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.