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.