[🇧🇩] Energy Security of Bangladesh

[Saif]

Improving summer power supply: Govt pays half the subsidy power ministry needs

The Finance Division last week disbursed Tk 1,500 crore in subsidy against the power ministry’s demand for the immediate release of Tk 3,000 crore to boost electricity supply during the summer months.

www.thedailystar.net

Improving summer power supply: Govt pays half the subsidy power ministry needs
Dollar crunch still bogging down furnace oil imports

Representational photo: Collected

The Finance Division last week disbursed Tk 1,500 crore in subsidy against the power ministry's demand for the immediate release of Tk 3,000 crore to boost electricity supply during the summer months.

The latest disbursement takes the amount of subsidy to Tk 18,799 crore so far this fiscal year. The government allocated a Tk 35,000 crore subsidy for the power sector for the current fiscal year to ensure uninterrupted electricity supply.

However, this move will not help the Bangladesh Power Development Board (PDB) improve the electricity supply significantly as the problem in opening letters of credit (LCs) to import furnace oil stemming from a shortage of dollars is another reason for the insufficient power supply.

The PDB is now enforcing 1,500 megawatts loadshedding a day. Many rural areas are experiencing daily eight to 10 hours of power outages, according to PDB officials.

Senior officials of the ministry and the PDB will hold a meeting today with the representatives of independent power producers (IPPs) to discuss ways to boost power production.

In a meeting with Finance Minister Abul Hassan Mahmood Ali in early April, State Minister for Power and Energy Nasrul Hamid and senior Power Division officials requested the finance minister to disburse Tk 3,000 crore from the Finance Division. The finance minister agreed to release about Tk 1,500 crore as cash support.

Finance ministry officials said they will release more funds next month.

PDB has been enforcing loadshedding, particularly in rural areas, since the end of the Eid holidays due to an increased demand amid the ongoing heatwave across the country.

As of 9:00pm yesterday, PDB produced 15,527MW of electricity against the demand of 16,650MW. Of the produced power, 7,400MW came from gas-based power plants, about 4,100MW from coal-fired plants and about 3,100MW from furnace-oil based plants.

Though the country's liquid fuel-based power plants have a combined capacity of around 6,000MW, the PDB cannot produce more than 3,500MW due to a shortage of fuel.

On April 22, the PDB produced an all-time record 16,233 MW. However, the figure dropped later.

"We don't have enough liquid fuel. Besides, the liquid fuel-based power plants are not designed to run round-the-clock. That's why we need to enforce loadshedding in parts of the country," said Mokammel Hossain, a member of PDB.

State Minister Nasrul Hamid will sit for a meeting today with the representatives of the Bangladesh Independent Power Producers Association (BIPPA).

Faisal Karim Khan, president of BIPPA, yesterday told The Daily Star that they would discuss how to enable IPPs to procure more furnace oil to boost power generation in future.

"The independent power producers cannot procure enough furnace oil due to the banks' inability to open enough LCs because of shortage of dollars. The IPPs have nothing to do with this problem. So, we are seeking help from our regulator [Power Division] and the customer [PDB]," he said.

Asked about the collection of arrear bills from the PDB, he said different IPPs have received different amounts against arrear bills. "The PDB was supposed to clear all the arrear bills until December last year."

This fiscal year, the government issued bonds worth Tk 10,599 crore to IPPs, according to Power Division data.

The power ministry officials earlier this month said about $2 billion is needed in the current fiscal year to clear the dues of all the companies concerned and also for their working capital to supply uninterrupted electricity. Half of this $2 billion would be spent on clearing dues of India's Adani Power and US energy giant Chevron, which is producing gas from Bibiyana, a major gas field in Bangladesh.

The rest of the amount will be used to pay the bills of purchasing liquid fuel, liquefied natural gas and coal for power generation.​

 

[Saif]

undefined | The Financial Express

thefinancialexpress.com.bd

Titas Gas losses heighten in Q3
FE REPORT
Published :
May 01, 2024 08:37
Updated :
May 01, 2024 08:37

State-owned Titas Gas Transmission and Distribution Company reported a 125 per cent year-on-year increase in losses in the third quarter through March of FY24.

It failed to return to profit even after the Bangladesh Energy Regulatory Commission (BERC) had hiked commission to Tk 0.21 from Tk 0.13 per cubic metre.

Titas Gas endured a loss of Tk 1.65 billion for the first time in FY23 after the government narrowed its profit margin.

At the time, it claimed that operating cost had surpassed income in FY23 for the decline in commission to Tk 0.13 from Tk 0.25 per cubic metre and that it would show a better business performance if the government increased the commission to Tk 0.21 per cubic metre.

"But the situation has not improved yet. We are still unable to cover our costs even after the regulator increased the commission," said General Manager (Finance) of Titas Aparna Islam.

Titas Gas has declared earnings per share of Tk 2.14 in the negative for the third quarter of FY24, which was Tk 1.19 in the negative for the same quarter of the year before.

In the first nine months through March of FY24, the company has shown a loss of Tk 1.67 per share.

The gas distribution margin of Tk 0.25 per cubic metre was "significantly high", said Mr Alam, who is serving as senior vice-president of the Consumers Association of Bangladesh.

"I believe the commission of Tk 0.13 was also high. Titas has already begun charging [prepaid] consumers meter rent. Now, the government has increased it [commission] to Tk 0.21, which is unexpected."

The company, which enjoys a monopoly on pipeline gas distribution in Dhaka and Mymensingh, earned a profit of Tk 3.18 billion in FY22.

It had secured good profits in the years until FY23 since its establishment in 1964.

Meanwhile, the stock went down 3 per cent to Tk 22.90 per share on Tuesday.

Titas Gas was listed on the Dhaka and Chattogram bourses in 2008 under direct listing through offloading of 25 per cent shares in the stock market. Currently, Petrobangla holds 75 per cent of the company's shares.​

 

[Saif]

Power price to go up four times a year

The government has drawn up a plan to increase the price of electricity four times a year for the next three years to withdraw all subsidies in the power sector, which the IMF recommends.

www.thedailystar.net

Power price to go up four times a year
Govt moves to withdraw subsidies in 3 years following IMF advice

Visual: Star

The government has drawn up a plan to increase the price of electricity four times a year for the next three years to withdraw all subsidies in the power sector, which the IMF recommends.

The plan was placed before a meeting between the visiting International Monetary Fund (IMF) mission and officials of the power and energy division yesterday.

The power price would be hiked in small amounts so that the consumers do not get a shock, power division officials told The Daily Star, adding that subsidy on gas would also be withdrawn gradually.

According to the officials, the IMF mission, led by Chris Papageorgiou, wanted to know the outstanding bills of the Independent Power Plants and how much had they been paid in bonds.

Meanwhile, the Consumers Association of Bangladesh (CAB) yesterday alleged that the government was hiking power and fuel prices to protect the interests of dishonest businesspeople.

It said the sector would not need subsidies had the government stopped irregularities and corruption.

CAB made13 recommendations, including a ban on non-competitive investments, so that the government does not have to raise the price.

The IMF mission arrived in Dhaka on April 23 for its second review of the $4.7 billion loan programme. The third tranche of the loan would be released following the review.

During meetings with finance ministry officials earlier, the IMF team asked the government to gradually reduce subsidies for power, gas, and fertiliser.

After entering into the IMF's $4.7 billion loan programme in January last year, the government hiked the prices of electricity and gas several times.

After 2022-23 fiscal year, the government subsidies for electricity, gas and fertiliser nearly doubled.

In the current fiscal year, the subsidy allocation is Tk 84,542 crore and the figure could be about the same in next year's budget.

The subsidy for power is around Tk 35,000 crore and around Tk 6,500 crore for gas this fiscal year.

The finance division this fiscal year paid the power division around Tk 19,000 in bonds and cash but unpaid bills amount to around Tk 60,000 as of last January, officials said.

A power division high officials said despite the hikes in electricity prices, Tk 7 to Tk 8 has to be subsidised for every unit of power produced.

"This is the main reason for the piling up of unpaid bills," the official said, adding that this time the IMF mission wanted to know the plan for reducing the arrears and subsidy burden.

The official said the government would withdraw the subsidies for the power and energy sector as it had done for petroleum fuels.

The IMF mission also wanted to know whether the Rooppur Nuclear Power Plant would require any subsidy.

"We told them that the per unit generation cost for the Rooppur plant would be low and would not need any subsidy," the official said.

Power division officials said the first unit of the 2,400-megawatt Rooppur plant would start production next March.

The IMF has been insisting on reducing the subsidy for the power and energy sector and diverting the money saved to the social safety net programmes.

The IMF mission will end its tour with joint meetings with finance division and Bangladesh Bank officials on May 6 and 7, according to finance division officials.​

 

[Saif]

Finance minister shares Bangladesh’s vision for clean, green energy transition

Finance Minister AH Mahmood Ali yesterday said building greater trust and confidence among countries could be key to leveraging enormous opportunities for cross border energy trade and attracting international finance in energy transition projects in South Asia

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Finance minister shares Bangladesh's vision for clean, green energy transition

Photo: UNB

Finance Minister AH Mahmood Ali yesterday said building greater trust and confidence among countries could be key to leveraging enormous opportunities for cross border energy trade and attracting international finance in energy transition projects in South Asia.

Speaking at an SASEC knowledge event, the finance minister presented Bangladesh's vision for a clean and green energy transition.

While speaking as a panelist, he focused on building greater trust and confidence among South Asian countries to leverage their additional capacities in hydro, solar, and other non-fossil fuel sources to meet the region's growing energy needs sustainably.

The minister put emphasis on creating enabling environment for domestic and foreign investors to bring finances to bankable energy projects.

He sought ADB's support to this connection.

As 2024 ADB annual meeting progressed into its second day, Bangladesh's finance minister attended the SASEC knowledge event on "Financing the Clean Energy Transition in South Asia."​

 

[Saif]

Gazprom wants to hike costs for gas production

Gazprom proposes a significant increase in gas production costs for extraction from wells in Bhola, Bangladesh, prompting a potential rise in gas prices.

en.prothomalo.com

Gazprom wants to hike costs for gas production
MohiuddinDhaka
Published: 05 May 2024, 12: 32

Russian energy giant Gazprom has proposed to extract gas from five wells in Bhola for Tk 2.64 billion per well.

The cost for gas extraction will increase by Tk 840 million per well. Earlier, the energy company extracted gas Tk 1.80 billion per well.

The total cost to extract gas from five Bhola wells will increase by Tk 4.20 billion.

The technical committee constituted by Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) carried out verification of the proposal as well as primary negotiations. Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) representatives were involved the process. The proposal was sent to the Proposal Processing Committee (PPC) led by the energy secretary in mid-March for final approval. This committee will finalise the proposal.

About the increase of costs, the committee members said pipes of MS metal are used in all wells of the country. This is not sustainable for long. So high quality chromium metal will be used this time. This will be longer lasting for extracting gas. As a result, the price is increasing. The cost will decrease by Tk 220 million if MS pipes are used.

Speaking to Prothom Alo, energy and mineral division secretary Nurul Alam said the proposal has not been finalised yet. The technical committee has been given responsibility to negotiate further over the price proposal. Gazprom will certainly decrease the cost.​

 

[Saif]

Raising energy prices can’t be our first resort

Frequently increasing prices is jeopardising public interests

www.thedailystar.net

Raising energy prices can't be our first resort
Frequently increasing prices is jeopardising public interests

VISUAL: STAR

We are alarmed by the government's decision to follow up its March energy price hike with three more raises this year, especially at a time when inflation is at its highest in more than a decade. After raising energy prices several times last year, the government again increased prices in March. Worryingly still, prices are likely to be increased in four rounds next year as the government plans to withdraw energy subsidies altogether in accordance with the IMF's $4.7 billion loan condition.

The issue here, as we understand it, is the government's poor revenue collection. As it struggles to increase revenue, it feels it has no other option but to cut back costs. But repeatedly increasing power prices will badly affect businesses, which are already complaining about having to struggle to keep up with foreign competitors amid escalating costs. And since power prices will further decrease people's disposable income, domestic demand will continue to drop, further adding to their woes. This may significantly worsen the economy and negatively impact growth.

Consumers, too, will be hammered by the price hikes. As power prices together with living costs continue to rise, while incomes remain stagnant, people will have no alternative but to further cut expenditures. And while higher power prices will affect all, it will hit the poor much harder. Given that lower-income groups have already reduced consumption of even essential food items, how are they supposed to be able to pay higher electricity bills? Did the government take all these factors into consideration when taking such an untimely decision?

To cut back on costs, the government should have renegotiated with the private power plants to reduce its absurd capacity charge payments—which are reportedly taking up 81 percent of the energy subsidies. But instead of doing that, its decision to put the burden on businesses and consumers is totally ridiculous. This just goes to show the lack of transparency and accountability in the sector which has had an abysmal impact on the economy.

If the government wants to do away with subsidies, it should start by removing all capacity charge payments to private power plants first. It's decision to do otherwise shows how policymaking has been captured by special interests. The government must stop surrendering to vested interests and reverse its decision. Power price hike is only acceptable if the government fixes all such issues draining its coffers and bring much-needed transparency and accountability in the sector.​

 

[Saif]

Bangladesh needs $50-$60b investment in energy sector in next five years: Nasrul

State Minister for Power, Energy and Mineral Resources, Nasrul Hamid today said that the increasing use of technology has created immense investment opportunities in the country’s power and energy sector. Bangladesh will need an investment of $50 to $60 billion in the power and energy techno

thefinancialexpress.com.bd

Bangladesh needs $50-$60b investment in energy sector in next five years: Nasrul
UNB
Published :
May 06, 2024 20:27
Updated :
May 06, 2024 20:27

State Minister for Power, Energy and Mineral Resources, Nasrul Hamid today said that the increasing use of technology has created immense investment opportunities in the country's power and energy sector.

Bangladesh will need an investment of $50 to $60 billion in the power and energy technology in the next 5 years, he told Singapore's non-resident High Commissioner to Bangladesh, Derek Loh, when the latter met him at his ministry office In the Secretariat.

During the meeting, they discussed various issues of mutual interest.

Welcoming the Singapore envoy, Nasrul Hamid said that the power and energy sector has been moving towards automation.

The High Commissioner expressed interest in renewable energy in Bangladesh while discussing use of technology in Singapore.

They had discussions on various issues including development of nuclear power, wind power, solar power, clean energy, price of solar power, smart grid, data center, LPG and LNG terminal, storage system, refinery, automation, electricity import and export.

Sheela Pillai, Charge d'Affaires, Singapore High Commission in Dhaka, among others, was present on the occasion.​

 

[Saif]

Green energy transition needs coordinated efforts, major investment: Nasrul

State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said that green energy transition needs coordinated initiative and major investment. “The developed world, including Europe, is moving towards renewable energy. We also need to increase the use of renewable energy,&rdquo

thefinancialexpress.com.bd

Green energy transition needs coordinated efforts, major investment: Nasrul
UNB
Published :
May 08, 2024 22:13
Updated :
May 08, 2024 22:13

State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said that green energy transition needs coordinated initiative and major investment.

"The developed world, including Europe, is moving towards renewable energy. We also need to increase the use of renewable energy," he said while addressing "2024 Policy Dialogue on Sweden-Bangladesh Partnership in Renewable Energy within the RMG Sector" at a Dhaka hotel today.

The Swedish Embassy, Swedish Energy Agency and Sweden-Bangladesh Business Council jointly organised the event.

The state minister said, in sync with the changing world, Bangladesh is also working to expand and increase the use of renewable energy.

"Efforts to provide clean electricity to businesses are continuing through net metering systems, rooftop solar, import of hydropower, and increased use of energy efficient appliances," he added.

He said the Power Division has already developed a structure of draft on 'Corporate Power Purchase Agreement (CPPA)' to supply electricity generated from renewable energy to factories including the apparel industry. Initially such CPPA will be signed with some factories on a pilot basis.

Under the CPPA, renewable energy will be used round the clock which will require high storage capacity, he said, adding, in that case, costs of electricity will go up due to the use of the storage facility.

"Finally, we need to move to a smart grid. There should also be a policy on these additional costs and technology costs," he observed.

The State Minister also said that sustainable development is not a European agenda or a global agenda, to survive in the competitive world, we also have to live with sustainable development and green transition.

He said that Vietnam and Sri Lanka are doing business focusing on efficiency, automation, business environment and Bangladesh also needs to compete more efficiently to survive.

Nasrul Hamid mentioned that global apparel brand H&M showed in their presentation that Bangladesh exports products worth $3 billion dollars a year to three Swedish companies: H&M, LINDEX and IKEA.

"Garments are supplied to the three companies through 200 suppliers, employing 0.5 million workers. The company aims to reduce greenhouse gas emissions by 50 per cent by 2030," he said.

Among others, Head of Delegation of the European Union to Bangladesh Ambassador Charles Whiteley, Ambassador of Sweden to Bangladesh Alexandra Berg von Linde, Chairman of Bangladesh Power Development Board (BPDB) Md. Mahabubur Rahman and Country Manager of H&M Ziaur Rahman spoke on the occasion.​