[🇧🇩] Energy Security of Bangladesh

[Saif]

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

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 firm

thefinancialexpress.com.bd

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

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.​

 

[Saif]

Dark nights, hot days feared in long summer

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...

www.newagebd.net

Dark nights, hot days feared in long summer​

Emran Hossain | Published: 00:00, Feb 20,2024​

​

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.

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[Saif]

ExxonMobil officials in Bangladesh as govt prepares March bidding round

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 ExxonMobil to participate and show its hand in the bidding round.....

www.newagebd.net

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

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.​

 

[Saif]

Importance of clean energy

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,

thefinancialexpress.com.bd

Importance of clean energy​

MATIUR RAHMAN

Published :​

Feb 21, 2024 23:39

Updated :​

Feb 21, 2024 23:39

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.​

 

[Saif]

Is an electricity tariff hike imminent?

Breaking News, International News & Multimedia

thedailynewnation.com

Is an electricity tariff hike imminent?​

21 Feb 2024, 1:16 pm0

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.​

 

[Saif]

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

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....

www.newagebd.net

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

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.​

 

[Saif]

Energy experts, economists oppose govt plan to raise electricity tariff

Breaking News, International News & Multimedia

thedailynewnation.com

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

26 Feb 2024, 7:26 pm

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.​

 

[Saif]

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

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

www.thedailystar.net

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

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.​

 

[Saif]

How can Bangladesh enhance its energy security?

Continuous gas exploration and exploitation of renewable energy should be the two pillars of energy security in the country.

www.thedailystar.net

How can Bangladesh enhance its energy security?​

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.

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.

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.

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

 

[Saif]

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

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 tech

thefinancialexpress.com.bd

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

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.​

 

[Saif]

'High dependence on imported fossil fuels bringing trouble'

"The high dependence on imported fossil fuels has significantly impacted our energy system."

www.thedailystar.net

'High dependence on imported fossil fuels bringing trouble'​

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

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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.​

 

[Saif]

State Minister hints at cutting fuel oil prices in days

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 s

thefinancialexpress.com.bd

State Minister hints at cutting fuel oil prices in days​

Published :​

Mar 03, 2024 19:58

Updated :​

Mar 03, 2024 19:58

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.​