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.