🇧🇩 - Energy Security of Bangladesh | World Defense Forum
Post

🇧🇩 Energy Security of Bangladesh

  • Thread starter Thread starter Saif
  • Start date Start date
  • Replies Replies 223
  • Views Views 5K
G Bangladesh Defense Forum

Saif

Senior Member
Joined
Jan 24, 2024
Messages
6,062
Reaction score
2,147
Origin

Residence

Axis Group

Economy to take a beating for acute gas crisis​


1708049762114.png


The severe gas crisis is increasing the cost of manufacturing of goods for both local and export markets, which may ultimately hit the pockets of consumers in the form of higher prices and the economy since overseas sales could see further slowdown.

Owing to lower generation of gas locally, factories in all sectors of the economy have long complained of inadequate energy supply. But the supply situation has worsened in the past two weeks.

At present, the government supplies 2,500 million cubic feet of gas per day (mmcfd), the lowest since April 2020, against a demand of 3,800 mmcfd, data from state-run Petrobangla showed.
The acute gas crisis has crippled the textile and garment sectors, which may not bode well for the country as they account for 85 percent of Bangladesh's exports and have created millions of jobs, mainly for the poor.

With the onset of winter, the power sector's demand for gas has subsided, but that does not mean the other sectors are getting more gas because of a drop in local production and fewer imports.
The shortage has hit hard industrial belts such as Narayanganj, Rupganj and Bhulta, forcing many factories to either keep production shut for long hours or run operations with expensive diesel in order to retain customers.

Most of the textile mills, which are usually gas guzzlers, in Savar, Ashulia, Gazipur, Maona and Narsingdi are running at 30 to 40 percent capacity because of the gas crisis.

Currently, textile millers have to spend $1 on fuel in order to make export-bound goods worth $2. When the gas supply is normal, they would ship goods worth $40 with the same expenditure on energy, industry people say.

"Usually, I export $20 million worth of garment items a month but the production has fallen. This will bring down exports to $10 million," said a composite garment factory owner in Bhulta. The company produces finished garments from cotton.

At its peak, it can produce 160 tonnes of yarn per day. However, the output has plunged to 60 tonnes, he said.

Now, the factory can dye 90,000 metres of fabrics a day against a capacity of more than 2.5 lakh metres. Similarly, the output of the fabric mill has fallen to 90,000 metres against the capacity of 2.5 lakh metres.

"I am running my mills not to make any profits but to maintain the flow of work orders from international buyers," the owner said.

He said the yarn production capacity of the five largest textile mills in Bhulta and Gausia of Narayanganj is 1,000 tonnes per day. But they have been producing 300 tonnes daily for the last 15 days owing to a fall in gas supply.

Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association, said there is zero pressure of gas for several hours in some factories.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the worst-affected industries are located in Narayanganj.

Nearly 500 garment factories in the industrial belt have almost zero output, said several owners.

The situation prompted the BKMEA to write to the prime minister on Sunday, calling for immediate steps to ride out the energy crunch.

The severity of the energy crisis has hit industries and businesses at a time when they are already weighed down by a sharp depreciation of the local currency, a shortage of US dollars needed to settle import payments, and a rising bank interest rate.

Owing to a significant fall in the foreign currency reserves, the taka has lost its value by about 30 percent against the US dollar in the past two years, which has made imports costlier.

Similarly, because of the withdrawal of the ceiling on lending rates in July, the cost of funds has gone up in the banking sector after remaining capped at 9 percent for more than three years.

"The cost of doing business has climbed due to the significant appreciation of the dollar," said Humayun Rashid, president of the International Business Forum of Bangladesh.

"We, the businessmen, are adopting various mechanisms to optimise efficiency to tackle the ongoing crisis."

Rashid, also the managing director of Energypac Power Generation Limited, said the dollar shortage, the gas crisis, and the increase in bank interest have affected businesses.

"One challenge is coming after another. As a result, businesses are finding it tough to survive."

Entrepreneurs in the leather footwear sector say although leather, the key raw material for the industry, can be sourced domestically, most of the chemicals and accessories needed to manufacture finished goods for both local and export markets need to be imported.

The packaging industry has seen an output decline of 25 percent.

"Demand has decreased like in other sectors," said Safius Sami Alamgir, president of the Bangladesh Flexible Packaging Industries Association.

Subir Kumar Ghose, chief executive officer of Partex Petro Ltd, said the overall import cost in the energy sector has increased by 10 to 12 percent due to the depreciation of the taka.

Md Fazlul Hoque, managing director of Maona-based Israq Textile Mills Ltd, said their yarn production fell to 70 tonnes a day against a capacity of 110 tonnes because of the lower gas pressure.

Hatem said the volatile exchange rate, the higher cost of financing, and the severe gas crisis are hitting the industries so badly that many owners may turn defaulters if they can't continue smooth production and export on time.

Industry people and analysts say a higher production cost will translate into higher prices of finished goods, meaning local consumers, who are grappling with an elevated level of inflation for the past 18 months, could see another spike in their cost-of-living.

If the prices are raised to absorb the higher cost of production, Bangladesh may also emerge as an unattractive supplier to global markets. As a result, sales may fall, both at home and abroad.
Exports grew at 0.84 percent in the first half of the current financial year. It rose 6.67 percent in the last financial year, which ended in June.​
 

Gas crisis in N'ganj forces residents to adopt alternatives for cooking​


1708050035478.png

Representational photo: Collected

Residents in Narayanganj are grappling with increased hardships due to acute shortage in gas supply.

Due to a lack of gas supply through pipelines, residential consumers are being compelled to resort to using LPG cylinders and electric stoves.​

Capitalising on the situation, businessmen are raising prices of gas cylinders and electric stoves.

Locals said the price of a 12-kg gas cylinder of an unidentified company has surged to Tk 1,500.

Local shopkeepers are charging up to Tk 1,550 for cylinders from reputable companies, they alleged.

Ameena Begum, a resident of Choudhury Bari in the port area, said , "Due to the unavailability of gas, I am now using an electric stove."

This shift has resulted in an additional burden for households, as the monthly electricity bills for electric stoves range from Tk 1,200 to Tk 1,500, said some locals.

Maksuda Begum, a housewife in the Masdair area, said, "Despite having gas, I resort to electric stoves because they are more reliable."

The gas crisis is not limited to Narayanganj Sadar; various areas including Paikpara, Baburail, Deobhog, Nimtala, Nitai Gonj, Tamakpatti, Amlapara, and Kaliar Bazar, are experiencing gas crisis.

Residents from these areas are contacting the gas company's complaint centre and expressing their frustration over the situation.

The struggle of residents is especially intense in areas like Kashipur, Masdair, and Baraibhoga.

A local organisation, "We, the Residents of Narayanganj" has initiated efforts and submitted a memorandum to the regional office of Titas Gas.

The organisation's president, Noor Uddin Ahmed, emphasised the need to end the malpractices of Titas Gas employees, which, according to him, are the root cause of the ongoing gas crisis.​
 

Govt importing LNG at lower price​


1708050153262.png

Representational photo: Collected

Bangladesh is getting liquefied natural gas (LNG) at a lower price from the international spot market as prices on the international market are on the decline.

The cabinet committee on government purchase approved the latest cargo, each of which is equivalent to 33.60 lakh million British thermal unit (MMbtu), at a rate of $9.93 per MMbtu yesterday.​

It will be supplied by the Singapore-based company Vitol Asia Pte Ltd at a total cost of Tk 429.69 crore.

On January 23, the government had approved another cargo at a rate of $10.88 per MMbtu. It will be supplied by Switzerland-based TotalEnergies Gas and Power Ltd. The total cost for that cargo was Tk 470.48 crore.

Currently, Bangladesh has Master Sale and Purchase Agreements (MSPA) with 22 global entities to purchase and supply LNG in the spot market. In yesterday's meeting, Oman's state-owned company OQ Trading Limited (OQT) was enlisted as an LNG supplier.

In December last year, the government had purchased a cargo of LNG at Tk 542.27 crore.

Global market analysts are projecting that the price of LNG will decrease more.

Meanwhile, the project cost for the installation of a Single Point Mooring (SPM) system with double line under Eastern Refinery (ERL) has increased for the fourth consecutive term.

The government has reached a fourth supplementary agreement with the engineering and procurement contractor of the project, China Petroleum Pipeline Engineering Corporation, at a cost of Tk 382 crore.

Besides, the government reached a second supplementary agreement with the German consultancy firm of the project, ILF Consulting Engineers, worth Tk 104.70 crore.

The original cost of the project to build a pipeline from the Moheshkhali Sea to the ERL was estimated at Tk 4,936 crore. But it was later revised three times and currently stands at Tk 7,125 crore.

Despite repeated attempts, ERL Managing Director Md Lokman was unreachable.​
 

Cabinet approves import of 3 LNG cargoes from Singaporean firms​


1708050267031.png

Representational image. File photo

Cabinet Committee on Government Purchase in a meeting today approved three separate proposals to import three LNG (liquified natural gas) consignments from Singapore-based companies.

Finance Minister Abul Hassan Mahmood Ali presided over the meeting.​

As per the proposals placed by Energy and Mineral Resources Division, state-owned Petrobangla will import two cargoes of LNG from Golbar Singapore Limited.

Each LNG cargo, having 33.60 lakh MMBtu, will cost Tk 425.81 crore, with each unit at $9.847.

The third LNG shipment will be imported from Vitol Asia (pvt) Limited, Singapore, at a cost of Tk 422.48 crore with each unit at $9.770.
All the three LNG cargoes will be imported from the international spot market through limited bidding process under the Rapid Increase in Supply of Power and Energy (Special) Act 2010.

Sources in the energy and mineral resources ministry that Bangladesh has planned to import a total of 13 LNG cargoes from January to June this year.

Earlier, the government signed Master Sale and Purchase Agreement with 22 shortlisted companies to import LNG from the international spot market.

Imports of LNG from the spot market were suspended from July 2022 to January 2023 as the price of LNG in the spot market increased many times while the government was facing a dollar crisis.

Currently, the country has been experiencing a severe gas crisis as production came down to nearly 2,500 million cubic feet per day (mmcfd) while the demand is about 4,000 mmcfd.

As a result, household consumers in many areas are not getting gas for their cooking while power and industrial production are being seriously disrupted due to gas shortage.​
 

Petrobangla eyes 100 more gas wells​


1708050407621.png


Petrobangla presented an ambitious plan yesterday to drill 100 new gas wells in the country aimed at boosting local production.

It unveiled the plan yesterday at a seminar with energy experts and other stakeholders concerned, though it failed to implement its previous plan.​

The state-owned company said it will implement the new plan simultaneously with the existing ones. It also said it is ready to appoint foreign contractors alongside three local companies to fulfill its goals.

According to the plan by Petrobangla's Think Tank Team (TTT), 69 of the 100 wells will be exploratory and workover will be carried out in 31 existing wells.

Md Anwarul Islam, managing director of Bakhrabad Gas Distribution Company Limited, and Meherul Hasan, general manager (Reservoir and Data Management) of Petrobangla, presented the plan.

In 2022, Petrobangla initiated the drillings of 48 gas wells, with a target to add around 618 million cubic feet of gas per day (mmcfd) by 2025.

The company was supposed to drill 15 wells by December 2023, and 217 mmcfd of gas was supposed to be added to the national grid.

However, Petrobangla yesterday said it has completed the drillings of 11 wells, confirming 126 mmfcd of gas supply. Besides, the workover of three wells is going on.

Only 41 mmcfd of it went to the national grid as the rest of it was found in Bhola, which has no connecting pipeline to the mainland.

The new plan also involves Bhola, raising question of the plan's efficacy in adding more supply to the grid. No projects have been taken up so far to set up a pipeline to connect the district with the national grid.

In the new plan, Bhola Island will have 14 wells, while 17 will be drilled in the Noakhali, Chandpur, Feni, and Chattogram area, and six in the Chattogram Hill Tracts, among others.

Energy division secretary Md Nurul Alam said the government wants to implement both the plans simultaneously.

"We will go for parallel drilling. The Bapex [state owned drilling company] has limitations, but we can hire foreign contractors," he added.

Beside the onshore drilling programmes, the government is going for an offshore bidding process next month, he said.

Bangladesh has finalised the Product Sharing Contract (PSC) in September last year for offshore exploration.

Farid Uddin, former general manager of Petrobangla, said the company should set a priority regarding drilling projects.

"We should go for Chattogram Hill Tracts first as the area has high potential [in gas production]….India has drilled hundreds of wells in Tripura and found gas."

In 2011, a government report read that there were possibilities of increasing 400-800 mmcfd gas by overhauling existing gas wells, but no initiatives were taken in this regard, said Maqbul-E-Elahi Chowdhury, former member of Bangladesh Energy Regulatory Commission.

Honorary Prof at Dhaka University's geology department Badrul Imam emphasised on a "third party evaluation" of every project's prospect and on technical auditing for successful drilling.

Nasrul Hamid, state minister for power, energy and mineral resources, said the country needs gas and the Petrobangla will be given targets to drill wells.

"The result will talk. If you [officials] fail, you will be removed. Nobody will be speared and no persuasion will be accepted against any failure."

Petrobangla Chairman Zanendra Nath Sarker presided over the programme.​
 

Gas supply to improve in Dhaka, adjacent areas in a day or two​


1708050658485.png

State Minister for Power, Energy, and Mineral Resources Nasrul Hamid today said gas supply situation will improve in Dhaka and adjacent areas in a day or two.

"We hope gas shortage in Dhaka will decrease and we'll see improvement in a day or two," he said while briefing reporters at his ministry.​

He noted that both floating storage and regasification units (FSRUs) in the country have resumed operation and the situation is gradually improving.

"However, one of them will undergo scheduled maintenance soon," he said, adding that normally there are some problems in the gas supply during winter.

"But the government has taken measures to increase the supply of LPG as some 80 percent of the residential consumers now use this liquefied gas," he said.

He said only consumers in Dhaka and adjoining areas use pipeline gas while the rest use LPG. If the industrial consumers are deducted from the total consumers, the number of household consumers will be 25 lakh, he said.

He also informed that the government has a plan to install gas meters for all consumers in the next 3 years.

The country has been experiencing acute gas shortage since the start of the winter season. However, the situation drastically deteriorated when one of the FSRUs experienced a "technical glitch" on Friday.

The FSRU was repaired and put back in operation, which led to a slight improvement in gas supply to Chattogram and elsewhere.

Meanwhile, another SFRU, which was on a 45-day scheduled maintenance, also resumed operation leading to a further improvement in the supply.

However, the gas crisis was not fully resolved.

Many areas in Dhaka, Narayanganj and Gazipur have been experiencing extreme gas crises or low-pressure problems.​
 

Why is renewable energy still neglected?​

Government mustn’t keep depending on fossil fuel power plants

1708213237014.png

Visual: Star

Despite the government's pledge to transition to renewable energy, its actions speak otherwise, as after failing to hit multiple energy targets, we are still heavily dependent on fossil fuels to generate electricity. Aside from intensifying the effects of climate change, this practice has also contributed to our economic crisis. The Centre for Policy Dialogue (CPD) on Wednesday urged for the phasing out of fossil fuel-based power plants. We wholeheartedly stand by this call.


According to the CPD, our overwhelming reliance on imported fuel is contributing to a persistent energy crisis, which is hampering power generation and affecting other sectors. Accordingly, it questioned why the government is so hellbent on importing liquefied natural gas (LNG) when it knows the potentials of our gas reserves, which, according to an expert, are among the least explored in the world. Reportedly, Bangladesh Petroleum Corporation and Petrobangla are struggling to pay an outstanding bill of $700 million to global suppliers. Suffice to say, if we continue in this manner, our debt burden will keep getting heavier.​

What's more perplexing is that the government, despite knowing the demand for power would not increase as per the projections, kept pushing for increasing the generation capacity, that too through the use of fossil fuel. And now, the country's power generation capacity from renewable sources stands at a measly four percent of the total. It's anyone's guess as to why the government is not focusing on renewable energy, as it is possible to produce around 3,000 MW of electricity from renewable sources with the current structure, according to an expert.


Bangladesh ranks the lowest among all the South Asian countries in terms of using renewable energy, which points to just how much the government has neglected this sector. This cannot continue. To resolve our current economic crisis and move towards a sustainable future, we have to prioritise renewable energy. As part of short-term measures, CPD has advised abolishing the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010, which has been incentivising our practices. Through such actions, coupled with good governance, we hope to one day abandon our dependence on fossil fuels.
 

Why the reluctance to pursue renewables?​

Government must overhaul existing energy strategy, prioritise clean energy

1708213380057.png

Visual: Star

Despite Bangladesh's professed commitments towards the environment and its role as a climate champion on the global stage, it is deplorable that the government has continued to focus heavily on fossil fuels, ignoring much needed investments in renewables. The renewable energy capacity target for 2030 was set at 6,000MW-16,000MW in the Mujib Climate Prosperity Plan 2022-2041, submitted at COP26, but the country has only added about 462MW of renewable energy to the national grid since 2017, when the first solar power plant was established. There are currently only 10 solar plants in operation, while two wind power plants have started trial runs. According to a report in this daily, another 15 plants are expected to go into production within the next year. But even then, their combined capacity will constitute only 4 percent of the total power mix in 2025. This is woefully inadequate.​

In 2016, the government had aimed to meet 10 percent of its energy needs through renewables by 2021, but since then it has not taken any visible steps to address the glaring gap in its clean energy target, beyond revising it multiple times in different policies and plans. Multiple studies have busted a myth often touted by government officials—that there is land scarcity in the country—and shown that there is more than adequate khas land to generate at least 2,15,011MW of solar energy.​

We are at a loss to understand why our policymakers were so reluctant to pursue the obvious path of sustainable, cheap and clean energy when the whole world, including two of its trusted regional partners—India and China—have taken dramatic leaps towards that end. While China is now the global leader in renewables, India has targeted to achieve half of its energy from renewables by 2030. The two giants have provided various incentives, such as cash grants and tax credits, but in Bangladesh, businesses have to pay 37-56 percent tax to set up renewable plants, according to experts.​

The country's prolonged energy crisis over the past two years—brought about by its overdependence on expensive imported fossil fuel—should have been a wake-up call to the government to explore more sustainable options; yet, we continue to see the same short-sighted policies being pursued by our policymakers, with little concern about the long-term implications of failing to invest in renewables, which are not only sustainable but also cost-effective. It is imperative that the government, in consultation with relevant stakeholders, overhaul its existing energy strategy if it is to meet its target of achieving 40 percent clean energy by 2040. We need to encourage investments in renewables, formulate relevant policies and develop local capacity to apply renewable technologies. We also need transparent and competitive bids while awarding contracts, so that we don't continue to pay Tk 16-17 per kilowatts of solar electricity when the global average is Tk 5.
 

Is renewable deployment suffering from fossil fuel lock-in?​

Technological lock-in refers to the situation of persistent failure to switch to a new technology as replacing the incumbent technology becomes highly expensive

1708213605082.png

VISUAL: REHNUMA PROSHOON

While the peak electricity supply reached 15,604MW in Bangladesh at the beginning of summer, many areas, mostly outside Dhaka, have been facing long hours of load-shedding and disruption of economic activities. The reason behind the current crisis is not the lower installed capacity, but the inability to buy imported energy to run the existing power plants and interrupted services due to technical inefficiency. It is tragic to see that while people are suffering from the crisis, over 40 percent of installed capacity remains idle. It is even more tragic that the new capacity addition of 660MW from the trial operation of Rampal and import of 748MW from Adani's Godda coal-based power plant could not be of any use to reduce people's suffering. On top of that, more committed power plants including Matarbari, Banshkhali, Rooppur nuclear power plant, and the second unit of Payra are waiting to be finished.

The question is no longer whether Bangladesh has the installed capacity to meet the electricity demand. Rather, the question is whether Bangladesh will be able to pay for the imported energy to fulfil its demand amid the US dollar crisis coupled with high international prices and dwindling foreign exchange reserves.

The excruciating summer temperature and the deteriorating power crisis in Bangladesh brought back the agenda of solar electricity. In this respect, recent policy developments need attention. The draft renewable energy policy set a target to increase the renewables' contribution to 40 percent by 2041. So far, the feasibility of the target has been discussed mainly from the technical and economic perspectives. Previous debates mostly focused on grid capacity, intermittent supply, battery use, demand management, etc. Another concern has been the high cost of solar power, until the cost declined globally over the last decade. Now, the new experiences of integrating renewables to the grid are widely known. Significant spillover of knowledge around the world made solar technology accessible to countries like Bangladesh. However, while the fossil fuel lock-in as a barrier to clean energy technology adoption is widely discussed in the West, it is yet to receive much attention in Bangladesh.

Technological lock-in refers to the situation of persistent failure to switch to a new technology as replacing the incumbent technology becomes highly expensive. Although the term has been used by economists, historians and sociologists since the 1980s, scholars have started to use "lock-in" in relation to fossil fuel use and the difficulty to switch to renewable energy. Others use the term carbon lock-in to describe a force that prolongs fossil fuel use despite knowing the risks of fossil fuels and having cost-effective alternatives. As a consequence, low-carbon technology diffuses at such a slow rate that the cost to society and the environment becomes too high.

Currently, many countries that are willing to phase out coal are finding it difficult to replace it, because it has already established a deep-rooted connection to society, institutions, and the economy. When a technology is adopted, it is not only about the energy it uses, it is also about the employment it creates, and the dependency it creates with the infrastructure, industry, and society. It is now very difficult for coal-dependent countries like Germany, India, Indonesia, and China to replace coal because it is expensive to replace the technology. The coal phaseout in those countries are slow, not only because the strong coal lobby resists phaseout, but also because it is expensive to compensate the workers, employ them elsewhere, and reorganise the infrastructure, economy, and institutions for clean energy use.

Considering the electricity overcapacity in Bangladesh created over the last decade, I want to say that Bangladesh, with its decisions to build coal power plants and an expensive nuclear power plant, has already started to feel the symptoms of technology lock-in. Even if Bangladesh wants to replace the existing technology with renewable technologies in the future, the possibility is getting weaker every day.

The investment of billions of dollars in LNG infrastructure, coal, and nuclear power plants over the last decade has already made the incumbent projects irreplaceable. It has already become difficult to implement a clean energy plan because of the existing overcapacity. Financing new renewable energy projects will most likely create some level or redundancy in the committed and existing installed capacity. Bangladesh's installed capacity of renewables is 966MW, which is 3.6 percent of the total installed capacity (26,700MW). The actual contribution to solar electricity supply is less than one percent (Ember 2023). By 2026, Bangladesh needs to install more than 1,500MW from renewable sources to reach the 10 percent target. The question is: don't we have to pay capacity charges to the idle plants? Obviously, we will have to pay unless the old ones are phased out.

Currently, the existing on-grid installed capacity of solar power is 367.81MW. There are 550MW solar park projects committed; all are at the implementation stage. The 200MW solar power plant in Gaibandha is operating on trial. Although there are more at the planning stage, there is little understanding of whether they will be implemented or not.
Considering the electricity overcapacity in Bangladesh created over the last decade, I want to say that Bangladesh, with its decisions to build coal power plants and an expensive nuclear power plant, has already started to feel the symptoms of technology lock-in. Even if Bangladesh wants to replace the existing technology with renewable technologies in the future, the possibility is getting weaker every day.​
The rising overcapacity is a concern not only because it is expensive now, but also because it will potentially reduce our ability to switch to cheaper alternatives. According to the new draft renewable energy policy, the targets to increase the renewable electricity supply are 2,500MW by 2026 (first phase), 8,000MW in 2026-2030 (second phase), and 24,000MW in 2030-2041 (third phase). The targets assume total installed capacity will be more than double (60,000MW) the current installed capacity (26,700MW) by 2041. It is also assumed that Bangladesh's GDP will grow above seven percent average. The Russia-Ukraine war, dollar crisis, rising inflation, forex reserve crisis, and poor economic performance do not seem to increase the demand as high as the predicted growth level. So, the new addition by committed power plants will more likely increase the burden as more plants need to remain idle.
The current gap between predicted and actual demand has questioned the reliability of the demand estimation. Even the past electricity demand estimation of the 2016 Master Plan was based on the assumption of 10 percent demand growth. The draft Integrated Energy and Power Master Plan (IEPMP) 2022 estimated that if the existing and committed power plants (gas, oil, coal, nuclear, and import) start production, by 2030 the total installed capacity will be 35,261MW. Based on various scenarios, the maximum demand in the same year will range from 31,709MW (low) to 41,890MW (high). After allowing for 10-15 percent reserve margin, the existing and already committed power plants will most likely satisfy the low scenario predicted demand, at the cost of limiting solar growth.

The existing coal-based capacity is 1,661MW, and committed capacity is 8,256MW. If more coal-based power plants are planned without considering the potential lock-in in the future, the electricity sector will again face a crisis. The persistent gap between actual generation and installed capacity has flagged the problem. It should ring the alarm now, rather than later when it will be even more difficult to replace the incumbent technologies. The government should learn from the crisis, revise the demand growth estimation based on more realistic assumptions, stop fossil fuel-based power plants, invest more on renewable deployment, and save the country from potential carbon lock-in. Expressing intention to transition to clean energy is not sufficient to save us from carbon lock-in.

Moshahida Sultana Ritu is associate professor of economics at the Department of Accounting and Information Systems, University of Dhaka.
 

Nuclear fusion: A big step towards clean, limitless energy​


1708213914764.png


The 35-nation International Thermonuclear Experimental Reactor (ITER) under construction in Cadarache, France is the world’s largest tokamak fusion reactor. Pictured here is the facade of the Tokamak Complex in October 2022. PHOTO: ITER

The declining reserves of fossil fuels and their detrimental effects on the environment have thrust nuclear power into the limelight. However, the 1986 Chernobyl and 2011 Fukushima accidents involving fission-based nuclear reactors that are in use now have heightened our doubts about nuclear technology's ability to provide a safe way of generating clean power.

Within the context of climate change, nuclear fusion is an attractive alternative because it does not produce greenhouse gases (GHG). Besides, unlike fission, fusion has a low burden of long-lasting dangerous radioactive waste. Fusion's by-product is helium, which is a non-toxic, non-radioactive gas used to inflate children's balloons.

So what is nuclear fusion? It is a process in which two lighter nuclei, typically isotopes of hydrogen such as deuterium and tritium, combine together under extreme conditions to form a heavier nucleus, releasing inexhaustible amounts of energy. A "fusion reactor" buried deep in the Sun's interior produces, in one heartbeat, the energy equivalent of 100 billion nuclear bombs.

Major challenges:

The quest to make fusion a viable power generation option has turned out to be extraordinarily difficult.

Yet, since the 1950s, scientists have been working tirelessly to develop a fusion reactor with the following goals in mind: 1) achieve the required temperature of more than 100 million degrees Celsius to ignite a self-sustaining fusion reaction, 2) contain and control the staggering levels of heat generated in the plasma, which is an ultra-hot soup of gases in which the electrons are completely detached from the atomic nucleus, 3) keep the plasma together at this temperature long enough to get useful amounts of energy out of the reaction, and 4) obtain more energy from the reaction than is used to heat the plasma to the ignition temperature.

The breakthroughs:

In August 2021, researchers at the National Ignition Facility (NIF) at the Lawrence Livermore National Lab in California were able to ignite a fusion reaction that lasted for a fraction of a second by pumping laser beams into a tiny chamber containing deuterium and tritium. A year later, researchers in South Korea were able to keep the reaction going for 30 seconds at temperatures beyond 100 million degrees Celsius.

The energy yield of both the experiments was modest and less than the energy needed to ignite the reaction.

Physicists have also devised two competing techniques to control the hot plasma and keep it away from the walls of the container. They are magnetic confinement and inertial confinement. The one that is preferred by fusion researchers is a magnetic confinement device called "tokamak." This workhorse of fusion is a doughnut-shaped chamber in which magnetic fields keep the plasma in perpetually looping paths without touching the walls.

The energy gain breakthrough:

On December 13, 2022, the US Department of Energy announced that scientists at the NIF had managed for the first time ever to achieve a "net energy gain" – producing more energy in a fusion reactor than was required to drive the process. In particular, it produced three million joules of energy, with about two million joules going into the reaction. (To put the unit of energy into perspective, the kinetic energy of a one tonne car moving at 100 mph is one million joules.) In the past, the energy input far exceeded the energy output from a fusion reaction.

So what does this mean for the possibility of creating effectively unlimited amounts of clean energy? Fusion researchers denote the ratio of output energy to input energy with the letter Q. Although in this experiment Q=1.5, fusion reactors will have to reach a threshold of Q=10 before energy generation can be considered practical for commercial use.

While the amount of energy released in the experiment at the NIF is barely enough to boil water for a few cups of coffee, in some ways, it is a scientific milestone in the sense that scientists and engineers, after "more than 60 years of research, development, engineering and experimentation," achieved a Q-value of greater than one.

Moreover, once vetted by outside experts, this landmark achievement will be a big step forward towards clean, limitless energy – at least four million times more energy than is produced by burning coal or oil, according to the UN's International Atomic Energy Agency. More importantly, it promises to stimulate interest in fusion-related research, and possibly leverage funds for building fusion reactors.

Future outlook:

Considered to be the holy grail of energy, nuclear fusion has the magic wand that will most certainly solve our lingering energy problem.

Having said that, significant challenges still remain. Researchers are now actively working on improving laser technology and reactor design at several laboratories in the US and around the world. But the high cost of research and very expensive hardware limit most of the work to multinational consortia.

The 35-nation International Thermonuclear Experimental Reactor (ITER) under construction in Cadarache, France is the world's largest tokamak fusion reactor. Since its inception in 2006, ITER has progressed in fits and starts. It is beset with technical delays, a labyrinthine decision-making process, and cost estimates that have soared from EUR 5 billion to around EUR 20 billion.
Regardless, ITER will move the world a step closer to creating energy that is inherently safe and clean, using controlled thermonuclear fusion.

Ultimately, though, the achievement of fusion energy production with Q greater than one does not necessarily mean a green energy revolution is imminent. It will probably be years, likely a decade or so, before fusion power bears fruit. And it is also not clear if fusion will ever be cheap enough to radically transform our power grid.

Dr Quamrul Haider is a professor of physics at Fordham University in New York, US. He is also one of the authors of the book Nuclear Fusion ‒ One Noble Goal and a Variety of Scientific and Technological Challenges.
 

Power production from coal up, several oil plants shut​

M AZIZUR RAHMAN
Published :​
Feb 18, 2024 00:10
Updated :​
Feb 18, 2024 00:10

1708215374828.png


Energy transition leads Bangladesh to plan substantial cut in import of petroleum products in 2024 as gasoil demand falls amid increasing switch to power production from coal-fired plants, sources said.

State-run Bangladesh Petroleum Corporation's (BPC) has projected import of around 6.51 million tonnes of refined petroleum products during January-to-December period this year, down 15.34 per cent from the 2023 imports, they said.

Bangladesh is currently going through an energy transition by way of reducing dependence on petroleum products of both diesel and furnace oil to generate electricity, which is trimming down its fuel consumption.

The country has already shut down six privately owned gasoil-fired power plants having the total generation capacity of around 1,000 megawatts. The laid-down plants are Jessore 100MW and Daudkandi 200MW owned by Bangla Track, Awarahati 100MW and Brahmangaon 100MW owned by Aggreko, APR Energy's Pangaon 300MW, and Paramount's Baghabari 200MW plant. The shutdown came in 2023, according to official data available with state-owned Bangladesh Power Development Board (BPDB).

The power authority also grounded several furnace-oil fired-power plants and softened deals with several others under 'no electricity, no pay' mechanism, in a change from the previous binding take-or-pay provision, to reduce the fuel consumption, said a senior BPDB official.

"The country, on the contrary, is relying more on coal and imported LNG for future power generation," he added.

Four coal plants with an aggregate capacity of around 3,365 megawatts are already in operation. The 1,234MW Maitree Super Thermal Power Project, SS Power's 1,224MW plant, Barisal Electric Power Co's 307MW plant and the 1st unit of Matarbari 1200MW plant initiated electricity generation in 2023. And the second unit of the Matarbari coal plant is expected to come online this coming March, the official lists the advances in the switch.

"These coal-fired power plants in Bangladesh alone will require around 45,000 tonnes of imported coal per day," says the official.

Experts say the import dependence for coal could be cut through mining domestic deposit of the fossil fuel discovered in huge volumes in the northern Dinajpur district. Currently coal is extracted at Barapukuria by a Chinese company.

On the other hand, the state-run oil corporation has projected to import around 4.29 million tonnes of diesel, 630,000 tonne of Jet A-1 fuel, 350,000mt octane, 1.15 million tonnes of furnace oil and 90,000 tonnes of marine fuel during January-December 2024.

The BPC will source around half of its total refined oils through international tenders, and the rest through government negotiations with state-run oil suppliers across the world, said the BPC official.

Separately, the country's private sector is likely to import around 3.0 million tonnes of furnace oil to generate electricity in their plants, said the BPDB official.

The state-run oil corporation will import around 1.5 million tonnes of crude oil in 2024, about 7.14 per cent higher than the crude-import volume during 2023, according to BPC.

Newly opened single-point mooring facility to import and store a significant volume of crude oil that prompted the BPC to import higher volume of crude to refine in the country's lone refinery -Eastern Refinery in Chattogram, said the BPC official.

The company imports crude from Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) to refine at its sole refinery.
 

More gas likely to be found in Kailashtila field: Nasrul​

United News of Bangladesh . Sylhet | Published: 20:09, Feb 17,2024​
facebook sharing button

225730_148.jpeg

State minister for power, energy and minerals resources Nasrul Hamid. -- File photo.

State minister for power, energy and minerals resources Nasrul Hamid hoped that 1.6 TCF (trillion cubic feet) more gas would be found at the Kailashtila gas field in Golapganj upazila of Sylhet.

It will be confirmed once the drilling is completed within the next four months, he said.

The state minister made the remarks after visiting the Kailashtila well number-8 on Saturday.

Nasrul said that the Kailashtila field previously had 3 TCF reserves and more gas reserve would be found once the current search wells are drilled.

‘We are waiting for you to take initiative. The ministry does not undertake any project. We want everyone to show their capability. Sylhet gas field has moved forward, taking on more projects. We want others to come forward as well,’ he said.

Mizanur Rahman, managing director of Sylhet Gas Fields Limited, said that seven wells were drilled in Kailashtila earlier, and gas was found in every well.

It is expected to find more than 1 TCF of gas after digging at 3,500 meters of the well, he said.

The drilling of the Kailashtila-8 well started on January 11 this year. The work is expected to be completed in 120 days. State-owned Bangladesh Petroleum Exploration and Production Company is digging the well.

Besides, there is an existing transmission only one and a half kilometres away and a usable process plant at a distance of two and a half kilometres. Although gas is surplus in many areas, including Bhola, and Zakiganj, it cannot be used as there is no transmission.​
 

Industries in Dhaka, Gazipur, N'ganj still reeling from acute gas crisis​

UNB
Published :​
Feb 18, 2024 20:46
Updated :​
Feb 18, 2024 21:21

1708301743792.png



Industries in Dhaka, Gazipur, and Narayanganj continue to be afflicted by an acute gas crisis, even though Titas Gas Transmission and Distribution Company, the state-owned distributor of natural gas, claims the situation has improved.

As reported in the media previously, garments and textiles firms in the industrial belt of these central districts have been suffering from an acute gas crisis for the last few months.

“The factories are in dire straits,” a top-level manager of a group of textile factories in Gazipur told UNB

Most of the industries in Gazipur do not get adequate supply of gas during their operational periods, the most crucial hours during which their machines need to be running. Inadequate supply manifests in the form of low pressure gas flow, he added.
Low pressure gas flow is akin to low voltage electricity - many appliances won't run, even though an electric charge is present.

The textiles group official said that due to the lack of gas supply, production in various factories is being disrupted and they are on the verge of shutting down.

In the ongoing gas crisis, important machines like generators and broilers in the dyeing section of the factories are not being run. This has been posing a great risk for the industries to continue their production and pushing them towards huge financial losses.

“Many industries would not be able to pay the salaries and festival bonuses during the coming Eid if the situation does not improve,” said an industry owner.

Industry insiders said there are more than 300 factories in Kaliakoir and other areas in Gazipur.

All these industries have been suffering from the nagging gas crisis and some of them have already suspended their productions.

Each of the industries has more than 1000 workers. But following the gas crisis, they have to reduce their production target while some of them use CNG at a higher cost to continue their operations.

A similar situation is prevailing in the Mirpur, Tongi and Narayanganj areas, said Mohammad Hatem, Executive President, of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

He said that despite increasing the price, the government is not able to provide adequate gas.

“Production in garment factories has come down to half due to non-availability of gas. Many buyers meanwhile are pushing for air shipments as the normal schedule for shipments has failed in keeping the commitment,” he said adding, some buyers are asking for discounts on the rates.

“Some customers are upset and cancel the order in such a situation,” he noted.

Recently the Bangladesh Chamber of Industries (BCI) has also alleged that no industry in the country is able to run at its full potential due to the gas crisis.

A Bangladesh Chamber Of Industries delegation, led by its president Anwar-ul Alam Chowdhury (Parvez), raised the allegation when it met Industries Minister Nurul Majid Mahmud Humayun at his ministry office.

The lone chamber for industries said the prices of electricity and gas were increased on the pretext of increasing prices on the international market in the hope that the government would ensure their continuous supply.

“But despite the declining trend of energy prices in the international market, it is being heard that the prices of electricity and gas will be increased again,” BCI said in a statement.

It demands for a sustainable solution to the problem. “If a long term plan is given to the industrial sector in terms of power and gas supply, it can move forward accordingly."

Titas Gas general manager Arpana Islam admitted the gas crisis. But she claimed that the situation has improved to some extent recently following measures to increase the gas supply.

She advised to talk to Petrobangla when asked whether there is any possibility in near future to further improve the gas supply situation.

Petrobangla official statistics reveal that in the last one month the total gas supply across the country has increased by just 100 million cubic feet per day (MMCFD) or so, leaving a deficit between production and supply of about 1500 mmcfd.

The Petrobangla data shows that on February 16 it produced 2671 mmcfd gas including its import from abroad against a demand for more than 4000 mmcfd.

The TItas Gas data also shows that about 30 power plants now remained out of operation due to gas shortage.​
 

Dark nights, hot days feared in long summer​

Emran Hossain | Published: 00:00, Feb 20,2024​
facebook sharing button

225946_188.jpg


This summer, due in less than two weeks, is feared to be long and hot, with almost nonstop load-shedding returning in February, the final month of winter.

Authorities forecast that they will need to increase power supply by 75 per cent by April, the hottest month, compared with what is now supplied—about 10,000MW.

Ensuring such a steep increase in power generation is very challenging for the government, particularly due to its shrinking fuel import capacity amid the worsening dollar crisis.

In the past summer, Bangladesh saw load-shedding exceed 3,000MW mainly because of the fuel crisis, as the maximum temperature crossed 40C on many days between April and June.

This summer is set to be different from any other summer people have ever experienced, as they are set to witness power prices go up frequently amid dark nights and hot days.

‘We cannot say there will be no load-shedding this summer,’ said Mohammad Hossain, director general, Power Cell, reminding the country of its dollar crisis.

He said that Power Cell had a plan outlining how much power would be generated using what fuel when power demand would peak at 17,500MW in April.

The Power Cell plan considers the installed generation capacity to be 26,311MW, far above projected peak demands of 15,100MW during the day and 17,500MW at night.

During the evening peak, the plan proposes to generate 38.62 per cent from gas, using 60 per cent of the gas-based power generation capacity of 11,133MW.

Over 80 per cent of coal-based power generation capacity of 5,036MW will be used, the Power Cell plan said, generating 4,100MW of the evening peak.

Coal will meet 23.42 per cent of the evening peak power demand.

Over 65 per cent of the furnace oil-based power generation capacity of 6,191MW will be used during the evening peak hour at 9:00pm, meeting over 23 per cent of the demand, the Power Cell plan said.

Over 90 per cent of about 2,600MW of import capacity would be used during the evening peak hour.

‘The plan is very hard to implement, given the past year’s records,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development.

For instance, he said, Bangladesh’s gas-based electricity production has dropped since 2021, the year gas accounted for 59.3 per cent of overall electricity generation.

In 2022, gas generated 53.8 per cent of power, followed by 50.8 per cent of electricity produced last year.

‘Bangladesh will not be able to supply enough gas anyway, neither from local sources nor through imports,’ he said.

Last year, Bangladesh’s half of the gas power capacity remained unused, adding to the capacity charge burden.

The Power Cell estimated that it needed 1,300mmcfd of gas to implement its plan, which is about 400mmcfd more than what could be supplied last year.

Bangladesh requires 2360mmcfd to fully use its gas power capacity, according to Petrobangla.

The contribution of furnace oil to electricity production, on the other hand, dropped to 21 per cent last year from 27.4 per cent the year before because of a fuel shortage.

Furnace-oil-based power plants are privately operated, and the government’s debt to private power plants stood at nearly Tk 21,500 crore last year due to the dollar crisis.

Power sector insiders said that the release of bonds might help the situation to some extent by allowing private power producers to keep their power plants in operation, but its effectiveness was yet to be seen.

The government also loaned over $2 billion for oil and gas imports in a bid to minimise the power crisis during the summer, when days are getting hotter every year because of the impacts of climate change.

‘More measures, such as shutting down shopping malls early on working days, could be taken to minimise power shortages,’ said Shafiqul Alam, lead energy analyst, the Institute of Energy Economic and Finance Analysis.

Power outages are likely to be severe in the evening when power demand increases in households in cities and villages for irrigating rice fields.

‘Everything depends on the government’s handling of the fuel crisis,’ he said.

The government’s summer power generation plan excludes diesel.

Coal power generation is expected to double compare with last year this summer.

The coal price is expected to remain stable in 2024, but the persisting dollar crisis might stand in the way of fully using coal power capacity, energy experts said.

In 2023, Bangladesh’s maximum generation during peak hours was 15,648MW, which was reached only once on April 19.

On the day of maximum generation, according to data released by the Power Grid Company of Bangladesh, 40 per cent of power came from using gas, followed by 35 per cent from furnace oil, 15 per cent from coal, and the rest from imports or renewable sources.

In the energy mix considered for this summer generation planning by the Power Cell, gas accounts for 42.31 per cent of the installed capacity, furnace oil for 23.53 per cent, coal 19 per cent, import 10 per cent, diesel 2.3 per cent and solar less than three per cent.

The PGCB data showed that authorities were struggling to generate even 10,000MW in February, with load-shedding almost round the clock. Over the past two days, only four hours were load-shedding-free, the PGCB data showed.

Load-shedding in fact returned in late January, the coldest month when power demand remained below 10,000MW. The load-shedding frequency increased this month, with it already reaching 500MW.

Ordinary people might not appear much bothered by frequent winter power cuts, but they cause losses to agriculture and businesses.

The irrigation-intensive boro, Bangladesh’s main rice crop, saw its cultivation face a setback because of cold temperatures in January.

Last year, jute fibre extraction faced problems because of a natural water shortage, forcing many farmers to create artificial ponds with water lifted from the ground using electricity.

The power price has increased by 300 per cent since 2009, along with a 500 per cent increase in its generation capacity.

The increased expenditure means channelling public money into private pockets as huge power overcapacity generates massive sums of capacity charges every year.

This would be the third year of an acute power outage since the government officially introduced rotating power cuts on July 19, 2022.

The government had initially promised not to roll out power cuts unannounced but failed to keep them because the shortage was far greater than expected, plunging parts of Bangladesh into darkness for up to 10 hours a day in the past year.

 

ExxonMobil officials in Bangladesh as govt prepares March bidding round​

Delegation from US supergiant IOC meets Nasrul Hamid​

United News of Bangladesh . Dhaka | Published: 17:56, Feb 21,2024
facebook sharing button

twitter sharing button
226051_151.png

whatsapp sharing button

Bangladesh government is planning to float an international tender in March for hydrocarbon exploration in the country’s maritime areas, where it would like US oil giant Exxon Mobil to participate and show its hand in the bidding round.

The US oil major was conveyed the government’s advice when a delegation of the company, led by its Opportunity Manager Jonathan Wilson, met State Minister for Power, Energy and Mineral Resources Nasrul Hamid at his office in the ministry on Tuesday (yesterday).

Nearly a year ago, in March 2023, an ExxonMobil spokesperson had confirmed to Upstream, a trade publication in the oil and gas industries, that: ‘ExxonMobil has held initial discussions with Petrobangla regarding Bangladesh’s plans for an exploration round.’

The US giant is understood to be particularly interested in the gas potential of Bangladesh’s deep-water open blocks and also perhaps its onshore acreage.

Wilson had written a letter to the state minister expressing his company’s interest.

Petrobangla chairman Zanendra Nath Sarker at the time said, ‘ExxonMobil has placed a primary proposal to negotiate on offshore blocks in deep sea as well as for some onshore blocks. The proposal is now under consideration.’

Before the general election in January this year, ExxonMobil was trying to persuade the government policymakers to accept its offer on an unsolicited basis to allow it for exploration work.

But that proposal was not accepted by the government. Now with greater clarity in the post-election scenario, the US company is once again showing its interest in exploring Bangladesh’s offshore blocks, according to well-placed sources at Petrobangla.

Certainly the presence of Jonathan Wilson himself in Dhaka now attests to that as well.

ExxonMobil is one of the handful of companies in the world that has the technical expertise and deep pockets that Bangladesh needs to boost its exploration and production sector following several disappointing licensing rounds and the exit of some other international players in recent years.

‘As part of the move, the company officials met the State Minister,’ a source at the Energy and Mineral Resources Division, requesting anonymity due to the inherently sensitive nature of dealing with international oil companies, told UNB.

Meanwhile, the government has taken a decision to float international tender in the first week of March, for its offshore blocks.

Earlier, on July 26 last year, the Cabinet Committee on Economic Affairs approved the draft ‘Bangladesh Offshore Model Production Sharing Contract (PSC) 2023’ in order to invite international bidding for hydrocarbon exploration in offshore areas of the country.

The final approval for the draft Model PSC 2023 was given under a plan to invite the bidding round. It was speculated a September bid might be in the offing, but that eventually fell through as the election was too close and at that stage there was still too much uncertainty to be cleared up.

Now the Prime Minister’s Office has recently given a go-ahead to the Energy Division’s plan for inviting the bidding round in March. Notably the PMO’s was the last approval that was missing for a September round, so the fact that it is now comfortable to give the green light signals positive engagement from the very top.

Farhana Sharon, general manager of the Petrobangla, informed that the organisation is taking necessary steps to invite the bidding round as per approval of the PMO.

According to official sources, the new Model PSC was prepared as part of a plan to invite international bidding for offshore deep and shallow water gas blocks, to make Bangladesh more attractive to international oil companies.

Under the initiative, the gas price was tagged with the price of Brent Crude in the international market to ensure flexibility.
‘Under the plan, we’re going to offer the price of gas at 10 percent of Brent Crude,’ the Petrobangla official said.

The official said if Brent Crude is traded at USD $75 per barrel, the gas price would be USD 7.5 per thousand cubic feet (MCF). The gas price will always remain linked to the international oil price, he said, referring to the new provision of the Model PSC 2023.

British oil & gas consultancy Wood Mackenzie has been advising the Bangladesh government and Petrobangla on the latest PSC revisions.

Official sources said the country has a total of 48 blocks, of which 26 are located offshore. Of the 26 offshore blocks, 11 are located in shallow sea (SS) water while 15 are located in deep sea (DS) water areas.

Of the offshore blocks, 24 remain open for IOCs while two blocks — SS-04 and SS-09 – are under contract with a joint venture of ONGC Videsh Ltd and Oil India Ltd where drilling work has recently started.

Bangladesh’s offshore area remains unexplored despite the settlement of its dispute with neighbouring Myanmar and India over maritime boundary almost nine years ago.

Currently, about 2300 mmcfd gas is being produced from 22 gas fields in the country, while about 600 mmcfd gas is being imported from abroad to meet the demand of about 4000 mmcfd, leaving a deficit of about 1200 mmcfd daily.​
 

Importance of clean energy​

MATIUR RAHMAN
Published :​
Feb 21, 2024 23:39
Updated :​
Feb 21, 2024 23:39

1708564858216.png


Clean energy refers to energy sources and technologies that produce minimal or no harmful emissions and have a lower environmental impact compared to traditional fossil fuels. These energy sources are renewable, abundant, and sustainable, offering significant benefits for mitigating climate change, reducing air pollution, and promoting environmental sustainability.


Renewable energy sources are derived from natural processes that are continuously replenished, such as sunlight, wind, water (hydropower), biomass, and geothermal heat. These sources are considered clean because they produce little to no greenhouse gas emissions or air pollutants during electricity generation.

Solar energy is harnessed from sunlight using photovoltaic (PV) panels or concentrated solar power (CSP) systems. Solar power is abundant, widely available, and emits no greenhouse gases or air pollutants during electricity generation.

Wind energy is generated by harnessing the kinetic energy of wind using wind turbines. Wind power is a clean and abundant energy source that produces no greenhouse gas emissions or air pollutants during electricity generation.

Hydropower, or hydroelectric power, is generated by harnessing the energy of flowing water, such as rivers and streams, using turbines. Hydropower is a clean and renewable energy source that produces no greenhouse gas emissions during electricity generation, although it can have environmental impacts on local ecosystems and communities.

Biomass energy is derived from organic materials, such as wood, agricultural residues, and organic waste, through processes such as combustion, fermentation, or gasification. While biomass is renewable, its environmental impact depends on factors such as the source of biomass and the efficiency of conversion technologies.

Geothermal energy is obtained from the heat stored beneath the Earth's surface, typically through the use of geothermal power plants or geothermal heat pumps. Geothermal power is clean, and reliable, and emits minimal greenhouse gases or air pollutants during electricity generation.

Nuclear energy is generated from nuclear reactions, typically through nuclear fission. While nuclear power plants produce electricity without emitting greenhouse gases, concerns about nuclear waste disposal, accidents, and proliferation make the classification of nuclear energy as "clean" controversial.

Clean energy technologies also include energy efficiency measures and energy storage systems, which help optimize energy use, reduce waste, and enhance the integration of renewable energy sources into the electricity grid. Overall, clean energy plays a crucial role in transitioning to a low-carbon economy, combating climate change, and promoting sustainable development.

Clean energy holds significant importance for Bangladesh due to the country's unique socio-economic and environmental context. Bangladesh is one of the most vulnerable countries to the adverse impacts of climate change, including sea-level rise, increased frequency of natural disasters, and changing weather patterns. Transitioning to clean energy sources, such as solar, wind, and hydroelectric power, can significantly reduce greenhouse gas emissions, contributing to global efforts to mitigate climate change and safeguard Bangladesh's environment and economy.

The use of traditional biomass, such as wood and cow dung, for cooking and heating purposes, contributes to indoor and outdoor air pollution in Bangladesh, leading to respiratory illnesses and premature deaths, particularly among women and children. Clean energy technologies, such as biogas stoves, solar cookers, and improved cookstoves, offer cleaner and healthier alternatives, improving air quality and public health outcomes.

Bangladesh heavily relies on imported fossil fuels, such as oil and natural gas, to meet its growing energy demand. This dependence makes the country vulnerable to price fluctuations and supply disruptions in the global market. Investing in domestic renewable energy sources, such as solar and wind power, enhances energy security by reducing reliance on imported fuels and diversifying the energy mix.

A significant portion of Bangladesh's population, particularly in rural areas, lacks access to reliable electricity. Clean energy solutions, such as decentralised solar microgrids and off-grid solar home systems, offer affordable and sustainable energy options for rural communities, supporting economic development, livelihood opportunities, and poverty alleviation efforts.

Investing in clean energy infrastructure and technologies can stimulate economic growth and create employment opportunities across the value chain, from manufacturing and installation to maintenance and operations. Renewable energy projects attract investments, drive innovation, and promote the development of a green economy, contributing to sustainable development and prosperity in Bangladesh.

Bangladesh is prone to cyclones, floods, and other natural disasters, which can disrupt energy infrastructure and access to electricity, exacerbating vulnerabilities and hindering recovery efforts. Distributed renewable energy systems, such as solar mini-grids and battery storage solutions, enhance the resilience of energy infrastructure, ensuring access to electricity during emergencies and supporting disaster preparedness and response efforts.

Rapid urbanisation in Bangladesh has led to increased energy demand, congestion, and environmental degradation in cities. Clean energy initiatives, such as promoting energy-efficient buildings, sustainable transport systems, and renewable energy-powered public infrastructure, support sustainable urbanisation and enhance the quality of life for urban residents while reducing environmental impacts.

Clean energy is essential for Bangladesh's sustainable development, offering opportunities to mitigate climate change, improve air quality, enhance energy security, alleviate poverty, stimulate economic growth, enhance disaster resilience, and promote sustainable urbanisation. By prioritising investments in renewable energy and adopting policies that facilitate the transition to a low-carbon economy, Bangladesh can build a more resilient, inclusive, and prosperous future for its citizens.

Dr Matiur Rahman is a researcher and development worker.​
 

Is an electricity tariff hike imminent?​

21 Feb 2024, 1:16 pm0
qasdewfr45t6y.jpg

File photo
UNB, Dhaka :

In a recent statement, State Minister for Power, Energy, and Mineral Resources, Nasrul Hamid, hinted at a forthcoming increase in electricity tariffs starting from March to counter the widening gap between production costs and sales revenues.
This move aims to alleviate financial pressures on the Bangladesh Power Development Board (BPDB) and the national economy.

“We’ve to adjust power tariff at both the retail and bulk level to cover the production cost. However, gas prices may be adjusted only for the power plants,” Hamid declared, assuring that the impact on retail consumers would be kept to a minimum.

Sources within the government reveal plans to implement a 5 percent hike in bulk electricity prices and a 3 percent increase at the retail level through an administrative order, bypassing traditional regulatory hearings.

This decision comes after months of deliberation among top policymakers, torn between raising tariffs or leveraging the banking system to issue more bonds.

The dilemma underscores the challenge of managing the substantial financial deficit incurred by the BPDB, with current electricity production costs nearly double the selling price.

According to the BPDB’s Annual Report 2022-23, the fiscal year saw the production of 87,024 million kilowatt hours of electricity at a total cost of TK 986.46 billion.

Its per unit production cost was Tk 11.33, while it was selling electricity at Tk 6.7 per unit — incurring a loss of about Tk 4.63 per unit.

This imbalance has led to a staggering loss of Tk 47,788 crore for the fiscal year, as the government grapples with purchasing power from private and international sources at significantly higher rates.

With this huge loss, the government has been facing great trouble as it has to purchase electricity worth Tk 82,778 crore from private sector power producers, while it generates electricity worth Tk 13,307 crore from its own generation plants.

The annual report also shows that the BPDB’s average per unit production cost from its own plants is Tk 7.63, while it is Tk 14.62 at the independent power producers or IPPs (private sector), at rental plants Tk 12.53, at public plants Tk 6.85, and imported power from India at Tk 8.77.

The government purchases electricity from the private sector and India in dollars.

The disparity in production costs between government and private sector plants further exacerbates the financial strain, with the government incurring a cumulative outstanding bill of approximately $5 billion in the energy sector alone.

Hamid also addressed the critical foreign exchange challenge, stating, “The crisis is not in local currency… But the main crisis is the dollar. We’re not getting dollars from Bangladesh Bank as per our needs,” highlighting the sector’s urgent requirement for $1 billion monthly to meet payment obligations.

In response, the government has initiated the issuance of bonds valued at Tk 5,000 crore, potentially rising to Tk 12,000 crore to mitigate some of the financial distress. However, officials acknowledge that this measure, coupled with ongoing subsidies, may not suffice, prompting further considerations for tariff adjustments or additional bond issuances.

As Bangladesh navigates this economic quagmire, the impending decision on electricity tariffs looms large, with potential implications for both the national economy and the everyday lives of its citizens.​
 

Bangladesh’s daily gas supply shortage 1,000 million cubic feet, Nasrul tells JS​

Staff Correspondent | Published: 15:38, Feb 25,2024 | Updated: 16:10, Feb 25,2024
facebook sharing button

twitter sharing button
226350_112.jpg

whatsapp sharing button

email sharing button

The state minister for power, energy and mineral resources, Nasrul Hamid, told the parliament on Sunday that the daily gas shortage in Bangladesh was about 1,000 million cubic feet against the country's demand.

Responding to ruling Awami League lawmaker M Abdul Latif, the state minister in the question and answer session of the Jatiya Sangsad also said that about 2,050 million cubic feet of gas was being extracted daily in the country.

At present, the daily demand for gas in the country is about 4,000 million cubic feet, he added.

He said that, against the demand, about 800-900 million cubic feet equivalent to imported LNG was being supplied to the national grid along with domestically produced gas.

As a result, there is a gas shortage of about 1,000 million cubic feet against the country's demand, he said.

Pointing out that different types of activities are being implemented to meet the existing shortage and future gas demand, the state minister said that 48 different types of well drilling activities have been undertaken by 2025, the successful implementation of which would enable an average of 618 million cubic feet of gas to be added to the national grid.

Of these, the drilling and workover activities of 10 wells have been completed, through which the production of 118 million cubic feet of gas per day has been ensured and the gas is being fed into the national grid at the rate of 33 million cubic feet per day, he said.

He said that the capacity of one of the two existing floating LNG terminals had recently increased by 100 million cubic feet daily, bringing the total LNG supply capacity to 1100 million cubic feet daily.

He said that long-term gas production projections up to 2040–41 fiscal have been made considering the issues of gas exploration, production of domestic gas fields, extraction of gas from unconventional resources to increase gas production in the future, gas exploration in the sea and LNG imports, and gas import through pipelines.

According to the projection, 4,608 million cubic feet of gas is expected to be supplied daily in the fiscal year 2030–31 and 5,249 million cubic feet of gas per day in the fiscal year 2040-41.

In response to another question from Abdul Latif, the state minister said that Bangladesh Petroleum Corporation imported 50 per cent of the total amount of refined fuel oil through G2G and 50 per cent through international open tenders.

Nasrul Hamid said that BPC was currently importing refined fuel oil on a G2G basis from state-owned companies in six countries.

The countries are— India, China, Indonesia, Thailand, UAE and Malaysia.

In response to the question of independent lawmaker Saiful Islam, the state minister told parliament that there were 141 thermal power plants with a capacity of 23,159 MW in the country.

2,656 MW thermal power is being imported from India, he said and added that 18 thermal power plants with a capacity of producing 11,303 MW were under construction and in various stages of the tender process. In response to the question of AL lawmaker Nurunnabi Chowdhury, he said that, to reduce the import dependency on crude oil, the government had adopted a plan to set up one new refinery with a capacity of 30 lakh metric tons, double the capacity of the current unit of Eastern Refinery Limited.

This project will be implemented by 2028–29FY, he added.​
 

Energy experts, economists oppose govt plan to raise electricity tariff​

26 Feb 2024, 7:26 pm

qawsdw4et6yhg-923x485.jpg

UNB, Dhaka :

Energy experts and economists are voicing strong opposition against the government’s proposal to further increase electricity tariffs in Bangladesh. They are urging a re-evaluation of the power sector’s financial management, specifically pointing out excessive and questionable spending as a more viable solution to the sector’s financial woes.

They observed that currently there is 42 percent surplus electricity that can be attributed to government’s deals to set up costly power plants.

“Rampant, unjust expenses – from state-owned company board remunerations to large-scale power purchase deals – underscore the need for financial rectification over tariff hikes,” eminent energy expert Prof SM Shamsul Alam said.

In a recent statement, State Minister for Power, Energy, and Mineral Resources, Nasrul Hamid, hinted at an increase in electricity tariffs, starting from March, to counter the widening gap between production costs and sales revenues.

The move aims to alleviate financial pressures on the Bangladesh Power Development Board (BPDB) and the national economy.

“We have to adjust power tariff at both the retail and bulk level to cover the production cost. However, gas prices may be adjusted only for the power plants,” Hamid declared, assuring that the impact on retail consumers would be kept to a minimum.

Sources within the government revealed plans to implement a 5 percent hike in bulk electricity prices and a 3 percent increase at the retail level through an administrative order, bypassing traditional regulatory hearings.

According to Annual Report 2022-23 of the Bangladesh Power Development Board (BPDB), per unit production cost was Tk 11.33, while electricity was sold at Tk 6.7 per unit — incurring a loss of about Tk 4.63 per unit.

This imbalance has led to a staggering loss of Tk 47,788 crore for the fiscal year, as the government grapples with purchasing electricity from private and international sources at significantly higher rates.

The government has been facing great trouble as it has to purchase electricity worth Tk 82,778 crore from private sector power producers, while it generates electricity worth Tk 13,307 crore from its own plants.

The annual report also shows that BPDB’s average per unit production cost from its own plants is Tk 7.63, while it is Tk 14.62 at the independent power producers or IPPs (private sector). At rental plants, the cost is Tk 12.53, at public plants Tk 6.85, and power imported from India cost Tk 8.77 per unit.

Sources in the BPDB said that in the last decade and a half, electricity prices have been increased on 11 occasions at the wholesale level and on 13 occasions at the consumer level.

In the current fiscal 2023-24, the gap between production cost and selling rate has further widened, and now average production cost of each unit is about Tk 12 while it’s selling at Tk 6.7 per unit.

Prof Shamsul Alam, also senior vice president of the Consumers Association of Bangladesh (CAB), said the unjust expenses in the state-owned power and energy entities have been established in the hearings of the Bangladesh Energy Regulatory Commission (BERC).

“But no steps were taken by the Power and Energy Ministry to address those issues. Rather, the regulatory body’s authority was taken away and it was turned non-functional by amending the relevant law,” the energy expert told UNB.

He said that in every case the government was found reluctant to take action to reduce the unjust expenses in the power and energy sector.

He also observed that the Rapid Increase of Power and Energy Supply (Special) Act has been key in creating the unbearable situation for which the government has to provide a huge capacity charge to the private power plant operators and subsidy to state entities.

“Now, the reality is that despite having 42 percent surplus electricity, the country has to endure significant load shedding, even during winter,” he said.

He said that it’s “ridiculous” that despite such surplus electricity and an obligation of capacity charge putting pressure on the economy, the government has announced a plan to import 9,000 MW of electricity from abroad.

Economist and Research Director at Centre for Policy Dialogue, Khondaker Golam Moazzem, in a recent seminar showed through a study report that all political parties in Bangladesh, except the ruling Awami League, want to get rid of capacity payments in the power sector.

He said that the reduction of over-generated power capacity was missing in the Awami League’s election manifesto announced before the January 7 national election.

He also recommended shutting down the costly rental power plants immediately to reduce the overall cost.

M. Tamim, special assistant to the chief advisor of the former caretaker government, said that without reducing the cost, the onus of the increased production cost is being imposed on the consumer.

“This way, the government subsidies can be reduced by increasing the electricity tariff. But it will neither address the dollar crisis, nor resolve the fuel import problem. So, load shedding cannot be prevented by increasing the power tariff,” he said.​
 
In order to extract gas from Bay of Bengal, Sheikh Hasina has asked for investment from International Islamic Trade Finance Corporation (ITFC). International Islamic Trade Finance Corporation (ITFC) Chief Executive Officer (CEO) Eng. Hani Salem has praised Bangladesh for her excellent track record of loan repayment.

Need investment for offshore gas extraction: PM tells ITFC delegation​


1709076461508.png

Photo: PID

Prime Minister Sheikh Hasina today said to mitigate the energy scarcity in the country the government has opted to go for offshore gas extraction.

"And we need investment for that purpose," she said.

The prime minister said this when International Islamic Trade Finance Corporation (ITFC) Chief Executive Officer (CEO) Eng. Hani Salem called on her at her Sangsad Bhaban office.

PM's speech writer M Nazrul Islam briefed the reporters after the call on.

Sheikh Hasina said that the government has provided electricity in all areas of the country.

She mentioned that during her first tenure in government in 1996 she opened the private sector for the power sector.

"Investment enabling environment is prevailing in the country as the present government has created that," she said.

She put emphasis on creating job opportunities and for that the country needs investment.

"We have especially given priority to improving the rural economy and food production."

The prime minister said that the government has emphasised containing present war-driven inflation and lessening the hassle for the people.

"For that we have stressed upon increasing all kinds of production," she said.

ITFC CEO Salem said that they will provide all-out support to materialise the Smart Bangladesh vision by Sheikh Hasina through investing in various sectors including infrastructure, ICT, debt management, energy sector and climate change issues.

Eng. Hani Salem appreciated the investment environment of Bangladesh and the financial management of Prime Minister Sheikh Hasina.

He mentioned that Bangladesh has an excellent track record for repayment of loans.

PM's advisor Salman Fazlur Rahman, Principal Secretary Md Tofazzel Hossain Miah and Economic Relations Division Secretary Md Shahriar Kader Siddiky were present.​
 

How can Bangladesh enhance its energy security?​


1709078812516.png

A developing country cannot import fuels to sustain a growing economy beyond a certain limit. Bangladesh is no exception. VISUAL: STAR

Bangladesh hasn't recovered from the economic shocks caused by the Covid pandemic and the Russia-Ukraine war, as it is still experiencing a slow but continuous draining of its foreign exchange reserves and is unable to stop the devaluation of taka. The power and energy sectors have been badly impacted in this situation because of their overdependence on imported fuels. Policymakers understood that the foreign currency requirement for this increasing dependency on fuel imports would soon become unsustainable. Experts then pointed out that this situation was mainly the result of neglecting two areas: gas exploration and renewable energy. The stark realisation that the country may not be able to pay for its fuel imports led the authorities and policymakers to declare enhanced gas exploration and incentivise rooftop solar panels and solar parks.

Over the last 20 years, natural gas production in Bangladesh tripled without the addition of any substantial reserves. Exploration was grossly neglected with the belief that no major discoveries were possible, and the shortfall in supply can be easily met through the import of liquefied natural gas (LNG). The unusually low LNG prices during the last decade emboldened those who propagated the idea that it was cheaper to import LNG than to invest in gas exploration. The strong proponents of LNG import cited Japan and Korea as examples.

Domestic natural gas production reached its highest level of 2,663 mmcfd in 2017. But it started to fall the following year, reaching around 2,250 mmcfd. Thus, there has been a production decline of approximately 400 mmcfd in the last six years. At this rate, by 2030 the production will reach a dangerously low level, and to meet the daily national demand, the LNG import burden will severely stress both the dollar reserves and exchange rate.
More than two years have gone by since the alarm was raised, and all the previously promised activities are yet to bear fruit. Very recently, however, some commitments with respect to gas exploration have been made. Petrobangla has announced an ambitious plan of drilling 46 wells by 2026 and a total of 100 wells by 2028. The plan is backed up by a promise of adequate funding and removal of bottlenecks. Moreover, focus has been renewed on the long neglected Bhola gas field, while offshore blocks are also being tendered. Now we wait and see how seriously and sincerely the drilling plan is executed.

The other long neglected area is renewable energy, especially grid-tied solar power plants and rooftop solar panels. The statuses of the four solar technologies that are directly or indirectly contributing to the total grid electricity are shown in the table below. Solar parks are continuously providing electricity to the grid when there is sunlight. The other on-grid technologies are directly contributing when they are sending electricity to the grid. At other times, like the off-grid technologies, they are indirectly contributing by lowering the load on the consumer. The net effect is the same.

1709078895196.png


The achievement on this front over the last 15 years—since the passing of Renewable Energy Policy, 2008—is dismal. Only 677 MW power generated by solar energy is being contributed to the grid. The implication of this failure can be understood by analysing the daily energy curve.

1709078918425.png

Source: BPDB website

The contribution of solar PV electricity can be seen from the Daily Energy Curve figure, which shows how the demand for electricity was met on February 18; the turquoise band from early morning to early evening is the contribution to the grid. To meet demand during these hours, the grid operator dispatched oil-fired (mainly HFO but also some diesel) power plants. What is amazing here is that the full demand could not be met due to a lack of fuel despite having more than enough power plants, and we had to resort to load-shedding. It is inconceivable that when the sun is shining, there is load-shedding. The electricity supplied by HFO and diesel power plants, including load-shedding, could have been supplied by solar PV. If the grid had enough solar PV capacity, they could have saved the fuel used by oil-fired power plants as well as prevented the load-shedding. In the last 15 years, we managed to build fossil-fuelled power plants with the collective generation capacity of more than 20,000 MW, but solar PV power plants with the capacity of less than 500 MW.


If Bangladesh had grid-connected solar power plants with the collective generation capacity of 2,000 MW more, which could have been accommodated in the grid without instability issues, a lot of foreign currency could have been saved and the country would have had greater energy security. However, to accommodate another 2,000 MW of daytime solar, there must be sufficient power plants to manage intermittency (to cover for cloudy days). In the table below, it can be seen that there are gas-fired power plants (gas turbines) with less than 1,500 MW capacity that can perform this task. Of course, there are plenty of oil-fired power plants, but the unit cost of electricity from these power plants is very high. It is ironic that we need more gas-fired power plants despite the fact that nearly 50 percent of the existing plants (with more than 5,000 MW generation capacity) are sitting idle. To keep tariffs low and add more solar PV electricity to the grid, the gas-fired power plants should be simple (single) cycle, not combined cycle, of which we have plenty and which is the principal cause of overcapacity.


1709078954998.png

Source: BPDB Annual Report 2021-22

The realisation that energy security cannot be ensured by importing fuels and that domestic resources are the only means of strengthening energy security have hopefully dawned upon policymakers in Bangladesh. Continuous gas exploration and exploitation of renewable energy should be the two pillars of energy security in the country. The neglected reserves of high quality coal should also be considered. A developing country cannot import fuels to sustain a growing economy beyond a certain limit.

Dr Ijaz Hossain is former dean of the Faculty of Engineering at Bangladesh University of Engineering and Technology (Buet).
 

BD seeks over $300m loan from WB to fund three energy projects​

FHM HUMAYAN KABIR
Published :​
Mar 03, 2024 00:35
Updated :​
Mar 03, 2024 00:35


1709424859310.png


Bangladesh has sought over US$300 million funds from the World Bank (WB) to improve the power and gas distribution and transmission networks of the country, officials said on Saturday.


The Economic Relations Division (ERD) requested the WB months ago to finance two investment projects and one technical assistance (TA) projects.

Officials said the ERD sought some US$337 million in loans for financing a gas transmission line, a power distribution line and a TA project for energy sector development.
However, the Washington-based lender is yet to reply in this regard, they added.

The state-run Gas Transmission Company Limited (GTCL) needs funds to install the Langalbandh-Mawa-Gopalganj-Khulna gas transmission pipeline through the Padma Bridge aimed at supplying natural gas to the western zone of the country.

The GTCL needs $130.76 million funds from the WB for its transmission line development works, said a company source.

Meanwhile, the West Zone Power Distribution Company Limited (WZPDCL) is going to take up the Distribution System Improvement under WZPDCL Area project that requires fund support.

The WZPDCL needs some $204 million funds for improving the power distribution lines in the country's western zone areas, including Khulna and part of Dhaka divisions, said another official at the Ministry of Power, Energy and Mineral Resources.

Besides, the ministry has sent another TA project funding request to the WB for getting $2.3 million in foreign aid.

"All the three funding requests have been sent to the WB during October-November period of 2023. However, we are yet to get any response. We will give them another reminder shortly," said a senior ERD official. "We hope the World Bank will bankroll the important projects."

Bangladesh's gas transmission lines have already been expanded to the country's southern, eastern, and north-eastern regions, but the westerns and north-western regions are still deprived of adequate supply of gas.

The proposed Langalbandh-Mawa-Gopalganj-Khulna gas transmission pipeline of the GTCL is expected to ensure the gas supply to the western Bangladesh and facilitate industrialisation.
The power distribution line improvement and expansion at the west zones will ensure uninterrupted electricity supply to the consumers.​
 

'High dependence on imported fossil fuels bringing trouble'​


1709508755848.png


Shafiqul Alam, lead energy analyst at the Institute For Energy Economics and Financial Analysis, discusses the state of our energy sector and implications of a possible price hike in an interview with Eresh Omar of The Daily Star.

Reportedly, the authorities forecast that they will need to increase power supply by 75 percent in April, while the government is already struggling to ensure the current supply. Realistically, can the government boost generation by that much, or will load-shedding be the norm come this summer?

It has been estimated that during summer nights in April, when the demand peaks, 17,500MW will need to be generated. If we look at recent power demands, only a few days ago, it was 11,600MW. Maximum generation, according to Bangladesh Power Development Board (BPDB) data, was 11,426MW. So, there was some load-shedding. Given our current power system capacity of around 26,500MW—without considering captive and off-grid systems—meeting that target should not be a problem. But due to the dollar crisis and because private power producers still owe payments, load-shedding will take place again.

Coal and LNG prices have significantly come down in the international market compared to last year. So, ideally, this year's load-shedding should not be as catastrophic as last year's. But a lot of it depends on how the government manages the total system. While the government took temporary measures, the economic pressure will likely remain. For example, the bonds that were issued to make payments to our private power producers have a cost—that is, the interest payments. These payments only helped oil-fired plants meet their obligation against bank loans. These power-generating units will need additional money to import fuel to produce electricity during this summer. The local gas supply situation has not improved and hence, sufficient fuel supply to gas-fired plants will be a huge challenge. This portrays a scenario where meeting summer peak demands will be difficult.

Although the government will receive international funds to import oil and LNG, this loan will have to be paid back. Given these challenges, the government has to exercise caution and be prudent in its management.

While focusing on increasing generation capacity, why did the government ignore primary energy supply over the years? And how costly is that proving?

When this government came to power in 2009, there were no other alternatives to ramping up generation capacity, because there was such a huge power supply deficit compared to demand. The initial focus on increasing generation capacity had some positive impacts, as industries grew and people's living standards improved. But in recent years, the increase in power demand could not match the trend of power system capacity expansion. Despite having enough generation capacity, we have not been able to cater to the needs of our industries; they still rely significantly on captive systems. If we could have supplied them with consistent and quality electricity, then perhaps this gap between demand and supply would not exist.

Perhaps the concern that we might not be able to find sufficient local natural gas reserves eventually tempted the government to resort to imported LNG to partially meet the demand for gas. Efforts in local gas exploration were not enough to meet the growing demand. Meanwhile, our success in exploiting renewable energy has been very limited. Once renewable energy was very expensive. But even when costs came down, we could not increase its capacity substantially. All these have increased our exposure to imported fossil fuels and their volatility in the international market. Our primary energy costs have gone up mainly due to import dependence.

The high dependence on imported fossil fuels has significantly impacted our energy system, leading to the need for upward price adjustments of energy and power in quick succession, especially in recent years. In fact, a significant amount of dollars is spent on energy imports, which also negatively affects the foreign currency reserves of the country. Besides, the government couldn't supply enough gas to industries which in turn operated at lower capacities last year. Although the industrial contribution to our GDP is on an increasing trajectory as per the Bangladesh Bureau of Statistics data, this contribution would have been even more with sufficient energy supply.
Read more

Why are industries using captive systems? Is it because our distribution systems aren't up to the mark?

Yes, there is still a lot to be done there. And the government is working on that, but it needs to be expedited. Also, we need to supply electricity to industries consistently.

Energy security is an integral part of any country's national security. From that perspective, how secure are we, and how can the government address the ongoing crisis in the energy sector?

As our dependency on imported energy increased drastically, our energy security concerns have increased too. To become more economically efficient, we cannot rely so much on external sources for our energy; we have to look into our internal resources. Right now, there are no immediate solutions. We have to focus on long-term solutions and mainly on improving planning, coordination, proper management and good governance.

As our dependency on imported energy increased drastically, our energy security concerns have increased too. To become more economically efficient, we cannot rely so much on external sources for our energy; we have to look into our internal resources.

Still, we can take some measures for short-term relief. For example, since we struggle a lot to meet the evening peak demand for electricity, and since we are now going through a crisis moment, we could perhaps take the initiative to close shopping malls a little earlier on weekdays. The government took a similar measure when the Russia-Ukraine war started. The government can also implement a time-of-use tariff to flatten the evening peak demand slightly.

In the long term, we have to seriously explore local gas both onshore and offshore. Different studies and reports have revealed that Bangladesh has the potential for gas reserves. The Schlumberger 2011 report, for example, talked about 49 wells that should be reworked on. Aside from that, we have to expand our renewable energy capacity. Here, also, we should avoid any sudden expansion. Instead, we should increase capacity gradually. Last April, we released a study which said that Bangladesh could incorporate around 3,000MW of solar energy, and thus reduce the operation of expensive plants during the day's peak hours (when sun is available) and cut down on associated fossil-fuel imports.

While solar can help us with day peak-time energy consumption, wind can help with nighttime consumption. Wind can also help during the daytime. Ultimately, we have to focus more on renewables and improve our energy efficiency, which is something all developed countries around the world are pursuing. Our industries have already improved energy efficiency to a certain level. Many households are using efficient appliances like LED lights and air conditioners with inverter technology. Still, there is a lot of room for energy efficiency improvement on the demand side for which we must spearhead consistent measures.

Cross-border energy trade with Bhutan, India and Nepal is also something we should explore. Reportedly, we have finalised an agreement for hydropower import from Nepal. But we should also explore the potential of energy export. This region has a significant variation in energy demand patterns. For instance, Nepal and Bhutan have low energy production and energy shortages in winter—since they are hydro-dependent. But we have a significant surplus electricity capacity during the winter. This provides an excellent case to export electricity to Nepal and Bhutan during the winter. We should continue our efforts for a regional energy trade that will help both the import and export of energy.

Reportedly, the government will soon raise energy prices. How fair is it to raise prices for consumers while paying capacity charges to idle power plant owners?

Last year's data substantiates that the power sector experienced quite a hefty revenue shortfall. The difference between selling and buying prices is very high. From that angle, the government has no alternative but to raise the power tariff. But increasing tariffs alone will not solve our problems. We need to reduce the cost. Identifying the costly and inefficient power plants and phasing them gradually out will help reduce costs. We also need to forecast future power demand more accurately to minimise overcapacity, reduce capacity payments and thus contain our fiscal burden.

There are a number of plants that are currently in the pipeline—aside from those that are already under construction. We should decelerate the projects that are at the contracting and planning phases, so that our overcapacity problem does not increase further and increase the burden on the economy.

Renewable energy, particularly solar, already has an economic case here. While the cost of solar energy is much higher in Bangladesh than in many other countries, the price will further come down in the foreseeable future, making it even more economically compelling. We need to enter the competitive renewable energy procurement process, which has the potential to reduce costs.

Sustainability is another important dimension that we must not forget. We need to use our resources prudently. For example, Solar Home Systems (SHS) contributed to transformational changes in the lives of rural and far-flung people. But reportedly, many of the SHS are no longer operational after 100 percent electricity coverage was achieved. So, ultimately, it is an inefficient utilisation of resources.

Moreover, as per the requirement to obtain new grid connections, different building owners have installed rooftop solar panels. But due to lack of monitoring, many of these installations do not work and deliver little or no energy. We have to cut down on such wastes.

As the power tariff adjustment is on the card, it should be done gradually. The distributional impacts of a price hike on lower income groups, who are often disproportionately affected, should also be kept in mind. Additionally, higher energy prices will affect industrial production.​
 

State Minister hints at cutting fuel oil prices in days​

Published :​
Mar 03, 2024 19:58
Updated :​
Mar 03, 2024 19:58

1709511363609.png


State Minister for Power, Energy, and Mineral Resources Nasrul Hamid has indicated reductions in fuel oil prices this week.


“Regular monthly adjustments to fuel oil prices may start in a few days. The energy division is now awaiting the prime minister’s approval about this,” he said while speaking to reporters at the Secretariat on Sunday afternoon, according to local media.

“As there is somewhat affordable availability of fuel oil in the global market, there could be reductions in fuel oil prices this month,” the state minister added.

Earlier on February 29, the government issued “Fuel Pricing Guidelines” through a gazette notification to set an automated price for petroleum fuels across the country.​
 

Bangladesh wants to import 9,000MW electricity from neighbours: Nasrul​


1709596901761.png

Photo: Collected

State Minister for Power, Energy, and Mineral Resources Nasrul Hamid today said Bangladesh and India have a huge opportunity to work together for the development of the power and energy sector.

"We want to import 9,000MW of electricity from neighbouring countries. The process to import hydro-electricity from Nepal and Bhutan has advanced," Hamid said when the Indian High Commissioner to Bangladesh Pranay Verma called on him at his office in the ministry.

He also informed the Indian envoy a deal is likely to be signed next month to import 40MW of hydropower from Nepal.

He said that the import of 500 MW of electricity from Nepal through Indian company GMR is almost final while the import of renewable energy is also in progress. The import and export from Meghalaya, Tripura, or Assam can be discussed.

He said the process of importing LNG and gas through H-Energy is almost final.

"We want to increase the connectivity with neighbouring countries including India. We need Indian cooperation in this regard," the minister said.

Nasrul Hamid said power trade will get momentum if there is a dedicated line from Nepal to Bangladesh. This will also benefit India.

He also said it is essential to have a stakeholders' meeting of both sides every month to increase the area of cooperation. "We can also work together on bio-fuel," he added

He observed that the demand for LPG is increasing. It should be considered actively as to how Bangladeshi private investors can work in India in these sectors.

The high commissioner said India's cooperation with Bangladesh in the power and energy sector is growing.

Import of hydropower from Nepal to Bangladesh is ongoing, he said, adding India is also importing about 600 MW of electricity from Nepal.

The issues on high voltage transmission lines, renewable energy, import-export of electricity, R-LNG, fuel capacity enhancement, energy efficiency, and future regional connectivity was discussed at the meeting.​
 

Power sector in deep crisis: Rizvi​


1709597047202.png

Ruhul Kabir Rizvi. File photo

BNP Senior Joint Secretary General Ruhul Kabir Rizvi today said the country's power sector has plunged into a deep crisis.

Talking to reporters at BNP's Nayapaltan office, Rizvi said Awami League General Secretary Obaidul Quader's recent remarks on the power situation contradict what Prime Minister Sheikh Hasina has said on the issue.​

The BNP leader said Quader claimed that hundred percent of the country's people are getting electricity supply, but the PM a few days ago stated that load-shedding on a small scale should remain in the country.

He said people of the country are suffering from load-shedding from morning to evening even though the temperature remains at a tolerable level.​
 

Price of 12kg LPG cylinder hiked by Tk 8​


1709597209791.png

File photo: Collected

The Bangladesh Energy Regulatory Commission (BERC) today raised the price of liquefied petroleum gas (LPG) by Tk 0.66, setting the new rate at Tk 123.52 per kg, up from the previous Tk 122.86.

This price change will be effective from 6:00pm today, indicating a slight increase in household and commercial expenses.

BERC at a press briefing today said that the price for a standard 12kg LPG cylinder will now be Tk 1,482, up from the previous Tk 1,474. This adjustment follows a rational scale across various LPG cylinder sizes, ranging from 5.5kg to 45kg, addressing the need for a proportional price revision across different consumer segments.

Furthermore, the price for "auto gas", the LPG variant used in motor vehicles, has also seen a revision, now priced at Tk 68.05 per litre, a slight increase from Tk 67.68.

Notably, LPG prices marketed by the state-owned LP Gas Company will remain unchanged. This exception is attributed to its local production and the company's minimal market share, which is less than five percent.

The decision to adjust LPG prices comes in the wake of rising costs in the international market, specifically tied to the increase in the Saudi CP (contract price), which serves as a benchmark for local operators importing LPG primarily from the Middle East.​
 

Congestion on the Dhaka-Ctg highway as locals protest gas supply cut​


1709685714578.png

Photo: Collected

Heavy traffic jam was reported on the Dhaka-Chattogram highway as residents of Munshiganj's Gazaria protested the suspension of gas supply in the area by blocking it.

According to locals, they occupied the busy road for 2 hours starting around noon creating heavy traffic jam on the highway. Around 2:00pm, after receiving assurance from administration, they moved from the highway easing the traffic congestion.

However, later, around 4:00pm, they again took position on the highway. The responsible officials are trying to convince them to move from the highway, reports our local correspondent.

According to locals, the Titas Gas Authority stopped gas supply to most areas of Gazaria Upazila from February 25th. They said the decision came without any notice or prior announcement.

They said the protest started when, around 11:30am, the Titas Gas Authority came to disconnect the "illegal transmission lines" in the Dori Bausia area of Bausia Union.

Gazaria Upazila Nirbahi Officer Kohinur Akhtar said, "Traffic became normal when we persuaded them and removed them from the road."

However, as of 5:00pm, thousands of men and women from several nearby villages again gathered on the highway creating heavy traffic jams.

Gazaria Bhaberchar Highway Police Officer-in-Charge, Md Humayun Kabir said, "Most of the agitators are women. They have been suffering due to a lack of gas. They want a quick solution. They were removed from the highway. But they are back again. It is causing traffic jam on the highway. We're trying to convince them to move away from the highway."​
 

Bangladesh to invite bids for offshore oil and gas exploration​

REUTERS
Published :​
Mar 06, 2024 00:01
Updated :​
Mar 06, 2024 00:01

1709688820778.png
Representational image

Bngladesh will invite international bidding for oil and gas exploration in 24 blocks in the Bay of Bengal on March 10 in an effort to boost domestic energy production, the chairman of state-owned Petrobangla told Reuters on Tuesday.

Bangladesh has been battling with energy shortages, with its gas reserves fast depleting and a spike in fuel prices following the Ukraine war.

"The deadline for submission of offers for the 24 offshore blocks will be the first week of September and after evaluations, we are hoping to finalise the deals by the end of this year," said Zanendra Nath Sarker.

"We're making plans to reduce supply shortages to keep gas-fired power plants and industries running," he said in an interview with Reuters in his office.

Petrobangla also plans to import 48 liquefied natural gas (LNG) cargoes from the spot market this year, upon approval from the government, up from 23 cargoes last year, other than cargoes from long-term deals, Sarker said.

Five cargoes from spot market will be imported in April while seven cargoes had been imported over the last two months, he added.

"We have also taken initiatives to drill 100 new gas wells in the country between 2025 and 2028 to boost local production," he said.

The move comes at a time when the South Asian country's gas reserves are set to completely deplete by 2033 if no new major discoveries are found.

Bangladesh has struggled to pay for imported oil and gas because of dwindling local reserves since the Russian invasion of Ukraine, forcing the country to turn last year to the International Monetary Fund for a $4.7 billion bailout.

"The dollar crisis in recent times is a global problem. But the government is giving priority to the energy and power sectors. So it will not be a barrier," Sarker said.

Bangladesh's offshore remains largely unexplored despite the settlement of a dispute in favour of Dhaka with neighbouring Myanmar and India over the maritime boundary.​

Two shallow water blocks are under contract for exploration with a joint venture of ONGC Overseas Limited and Oil India Limited where drilling has recently begun, officials said.
 

Bangladesh's Energy Backtrack​

Decoding the Integrated Energy and Power Master Plan 2023

1709765803692.png

The freshly approved IEPMP seems to chalk out the coal transition from imported to domestic coal rather than transitioning from fossil fuel to renewable or clean energy. FILE PHOTO: RAJIB RAIHAN

The Ministry of Power, Energy, and Mineral Resources (MPEMR) published the Integrated Energy and Power Master Plan (IEPMP) 2023 on November 27 last year. The IEPMP was passed after revising the draft seven times.

The final draft has been widely disseminated among stakeholders. But despite multiple revisions, the IEPMP fails to demonstrate a coherent plan to attain renewable energy transition while ensuring energy security. Instead, an overwhelming presence of different advanced technologies (such as nuclear, carbon capture and storage units, hydrogen, and ammonia) have been observed. The majority of these technologies commit to clean coal and are yet to be tested for their effectiveness in reducing carbon emissions. Such a shift in narratives creates confusion among the masses regarding the government's renewable energy stance. This type of jargonal change hints at the government's willingness to keep fossil fuel use, especially of coal, alive.

Renewable energy targets in IEPMP

The progress in renewable energy deployment in Bangladesh has been sluggish for quite some time. According to SREDA, the renewable energy generated power in Bangladesh is 1,202 MW, and the total share stands at 4.1 percent. The lion's share of current renewable energy is from solar (both off-grid and on-grid), as 968 MW is generated from solar energy in Bangladesh. However, aligning with the prime minister's announcement, the newly launched IEPMP sets the clean energy target at 40 percent of the total installed generation capacity (23,500 MW) by 2041. Unfortunately, the new IEPMP faultily revised renewable energy to clean energy, where targets are set as 18 percent by 2030 and 40 percent by 2041. The share of renewable energy within the clean energy mentioned in the IEPMP is not even half. By 2030, of the 18 percent clean energy, 5.7 percent (1,726 MW) will be renewable, and by 2041 of the 40 percent clean energy, only 8.8 percent (5,157 MW) will be from renewable energy sources. Now, the billion-dollar question is: what makes up the remaining 12.3 percent by 2030 and 31 percent by 2041?

Emphasis on technology for clean energy goals

The IEPMP mentions the use of advanced technology and fuel cells to achieve clean energy targets. It includes coal-fired power plants with Carbon Capture and Storage (CCS) technology, nuclear, coal co-fired with ammonia, and hydrogen co-fired with gas (LNG) as clean energy sources. The plan explicitly mentions that to achieve the goal of 40 percent of electricity generated from clean energy sources, it will be necessary to introduce hydrogen (H2) at six percent and ammonia (NH3) at two percent.

The rationale of the MPEMR behind introducing these technologies is that Bangladesh will not be able to achieve the clean energy goals via traditional renewable energy sources. This itself seems to contradict the estimation of renewable energy potential in Bangladesh presented in the final IEPMP. According to the renewable energy generation deployment plan under the Advanced Technology Scenario (ATS), 9,500 MW can be generated from solar and 7,575 MW can be generated from wind. Biomass can generate 165 MW, with 230 MW of hydropower. Hence, a total of 17,470 MW can be generated from traditional renewable energy sources by 2041, which is almost 30 percent of the total power demand.

Timeline of hydrogen and ammonia introduction

The freshly approved IEPMP lays out the plan to introduce ammonia co-firing as early as 2035 and coal co-firing as early as 2037. Gas-fired power plants with 20 percent hydrogen co-firing will be starting in 2037. Later, it will be upgraded to 50 percent in 2045 and 100 percent hydrogen firing starting in 2040. The plan will introduce blue hydrogen first, but it has not yet confirmed whether green hydrogen will be introduced or not. In the case of ammonia, coal-fired power plants with 20 percent NH3 co-firing will be starting in 2035 and will be upgraded to 50 percent in 2040. After 2037, the introduction of CCS into ammonia co-firing should also be considered to further reduce CO2 emissions.

Environmental and financial feasibility of hydrogen and ammonia

Hydrogen and ammonia co-firing with gas and coal are not 100 percent clean and do emit carbon. Fuel cells such as hydrogen and ammonia are only environment-friendly and emit zero carbon if they are green; that is, constructed from renewable sources. Hence, only if green hydrogen and ammonia are used for power generation will Bangladesh be able to keep up with the energy transition commitment. Even if the MPEMR ends up using green hydrogen and ammonia for electricity generation, it will not be financially viable. Several pieces of literature have already demonstrated that the levelised cost of electricity (LCOE) from these sources is much higher than in traditional renewable energy sources. The IEPMP itself demonstrates that the LCOE from ammonia is USC 17/kWh and USC 14/kWh for hydrogen. In contrast, the LCOE for solar will be USC 2.7/kWh in 2030 and USC 2.1/kWh in 2050. The required investment amount of the generation capacity installations till 2050 in the IEPMP is estimated at $157 billion. The total investment for power generation from clean energy is $64.4 billion, of which it's $29.7 billion for wind (46 percent), $20.1 billion for nuclear (31 percent), $7.2 billion for solar (12 percent), and $6.9 billion for hydrogen and ammonia (11 percent).

Lack of renewable energy planning

CCS, ammonia, and hydrogen technologies are costly and will require hefty investment to be introduced in Bangladesh. There is no detailed plan of the necessary financial estimates for investment and maintenance of renewable or clean technologies that could be used to attain the goal of low carbon emissions. Additionally, there is no accurate policy framework for renewable energy subsidies yet. Several government decisions on renewable energy, such as the decision to phase out diesel-based power plants, as well as medium-term plans for installing solar PVs in agriculture, irrigation, and primary schools are not mentioned or reflected in the IEPMP. No feasibility study is proposed for renewable energy-related implementation in various spheres of the economy.

On the other hand, in the section that highlights power policies, renewable or clean energy policies are completely absent. Instead, a plan for the hydrogen/ammonia fuel supply system is highly emphasised. The government is planning a demonstration test essential for evaluation in Bangladesh for ammonia co-firing and studies on plant locations, transmission, and fuel supply for hydrogen. The schedule for CCS implementation for gas-fired plants and the need for preliminary studies on suitable sites and CCS technologies are already in the works.

De facto coal transition

Through advanced coal-intensive technologies, the government is trying to keep coal alive and further expand the domestic use of imported LNG. The new IEPMP unreasonably assumes that domestic coal production will continue to increase by 2050. This is mainly for ammonia co-fired with coal and CCS technologies to clean coal. Overall, the freshly approved IEPMP seems to chalk out the coal transition from imported to domestic coal rather than transitioning from fossil fuel to renewable or clean energy. This indicates that the government is willing to start walking in the opposite direction of renewable energy targets.

Dr Khondaker Golam Moazzem is research director at Centre for Policy Dialogue (CPD).

Helen Mashiyat Preoty is research associate at CPD.
 

Govt reduces fuel price; diesel now Tk 108.25, Octane Tk 126​


1709852570546.png

Representational image. File photo

The government has slightly reduced the fuel oil price today following the automated price formula.

From 12:00am, the diesel and kerosene price will be Tk 108.25 per litre, while the petrol price will be Tk 122 and Octane price will be Tk 126.

The ministry of Power, Energy and Mineral Resources today issued a gazette notification in this regard.

Comparing the previous prices, diesel and kerosene price has been decreased by Tk 0.75, Octane dropped by Tk 4 and petrol by Tk 3.

A ministry press release said that after the latest adjustment of fuel oil price in August 2022, the premium cost of fuel import, transport cost, insurance and bank interest increased a lot due to the impact of coronavirus pandemic, Russia-Ukraine war, and tension in Middle East.

It said, from now on the fuel price will be adjusted every month following the new guideline.

The government introduced the automated fuel pricing mechanism on February 29 as per one of the conditions for the $4.7 billion loan from the International Monetary Fund.​
 

Petrobangla invites offshore bidding for oil, gas exploration​


1710113574203.png

Photo: Collected

Petrobangla, the oil, gas and mineral corporation, has floated the offshore bidding tender, inviting international oil and gas companies to explore the Bangladesh maritime area in the Bay of Bengal.

The tender, named "Oil and Natural Gas Exploration Under Bangladesh Offshore Bidding Round 2024", was published in local newspapers and websites of concerned government entities including Bangladeshi missions abroad today, giving six months' time until September 9, 2024 for submission of the bids.

As per the floated tender, a total of 24 offshore blocks — of which nine are shallow blocks — and 15 deep sea blocks are available for the bidding round.

The nine shallow sea blocks are SS-01, 02, 03, 05, 06, 07, 08, 10 and 11, and 15 deep sea blocks are DS-08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22.

The bidder, singly or in association with other companies, can bid for one or more blocks.

Contracts will be signed with the successful bidders in line with the Bangladesh Offshore Model Production Sharing Contract 2023, said the tender.

The features of the proposed contract include full repatriation of profit, no signature bonus or royalty, uncapped attractive gas price linked with international marker, oil price to be determined on the basis of the fair market value prevailing in South and Southeast Asia.

It entails no duty for equipment and machinery imported for petroleum operations while the contractor's corporate income tax liability will be borne by Petrobangla, and bank guarantee for performance of the minimum exploration programme.

There will be provision for assignment of interest and share-transfer and 100 percent cost recovery with a yearly cap of 75 percent.

The contractor must have a mandatory work programme consisting of 2D seismic survey and mandatory purchase of available 2D multi-client seismic data against bidded blocks to get relief from mandatory work obligations proportionately.

They will have minimum work obligation in each of the exploration periods while biddable work programme commitment over and above the mandatory programme.

Companies interested in bidding and purchasing of Promotional and Data Sales Packages may contact the Director, Production Sharing Contract, Bangladesh Oil, Gas & Mineral Corporation (Petrobangla) Petrocentre, 3 Karan Bazar, Dhaka-1215, said the bidding tender.​
 

Govt urges foreign investors to explore maritime area
Staff Correspondent | Published: 00:21, Mar 12,2024

1710197161210.png


Bangladesh on Monday urged foreign investors to explore the country’s maritime area through the bidding opened the day before, offering what it said was one of the most lucrative deals in the world.

The bidding, which will close on September 9, has already generated widespread interest among global oil companies, including prominent ones, the power and energy ministry high-ups revealed in a press conference on Monday, without disclosing their names.

Energy experts agreed with the government about the Production Sharing Contract of 2023, on which the bidding is modelled, being too profitable for private investors but differed from the view that suggested it would benefit Bangladesh with all its concessions and tax holidays.

‘It offers one of the most lucrative prices in the world,’ energy secretary Nurul Alam said at the press conference hosted by the national gas and oil company Petrobangla.

‘We don’t want to reveal names but would like to share that some companies have already reached out to us,’ he said.

Petrobangla chairman Zanendra Nath Sarker opened the press conference, announcing that the PSC spared investors payments such as royalty payments, signature bonuses, and any kinds of import duties or taxes.

The investors will need to pay a minimum bank guarantee and can transfer shares, he said, adding that investors can bid for one or more blocks alone or with other companies.

For ensuring a faster return on investment, the PSC offers 75 per cent cost recovery, he said.

A total of 24 offshore blocks are open for bidding, including nine shallow blocks. The shallow blocks are 3m to 200m deep while the deep sea blocks are 201m to 2000m deep.

The price will be linked to oil, meaning that the earlier provision of any cap on the price is no longer there.

Petrobangla officials said that this was a really attractive package, citing the example of Myanmar and Thailand, where companies needed to pay 10 per cent and 20 per cent royalty, respectively.

‘We invite the biggest companies in the world who have experience in maritime exploration to participate in the bidding,’ said power and energy state minister Nasrul Hamid.

Nasrul claimed that the bidding took a while to occur due to disruptions like the Covid-19 pandemic since the last bidding in 2016.

Nasrul thanked stakeholders for their hard work to finally make the bidding happen, including UK-based Wood Mackenzie, a multinational research and consultancy group, whose recommendations shaped the 2023 model PSC.

Bangladesh has so far held seven biddings since 1974 for gas and oil exploration, with the highest number of foreign companies entering production sharing contracts in 1974.

Bangladesh has drilled 97 wells over the past century, finding gas in 29 wells. Bangladesh’s current production capacity is about 2100mmcfd against a demand of about 5000mmcfd.

After a prolonged period of inactivity over exploration, the government passed the 2023 PSC in the election year, months before it assumed power for the fourth straight term.

Despite Bangladesh reportedly sitting on a huge gas reserve being the world’s largest delta, the government spent more money on gas imports rather than investing in the exploration or building the capacity of Bangladesh Petroleum Exploration and Production Company Limited.

‘The bidding is the culmination of a long journey taken by a syndicate of powerful people at home and abroad to get complete control over the natural resource,’ said Anu Muhammad, former member secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port.

Considering tax holidays and other concessions, on top of the new pricing formula linked to the Brent oil price, the actual price of gas would be higher than the international market rate, he said.

This too lucrative contract, he said, might lead to excessive exploitation of natural resources, eventually leading to a situation where it would have to be exported.

American oil giant ExxonMobil has expressed its interest in exploration in Bangladesh in the election year. Other US multinationals, such as Chevron and ConocoPhillips, are also potential contenders in the bidding.

The power and energy state minister and the power, energy and mineral resources affairs adviser to the prime minister, Tawfiq-e-Elahi Chowdhury, did not answer the question asked about the geopolitical risks involved in inviting foreign companies to the Bay of Bengal.

An enormous gas exploration potential opened up between 2012 and 2014 after Bangladesh won over 20,000sq km in the Bay of Bengal following the settlement of maritime disputes with India and Myanmar.

Immediately after losing its maritime dispute with Bangladesh, Myanmar awarded 20 offshore blocks, mostly in the Rakhine basin off the Arakan coast, south of Teknaf, to international oil companies by 2014.

Of 26 open offshore blocks, Bangladesh has PSC for two shallow sea blocks — blocks SS-04 and SS-09, which ONGC Videsh Ltd and Oil India Ltd are jointly exploring.

The South Korean Posco International exited from block DS-12 in 2020 seeking a gas price hike.

Before exiting, Posco carried out a two-dimensional, or 2D, seismic survey over about 3,580-kilometres area, double the area it committed for the survey, detecting half a dozen potential gas spots.

ConocoPhillips got out of the PSC signed under the 2008 bidding after completing a survey of 5,750-km area in the deep sea blocks DS-10 and DS-11.

US oil giant Chevron has three onshore blocks — 12, 13 and 14 — while Singapore’s KrisEnergy has been producing onshore block 9.​
 

Japan chooses Bangladesh, others to get rid of surplus LNG: report
Staff Correspondent | Published: 23:52, Mar 12,2024


1710285426384.png


Japan’s largest liquefied natural gas buyers have surplus problems, prompting them to expand business to South and Southeast Asian countries, including Bangladesh, according to a report released by the United States-based Institute for Energy Economics and Financial Analysis.

The report also revealed that demand for LNG in Japan was falling for several reasons, but Japan’s LNG buyers still increased their purchases aimed at becoming a major LNG player.


The Japan International Cooperation Agency formulated Bangladesh’s latest Integrated Energy and Power Master Plan, describing gas as the friendliest fossil fuel and one of the most viable options to pursue to achieve an ambitious power generation goal.

Energy experts in Bangladesh have already harshly criticized the Bangladeshi master plan, describing it as an extension of Japan’s business plan, partly because of its overwhelming reliance on gas and partly because it included technologies—hydrogen fuel and ammonia co-firing—that Japan was developing.

‘As domestic demand falls faster than LNG purchase commitments, Japanese utilities will face an important choice,’ said Christopher Doleman, an IEEFA LNG specialist and a co-author of the report.

‘Either they can resell flexible cargoes abroad or exercise contractual volume flexibilities and cancellation rights, which may incur additional costs,’ he said.

The report finds that Japan’s largest utilities—including JERA, Tokyo Gas, Osaka Gas, and Kansai Electric—are likely to face an over-contracted position of roughly 11 million tonnes per annum (mtpa) for the remainder of the decade.

Japan’s Ministry of Economy, Trade, and Industry has set a target for companies to transact 100 mtpa of LNG by 2030. This is well above the 79 mtpa that buyers have currently contracted, but in line with recent transaction volumes, according to the report released on Monday.

Meanwhile, Japan’s Asia Zero Emission Community initiative aims to replicate its energy mix across Asia.

These policies, as well as the corporate strategies of major utilities, suggest that Japanese companies will continue to play a major role in LNG transactions, despite declining domestic demand.

JERA executives have expressed a desire to turn the company into a major global LNG portfolio player, while Tokyo Gas has said that the ultimate target is to form a Southeast Asian LNG value chain.

Based on figures from the Japan Oil, Gas, and Metals National Corporation (JOGMEC), LNG sales by Japanese companies to third countries surged from 14.97 million tonnes (mt) in FY2018 to over 38 mt in FY2021. Although domestic sales have declined, the total volume of LNG transacted by Japanese companies increased over the same timeframe.

‘Today, the volume of LNG sold abroad is nearly 50 per cent of the volume consumed domestically,’ read a line from the IEEFA report.

The IEEFA report listed reasons that led to the decline in LNG demand in Japan: resumption of nuclear power plants, increased renewable capacity, and no rise in power consumption because of demographic reasons.

Japan’s four largest utilities account for almost three-quarters of Japan’s historical LNG contracting activity.

JERA, including the contracts inherited from its parent companies, Tokyo Electric and Chubu Electric, is responsible for 40 per cent.


JERA has invested in LNG-based power plants coming online this year in Bangladesh.


JERA acquired a 19 per cent interest in Summit Power International Limited, which is an LNG importer in Bangladesh, in 2019.

The report said that JERA in 2023 revealed plans to develop LNG regasification, storage, and supply with Summit Power.

Kansai Electric, on the other hand, provides training for the operation and maintenance of thermal power plants jointly with JICA, the report said.

Japan’s Ministry of Economy, Trade, and Industry established in 2020 the New International Resource Strategy for Enhancing LNG Security focused on increasing LNG business in South and Southeast Asia.

Japan took its strategy to expand its LNG business overseas after it first over-contracted LNG in 2017, the report said.

‘That year, the government announced a $10 billion funding package to develop Asia’s LNG market, which was partly designed to position Japanese companies to capitalize on LNG trading opportunities.

In September 2019, the government of Japan announced another $10 billion funding package for the development of LNG infrastructure globally,’ the report said.

Overall, Japan’s LNG demand has fallen by 22 million tonnes since 2014, the report said.

Besides Bangladesh, Japan’s LNG buyers have investments in Indonesia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam in a wide range of areas, from power generation to gas supply to building the necessary infrastructure.​
 

The case for renewable energy & Bangladesh​

HASNAT ABDUL HYE
Published :​
Feb 19, 2024 21:28
Updated :​
Feb 20, 2024 21:21

1710286384830.png

Technicians inspect floating solar panels installed on reservoirs in Chapainawabganj—Xinhua Photo

The case for renewable energy is twofold: (1) to reduce chronic dependence on fossil fuels thereby cut down on import requirements; and (2) to diminish carbon emission that is contributing to climate change and threatening lives and livelihoods of millions of people around the world besides destroying ecology that supports planetary stability.


As countries have developed industrially, their need for fossil fuels have increased exponentially. This has resulted in a supply- demand mismatch, pushing up the prices for fossil fuels. For developing countries this is placing a heavy burden on their budgetary resource. Increasing demand and use, on the other hand, is depleting the reserves of fossil fuels in the world. The other, the more serious, problem is the growing incidence of carbon emission that has morphed into an existential threat for mankind and all living organisms. Beginning from the Earth Summit in Rio in 1992 that, among others, set up United Nations Convention Framework on Climate Change, there has been an annual summit on climate change to monitor and take policy decisions on reducing the use of fossil fuels that contribute to greenhouse gases, including carbon emissions. Both for abiding by with the global decision to cut down in carbon emission and to reduce dependence on non-renewable energy, Bangladesh has adopted renewable energy promotion as an important policy objective.

In the Master Plan on Energy in 2020 it was envisaged that 10 per cent of total power generation will come from renewable sources. But though power generation capacity from fossil fuels has been achieved as per the goal, the same from renewable sources have fallen short of the target. Till today power generation from renewable sources has not reached 4 per cent of the total. The government has set the goal of generating 60 thousand mega watts of power by 2041 out of which 40 per cent is expected to come from renewable sources. At present the total power generation of the country is 28.134 mega watts based on captive and renewable sources. As pointed out earlier, 10 per cent of total generation was expected from renewable sources which amount to little more than 2800 mega watts. But according to the Sustainable and Renewable Energy Development Authority (SREDA) the actual contribution from this source was only 1194 mega watts which amounts to little more than 4 per cent.

According to SREDA, as of August 2023 the total capacity of power generation from renewable source stood at 1194 mega watts. Out of this, solar energy contributed 960.8 mega watts, hydro power 230 megawatts, wind power 2.9 mega watts, bio gas 0.69. mega watts and bio mass 0.4 mega watts. It has been pointed out by energy analysts that power generation from renewable sources has not picked up due to lack of adequate publicity, absence of official guidelines and meagre incentives given to private sector. Energy experts are of the opinion that about 3000 mega watts power can be generated from solar and wind energy in the country, thereby reducing the pressure on fossil fuel-based power generation.

From the experience gained so far and considering the feasibility it has been concluded that a good part of the potential for increasing power generation from solar and wind power remains untapped. The private sector is interested to invest in this sector in a big way but the tax structure acts as a disincentive. If the import of solar panel is allowed tax free or at a nominal rate this will encourage many entrepreneurs to invest. This can either be achieved through public private partnership (PPP) or through the private sector.

The technology of solar and wind power is simple enough to be used by Bangladeshi technicians and workers. If they are sent to China or Chinese experts are invited to Bangladesh technology transfer can take place within a short period. On the demand side, customers can easily be made interested in the use of solar power because of the low cost per unit of power that saves Tk 4 per kilowatt. A particular target for absorption of solar power is the housing sector where the design of the building can build in installation of solar panels on roofs and solid walls. For big factories it can be made obligatory to install solar panels to produce part of the electricity they need. It is encouraging that the business model of roof- top solar power has proved both feasible and viable. Operators, investors and commercial banks have all shown Interest in the solar rooftop business model.

Compared to solar energy, wind and hydropower is still at a fledgling stage. Only coastal areas of the country appear to be fertile grounds for exploitation of the potentials. But though limited in scope, these sources have one advantage over solar energy and that is their all weather availability. Since in renewable energy, a mix is being considered even sectors with low potential should be used.

Most important is acquisition of technical know-how at grassroots level so that repair and maintenance facilities are available at local level. This may be a potent attraction for creating demand. It has been found by solar energy providers like IDCOL that in agriculture production farmers are showing interest in using solar power instead of diesel to run their irrigation pumps because of the decentralised service system. Where garment factories are found in a cluster and it is feasible to service installed solar panels by the operator , factory owners are coming forward to use solar energy without much persuasion.

The most important source of renewable energy that is also environment-friendly is, of course, nuclear power. Leaving aside the risk of melt-down, power generated in nuclear plan is cheaper than that produced by fossil fuels. The Rooppur Power Plant, when ready for operation will make significant contribution to power generation in Bangladesh. If the second nuclear plant on the drawing board materialises, the energy sector in Bangladesh will be in a position to export power from the national grid.

Hung up on the use of fossil fuel for power generation for long, it is understandable that gaining momentum takes time. But it is gratifying that a beginning has been made and Bangladesh is poised to wean itself away from total dependence on fossil fuel-based power generation.​
 
I wish the best for Bangladesh.

Perhaps hydroelectric, tidal, and wind energy will be good for Bangladesh.
Hydroelectricity is not an option for Bangladesh because most of our land is used to grow rice and other agricultural commodities. However, Bangladesh is working on using wind and solar energy to meet her energy demand.
 
Hydroelectricity is not an option for Bangladesh because most of our land is used to grow rice and other agricultural commodities. However, Bangladesh is working on using wind and solar energy to meet her energy demand.
How about Tidal energy? Bangladesh has a large shoreline with the Bengal Sea.
1710347271992.png


1710347285755.png
 

Gas crisis till April at least​

Summit’s floating storage to take another month to finish maintenance work

1710367565727.png

Photo: Summit Group

Gas scarcity is likely to continue till April despite the government's repeated assurance of scaling up gas supply during Ramadan and the irrigation season as one of the two Floating Storage and Regasification Units (FSRU) will take longer to complete maintenance works.

The Summit-operated FSRU, which re-gasifies the imported liquefied natural gas and supplies to the national grid, was supposed to resume operation after maintenance in the first week of March.​

But Nasrul Hamid, the state minister for power, energy and mineral resources, yesterday said that FSRU is unlikely to resume operation before March 30.

"We import 30 percent of our gas supply. Due to the lack of the FSRU, we have a shortfall of 10 percent of gas. Besides, our local gas production is also in decline," he told journalists after a meeting with the government officials of different companies related to the gas and fuel supply.

In a Facebook post yesterday, Ayesha Aziz Khan, the managing director and chief executive officer of Summit Power International, wrote: "We are pleased to see the dry-docking procedure of Summit's first FSRU at the Seatrium Benoi Yard, Singapore."

This FSRU, with a storage capacity of 136,000 cubic metres and a regasification capacity of 500 mmcfd, is being overhauled and restored to a brand new condition.

It will reach Moheshkhali by April, the post added.

Two FSRUs had been supplying around 850 million cubic feet of gas a day (Mmmcfd) until October last year when the Excelerate-operated FSRU went into maintenance and the supply dropped to 500mmcfd.

In mid-January, both the FSRUs were disconnected from the grid due to technical glitches. Consumers in Dhaka, Chattogram, Narayanganj and Gazipur faced a week of gas supply disruptions and many industries did not get gas. Households also faced acute crises over the week.

Later on January 20, the Excelerate FSRU resumed operation but the gas supply didn't increase proportionately as the Summit-run FSRU started going into maintenance.

Yesterday, the total gas supply was around 2,600 mmcfd against the demand of over 3,800mmcfd. Three out of six fertiliser factories were shut due to gas shortages.

City dwellers in different areas are unable to cook Sehri at midnight and have been experiencing gas shortages before Iftar too.

"Gas crisis has become a part of life," said Sadekon Nahar Dilruba, a resident of Khilgaon.

During the daytime, gas pressure is very low, she said, adding that the pressure increased after 1:00am on the first and second days of Ramadan and again dried out before 4:00am.

"I struggle a lot to cook Sehri and Iftar, but I have to pay a gas bill of Tk 1,080 for two stoves every month," she added.

Asked about the solution for people like Sadekon, Hamid said: "There is an option for household consumers and I will request those who have a gas shortage in their areas to use LPG (bottled liquefied petroleum gas) as an alternate solution."

At the meeting, two decisions were taken to keep the gas and power supply situation at a bearable level: the CNG refuelling stations will be kept closed for six hours (4:00pm to 10pm) a day and the schedule of irrigation pumps will be from 12am to 6:00am every day.

However, centring on Eid-ul-Fitr, from April 7 to 18, the gas stations will remain open 24 hours.

About the electricity supply, Hamid said if the fuel supply stays uninterrupted, the electricity supply will be uninterrupted during Ramadan.

"The power cuts will only happen for a short time," he said.

Yesterday, the load-shedding was over 500 megawatts across the country at around 3.00pm. The production was around 11,400MW against the demand of 11,900MW.

The power sector was getting 880mmcfd of gas against the demand of over 1,900mmcfd.​
 

Single-Point Mooring pumps 40,000 tonnes of crude oil from Maheshkhali to Eastern Refinery
BSS
Published :
Mar 15, 2024 21:40
Updated :
Mar 15, 2024 21:47

1710544167175.png


With the government's sincere efforts, Single-Point Mooring (SPM), a deep-sea floating oil pipe, successfully pumped 40,000 metric tonnes of crude oil from Maheshkhali Pumping Station to Eastern Refinery Limited (ERL) safely and smoothly on Friday.

According to a release issued by Deputy Information Officer of Power, Energy, and Mineral Resources Ministry Mir Aslam Uddin, the long-cherished SPM project was commissioned through the transportation of crude oil from Moheshkhali to ERL.

“Bangladesh Petroleum Corporation (BPC) initiated the SPM project to carry fuel through pipelines from mother vessels quickly, which would also save Tk 8.0 billion per annum,” State Minister for Power Energy and Mineral Resources Nasrul Hamid told reporters earlier.

He said once the project was implemented, it would reduce oil pilferage and time for fuel oil supply across the country.

“The Awami League government, led by Prime Minister Sheikh Hasina, has instructed the SPM to unload imported crude oil from deep seas in a more efficient and time-saving manner. The SPM will also ensure energy security in the country,” the state minister added.​
 

More power plants than needed​


Consumers ultimately bear the brunt for excess capacity, experts say

1710629542688.png


The government is continuing to ramp up the power generation capacity even though the electricity demand did not increase as per projection, putting an additional price burden on consumers, said energy experts.

In the Power System Master Plan (PSMP) 2016, the electricity demand in 2024 was forecasted to be 20,129 megawatts. In reality, the highest projected demand for electricity this year is 17,800MW.​

The power generation capacity at present is 26,844 megawatts.

It means there is an overcapacity of over 9,000 MW excluding the captive power generation capacity (electricity generated at the industries by themselves) and off-grid renewable energy that accounted for another 3,223 MW, according to data from the Bangladesh Power Development Board.

Due to the increased generation capacity, the government needs to spend more than the necessary amount for generation, said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.

1710629562687.png


"To meet the higher generation cost, the government needs to adjust the electricity prices repeatedly -- the consumers are not at fault here," he said.

The higher generation cost is due to capacity payments, a fee that must be paid to the power producers for every idle hour.

Globally, the target for reserve margin, which is the amount of unused available capability of an electric power system (at peak load for a utility system) as a percentage of total capability -- is 20 percent, according to experts.

The PSMP 2016 says that the reserve margin would be brought down to 20 percent by 2025 when the peak demand would be 21,903 MW.

In reality, the reserve margin is more than 35 percent and will increase more in the upcoming days.

"It is true that to make the power supply smooth and healthy certain percentage of reserve margin is essential, but unplanned and aggressive increase in generation could make reserve margin more than optimum limit resulted into extra pressure in the economy of the country," said the PSMP 2016, which was revised in 2018.

Subsequently, it called for a thorough study to ascertain which level of reserve margin is actually required for continuing uninterruptible and reliable power supply to the customers with minimum pressure on the economy.

However, according to the Integrated Energy and Power Master Plan 2023, the follow-up to PSMP 2016, it would not be until 2040 that the reserve capacity will come down to 20 percent.

In the 2030s, the reserve capacity will remain at around 30 percent, it said.

The government has been increasing the capacity without considering the rise in demand, the CPD said in a study last week while presenting a comparative supply-demand picture.

Until 2018, the power generation capacity increased proportionately, but later, the power demand and generation capacity went in different directions, the study said.

Due to the excess capacity, the government needs to keep a good number of power plants idle daily, which is costing the exchequer in capacity payments.

Last fiscal year, the PDB had to pay more than Tk 26,000 crore as capacity payments.

Despite increasing the electricity prices in the first quarter of last year, the PDB reported a loss of Tk 43,539 crore for fiscal 2022-23 while the government allotted a subsidy of Tk 39,534 crore to them, according to a CPD study published last week.

There is a correlation between government subsidy and capacity payments, the CPD study said.

PDB has been incurring losses mainly due to an increase in operating expenses driven by the use of diesel or furnace oil for power generation in rentals and quick rentals alongside a significant amount in capacity payment to independent power producers, Moazzem said.

"The government should reduce the cost of electricity production instead of burdening people with increased tariffs to cut subsidies in the sector," he added.

The power generation cost increased as a result of faulty systems, wrong policy and overcapacity, said M Shamsul Alam, vice-president of Consumers' Association of Bangladesh.

None of the power distribution companies made a loss but the PDB did, he said.

"When the government brought the private power producers into the business, they didn't create any competition. How much money have they spent, how much they are making as profit, nobody knows."

When demand increased by only 3 percent, the government increased the capacity by 12 percent, he said.

"This is injustice," he added.

The government counts many abandoned or old power plants in calculating the capacity, said Mohammad Hossain, director-general of Power Cell.

"It's for showing the government's success at a bigger scale. Ultimately, there is more or less 20 percent reserve capacity, not more than that," he added.​
 

LNG Processing: Capacity to outpace demand​

Says UK-based BMI Research; idle facilities rack up capacity charges

1710802864610.png

Representational image. File photo

Bangladesh will end up with surplus LNG regasification capacity by the end of this decade, said the UK-based BMI Research -- a development that will ultimately cost the exchequer in fees similar to capacity charges for power plants.

At present, there are two floating storage and regasification units (FSRUs) -- which re-gasifies the imported liquefied natural gas and supplies to the national grid -- with a combined annual capacity of 7.6 million tonnes (mtpa).

The government has planned four more LNG terminal projects: one onshore in Matarbari with the capacity to regasify 7.6 mtpa LNG, two FSRUs with the same capacity in Moheshkhali and Payra, and extending the capacity of one of the two existing FSRUs.

Based on the planned projects, an additional 21 mtpa of LNG regasification capacity will be added before the end of the decade, said BMI Research in its latest commentary on Bangladesh's oil and gas sectors.

In 2023, Petrobangla signed two additional long-term LNG sale and purchase agreements with QatarEnergy and Oman Trading International for 1.8 mtpa and 1.5 mtpa, respectively.

Petrobangla's contracted LNG imports are expected to increase to up to 6.8 mtpa when the two new contracts begin LNG deliveries in 2026.

"Based on the projected LNG import outlook, Bangladesh will have significant surplus LNG regasification capacity," said BMI Research, a Fitch Solutions company.

Besides, Petrobangla is also seeking to import 3.8 mtpa of gas from India's H-Energy through the 275 km cross-border pipeline from Kanai Chatta in the East Midnapore district to Shrirampur in Khulna.

"It remains uncertain whether all new LNG terminals will be built in light of Bangladesh facing several challenges, including the lack of gas transmission pipelines to support gas distribution and proposed pipeline natural gas imports from India," BMI Research said.

Meanwhile, the government has been unable to utilise the existing regasification capacity of 7.6 mtpa.

Bangladesh imported the highest 5.06 mtpa in fiscal 2021-22, according to the data from Petrobangla. Last fiscal year, 4.08 mtpa of LNG was imported.

Just like the capacity charges for power plants, the regasification units have a fixed cost based on the installed capacity, according to Petrobangla officials who spoke to The Daily Star on the condition of anonymity to speak candidly on the issue.

"Petrobangla could not utilise the full capacity until now," said one of the officials, while declining to disclose the fixed charges that the government has to bear for keeping the regasification facilities idle.

The government has been underutilising the existing FSRUs since 2018 when they started importing LNG, said M Shamsul Alam, vice-president of the Consumers' Association of Bangladesh.

"All these projects were awarded unsolicited as well," he said, while calling for proper feasibility studies before taking on any project.

On the other hand, natural gas production has consistently fallen since peak production of 27.6 billion cubic metres (bcm) in 2016.

"We anticipate that Bangladesh's natural gas supply woes will worsen due to insufficient investment in upstream exploration activities," BMI Research said.

To reverse the production decline, in February last year Petrobangla announced its plan to drill 46 wells between 2023 and 2024.

But not much progress has been made on that front, the report said.

"We see limited room for substantial growth in supply."

Subsequently, BMI Research has forecast Bangladesh's natural gas production to decline by 3 percent annually during the period. The country's natural gas production is expected to decline further to below 20 bcm by 2028, widening the deficit to up to 18.4 bcm.

"Our faulty policy has brought us to a situation that we have become dependent on importing LNG more and more," said Badrul Imam, honorary professor at the University of Dhaka's geology department.

The government's recent moves to drill 46 onshore gas wells and go for offshore gas exploration have come too late in the day.

"We are already late. We needed to initiate rigorous drilling projects at least five years earlier. We need to wait some more years to get the results of these initiatives," Imam added.

At the end of the day, it is the consumers who suffer in every way: they have to bear the additional charges for the government's wrong decisions and also have to make do with less than their required volume of gas, said CAB's Alam.

"This impacts the overall economy ultimately," said Alam, also the dean of Daffodil International University's faculty of engineering.​
 

Ten years delay in oil-gas exploration a testament to short-sightedness and ineptitude​


1710803919703.png

Dr Badrul Imam

Dr Badrul Imam, energy expert and retired professor of Dhaka University's Department of Geology speaks to Golam Mortoza of The Daily Star about the overall procedure of oil-gas exploration in Bangladesh, its reserve situation, and export opportunities.

You have always opined that we should give more focus to oil-gas exploration on both land and sea. After almost a decade, it seems the matter is getting some importance. What is your view in this regard?

I think we are already too late. If you look at the last 10 years, since 2012, we haven't done much regarding the ocean. Our huge and resourceful sea has a lot of potential. Both Myanmar and India have discovered gas there. We stayed mostly idle. I always find this decision illogical. One of our biggest weaknesses in the gas sector is that we have not utilised our vast sea.
Finally, we are taking some initiatives. It's better late than never. Now that we have started, we should move forward properly. If we could have started this initiative five years ago, then by now we would have gotten some gas supply. The exploration just started; it will take a long time before we get the gas from the sea.

International organisations have been asked to submit their tenders. How long do you think the entire process might take for us to get gas?

It will take at least five years to get it. Tender seeking, acceptance, and initiation of the process—all that will take at least one and a half years. The bid-winning firm will take another year for the initial preparations. After that, they would eventually head towards the sea. Two more years will be needed to do the survey, exploration, and excavation. After these steps, we can start talking about getting gas. Even when the gas is identified, we will have to set up pipelines to bring it in. That will take some more time.

This is why I keep asking, why did we sit idle for 10 years? We marked our sea borders in 2021. Myanmar and India finished their work in 2014. Now we have to pay for sitting idle for a decade.

What could be the reasons for sitting idle like that?

There's no reason. It is just another example of short-sightedness and ineptitude.


Both Myanmar and India identified huge amounts of gas underwater. We might also get a similar amount. Foreign firms usually extract and sell the gas quickly and leave with the proceeds. Sometimes they sell it to other countries, in which case, how useful will it be for Bangladesh?

Bangladesh's gas cannot be exported—this must be a properly documented red-line condition. No matter what the circumstances, there should never be a scope for exporting this gas. However, in the tender document, it has been mentioned that if the extracted gas is not bought or used by Bangladesh, it can be exported. It is better not to write this. However, the oil-gas extracting organisations put pressure to include it. Because, when they go for bank loans, the bank demands to keep an option for export in the organisation's working plan.

However, our reality is different, because we do not have anything else. As long as Bangladesh needs it, we have to use this source. The demand is rising exponentially and the supply is dwindling. Thus, even if we increase the supply, it will never be able to match the demand. Thus, a certain amount of LNG import must continue.

The amount of gas that we are expecting to extract may not be needed immediately. We may be able to use it for years. However, the foreign firm might want to get it extracted as fast as possible so that it can maximise its profits.

We have to keep the production low. We don't have to extract it all in one go. If needed, we will take 10 years to extract the amount of gas that could have been extracted in a year.

Would the foreign firm agree to this condition?

It's a logical question. However, we have to strike a balance here. If the foreign firm is given the liberty to extract and sell as much as it wants, that's one thing. However, to uphold the nation's interests, the contract can specify that gas extraction should be as per the nation's demand levels. They will conduct business, but the pace will be slower. Such contracts are signed across the globe and international firms are also aware of the logic behind it. However, whether we can make them agree to it or not solely depends on our negotiation skills.

We made the right call by focusing on gas extraction. However, it will not be wise to quickly extract and deplete this source. Extraction should be as per demand, and the extracted gas should not be exported under any circumstances.

Will Bangladesh buy gas from foreign firms as per the international market value set in dollars?

Yes, the gas price will be determined per the international crude oil price. Currently, the crude oil price is $80. Thus, each unit of gas will be sold at $8. The gas price will go up and down as per the crude oil price.

Was there a survey done to determine the amount of gas reserves in the different blocks of Bangladesh's sea borders?

Some general surveys were conducted, but no information was available regarding the specific amount. However, as a whole, it can be said that compared to the western blocks, the eastern blocks may contain a higher amount of gas. Thus, foreign firms are more interested in the eastern blocks.

These blocks are adjacent to Myanmar. As Myanmar explored a huge amount of gas, it is being assumed that we will also find a large amount in our blocks.

Is there an opportunity to only allow extraction from a few blocks instead of all of them?

Yes, we can permit extraction from only a few blocks. It depends on the government's decision.

The government keeps on stressing that foreign firms will not show interest unless they are allowed to export.

This depends on the negotiations completely. Bangladesh needs a lot of gas, so why can't the government explain this to the foreign firm? No matter how much gas they extract, it will not meet our demand. We don't have any other form of fuel. We run everything on gas. Thus, the foreign firm should not be afraid of the fact that we might not buy the gas they extract and they will need to export to make a profit.

Did Myanmar and India only get gas from their blocks, or did they get oil as well?

They mainly discovered gas. A small amount of oil exists here, but it is inadequate.

Foreign firms surveyed our blocks. Do you know about their findings?

TGS did some surveys. Bangladesh commissioned a survey work where TGS jointly worked with another US-based firm. They will now sell this survey report to other firms so that they can quickly go for gas exploration. This report would be handed over to Bangladesh and sold to other foreign firms.

So, Bangladesh doesn't know yet the exact amount of gas contained within the blocks?

No, we don't. Such a survey has not been conducted. TGS's survey is a basic one. Until the excavation starts, it cannot be said what amount of gas exists. The initial survey gave us a possibility. Now we have to get the precise information by excavating.

You have placed a similar emphasis on land-based sources. Recently we found gas in the third well in Sundalpur. Is the current pace of land-based gas extraction satisfactory?

It is not being emphasised enough. We have been saying for a long time that the Chittagong hill tracts have a lot of potential, but not enough development is taking place. In a way, we can say that it is getting focused—there's a plan to excavate a well within three years. Previously, there were no plans to excavate so many wells. Now it is going on in a big way.

Now we must see whether all the plans get implemented or not, because there was another plan in 2015-16 for excavating 100 wells, but the plan got scrapped after only a few wells were excavated.

BAPEX can excavate wells and extract gas for much cheaper. Still, while excavating wells, Gazprom or other firms get priority over it. Are we still following this policy?

Yes, this policy has not been changed. BAPEX does not get priority. BAPEX has a lot of potential. We have to firmly support it, as it can do a lot.

Translated from Bangla by Mohammed Ishtiaque Khan
 

What to make of Petrobangla’s new oil and gas exploration tender?​

1710888709917.png


VISUAL: Shaikh Sultana Jahan Badhon

In a landmark development, Bangladesh took a notable stride in its energy sector by announcing new oil and gas exploration ventures. On March 10, Petrobangla floated an international tender for shallow and deep sea oil and gas exploration. Despite being delayed by at least a decade, this decision marks a pivotal moment in the country's quest for energy independence. Bangladesh, blessed with promising geological formations, has long been recognised for its potential in the gas sector.

However, the exploitation of these resources has been limited. The recent announcement signals a shift towards unlocking the full potential of the nation's hydrocarbon reserves and exploring untapped reserves.

The exploration tender has been launched with much domestic appreciation. Yet, amidst the global investment shift towards green energy sources, the level of attention from international investors remains to be seen. Moreover, the introduction of this initiative is quite delayed. As the world transitions towards cleaner energy sources, Bangladesh's strategic move underscores its commitment to sustainable development while harnessing its natural resources for the benefit of its citizens. However, the country faces economic challenges due to its heavy reliance on oil and gas imports. Exploring untapped hydrocarbon reserves could alleviate this dependency and mitigate the economic crisis. From an energy planning perspective, Bangladesh is moving towards a transformation that includes LNG, hydrogen, and ammonia as primary fuels all being import-oriented, and so energy sustainability remains a major concern.

The success of Bangladesh's exploration endeavours will depend on various factors, including technological implementation, regulatory capability, trade negotiation expertise, professionalism, transparency, and geopolitical influence. Overcoming these challenges will be crucial for realising the potential benefits of oil and gas exploration in the region. Nevertheless, the prospects are promising. With the right strategies in place, Bangladesh has the potential to address its deep energy crisis and reduce its dependency on foreign currency reserves.

The international tender for shallow and deep sea oil and gas exploration sparks some questions regarding its potential success in attracting offshore oil and gas exploration. Between 2016 and 2019, Petrobangla proposed conducting extensive deep and shallow sea surveys, aiming for a multi-client survey. However, the government's indecision on the proposal and subsequent delays, exacerbated by the Covid pandemic, resulted in wasted time. In 2022-2023, Bangladesh, in collaboration with a foreign consortium (Schlumberger), finally initiated a crucial multi-client survey in the Bay of Bengal, with a focus on the deep sea area. While such surveys are vital for major oil companies, concerns arise regarding the failure to release historically preserved survey data, to involve relevant international oil companies (IOCs) in past surveys, and to organise the sale of this new survey data into accessible packages. Petrobangla has outlined the availability of eight data packages for purchase by interested IOCs. However, before delving into the specifics, it's crucial to define what makes these packages lucrative. Understanding why IOCs would perceive these data packages as valuable and view both deep and shallow sea blocks as having potential is essential.


Bangladesh's oil exploration journey dates back to 1974 when six foreign oil companies surveyed our sea. Subsequent surveys by Cairn India, Santos Ltd, ConocoPhillips, and Posco Daewoo generated valuable reports, stored in Petrobangla's database. However, the reluctance to utilise this existing data and the lack of incentives in the Offshore Model Production Sharing Contract (PSC) hindered progress. The Ministry of Power, Energy, and Mineral Resources (MPEMR) and Petrobangla's combined failure to leverage stored data for bidding purposes underscores the need for proactive measures. Hence, the absence of high-quality data that failed to attract IOCs in the past. While some IOCs have shown interest, concerns persist about the inefficient management, poor trade negotiation skills, and unprofessional mentality within Petrobangla and the ministry. Effective management and the deployment of qualified professionals are essential for enhancing the attractiveness of the bidding process.

Past experiences with companies like ConocoPhillips, Santos, Posco Daewoo, and Woodside Energy highlight challenges related to unattractive PSCs and fixed gas prices.

While the new PSC addresses these issues, other unconventional concerns remain regarding the non-transparent intention to appoint preferred contractors, inclined conflict of interest towards LNG import groups, geopolitical issues in accessing the Bay of Bengal, and circumvention of bidding processes. Resolving these issues is imperative to maintain investors' interest. The departure of IOCs due to dissatisfaction with the current management, particularly the state minister of the MPEMR, underscores the urgent need for leadership changes. Despite efforts to address concerns and offer financial incentives, including adjustments to gas prices, companies like Santos may not return to Bangladesh without substantial management reforms.

In terms of oil and gas extraction in shallow seas, Bangladesh has faced significant setbacks, particularly in two potential blocks—SS-10 and SS-11. Myanmar has successfully extracted substantial gas reserves from wells named Mia and Shwe since 2013, following the resolution of a maritime boundary dispute in 2012. The reasons behind Bangladesh's delay since 2013, whether attributed to corruption, inefficiency, or diplomatic issues, needs a thorough examination. Woodside Energy, an Australian company, expressed interest in exploring for oil and gas in five blocks adjacent to Myanmar, where they had confirmed reserves. Despite this, Bangladesh did not pursue the proposal based on advice from advisors. Two survey biddings were cancelled by the ministry because their favoured company did not get them.

Geopolitical considerations may also be at play, with the US seeking entry into Bangladesh's deep sea territories to counter China's influence in the region. Major companies like ExxonMobil and Chevron have shown keen interest. However, doubts persist regarding the technical and negotiating capabilities of Petrobangla and the MPEMR. These concerns underscore the complexity of the challenges involved in navigating Bangladesh's oil and gas sector.

Certainly, the MPEMR minister and energy advisor bear significant responsibility in this matter. Their role involves safeguarding the interests of specific groups. If the prevailing uncertainty remains unresolved, it appears that even with a favourable PSC, companies like Santos may opt not to return, exacerbating the situation.

In addition to the challenges mentioned, there are also objections regarding tender-related expenses. The extensive advertisement in nine newspapers across the country, paid reports in prestigious publications like The Economist, and the six-month roadshow are perceived as wasteful expenditures of time and resources. In response to this author's questions, Khondkar Saleque, an expert in energy sector tendering and negotiation, suggested that Petrobangla should make historically preserved data accessible to interested parties. Rather than conducting inefficient roadshows abroad, Saleque proposes inviting interested IOCs to Bangladesh for in-depth discussions. This approach aims to streamline the process, minimise unnecessary expenses, and facilitate more direct engagement with potential investors.

Faiz Ahmad Taiyeb writes on sustainable development and is a public policy critic. He has several books to his credit, including 'Fourth Industrial Revolution and Bangladesh', 'Bangladesh: Development Trajectory And Democracy Deficit' and '50 Years of Bangladesh Economy.'
 

Another albatross around the neck of the energy sector?​

Surplus LNG regasification capacity predicted to emerge as a headache

1710973025961.png

VISUAL: STAR

It is worrying to learn of the widening gap between our LNG imports and regasification capacity, with a UK-based research firm predicting that Bangladesh will end up with surplus regasification capacity by the end of this decade. This, among other things, means incurring hefty capacity charges similar to what we are already having to pay for the idle or underutilised power plants. The burden of these charges, it goes without saying, will inevitably fall on consumers. The question is, why are we allowing another potential albatross around the neck of the energy sector?

The looming surplus comes on the back of Bangladesh's increasing reliance on costly LNG imports as well as a continued decline in natural gas production, which is unlikely to see a substantial reversal despite recent efforts by Petrobangla. Currently, Bangladesh has two Floating Storage and Regasification Units (FSRUs)—which convert LNG, or liquefied natural gas, back to gas before supplying it to the national grid—with a combined annual capacity of 7.6 million tonnes (mtpa). An additional 21 mtpa of regasification capacity will be added if the planned four LNG terminal projects, including additional FSRUs and an onshore terminal, come into existence. However, the government has consistently failed to utilise the existing capacity so far, and even if the expected boost in LNG imports is factored in, Bangladesh will still have "significant" surplus capacity, researchers say.

Like the capacity charges for power plants, the regasification units also have a fixed cost based on their installed capacity, meaning that there will be no getting around the payment regardless of whether we can utilise it or not. So, why are we heading down a path that is certain to incur the same wasteful expenditure? This represents a glaring lack of foresight on the part of policymakers. The priority, instead, should have been addressing concerns surrounding supply and price fluctuations as well as proper utilisation of existing capacity. Moreover, there is a crying need to boost production of natural gas, which experts say should have been prioritised long time ago.

We urge the government to learn from past mistakes and undertake comprehensive feasibility studies and risk assessments before expanding LNG regasification capacity. Given the damage it has already done to the energy sector through various questionable policies, it should urgently engage experts to chart the sector's future trajectory, and boosting gas exploration and production must be a vital part of it. Furthermore, we must enhance energy efficiency and promote renewable energy sources to reduce reliance on fossil fuels and mitigate environmental impact.​
 

Germany’s experience in technology can help Bangladesh develop wind power: Nasrul​

UNB
Published :​
Mar 20, 2024 19:39
Updated :​
Mar 20, 2024 19:39

1710974988428.png

State Minister for Power, Energy and Mineral Resources Nasrul Hamid said Germany’s experience in wind technology can make a special contribution to Bangladesh’s wind power.


He said this during a meeting with Dr. Barbel Kofler, German Parliamentary State Secretary of the Ministry of Economic Cooperation and Development in Berlin on Tuesday.

During the meeting they discussed various issues of mutual interest.

The State Minister also said that cooperative efforts between Bangladesh and Germany in the field of renewable energy will have a positive impact.

He noted that Bangladesh is successfully implementing the Solar Home System Programme with a special emphasis on innovation and resilience.

“This groundbreaking initiative is attracting rural communities to clean and sustainable energy sources; At the same time, they are self-reliant by realising their hopes and aspirations," he told the German State Secretary.

He said that the solar home system programme not only lights the house but also brings a light of hope to those who were previously in darkness.

Additionally, Bangladesh has announced its commitment to renewable energy and climate resilience through initiatives such as the Mujib Climate Prosperity Plan.

By leveraging global partnerships and resources, Bangladesh is committed to mitigating the effects of climate change, he added.

The state minister also said that the recent commissioning of a 60 MW onshore wind power has marked a significant milestone in Bangladesh’s progress in the field of energy.

This achievement not only highlights Bangladesh’s commitment to reduce its dependence on traditional energy sources but also shows its willingness to cooperate with developed countries including Germany in renewable energy.

The state minister said the innovation and partnership are a green signal for future generations of both the countries. This green signal will set an example for others to follow.

The Parliamentary State Secretary of Germany expressed interest in the overall situation of electricity and energy in Bangladesh and said that Germany will cooperate in the development of renewable energy in Bangladesh.​
 

Nasrul hopes Germany to further cooperate in clean energy​

BSS
Published :​
Mar 22, 2024 19:58
Updated :​
Mar 22, 2024 22:50

1711147277493.png


As Bangladesh government is moving forward with the goal of generating 40 per cent of electricity from clean energy in 2041, State Minister for Power, Energy and Mineral Resources Nasrul Hamid hoped that Germany will further cooperate in renewable energy sector.

“We always encourage increase of fuel-mix share of renewable energy,” he said on screen after the two-day long 10th Berlin Energy Transition Dialogue (BETD) at the Berlin headquarters of the Federal Foreign Office of Germany.

In the Berlin Energy Transition Dialogue, Nasrul Hamid held three meetings with ministers from 70 countries and discussed challenges and solutions on renewable energy and energy transition.

He raised the issue of technology transfer and finance among other countries’ ministers and talked how quick Bangladesh can go for renewable energy.

“I have talked with Germany Foreign Minister about challenges and expenses of renewable energy installation,” he said.

“We had close-door meetings on how Germany can help us to expand clean energy. Meetings were also held with Vice Chancellor of Germany and Deputy Secretary of Parliamentary Committee,” the state minister said.

He reiterated Bangladesh’s national goal of achieving 40 percent power production from clean energy by 2041 under Prime Minister Sheikh Hasina’s leadership.

Nasrul Hamid said Germany acknowledged Bangladesh’s progress in transitioning to clean energy and praised the government’s roadmap.​
 

‘Bangladesh robbed of $14b in 3 years’​

Says PM’s energy adviser on global oil price hike

1711318550044.png

Tawfiq-e-Elahi

Bangladesh was robbed of $14 billion in the past three years because of the spike in global oil prices, said Tawfiq-e-Elahi Chowdhury, the prime minister's energy adviser.

"All the oil companies and exporters increased the oil price. In my calculation, they have robbed us of around $14 billion since 2022. How can an economy be stable if a country's wealth is taken in such a way?"

Chowdhury's comments came at a seminar on "Unpacking the Economic Manifesto of the Awami League: Trends and Challenges for Tomorrow's Bangladesh" in Dhaka organised by the Bangladesh Institute of Development Studies (BIDS).

In the middle of 2020, crude oil prices plummeted to $25-$30 a barrel as demand shrank for the global coronavirus pandemic.

But once the impacts of the global health crisis petered out in 2021, the prices began to creep up and it went through the roof after the Ukraine war that began in February 2022.

The higher prices meant Bangladesh had to pay more for fuel, which ate up the foreign currency reserves at an alarming rate. The shrinking reserves meant the dollar appreciated substantially against the taka, raising the prices of practically everything in Bangladesh, an import-dependent country.

Subsequently, inflation hit a decade high.

Economic instability hit Bangladesh after the global fuel price started climbing, Chowdhury said, while blaming the Ukraine war for the price hike.

"Had the Russia-Ukraine war not broken out, Bangladesh would have remained in a much better shape. We are the victim of geo-political tensions."

Global lenders have also increased the interest rate of loans, which has made borrowing costlier for Bangladesh.

"Still, Bangladesh is doing well," Chowdhury added.

At the event, Finance Minister Abul Hassan Mahmood Ali blasted the people who had said Bangladesh would face the same economic turmoil as Sri Lanka. "Many had said we would become like Sri Lanka but it didn't happen."

"Many international banks and agencies have come forward to lend to us."

Germany, South Korea and Saudi Arabia are particularly coming forward to invest.

"The way new investment is coming into the country is a good thing. The country is doing well. We believe that we will be able to overcome the obstacles we are facing," he added.

Mashiur Rahman, the prime minister's economic affairs adviser; Kamal Abdul Naser Chowdhury, education and cultural affairs adviser to the prime minister; Manzoor Ahmed, an emeritus professor of BRAC University; and MM Akash, a former professor of the University of Dhaka's economics department, also spoke.

Binayak Sen, director general of the BIDS, moderated the event.​
 

Saudi Arabia's Islamic Trade Finance Corp to provide $1.4 billion to Bangladesh Petroleum​


The Islamic Trade Finance Corporation (ITFC) signed an agreement on Monday to provide $1.4 billion to the Bangladesh Petroleum Corporation, Saudi Arabia's state news agency SPA reported.

The ITFC, part of Saudi Arabia's Islamic Development Bank, said the financing was aimed at developing Bangladesh's energy infrastructure.

"This agreement is a testament to the successful long-term partnership between the two parties and the financing plan will ensure energy security for one of the fastest-growing economies in South Asia," SPA said.
SPA did not say what form the financing would take.​
 

Contracts of Summit’s three power plants extended​

The plants are located in Dhaka’s Ashulia, Narshingdi’s Madhabdi and Cumilla’s Chandina

1711578196200.png


The government has extended the contracts of Summit-owned three gas-based power plants for the next five years.

The plants are located in Dhaka's Ashulia, Narshingdi's Madhabdi and Cumilla's Chandina, which have a combined capacity of around 50 megawatts (MW).​

Yesterday, the cabinet committee on government purchase approved the extension of the power plants.

All three plants were established in 2003 and the contracts expired on November last year.

There will be no provision of capacity payments in the extended power plants, said Md Mahmudul Hossain Khan, secretary for coordination and reforms of the cabinet division.

"They will only get the operational charges which would cost Tk 6.04 per unit," he said.

In the next five years, the government would save Tk 0.0725 per unit electricity while the total save would be Tk 6.81 crore.

Meanwhile, the Summit Group informed the cabinet meeting on economic affairs that it has formed a special purpose vehicle company named Summit LNG Terminal II Co Ltd, which will build and operate the country's third Floating Storage and Regasification Unit.

The unit with 600 mmcfd capacity was supposed to be built by the Summit Oil and Shipping Co Ltd.​