsidy distorts energy prices leading to inefficient resource allocations whereby putting the economy in to jeopardy.
Moreover, subsidizing policies aimed at helping the poorer segment of the society and enhancing the overall economic welfare level are ineffective as benefits of such subsidy provisions are enjoyed by the wealthier segment of the society.
Thus, it is ideal for the government to refrain from excessive intervention into the energy markets and to adopt appropriate public policies to enhance completion within the aforementioned sector.
Prevalence of cost-reflective energy prices could well be a possible step towards achieving energy security in the underdeveloped nations which would in turn complement to the Sustainable Development Goals.
Muntasir Murshed is a BS Graduate in the field of Economics from North South University, Bangladesh.
Achievements and failures of power and energy sector in Bangladesh
December 29, 2016 Thursday 7:30 PM By Saleque Sufi
Bangladesh government on December 8, 2016 celebrated achieving 15,000 MW power generation installed capacity with fancy fireworks at Hatirjheel area in Dhaka.
Government achieved noticeable success in confronting chronic power load-shedding that it inherited. But concerns are now being raised about sustainability of success for continued fuel supply crisis.
The proven reserve of natural gas is fast depleting. The exploration for new resource is not giving confidence of major success in less than 8-10 years. Exploitation of discovered coal resource is stuck in political indecision.
Bangladesh is walking the wrong route of exclusive reliance on imported fuel without required home works. All these are leading the long-term energy security to deep uncertainties.
It is not installed capacity, what matters is actual generation and quality of supply to end users. The 15,000 MW includes 2,300 MW off-grid captive power generation exclusive for use in industries, 3,000 MW liquid fuel-based contingency power supposed to be phased out by this time and 600 MW import from India.
Grid connected generation capacity is about 12,780 MW. For various reasons ranging from fuel deficit, transmission distribution networks constraints actual generation averages 8,300-8,500 MW. Only on one occasion on June 30, 2016 during peak hours’ actual generation touched 9,032 MW.
Having said these there is no reason why the creditable achievements of the present government over the past eight years in increasing power generation and disciplining the sector can go unnoticed.
But side by side to success there have been some failures which creates genuine doubts about sustainability of success.
The nation was suffering from chronic power load-shedding and gas supply crisis in 2009 when present government came to power in the last term. The installed generation capacity at end 2008 was 4,942 MW and highest generation achieved during peak hours of summer 2008 was 3,500 MW.
The average power demand at that time was about 6,000 MW. Eight to ten hours’ unpleasant load- shedding in summer days was causing unbearable miseries. From that position achieving installed capacity of 15,080 MW and average generation of 8,300-8,500 MW is no mean achievement.
The access to power has also increased from 49% in 2008 to 78% (off grid solar power supply included) in end 2016 is also a major achievement. Reduction of system loss to 13% is also a major achievement.
The present power generation and supply situation is much better than what it used to be in 2008. But at the same time gas and fuel supply situation is in deep crisis. Failure of a political government in exploiting own superior coal resource and utilise this as priority option for power generation is frustrating.
If mining applying appropriate mining method could be started at Phulbari and Barapukuria and simultaneously mine moth power plants could be set up about 4,000 MW new power could be available by now.
For reasons, unknown government relied exclusively of capacity hamstrung Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX) for onshore gas exploration. Experts believe that engaging international oil company (IOCs) through production sharing contract (PSC) in onshore frontier areas by 2010 about 5tcf new gas could be discovered.
Government even delayed in selecting joint venture partner for BAPEX for further exploring four identified structures in the greater Chittagong area. If done in 2012 gas crisis in Chittagong could be partially mitigated by now.
IOCs did not carry out any exploration over the last several years. Australian company Santos operated Shangu gas field completed depleted. USA based Conoco-Philips after wasting several holding some offshore blocks with a ploy for improving their portfolio in money market left without conducting any exploration.
Indian company ONGC and Santos are now due to start some exploration soon. Apart from that Petrobangla and South Korean Posco Daewoo International Corporation are set signing PSC in offshore.
The financial and fiscal incentives of Model PSC of Bangladesh are not considered attractive to IOCs for making risk investment in the offshore areas.
Bangladesh deep water areas in newly acquired vast areas of the Bay of Bengal does not have even primary data.
Petrobangla initiative for data acquisition through engaging contractor for multi-client survey got road blocked by Ministry of Energy and Prime Minister’s office.
Moreover, global oil price crash also acted as a dis-incentive for major IOCs. Power Cell, a think tank of the Power Ministry, now is working on updating PSC engaging consultant.
In this situation exploration activities in the deep water may not start in less than two years from now. Fruits from any success may take eight to ten years.
Experts observe that Chevron was given almost free hands in expanding gas production at their highest limit.
Consequently, Bibiyana gas field became backbone of gas supply. It has started depleting alarmingly. Chevron recovering major investment is now planning to leave relinquishing depleting gas fields.
Bangladesh in a desperate bid to increase reserve adopted 108 wells including 53 exploration wells drilling program in 5 years for capacity hamstrung BAPEX.
It is impossible to do that by even a major IOCs anywhere in the world. Now after wasting several months Russian Energy giant Gazprom is being given opportunity based on their unsolicited offer for partnering with BAPEX.
Gazprom engaged sub-contractor did a very poor works of 10 wells drilling in the recent past.
Like the other side of bright moon there are major failures also. Government over eight years have miserably failed to expand gas reserve base and take political decision of mining own superior quality coal.
About 9 tcf of proven gas reserve has been used against which only about 1 tcf new gas reserve could be added. Government did nothing at all to exploit the four billion discovered own coal resource.
The liquid fuel based power generation adopted as short term contingency action still being relied for contributing 28% of present power generation capacity.
All such plants were supposed to be phased out by now. The fast depletion of reaming gas resource at 1 tcf annually has already made long term energy security vulnerable. Over the past eight years not even 10 exploration wells could be drilled.
BAPEX with very limited capacity of its own explored and developed some marginal gas fields but compared to huge demand of gas these were tiny little. Petrobangla still supplies 900 -1,000 mmcfd gas to power.
If used in fuel efficient power generation this could generate 5,500 -6,000 MW. But the repowering program of fuel inefficient ageing power plants is also moving at snail’s pace.
The depleting scenario of own gas reserve and indecision of mining own coal in the childish excuses of protecting farming land and water management forced government going for imported coal and fuel generation option.
That option requires huge investments for developing enabling infrastructure, a large contingent of qualified and competent human resources for managing coal and LNG supply chain, project management and operation, appropriate pricing structure and above all vastly improved energy and power sector governance.
For lack of all these most of the imported fuel based mega power projects are running years behind schedule.
PSMP 2010 had envisioned a fuel mix for 50% contribution of coal for generating 40,000 MW power in 2030. About 30% of this was planned to come from local coal. For reasons best known to senior policy maker’s local coal mining was ignored giving exclusive emphasis on imported coal.
The under approval process PSMP 2015 provides a fuel mix of 3%% from coal (almost exclusively imported coal), 35% LNG and Gas and 30% from Nuclear, Power Import and Renewable. The contribution of coal in end 2016 is not even 2%.
Bangladesh is set to become over 90% reliant on imported fuel for generating power by 2030 is it cannot mine its own coal and discover some major gas reserve soon.
Global and regional geo politics, very expensive and technologically intensive infrastructure development required for import of coal and LNG would make fuel import very challenging.
Volatile global market would make fuel price unsustainable and therefore cause power generation cost go beyond affordable limit.
Moreover, present state of governance and lack of required competent manpower would make implementation of several imported fuel based mega projects extremely challenging.
One of the major setback of present government over the past eight years is Petrobangla failing to carry out required exploration for new gas resources. The depleting scenario of own gas resources was evidenced in early 2000.
Still no initiative was taken to explore in onshore and offshore for new gas. Amateur top management of Petrobangla made energy sector operation comical.
Policy makers were misguided about presence of huge gas resource in unprofessional manner after conducting seismic surveys only. Huge unnecessary investments were made in gas transmission infrastructure. LNG import initiative rightly taken in 2010 failed to achieve success in six years.
The present production capacity of 2,750 mmcfd is expected to reduce sharply from 2019 for rapid depletion of major producing fields. The present actual deficit is 1000 mmcfd which may become even more in 2019 when the first delivery of 500 mmcfd LNG may be available.
How that will meet the deficit? The land based LNG terminal in Bangladesh will require very expensive works of either reclaiming land from the sea or taking coastal areas into the sea through massive dredging.
Finally, for managing Coal and LNG supply chain management Bangladesh requires a very competent work force. Most of the imported fuel based mega power projects are running years behind schedule. Only two projects – Rampal Power plant and NWPGCL plant at Payera are advancing with expectation for commercial operation by 2020.
Even those have many challenges especially coal transportation. Mega projects at Maheskhali and Matarbari have travel through rough rides. We are not sure that entrepreneurs of other imported coal fired power projects inland are at all aware of the challenges of coal transportation.
Pricing is another matter which poses huge challenge. If, we consider the example of LNG. Is there any home work at what price LNG converted gas would be supplied? Or has any one done any works on power pricing absorbing all costs of infrastructure and modern technology planned for imported coal use? We won’t be discussing multi-billion dollar Nuclear Power plant project here.
People talk about power import from Bhutan and Nepal. Such talks are going on since late 1990s and may continue in foreseeable future also. Regional geo politics apart from anything else is a major challenge.
Bangladesh could make headway in renewable energy use and energy efficiency. But here also talks are more than works. Solar home system is a major achievement. Roof top solar need incentives. Energy efficiency initiatives require comprehensive action plans.
All that appearing like rainbow now in energy and power sector may blow with the wind soon if government fail to appreciate the challenges at hand and emerging. Hope 2017 will witness revolutionary changes.
Saleque Sufi is an energy expert.
Challenges of transition in developing energy sector in Bangladesh
December 23, 2016 Friday 4:35 PM By Dr. Badrul Imam
Bangladesh stands at a cross road of transition from an under developed power and energy sector to a more developed one with aspiration of becoming a middle income country.
With a per capita energy use of 214 kgoe the country trails far behind its neighbours India (606 kgoe), Thailand (1988 kgoe), Malaysia (3020 kgoe), not to mention the robust developed nations.
While the government’s mega projects in the energy and power developments are generally well conceived, there are major challenges that need to be addressed.
A major challenge presently faced by Bangladesh is to ensure primary energy supply in order to run the mega scale power projects and fast growing industrial installations.
In the face of a fast depleting gas reserve and a lack of initiative to develop local coal, achieving a sustainable local primary energy source becomes increasingly hard.
A consequence of the above will be an increase of dependence on imported energy. While in 2010, the share of local natural gas in power generation was about 89%, it is projected that natural gas may contribute about 25% of the power generation in 2030 (PSMP 2010).
In the medium to long term future the local energy sources are likely to be replaced by imported fuels including coal, liquefied natural gas (LNG) and oil. In one estimate Bangladesh may have 90% dependence on imported energy sources by the year 2030.
The present downward trend of prices of oil, LNG and coal is likely to be short lived and will bounce back to their original or even higher positions. Therefore long term dependence on imported fuel for most of its requirement will introduce stress on the economy, will increase prices of industrial products including electricity and import inflation.
The government’s power sector vision aspires to achieve a generation capacity of 24,000 MW by 2021 with aim of providing all with electricity. The most important challenge in the way of its successful implementation is an uncertainty of a sustainable cost effective primary energy supply.
The remaining gas reserve of Bangladesh may run out in about a decade considering the increasing gas demand.
The government plans to resolve the crisis by adopting diversification in the fuel mix including coal, gas, LNG, oil, nuclear, cross border electricity and renewables. While such move is correct and justified, certain terms are questionable. Thus the policy to go for massive scale coal import rather than local coal development is debated.
A similar issue of debate is the stand on long term import of large volume of LNG instead of making serious drive for local gas exploration.
Major exploration for hydrocarbon has not been undertaken in the country for more than a decade and little gas reserve could be added to the reserve base.
There has been a lack of policy decision to prioritize gas exploration. In spite of the fact that a large ocean area has now been claimed by the government as undisputed following the verdict of international court, there has been too little activity in the Bangladesh offshore.
Yet on the other side of offshore boundary, Myanmar has been registering significant gas discoveries since the boundary dispute was settled in 2012.
One of the late discoveries, named Thalin gas field, occur in Myanmar gas block AD-7 just across the maritime boundary with Bangladesh. Interestingly the offshore Rakhain Basin of Myanmar where the late gas discoveries are being made is a geologic continuation of the south-eastern offshore Bangladesh.
Geologists are therefore pointedly suggesting that the latter area would be equally gas prospective as the former. Unfortunately the Bangladesh offshore sees too little exploration to prove it right.
There has been little clarity of the causes of delays to kick start multi-client seismic survey in the Bangladesh offshore, a program conceived more than two years ago but could hardly start.
The onshore exploration in Bangladesh likewise could be called anything but serious with only 6 exploratory wells drilled in the last 10 years. All the 24 gas field discoveries onshore since 1955 fall in what is known as conventional ‘structural types’ prospects.
Further categories of ‘less conventional’ and ‘unconventional prospects’ are yet to explore in Bangladesh. Known as stratigraphic prospect, synclinal prospects and tight gas prospects, these have been proved gas bearing in the adjacent Tripura and Assam district in India.
This means similar discoveries await in Bangladesh should targeted explorations are launched. The above explanation leads to the conclusion that gas exploration in Bangladesh is yet to reach a mature stage and further explorations are required before the true gas potentials of the country is known.
In the above context the logic of going for large volume of LNG import on a long term basis may be questionable. The single LNG terminal being built off Chittagong is justified in the sense that an immediate and a near term gas crisis may be overcome by replacement LNG.
But in the long term serious gas exploration would most likely offer Bangladesh reasonable amount of new gas. A costly long term LNG solution involving multiple onshore and offshore LNG terminals for large volume of LNG feed is not the best option before exhausting yet to discover gas reserves in the country.
Coal is going to be the prime fuel for power generation in Bangladesh in the 20s and beyond. The six or more large scale (1300 MW each) coal fired power plants planned and being actively pursuit at present are to be fed totally by imported coal.
The coal power plant’s demand is expected to increase from the present 0.6 million ton coal per year to 18 million ton in 2025 and to 30 million ton in 2030. While these will generate significant electricity, the 100% dependence on imported coal will raise the power price.
Bangladesh has reasonable reserve of shallow mineable coal in the Dinajpur and Rangpur districts. But development of national coal resource has been slow and takes a back seat in national policy planning. The option of building mine mouth coal based power plants in the north Bengal has not received the attention these deserve.
Four known coal fields in the north Bengal could develop underground mines to reasonably support 1000 MW capacity power plants each. A combined source of local and imported coal would suite the economy better than relying totally on imported coal.
There has been a phenomenal growth of solar home system (SHS) in Bangladesh over the last decade. The rate of growth of SHS has set a world record with over 4 million household having SHS by 2016.
Although the cumulative solar power amounts to 190 MW (2.5% of country’s total power generation), it has brought enormous social benefit by lightening a very large mass of rural population who would never have grid electricity.
The reduction of cost of solar installation has set a better prospect of this technology to play more significant role in near future.
In the long term future, Bangladesh has to look beyond its border for energy options. Cross border energy import either in the form of natural gas or in the form of electricity could well be major sources of energy. Bangladesh has already opened up a cross border electricity import trade with India and this could grow in coming years.
In this respect the hydro electricity import option from Bhutan and Nepal, has been merited highly. Both Nepal and Bhutan have enormous prospect of hydro power development and Bangladesh should take the opportunity to join the neighbours to implement an action plan whereby hydropower could be imported.
Bangladesh lost an opportunity of getting cross border pipeline gas from Myanmar when it decline to accept a Tri-nation (Myanmar-India-Bangladesh) gas pipeline agreement in 2005.
The present stand-still status of transnational gas pipeline projects of either TAPI (Turkmenistan-Afghanistan-Pakistan-India) or IPI (Iran-Pakistan-India) may change to a more fast moving activity depending upon international politics.
However should any of these projects get off the ground Bangladesh could get a very long term gas security if she can join the team of transnational gas traders.
To conclude, it may be pointed out that Bangladesh is set to increase its energy and power supply very significantly in near future in line with increased demands. For this to happen, a secure supply of primary energy need to be ensured.
The government plans to use imported coal, oil and LNG to fuel the system and this will come at a cost. An over dependence on imported fuel may offset the economic balance with consequence that power and the industrial products will come at a higher price.
Development of indigenous energy resources should be considered to maximum possible level before a wholly import based energy supply system is undertaken. A strong gas exploration program specially in the offshore could still change the way Bangladesh expects to achieve a secure energy supply.
Dr. Badrul Imam is an energy expert and professor of Geology of Dhaka University.
Hydrocarbon prospect in deep sea areas of Bangladesh
December 23, 2016 Friday 4:34 PM By Rezaul Kabir
Bengal delta is one of the active delta in world and Bangladesh is located within this deltaic region. Every year a huge load of sediment is carried by rivers flowing over Bangladesh and deposited into Bay of Bengal.
The source of petroleum is plants and animals that died millions of years ago and the sediment of Bengal delta carries a huge amount of organic substance which lead to the generation of hydrocarbon through a process of sediment compaction, maturation and migration under certain pressure and temperature within the time span of million years.
Oil and gas prospect in Bangladesh is very potential and have gas discovery through a belt from north east to middle to south eastern and south part of Bangladesh.
Sangu gas field is only offshore discovery is already shut down now. Oil discovery was only at Haripur in Sylhet and not in production track. Oil and gas is only energy that leads the world to modern civilization and show the way of development for a nation.
Bangladesh is still at back on petroleum exploration and could not reach to an expected level of success in the development of country.
Very recent Bangladesh won at the arbitration on International sea territory and opens a vast area for oil and gas exploration in offshore which is highly prospective for hydrocarbon.
Hence Bangladesh Government may anticipate appreciation for their important role on arbitration and cordial gratitude to present government.
Geologically Mio-Pliocene (Time 1.65-23million years) formation is oil and gas bearing formation of Bengal basin and depth ranges from 3.0-5.0km from surface and can be less in deep sea, i.e. 2-3km from sea bed. Sea bed is below water depth and depth ranges 1-1.5km at deep sea.
Deep sea formation is not much affected by the recent deposited sediments as it is far away from depositional arch of shallow sea and hydrocarbon bearing formation will not be deeper at deep sea.
Presence of high pressure in subsurface geology is the main barrier of drilling and very costly drilling as well. Tectonically Bangladesh is located in subduction zone of Indian plate and Burmese plate.
Tectonic feature in formation like major and minor fault, fracture, unconformity etc changes the reservoir of oil and gas as well as represent abnormal pressure indicates the most critical situation for drilling.
Tectonic force is one of the important reason lead discontinuity of rock formation and decompose the reservoir potential of formation.
Need to mention that earthquake is the element of plate movement and it damage not only on the surface but also smash up the rock formation by creating fault and fracture at underground affecting the oil and gas reservoir, migration of hydrocarbon and generate new abnormal pressure zone in formation.
South, south western and western deep sea and nearby area of Bengal basin is likely a trough and consist of organic rich thick sedimentary rock covered by huge water body above sea bed may reduce the consequence of tectonic force to rock body of this area.
Underground drilling hazard will also be less in rock formation of deep sea. Less hazardous formation will be favorable for drilling, may faster the drilling operation and reduce the cost as well for safe completion of drilling a well.
Geologically south, south west and western part of offshore will be more favorable for drilling as the high pressure zone is gradually tend to deeper from north east to south west in formation of this part.
Presence of hydrocarbon at shallow depth in Pleistocene (Time
During drilling Sangu (7) B at Sangu platform observed traces of oil show at shallow depth around 950m-1100m from surface, is not reserve but possibly source.
It suggests have prospect of oil reserve in Pleistocene formation of deep sea. Besides for any discovery of oil and gas it may need to justify reserve quantity and all expenses relate to production stage. So reserve quantity of hydrocarbon is also important for declaration of any oil or gas field.
There is very few offshore drilling in Bangladesh and limited data is not sufficient to analyze oil and gas reserve. So far from the deltaic nature, depositional history and sediment criterion it assumes deep offshore and adjacent area might be rich in oil and gas.
It will not be very surprising if a giant oil field is hiding beneath the deep sea part of Bengal basin. Bangladesh is spending huge foreign currency on importing crude oil and drawing back sustainable development of country.
It is the appropriate time to focus on petroleum exploration in vast offshore area with a great hope of black gold.
Father of the Nation Bangabandhu Sheikh Mujibur Rahman has brought sovereignty for people of Bangladesh and his idolize daughter honorable Prime Minister Sheikh Hasina is very much keen to develop country at each point and working hard to achieve the goal.
Rezaul Kabir is a geologist and an international petroleum exploration specialist.
‘Energy-the lifeline of an economy’
December 3, 2016 Saturday 11:06 AM By Muntasir Murshed
Energy is viewed as oxygen for an economy and has been included as the seventh goal amongst the seventeen Sustainable Development Goals (SDGs).
This goal puts utmost focus on ensuring affordable and environment-friendly sustainable energy supply across the globe.
Thus, no stones should be left unturned to ensure its sustainable development and availability (energy security).
Failure to do so would definitely generate adverse consequences hampering the economic growth potentials, especially that of the developing economies such as Bangladesh.
Energy is correctly perceived to be the lifeblood of the economy towards its growth and development. It is a bedrock input for economic growth and a vital ingredient in attributing to improvements in socioeconomic conditions of underdeveloped countries in particular, including Bangladesh.
Thus, the utmost importance of exploring the immense economies of energy resources is of key significance for researchers and policy makers round the globe.
Economists assert, “Without heat, light and power you cannot build or run the factories and cities that provide goods, jobs and homes, nor enjoy the amenities that make life more comfortable and enjoyable.”
Many parts of the developed world still face sluggish economic growth rates and negative externalities following financial crises. A possible reason for this is shortage of power which severely mitigates the pace of industrialization in those economies.
Thus, the energy industry is undoubtedly an engine of growth, since its products serve as inputs into production of nearly every goods and services that adds value to the gross domestic product of a nation. Furthermore, it also contributes to employment generation and poverty alleviation.
Traditionally, labour and capital were considered to be the main inputs in production models. However, as time progressed the importance of energy as a crucial input has been highlighted and more energy-augmented production models emerged.
The role of energy in development of an economy is multidimensional in nature. The energy industry contributes to economic growth in two ways. First, energy is an important sector of the economy that creates jobs and value addition by extracting, transforming and distributing energy goods and services throughout the economy.
In 2009 the energy industry accounted for about 4% of GDP in the United States. In some countries that are heavily dependent on energy exports the share is even higher: 30% in Nigeria, 35% in Venezuela and 57% in Kuwait.
The energy industry extends its reach into economies as an investor, employer and purchaser of goods and services. Second, energy underpins the rest of the economy. Energy is an input for nearly all goods and services.
In many countries, the flow of energy is usually taken for granted. But price shocks and supply interruptions can shake economies as a whole.
The energy industry directly affects the economy by using labour and capital to produce energy. This role is particularly important when economic growth and job creation are such high priorities around the world.
The energy sector directly employs fewer people than might be expected given its share of GDP, especially when compared to other industries. However, recent research demonstrates that the energy industry supports many more jobs than it generates directly, owing to its long supply chains and spending by employees and suppliers.
Energy-related industries do not have a large need for labour, but the workers they hire are relatively highly skilled and highly paid. As a result of their high salaries, employees of the energy industry contribute more absolute spending per capita to the economy than the average worker.
High wages in the sector reflect the fact that energy industry workers are much more productive than average, contributing a larger share of GDP per worker than most other workers in the economy. The impact of the energy sector in context of economic growth attainments can be easily explained using the expenditure approach for calculation of gross domestic product.
Under this approach, aggregate demand is expressed as the sum of total consumption expenditure, total private investment expenditure, government expenditure, and net exports.
In addition to the energy sector’s economic contributions in general, relatively lower and stable energy prices also help stimulate the economy.
Firstly, lower energy prices reduce expenses for end consumers increasing their disposable income and raising their purchasing powers. Secondly, lower energy prices reduce input costs for producers of nearly all goods and services in the economy, thus reducing their costs of production which raises their profit opportunities as well.
Conversely, relatively higher energy prices place a drag on economic growth. In addition, rising energy prices take purchasing power away from consumers, particularly from lower-income groups. Loss of purchasing power is synonymous to reduction in average standard of living of the people within an economy which is not desirable at all from the perspective of economic welfare and prosperity.
However, it must be kept in mind that low energy prices are desirable from the economic perspective but those low energy prices must be market determined under perfectly competitive framework rather than via government intervention in the energy market since such interventions have severe economic complications of their own.
According to the World Bank, it is impossible for any economy to attain and sustain economic development without exposing it to a minimum level of energy.
Thus, the concept of energy security in context of attainment of Sustainable Development Goals (SDGs) is put under immense consideration and emphasis by the World Bank especially for the developing economies.
The Bangladesh government is also working with the vision of achieving the SDGs whereby ensuring energy sufficiency within the economy could be one of the most effective channels.
Compared to the developed countries there are numerous problems that can be associated with the energy sectors of the developing countries. These problems if kept unattended and unsolved would not generate the true potentials of those sectors with regard to attainment of economic growth and development in a sustainable manner.
The most important problem associated with the Energy markets of developing countries is too much of government intervention in the energy market contributing to absence of cost-reflective prices. In simple terms, cost-reflective price means that the price of the end products must reflect the true cost of producing those products.
The energy sector of most of the developing countries is characterized by a mixed economy rather than an optimal perfectly competitive market and as a result cost reflective prices do not exist. This is the main problem with regard to energy markets in the developing countries whereby economic growth and development are hampered adversely.
We know that under perfect competition and economy performs optimally whereby resources are used efficiently and optimally, prices are determined by market forces and are cost reflective in nature.
However, this is not ensured in the energy markets of the developing countries mainly because of the provision of subsidies by the governments. In the developed countries there is minimal government intervention in the energy market and energy prices are market determined and are cost-reflective in nature.
Conversely, energy markets in the developing countries are characterized by high levels of government intervention that distorts energy prices and leads to inefficiencies in energy use. Governments with the intention of keeping energy prices low tend to provide both consumption and production subsidies with regard to energy consumption.
The government supplies energy resources, used as industrial inputs, to producers at subsidized rates and as a result the private cost of the producers do not reflect the true cost, creating an externality and eventually leading to inefficiencies within the energy market. Since the producers are receiving their energy inputs at lower rates their energy demand and employment are higher than the optimal level which also leads to the more aggregated energy problems.
Similarly, the government also supplies energy products to end users (consumers) at subsidized rates which also triggers over consumption of energy also attributing to adverse economic problems.
In recent years, macroeconomic pressures have intensified on the Bangladesh economy resulting from a number of adverse internal and external developments. While the global financial and economic crisis in 2008 created certain pressures, the IMF stated that one of the major domestic factors creating fiscal pressure on the economy is the below-cost provision of fuel and electricity against the backdrop of a rapid expansion in oil-dependent power generation.
The expectation is that the expansion of base power capacity would allow a gradual phasing out of the high-cost rental plants, and efforts to increase gas supply to base plants will further reduce generation costs.
Moreover, in pursuit of the efforts to bringing subsidy costs fully on-budget, a plan setting out a schedule of disbursements from the government to the BPC has been formalized and approved. No doubt, such efforts should be implemented in a comprehensive manner to ensure full transparency of the energy subsidy costs.
At the same time, subsidy costs need to be reduced to build up more space for development spending, such as through a gradual replacement of subsidies by targeted cash transfers.
Energy is believed to be the driving force of the nation and it is very much in line with attainment of the SDGs in Bangladesh. The energy sector therefore has to be considered as the most important sector since its performance is linked with performances in almost all other sectors within an economy.
It is a prime task for a developing economy to tap all possible options that are optimal for their Energy Sector’s development and in order to do so the economic policies have to be focused on accurate identification of the appropriate energy sector reform strategies in order to maximize the benefits from development of the energy sector.
Muntasir Murshed is a BS Graduate in the field of Economics from North South University, Bangladesh.
‘Bio-energy as a renewable energy source to ensure energy security in Bangladesh’
November 13, 2016 Sunday 1:38 PM By Dr Sakib Bin Amin and Muntasir Murshed
A common characteristic of all undeveloped nations around the globe is the incompetence to match respective demand for energy.
For instance, use of traditional indigenous energy resources in Bangladesh is inadequate in ensuring energy sufficiency across the nation.
As a result, the country’s growth prospects are being hampered to a great extent. Traditionally, developing economies have endeavoured in employing bio-fuels such as wood and cow dung cakes for energy.
However, putting these and other non-renewable energy sources into use have generated adversities in the form of environmental degradation and health hazards. As a result, the pace of development had been curtailed to a major extent.
It has been witnessed that use of traditional bio-fuels in Bangladesh had led to heath issues of women who cook food using fuel wood and also the cooking efficiency was found to be less than 15 percent.
In addition to these, carbon emission is also a concern since most of these energy sources result in emission of greenhouse gases in to the atmosphere.
Thus, bio-energy in the form of bio-fuels can resolve these issues making it an ideal sustainable renewable energy source for Bangladesh which would also be both eco-friendly and healthy.
Bio-energy can also relieve the fiscal burdens of the nation arising from oil imports by the quick rentals companies to generate power which in turn would ensure greater investments in relatively more productive sectors spawning higher rates of economic growth.
Furthermore, bio-energy in the form of bio-gas can also match the country’s overall electricity demand providing electrification in those rural areas that are yet to be brought under the national grid.
In the early 1980’s bio-mass dominated energy requirement in Bangladesh and contributed to more than 55% of the entire energy requirement of the country. It is to be mentioned that the contribution of bio-mass has significantly decreased with the increase in commercial energy use employing other energy sources.
In 2015, Bangladesh’s primary energy consumption is estimated 62% natural gas, 12% traditional bio-mass and waste, 21% oil, 2.5% coal, and 2.5% hydropower and solar. Despite such a sharp fall in overall energy contribution, bio-mass still is the principal source of energy for the rural population and comprise almost one-sixth of the total primary energy consumption in Bangladesh.
However, given the country’s vast availability of bio-energy resources, it is ideal for Bangladesh to contribute more to the total energy supply within the economy.
In Bangladesh, biomass is used for both energy and non-energy purposes. It is extensively utilised in rural areas as a fuel source primarily used for cooking and heating. The traditional biomass sources include agricultural residue (rice husks, rice and jute stalks, sugarcane bagasse, etc.), animal waste (mainly dried form, but some biogas plants, too), scrub wood and fire wood.
These renewable bio-mass resources are considered to have significant potential to meet the energy demand, especially in the rural areas. Many commercial and industrial entities also employ bio-mass as an input.
In addition, bio-mass are even used as animal feed, rural house building material, wood for furniture making and as for producing fertiliser. The country wide pattern of utilisation of bio-mass for energy varies from one region of the nation to another and is also harnessed to differences in income groups of households, family sizes, land ownerships, and educational status.
Although Bangladesh demonstrated some progress to achieve macroeconomic stability, sustaining annual growth rate of 6.34 % since 2011, it continues to face challenges in the form energy crisis, notably a deficit in electricity supply.
One of the many reasons behind this gap is the fact that addition in installed capacity is not matched in terms of proportional increase in electricity generation as some plants may remain out of operation due to acute energy shortages.
Almost 62.5 % of total electricity production in Bangladesh is fueled by natural gas and such heavy dependence on natural gas is ominous for the nation since its natural gas reserve, at the current rate of exploration and consumption, is expected to be exhausted by 2031.
In order to somewhat relieve the pressure on natural gas imported oils were used as a replacement fuel to generate electricity but such an action led to fiscal burdens. The next best option, coal, could not be solve the energy crisis instantly due to various problems like carbon emissions, high expense costs and inadequate expertise in coal extraction.
Thus, in quest for meeting domestic electricity demand Bangladesh can look to at its indigenous bio-mass reserves using bio-energy as a renewable input for large scale commercial electricity generation.
It is acknowledged that bio-energy is environmentally safe in the sense that combustion of biomass to produce biogas, if executed in a protected environment, does not lead to emission of greenhouse gases into the atmosphere.
Therefore, the challenge that remains is to successfully transfer the bio-energy into industrial heating and/or electricity production.
Apart from industrial uses, bio-energy can also be used for municipal use especially in the rural areas relieving people from the burden of waste disposal and sanitation problems. Moreover, bio-gas can be used to generate electricity that can be used to run waste management plants.
Another possible use of bio-energy can be in the household sector where bio-gas can be directly used for cooking and heating purposes which would induce domestic savings from the associated costs otherwise.
In addition to these, bio-energy can be extremely helpful for farmers who no longer have to rely on the expensive diesel and kerosene to run irrigation pumps and lighten houses, using bio-gas as a substitute to these fuels.
Finally, solid bio-mass can be converted in compressed natural gas that can be employed to run vehicles whereby the import bills, arising from petroleum imports, could be reduced to a huge extent.
Although bio-energy contributes to a nominal portion of entire world demand for energy, there are some developing countries that have used bio-mass as their principle source of energy. For example, bio-mass is the prime source of energy in Malawi.
It is responsible for 97 percent of total energy supply within Malawi. Moreover, 88.5 percent of the country’s entire energy requirement is met by bio-energy resources. Similarly, bio-mass accounts for about 68 percent of Kenya’s local energy demands and it is expected to remain the main source of energy in future.
Hence, it is recommended that Bangladesh should follow these countries and focus on making best use of its bio-energy generation potentials which would complement the other renewable and non-renewable energy sources already in use.
Dr Sakib Bin Amin is an Assistant Professor at the School of Business and Economics at North South University.
Muntasir Murshed is a BS Graduate in the field of Economics from North South University, Bangladesh.
LPG: Survival fuel for Bangladesh
November 10, 2016 Thursday 9:23 AM By Engr Md. Jakaria Jalal
The nation is preparing to roar in the world economy very shortly, international news about Bangladesh confirms such: The World Bank ranked Bangladesh as the top 8th in remittance receiving country in the world with more than US$ 15 Billion in 2015.
Goldman Sachs’ has predicted that Bangladesh will soon become one of the largest economies of the world.
A Bloomberg report has cited Bangladesh to be on track to log in the second best economic growth figure in 2016 around the world. CNN Money has forecast Bangladesh’s growth is going to be the 3rd highest for next five years.
As per the above opinions from globally reputed institutions, there is no doubt that we Bangladeshis are going to create waves in the international economy. However, are we truly prepared to do that? What are the bottlenecks to achieve that golden mark?
What could be the possible reasons for not achieving that mark? Have we considered our potential threats? The major obstacles which the common man of Bangladesh considers are factors such as political instability, social conflicts, literacy rate and uncontrolled environment pollution etc.
However as technically knowledgeable people, we need to realize that the most challenging obstacle that we are going to face for gaining a credible position within world economy is the Energy Crisis.
Mistakes of the Past
We had the options in our hand to avert this crisis (oil, coal, Natural Gas). However, lack of proper management with each of these resources are forcing us to rethink what we have done so far. We have consumed our limited resources (such as Natural Gas) and provided almost half of the resource to all sectors of the country; whereas this non-renewable resource’s use should have been limited to only the best uses.
We did not initiate the second refinery project whereas we are losing more money to purchase finished oil. We have adequate coal reserves but we don’t have the proper regulation to crack it, yet on the other hand we are importing coal to run the power station. Bangladesh doesn’t have any pricing formula for petroleum products which basically leads our state owned Petroleum Corporation to exist as a losing concern. Considering all these less than optimum results regarding our energy resources, we are now planning to go for LNG and nuclear energy options, which are both highly technical as well as investment intensive.
The present condition
As per International Energy Statistics, Bangladesh has around 8.5 TCF proven gas reserve as of 2015 and we have already consumed around half of that. With socio-economic development of the country, demand for energy is rising very fast. Present sector-wise gas consumption is presently 2700 MMSCFD gas and is being consumed by the Power (41%), Fertilizer (7%), Industry & Tea-Estate (17%), Captive Power (17%), CNG (5%), Commercial (1%), and Domestic (12%) sectors.
About 2.5 million customers of different sectors presently use natural gas in the country. There are 72 gas-based power plants in the country. Out of them 31 grid connected and 5 non-grid power plants, having total capacity of more than 2300 MW has been installed in the last 5 years.
It may be mentioned that out of 25 gas fields so far discovered in the country, 19 gas fields are presently in production. By 2016-20 overall gas demand in the country is estimated to be 4500 MMSCFD. Yet it may not be possible to meet this demand fully from the production from existing gas fields.
If we look into the consumption segment of natural gas above mentioned, we will find that around 17% of all consumption falls under domestic and CNG segment. If we can reduce these two segments initially we will have some additional time to deplete our natural gas resources.
The most probable solution for the future
The solution that we have available to us to cater the domestic and CNG segment: it is obvious that we have only one option in hand which is LPG. Around the world LPG is the most popular cooking fuel and Autogas (LPG used in vehicles) is considered the world’s safest and best alternative fuel to octane.
LPG has a very wide variety of uses: it is mainly used via cylinders across many different markets as an efficient fuel source. It is used in the agricultural, recreation, hospitality, calefaction, construction, sailing and fishing sectors.
It can serve as fuel for cooking, central heating and for water heating and is a particularly cost-effective and efficient way to heat off-grid homes. On the safety front, LPG cylinders must be updated to new standards regarding safety and user experience. All these steps will provide a huge contribution to the energy demands for domestic usage.
The challenges of the LPG Industry
Even though technically LPG is the most viable solution, the current capacity of the industry to cater to the upcoming demand has to be considered as well.
Even a few years ago, the LPG industry was not in a position for this purpose, but over the years, the industry has evolved. Many new investors, both local and international, are playing a vital role in this sector as well.
The current capacity of the industry is not optimum to fulfill the energy demands, more investment and better structure is an immediate requirement to serve the potential upcoming demand. Currently, apart from the state owned BPC supplied LPG from oil refinery and gas condensate fraction plant, six more private companies are importing LPG at their own terminals in Mongla and Chittagong through LPG carrier ships.
Among them two are foreign investors, LAUGFS (formerly known as PETREGAZ and Kleenheat) from Srilanka LPG giant and TOTAL GAZ from France.
Four other local organizations are Bashundhara, JamunaSpacetech, Omera and BM, LAUGFS, Bashundhara, Jamuna, Omera have their own terminal in Mongla and TOTAL GAZ, BM are operating their terminals in Chittagong.
Within a very short time few other local entrepreneurs like SenaKallyanSangstha, Orion group, Intraco, Navana and Beximco will start their operation and all terminals have been planned to setup in Mongla. There is no doubt that the upcoming new infrastructure will strengthen the LPG supply chain. Existing companies are also in expanding mode and will streamline their LPG logistics capability.
Role of the government
Investors are very eager to cater to this energy demand, but their investments alone will not be enough to satisfy the target market through LPG. This particular industry needs the proper legislative steps from the government to completely bring about the growth of this market.
LPG has been promoted by different countries around the world by respective local government though different rules and regulations. LPG industry in Bangladesh is still suffering from lack of proper and business friendly rules, the industry is not streamlined and safety culture has not been well defined. Bureaucratic malfunctioning, slow decision making process, lack of unity among the players are now main obstacles to the growth the LPG industry itself.
As most of the LPG suppliers are Mongla based, it is a matter of time before Mongla would be declared as ‘LPG CITY’. Regular dredging in ‘Poshur channel’ is now essential for the purposes of receiving large cargo vessels at the plant terminal, which will reduce the cost of the product.
Structured distribution channel model is an immediate requirement to strengthen cylinder distribution throughout the country. Proper pricing of the Natural Gas and subsidy to LPG through national level will inspire people to convert from Natural Gas to LPG.
Autogas business is now an immediate alternate for the current CNG station owners, as they are desperately looking for the alternative to serve their customers but unfortunately there are no definite regulations to direct them.
It is to be if such a step is given the go ahead from the Government, we can save 5% of national NG consumption thus reducing the dependency on the natural gas.
Worldwide LPG is called available fuel; as long as oil will be refined, refined LPG will be one of the byproducts.
The number of LPG carriers and traders are increasing rapidly to serve a country like ours, where we have lack of oil as a natural resource. We need to merely capitalize current pricing of LPG which is lowest ever in our industry.
Once we make the people accustomed with this product, then it will be easy to spread its uses for different purposes.
Looking forward to the positive attitude of government for declaring new LPG business-friendly legislation not only to propagate this business but also to remain at least a bit safe in energy balance.
We are heading to an unknown destination regarding energy security where we need be more focused and have to find the survival fuel: for which the possible, immediate and best fit solution is ‘LPG’.
Engr Md. Jakaria Jalal, DGM (Business, Operations and Planning), Bashundhara LP Gas Ltd.
Cross-border electricity trading ensuring energy security in Bangladesh economy
October 20, 2016 Thursday 1:44 PM By Dr Sakib Bin Amin and Muntasir Murshed
Electricity plays a significant role as input for the socio-economic development of a nation. It is widely acknowledged that, no underdeveloped nation has managed to attain development beyond a subsistence economy without ensuring a minimum amount of electricity that is accessible to a broad segment of its population.
Thus, the importance of electricity in an economy is undeniable which calls for proper and effective energy sector arrangements to which Bangladesh is no exception. Energy security for a country may be conceptualised as the country’s access to energy sources of various types consistent with its energy needs for numerous purposes.
Therefore, one of the ways of ensuring energy security is to achieve self-sufficiency in electricity generation or to engage in Cross-Border Electricity Trading (CBET) with regional neighbours.
Bangladesh, like other developing countries, is forced to choose the latter option due to the inability to generation electricity on its own following limited fuel options.
Although the country has demonstrated some progress to achieve macroeconomic stability and has maintained an annual growth rate of 6.34% on average since 2011, it still continues to face challenges in the form of underdeveloped power infrastructure and energy deficits.
In Bangladesh, electricity is the commonly used form of energy which is employed to facilitate most of its economic activities. Moreover, the government has envisioned ensuring 100% electrification rate by 2021, but at present only 74% of the population has been blessed with access to affordable and reliable electricity supply.
It is also a matter of serious concern since rural electrification rate is still around 40% and has to be increased dramatically to achieve the government’s stated goal.
Recent trend conforms that Bangladesh has historically been facing electricity deficits. In addition, almost 62.5 % of total electricity production in Bangladesh is fueled by natural gas. Such heavy reliance on natural gas is also an ominous sign for the nation since its natural gas reserve, at the current rate of exploration and consumption, is expected to be exhausted by 2031.
Moreover, imported oils have also been used to generate electricity mainly by the quick rental companies which also exert pressures on the fiscal burden. As a result of input inadequacy, Bangladesh was compelled to look at new avenues for boosting its generation capacities.
Fuel diversification is definitely an option for Bangladesh to match its domestic electricity demand but the associated costs of the ‘fuel mixing` mechanisms make it a less preferable choice and puts more weight to go for CBET.
Successful performance in CBET would definitely lead to a reduction in the cost of electricity since the unit cost of imported electricity is in between locally generated gas and oil-based electricity costs. It is argued that coal-based electricity is another substitute for the expensive oil based generation.
At present, producing electricity using coal costs around BDT 5/kWh which makes it economically feasible compared to the other mentioned energy sources. However, due to environmental and other problems associated with coal-based electricity generation CBET seems to be a safer option while coal-based electricity projects can be kept for the near future.
It is empirically revealed worldwide that the benefit-cost ratio of engaging in CBET is certainly promising and therefore it can leave no stones unturned in tackling the nation’s energy crisis through this channel.
At present, Bangladesh’s CBET is primarily involves India which calls for diversification in trade partners. In January 2010, Bangladesh and India signed a 25-year long memorandum of understanding MoU and had promised to exchange electricity through a cross-border interconnection leading to the development of a 400 kV, 30-km double-circuit HVDC line from Bheramara (Bangladesh) to Baharampur (India) and a 500 MW 400/230 KV back-to-back HVDC substation at Bheramara.
Even though there had been a couple of similar agreements with India, considering the potentials of CBET, the benefits from such regional power sharing arrangements are yet to be realised.
As part of diversifying trade partners, it is recommended that Bangladesh gets into favourable trade terms with Bhutan who has more than 100 Giga Watt (GW) of hydro power in reserve. Ideally, Bangladesh should focus on building up a Bhutan-Bangladesh electricity cooperation arrangement as almost 45% of Bhutan’s total exports are generated from electricity trade across national boundaries, primarily with India.
Apart from the interconnection between the two nations, Bangladesh may also negotiate for the use of the intervening Indian corridor with Bhutan for importing cheap hydro power from Bhutan and in exchange can allow corridor for India, ensuring national security, to transfer its electricity power from its western to eastern parts (from Assam to Tripura).
Strengthening cross-border electricity cooperation within the South Asian region can be a revolutionary answer to ensuring adequate and reliable electricity availability within the regional nations since there are complementarities in demand for electricity and resource endowments as a result of diversity in primary energy sources and differences in seasonal patterns of electricity requirements and availabilities.
Currently, the arrangements for power transmission and trade are usually bilateral, mainly involving two governments with minimal involvement of the private sectors. Thus, there should be urgency in encouraging private investments further in the form of multilateral public-private partnerships. CBET not only resolves energy crisis but it also enhances the possibilities of future regional cooperation within the SAARC in other sectors also.
Dr Sakib Bin Amin is an Assistant Professor at the School of Business and Economics at North South University.
Muntasir Murshed is a BS Graduate in the field of Economics from North South University, Bangladesh.
Rampal power plant will not harm Sundarbans
September 3, 2016 Saturday 2:32 PM By Saleque Sufi
The under construction 1,320 MW imported coal based ultra-super critical power plant, located 14 kilometers away from the outer periphery of Sundarbans will not cause any harm to this largest mangrove forest in the world.
However, the agitation of National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports got political dimension when leader of the opposition joined the chorus terming the project as anti-state activity and urging the government for cancelling it for what she termed protecting national interest.
Prime Minister Sheikh Hasina in a press meet categorically rebutted the BNP Chairperson Begum Khaleda Zia presenting evidences in support of the government approved project.
This writer made an on the spot survey and checks of site activities and had found all environment safeguards in place and all other aspects covered for eliminating possibilities of harmful impacts of air, water and earth from construction and operation of the plant.
The Rampal Power plant Project is one of the several large imported fuel based power generation project taken up by the Government of Bangladesh as part of its power sector vision for long term energy security.
Bangladesh is set to achieve power to all by 2021 with a generation capacity of 24,000 MW.
Power System Master Plan (PSMP) 2015 under approval process now visualizes a generation capacity of 57,000 MW by 2041.
Bangladesh is aspirating to turn into developed economy by then. In the fuel diversification plan Bangladesh will rely 35% on imported coal by 2041.
Rapidly depleting own natural gas reserve and persistent indecision about mining own coal leaves Bangladesh with only option of importing primary fuel (LNG, Pipeline Gas and Coal). Obviously coal is cheaper and preferred option.
Most of the new power plants need to be located along the coastal regions with preference for the power and energy hungry south western region. Rampal has the unique advantage of relocating minimum habitants and affecting minimum cultivable land.
Most of the 900 acre land allotted for the project had shrimp cultivation with few tongs prepared for the supervisors. Some land was growing one crop.
Moreover, being located beside Poshur River it provided ease for transporting construction materials, equipment and plant as well as coal from abroad.
Two Governments owned enterprises of Bangladesh and India, BPDB and NTPC, formed a joint venture company Bangladesh-India Friendship Power Company Ltd (BIFPCL) on 50-50 equity partnership for owning and operating the company.
Partners contributed 15% each for the project and after selection of Engineering, Procurement and Construction (EPC) Contractor Bharat Heavy Electricals Limited (BHEL), India the 70% of the project cost is coming from Indian state owned Exim Bank. Parties are equally liable for repaying the loan from the sale proceeds of power.
BPDB as single buyer of power would purchase the entire power for use in Bangladesh. BPDB being a 100% government owned company Government of Bangladesh provides sovereign guarantee as per norms of similar projects.
BIFPCL would operate as Independent Power Producer (IPP) enjoying fiscal incentives applicable for other IPPs in Bangladesh. Though relatively dirty fuel still energy world persists with coal as preferred fuel for power.
Climate Wire of World Research Institute evidences that 455 power plants of capacity 519,396 MW would be built in India alone over the next decade. 1,231 new coal fired power plant would be constructed in the world of 1.4 million MW capacity.
Rampal is located at 14 km away from the outer boundary of Sundarban mangrove forest and 65 km from the region categorised as UNESCO World heritage. Gladstone Coal port and NRG Coal fired power plant are located almost at the same distance of UNESCO world heritage Great Barrier Reef in Queensland Australia.
Bangladesh environment law permits such plants to be located outside 10 km of reserve forests. Location of Rampal in that consideration has not infringed any provisions. Some quarter quoting Indian Government 25 Km limit guideline is trying to confuse the matter.
Guidelines are not act and Law. Moreover, even in India two plants Tata Tegunia (660 MW) and Cuttack KVK (1,050 MW) are within 5 km of Cuttack Kalikot Wild Life Sanctuaries.
Technology Addressing Emission Impacts
(a) Technology and Coal
Rampal power plant (RPP) would adopt ultra-super critical technology meaning use of lower quantity of coal for generating greater amount of power.
The latent heat of super saturated steam would be transformed to electric energy by steam turbine. This would reduce CO2, SO2, NO2 emissions compared with sub critical technology. Superior quality coal (57,000 kcal, 0.6-0.9 % sulfur and less than 15% ash) would also primarily address emissions concern.
Indonesia, Australia, South Africa and Mozambique are the potential source of this coal. India does not have enough of such high quality coal. Hence the concern of coal coming from India can be completely ruled out.
(b) SO2, NO2, HG and Ash Control
RPP will have specialised Flue Gas Desulfurization Plant (FGD) for restricting SO2 emission. Wet Lime and Limestone forced Oxidation (LSFO) with double flow contact scrubber would extract about 95-98% sulfur from coal before it goes for burning to heat water.
The plant will have low NOx burner to restrict NOx emissions.
Electrostatic Precipitator would extract almost 100% fly ash and bottom ash from the coal and these would be collected applying dry ash cooling system. Mercury would be removed also in the process.
The above facilities included in RPP would restrict emissions well below permissible limit. Moreover, 275 meter tall chimney would reduce velocity of emissions such that emitted thin flue gas would not blow to longer distance. Air pollution may not happen at all at 14 km distance from the plant.
(c) Ash Disposal
Some cement factories nearby have already opened dialogue with BIFPCL for taking all of the fly ash. Currently ash is imported from India which has high sulfur content. For contingency ash may be temporally dumped at ash ponds as concentrated slurry. But that situation may not arise at all.
Water Use and Effluent Treatment
Closed loop water recycling system would limit water use below 0.05% of the leanest time water flow of the Poshur river. A multistage effluent treatment plant and cooling system would treat water to pH-7 quality and cool down below 2 degree Celsius. Such discharge won’t cause any harm to fishes and acquatics.
Medium capacity coal carriers either Panamax or Supramax carrying coal would anchor at deep sea. Modern coal carriers have facilities for transshipping coal to smaller lighterage vessels in all covered method.
Only two 10,000 tons capacity covered coal carriers would be plying through Poshur River channel every not adding too much to 400-500 vessels plying everyday through the channel. The vessels would be covered and would be of low noise emitting. Coal being self-burning nature is always kept wet during transportation.
As such there would no case of spillage of coal from the carriers. Even if that happens at all coal does not pollute water. As contingency plan coal of 3 months requirement would be stored in all covered storage facility for meeting any coal chain break situation.
Impacts on Sundarbans
Sundarbans is in vulnerable condition now. Unscrupulous persons are hunting deers, tigers, setting fire to tress. Another group through intensive shrimp cultivation increasing salinity. This is harming Sundari and Kaora tress.
Government must be more alert, careful and vigilant in controlling and eliminating all such activities. RPP in operation would stimulate lot of business and commercial activities in the region.
Government must intensively monitor and regulate industrialization of the region. A high power national committee consisting of Mongla EPZ, Mongla Port Authority, Coast Guards, Bangladesh Navy, and Department of Environment must be formed for monitoring and regulating smooth growth of industries and business for the greater interest of Sundarbans.
Regular capital dredging and maintenance dredging of Poshur channel must be done to maintain navigability and reducing salinity.
A modern coal fired RPP adopting state of the art modern technology (Ultra Super Critical) and incorporating all units required for extracting Sulfur, Nitrous oxides, Mercury and Ash would ensure that air pollution is controlled below permissible limit.
Closed Loop Water Cooling system would restrict water use and ETP would treat effluent to pH-7 level and cool discharged water to below 2 degree Celsius.
We hope the eye witness account of an energy professional having 40 years proven hands on experience would remove any or all confusions.
However, the plant would require services of a team of qualified, well trained and committed professionals and intensive monitoring by Department of Environment and other relevant agencies.
Saleque Sufi is an energy expert.