[🇧🇩] Energy Security of Bangladesh

[Saif]

It’s a myth

Using just 10 percent of the government’s khas lands nationwide could meet the country’s entire electricity demand through solar power, as per a study by Coastal Livelihood and Environmental Action Network.

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Land Scarcity for Solar Power in Bangladesh
It’s a myth

• 10pc of govt land can make 100pc solar energy​
• Only 2.07 lakh acres required​
• 25.73 lakh acres govt khas land available​
• 4.02 lakh acres solarisable​

Using just 10 percent of the government's khas lands nationwide could meet the country's entire electricity demand through solar power, as per a study by Coastal Livelihood and Environmental Action Network.

The study said that if the government plans to get 100 percent electricity from solar, they will require a total of 2.07 lakh acres of space, while the country's total available khas land is around 25.73 lakh acres.

The study excluded certain forests, rivers and agricultural lands that are unsuitable from the total 25.73 lakh acres of khas land and calculated that around 4.02 lakh acres are "solarisable".

Speakers at an event yesterday said the idea of land scarcity in regards to solar power expansion in Bangladesh is a myth.

"We are not demanding that 100 percent of renewables will come from solar, as there is potential for at least 30,000 MW from wind alone. But if the government plans to get 100 percent from solar, they would be able to keep 1.95 lakh acres of solarisable land for other purposes, after achieving the target," said SK Reason, research officer at CLEAN, while presenting the findings.

The remarks came on the second day of the Bangladesh Energy Prosperity 2050 Conference at the capital's BIAM auditorium in a session, titled "Land Constraints for Renewable Energy in Bangladesh".

"Outside of the existing solarisable land, there are also water bodies and rooftops where solar systems can be set up. Additionally, some agricultural lands could be used to set up agrivoltaics systems to increase the power production," SK Reason said.

It is possible to generate around 1,35,929 MW of electricity from solar systems against the government's total power generation target of 84,858 MW in 2050, he concluded.

BRAC University's Assistant Professor Rohini Kamal said the government has a policy to not use agricultural land for other purposes. However, agrivoltaics may be a solution.

"Dual use of land for both farming and solar energy generation [agrivoltaics] can be a win-win situation," she said, adding that they have initiated pilot projects to calculate how much compensation would be required per acre if such initiatives were taken.

Bahlul Alam, Learning and Advocacy Officer at An Organization for Socio-Economic Development (AOSED), described their own findings on how the land grabbers have been grabbing agricultural lands in the name of solar power installation.

Shahriar Ahmed Chowdhury, chairman at Center for Renewable Energy Services Ltd, said there are thousands of acres of land available which have not been used as agricultural lands.

"We have built a power system where the government has to subsidise around Tk 40,000 crore a year. With this one year's investment, we can build solar power plants that would generate around 4,000MW, without requiring any fuel," he said.

Lawyer Qazi Zahed Iqbal chaired the session and Senior Coordinator (Programme) at Manusher Jonno Foundation Wasiur Rahman Tonmoy moderated it.

The closing ceremony of the three-day conference will take place at 2:30 pm today. This morning, separate sessions will be held on topics including the role of marginalised communities in the energy transition, the creation of 100,000 new jobs in the renewable sector, and decarbonising Bangladesh's apparel and transport sectors.​

 

[Saif]

An overhaul of power policy long overdue

AN UNEVEN development of the power sector, riding on a wrong policy and supported by the now-repealed energy indemnity law, is more pronounced with a decline in the power demand since the onset of the winter. A low demand for power shows the abnormal extent of power overcapacity. About three...

www.newagebd.net

An overhaul of power policy long overdue
13 December, 2024, 00:00

AN UNEVEN development of the power sector, riding on a wrong policy and supported by the now-repealed energy indemnity law, is more pronounced with a decline in the power demand since the onset of the winter. A low demand for power shows the abnormal extent of power overcapacity. About three quarters of the installed power generation capacity have remained unused since the winter set in. The current installed power generation capacity is 27.74GW while the minimum power demand on December 11 was only 6.77MW, suggesting a 75 per cent overcapacity. Even in the summer, when the demand for power is at its peak, the overcapacity hovers around 50–60 per cent. What is ironic in the situation is that even with such overcapacity, the government cannot meet the demand as many power plants sit idle round the year while others produce only a portion of their capacity. What is problematic in the situation is that the government needs to pay the power plants capacity charge irrespective of whether they produce power. The government paid Tk 104,000 crore to 82 independent and 32 rental power producers in capacity charges in 2009–22.

What the situation shows is that the Awami League government followed a wrong energy policy to channel public money into private pockets. The recently released white paper on the state of the Bangladesh economy that a government committee prepared has also highlights how the power sector was a hub of corruption. What the situation further shows is that the authorities did not follow a pragmatic course and invested heavily in increasing power generation capacity, without taking into consideration the growth in demand, transmission and distribution capacity. When a maximum of 15 per cent overcapacity is considered pragmatic, the authorities increased it to 60–75 per cent. The Awami League government invested $33 billion in the power sector, increasing the power generation capacity by more than fivefold, but it was a lopsided development. For example, in 2021–22, distribution lines increased by only 2.5 per cent while power generation capacity increased by 16 per cent, that too against a 2 per cent increase in demand. What has also compounded the situation is a steady decline in power demand in the industrial sector, where the demand is largely met with captive power produced independently by using gas at a subsidised cost. The supply of gas to captive power is also responsible for deteriorating the fuel crisis in the power plants generating power for the national grid.

It is high time the government attended to the paradox in the power policy and ensured a balance between overcapacity and demand. The government should also withdraw from the binding capacity payment agreement and expand the transmission and distribution lines to better use the power. The authorities should also review the agreements that the Awami League government made with power plants, many of which are believed to be bleeding the economy without benefitting the people.​

 

[Saif]

Making hydrocarbon exploration bids attractive

International Oil Companies (IOCs) did not respond to Petrobangla's invitation for participation in oil and gas exploration bidding in the Bay of Bengal offshore blocks. Earlier Petrobangla floated open tender for bidding on March 10, 2024. The deadline for submission of bidding documents for explo

thefinancialexpress.com.bd

Making hydrocarbon exploration bids attractive
Mushfiqur Rahman
Published :
Dec 12, 2024 23:48
Updated :
Dec 12, 2024 23:48

International Oil Companies (IOCs) did not respond to Petrobangla's invitation for participation in oil and gas exploration bidding in the Bay of Bengal offshore blocks. Earlier Petrobangla floated open tender for bidding on March 10, 2024. The deadline for submission of bidding documents for exploration of oil and gas under the Production Sharing Contract (PSC) was set initially for September 2024. It was further extended until December 9, 2024. Petrobangla invited 55 IOCs for participation in the bidding process for 9 offshore blocks in the shallow sea and 15 deep sea blocks. As per Petrobangla information, seven IOCs bought tender documents and nine IOCs bought seismic survey and other geological data offered by Petrobangla prior to submission of the bidding documents. Geologists have been considering the Bay of Bengal offshore area of Bangladesh as very attractive for oil and gas field discovery. However, no response for Petrobangla bidding for leasing out Bangladesh offshore blocks have surprised Petrobangla and energy sector officials. Also, the question emerged, whether the high expectations for attractive oil and gas field discovery in the maritime area of Bangladesh are really justified. Experts believe this 'no response' will further delay the oil and gas exploration process in the country. As a result, the country's dependence on costly primary fuel import will increase further.

Currently, Indian oil company ONGC has been engaged in two shallow offshore blocks for oil and gas exploration under PSC Contract with Petrobangla. The last International bidding for offshore blocks was organised by Petrobangla in 2016. The PSC with ONGC was signed in 2012. For deep offshore blocks (DS-10 and DS-11) Petrobangla signed PSC with ConocoPhillips following PSC bidding process in 2008. But the company relinquished the blocks after exploration campaigns during 2012-2013. Since then Bangladesh received little interests from IOCs for exploration in the deep offshore blocks in the maritime area of Bangladesh.

After several amendments in the Model PSC documents and seismic survey carried out in the offshore area for identifying oil and gas potentials, different IOCs including ExxonMobil, Chevron, PETRONAS, TGDS and Schlumberger, Inpex Corporation, JOGMEC, SPA, Chinook Energy Inc, KrisEnergy Ltd. and ONGC expressed their interests for participation in oil and gas exploration. These companies expected modifications of the Model PSC Contract Terms and more financial benefits for investors in the oil and gas sector. Petrobangla has amended a number of times the Model PSC document to make it flexible and investment friendly. Also, seismic survey data was gathered ( a two dimensional multi-client seismic survey) and offered with the help of international contractor in the Bangladesh maritime area to better understand the geological potentials for oil and gas exploration in the offered blocks.

Sector experts believe that the existing political situation, depressed market of oil and gas in the international arena may have discouraged participation in the tender process for Bangladesh offshore blocks. Petrobangla Chairman Zannedra Nath Sarker considers that the situation needs thorough assessment and further consultations with the potential IOCs.

Bangladesh desperately needs investment and advanced technological assistances from experienced IOCs for oil and gas exploration in its maritime area. The country has so far 29 discovered gas fields. Among the known gas fields, 20 fields produce natural gas with the help of 107 production wells. Present domestic gas production is approximately 1,872-1,960 mmcfd. As per the estimate of the Hydrocarbon Unit, there are approximately 9 Trillion cubic feet (TCF) (proven and probable) gas reserve unutilised in the country. LNG has been imported and approximately 820 mmcfd (re-gasified LNG) are being added daily. On the contrary, the demand for gas stands at approximately 4,000 mmcfd. The present gas consumption practices indicate that electricity generation units are the major consumers (43 per cent) of natural gas in the country. Other consumers include industries (18 per cent), captive generators (17 per cent), residential (11 per cent), fertiliser factories (5 per cent), CNG (5 per cent).

As the natural gas production from the domestic sources has been declining rapidly, demands for LNG import have been increasing to ensure primary energy supply. Importing LNG and its processing costs at the FSRU are costly. The existing re-gasification capacity for LNG remains restricted (two installed FSRU with a total maximum capacity to re-gasify 1,100 mmcfd gas). Alternative available sources of commercial primary energy are costly and import based too. In the current year, approximately 6.9 million tonnes of liquid petroleum was imported and supplied to different consumers (transport, power, industry, agriculture, domestic and others sectors) in the country.

Primary energy supply shortages have been causing pains for carrying out economic activities in the country. Business and industry owners have been demanding smooth and quality supply of energy for maintaining industrial production and projected growth. Adviser for Energy and Mineral Resources Muhammad Fouzul Kabir Khan in a seminar organised by the DCCI on December 7, 2024 said that ' we need 4,000 mmcfd gas but the supply is lower than 3,000 mmcfd'. To reduce the demand and supply gap, the Adviser suggested enhancing gas exploration activities in the country.

Experts believe that the 'unexpected' outcome of the PSC bidding process in 2024 for the offshore blocks calls for objective assessment of the situation. As Bangladesh has no record of major oil and gas field discovery in the Bay of Bengal and available data do not offer attractive enough indications for oil and gas field discovery so far, the conventional invitation for tender may not help Petrobangla to find technically competent and financially strong partners for oil and gas exploration (especially in the deep offshore blocks). Also, complicated geology there may require flexible approach for awarding PSC. Prior consultation with the potential IOCs, assessing their expectations from Petrobangla are important preparatory works to be done before floating tenders. Flexible, attractive and balanced package from Petrobangla may help find appropriate PSC partner for exploration activities in the offshore blocks.

​

 

[Saif]

Bangladesh needs energy sovereignty for sustainable development: Rizwana

Bangladesh needs energy sovereignty and an inclusive energy transition to meet its sustainable development goals (SDGs), Environment Adviser Syeda Rizwana Hasan said on Friday. She emphasised that the country’s energy future should focus on clean, affordable, and reliable systems while addre

thefinancialexpress.com.bd

Bangladesh needs energy sovereignty for sustainable development: Rizwana
FE Online Report
Published :
Dec 13, 2024 20:44
Updated :
Dec 13, 2024 20:44

Bangladesh needs energy sovereignty and an inclusive energy transition to meet its sustainable development goals (SDGs), Environment Adviser Syeda Rizwana Hasan said on Friday.

She emphasised that the country’s energy future should focus on clean, affordable, and reliable systems while addressing climate change and ensuring energy equity.

Speaking at the closing programme of the 2nd Conference of "Bangladesh Energy Prosperity 2050" at the BIAM Foundation Complex in Dhaka on Friday, she also noted that an opportunity for change has emerged in the energy sector.

"We need to find a way to achieve energy sovereignty. The government will continue to meet the demands of civil society, and there needs to be a dialogue on whether the energy policy should be revised or changed,” she added.

“We must find a pathway to achieve energy sovereignty. The government should remain responsive to the demands of civil society, and there must be a dialogue on whether the current energy policy requires revision or reform,” she added.

The adviser highlighted the need for innovation, capacity building, and regional cooperation to harness renewable energy potential.

She said, “Our journey towards energy prosperity in 2050 requires collective efforts from policymakers, industry leaders, researchers, and citizens.”

The conference includes discussions on renewable energy, energy efficiency, and innovative financing mechanisms.

Participants explored ways to reduce dependency on fossil fuels while ensuring energy access for all.

Professor Ijaz Hossain of BUET, Dr Iftekharuzzaman, executive director of TIB, and Zahidul Islam, vice president of the Bangladesh Solar and Renewable Energy Association, were present.

Hasan Mehedi, member secretary of the Bangladesh Working Group on Energy and Development, presented the conference's declaration.

The event brought together policymakers, academics, and industry experts to develop actionable strategies for a sustainable energy future.

The closing session concluded with a commitment to strengthening collaboration among stakeholders and accelerating the adoption of clean energy solutions in line with Bangladesh's national priorities.​

 

[Saif]

Oil to be transported from Chattogram to Dhaka by pipeline in March

The project launched to transport fuel oil from Chattogram to Dhaka through pipeline is ending this running month. Bangladesh Petroleum Corporation (BPC) is planning to transport fuel oil through this new pipeline from March.

en.prothomalo.com

Oil to be transported from Chattogram to Dhaka by pipeline in March
Sujoy Chowdhury
Chattogram
Published: 14 Dec 2024, 18: 14

The project launched to transport fuel oil from Chattogram to Dhaka through pipeline is ending this running month. As much as 250 kilometres of pipeline has been installed already.

Bangladesh Petroleum Corporation (BPC) is planning to transport fuel oil through this new pipeline from March. Once it goes into operation, around Tk 2.36 billion (Tk 236 crore) will be saved.

BPC officials say that the cost of transporting oil will be reduced by this project. Besides, the supply system will be smoother while it will be possible to prevent environment pollution as well.

As much as 2.7 million tonnes (27 lakh tonnes) of diesel would be transported through the pipeline annually. Currently, the demand stands at 2.14 million tonnes (21.4 lakh tonnes).

According to project documents, the project was approved in October 2018. In the beginning, the duration of the project was till December 2020 but the work of the project actually started in 2020.

The project duration was extended till December 2022 in the first go and then till December 2024 in the second go. Initially, the project cost was estimated to be Tk 28.62 billion (Tk 2,862 crore).

However, the cost has now escalated to Tk 36.99 billion (Tk 3,699 crore). This project undertaken by the BPC is being implemented by 24 Engineer Construction Brigade of the Bangladesh Army.

On the matter of the construction starting late, project director Colonel Md Jahangir Hossain told Prothom Alo that some changes were brought in the project after the main construction had begun. After including those changes, the project was approved again in 2020.

The construction had also started the same year but then the work was suspended for almost a year because of the Corona pandemic. That’s why it took four years to complete the project.

While speaking on the matter of cost escalation, this project director said 90 per cent of the equipment for the project is being imported from different European countries.

Also the import procedure is being disrupted because of the Russia-Ukraine war. The price of dollar as well as the equipment has gone up. The project cost has gone up because of all these reason, he added.

According to the documents, there are two sections of the pipeline. One section runs from Chattogram’s Patenga to Godnail Depot in Narayanganj via Feni, Cumilla, Chandpur and Munshiganj.

The other section travels from Godnail to Fatulla in Narayanganj. Apart from the pipeline, there are other equipment including booster pump and nine generators under the same project.

Investment to return in 16 years

It has been learnt from BPC sources that on average the annual demand of fuel oil in the country stands at 6.5 million (65 lakh) tonnes. Meanwhile, 6.7 million (67 lakh) tonnes had been supplied in the last 2023-24 fiscal year. As much as 75 per cent of that was diesel after all.

About 40 per cent of the total demand of fuel oil is used in Dhaka division alone. To transport oil to Dhaka in the current method, it is first transported from Chattogram’s Patenga to Godnail and Fatulla depots in Narayanganj through the waterways.

Then that oil is transported from Narayanganj to Dhaka by road. Around 150 small and large ships are used every month for the transportation. As much as Tk 2 billion (Tk 200 crore) is being spent on this every year.

Project documents say that the project will generate Tk 3.26 billion (Tk 326 crore) in revenue every year. Meanwhile, Tk 900 million (Tk 90 crore) will be spent on different sectors including operation, maintenance, fuel, electricity bill and rent for the land. In this way Tk 2.36 billion (Tk 236 crore) will be saved per year. So, the investment will return within just 16 years.

When asked, BPC-designated project director Md Aminul Haque told Prothom Alo that the construction of the project will be completely finished by December. Then after finishing the commissioning work, it will be possible to start the supply of fuel in full swing.

However, BPC director (operation and administration) Anupam Barua has stated that the transportation of oil through the pipeline will start by next March.

He told Prothom Alo that the commissioning of the project will be done in January. Then there will be staff recruitment and training activities. And, the transportation of oil will begin in March. Once this project has ended, it will save both money and time.

 

[Saif]

AIIB to give $159m for power project

The interim government has signed an agreement with Asian Infrastructure Investment Bank (AIIB) to avail a $158.89 million loan to implement a power transmission infrastructure project through Power Grid Bangladesh.

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AIIB to give $159m for power project

The interim government has signed an agreement with Asian Infrastructure Investment Bank (AIIB) to avail a $158.89 million loan to implement a power transmission infrastructure project through Power Grid Bangladesh.

The loan has a maturity period of 32 years, including a seven-year grace period, and will come in several currencies. The lion's share, $109.78 million, will be provided in the form of the greenback.

The interest rate will be the secured overnight financing rate (SOFR) plus variable spread for the US dollar, six-month euro interbank offered rate (EURIBOR) plus variable spread for the euro, and 3-month Shanghai interbank offered rate (SHIBOR) plus variable spread for the Chinese Renminbi.

A "variable spread" is a percentage added to a benchmark interest rate (like SOFR) that adjusts over time based on factors such as credit risk, market conditions, or predefined terms in a financial agreement.

In addition, the front end fee will be 0.25 percent of the loan amount (one-time) and commitment fee will be 0.25 percent of the undisbursed amount.

The front end fee on a loan means a charge levied by a lender when a loan is set up or when the first payment of the loan is taken. It may be a commitment fee, an establishment fee, or a documentation fee.

Mirana Mahrukh, additional secretary to Economic Relations Division, and Rajat Misra, AIIB's acting vice-president for Investment Clients Region I and Financial Institutions and Funds, Global, signed the agreement on the "Southern Chattogram and Kaliakoir Transmission Infrastructure Development Project" on December 10.​

 

[Saif]

Payra power plant halts production for tests of new facility

Production cost at new facility to be lower than that of Adani, other plants

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Payra power plant halts production for tests of new facility
Production cost at new facility to be lower than that of Adani, other plants

The Payra thermal power plant in Kalapara upazila of Patuakhali has halted production to conduct maintenance and facilitate the test commissioning of a neighbouring facility, according to officials of the 1,320-megawatt (MW) coal-fired power station.

They informed that the plant's first 660 MW unit was shut down for seven days from December 16 for the test commissioning of the nearby power plant run by RPCL- NORINCO International Power Limited (RNPL).

Meanwhile, the second unit was shuttered earlier on November 9 for three months for conducting major maintenance works, said Shah Abdul Mawla, project officer of the Payra power plant.

He said the newly-built RNPL power plant will begin production on a trial basis in January.

As such, power generation at the Payra power plant was halted to allow testing of the transmission lines of the new facility in Amtoli upazila of Barguna, he said.

The new plant is located on the banks of the Ramnabad river, just two kilometres north of the Payra power plant. Costing about $2.5 billion, its construction began in 2019 on some 950 acres of land.

The RNPL is a joint venture of Bangladesh's state-owned Rural Power Company Limited and China's state-owned Norinco International Cooperation Limited, with each having an equal stake.

To enable the test for commissioning the RNPL-run plant, the authorities of the Payra power plant allowed for their thermal power transmission lines to be kept shut, he added.

Selim Bhuiyan, managing director of the RNPL, said each unit of the two units of the new power station can produce up to 660 MW of electricity.

"But to begin operations, it is now necessary to conduct the test. For this, the Payra-Gopalganj 400 kV power transmission line will have to be shut down. Then, it will take up to 75 days for the commissioning," he added.

Bhuiyan also said they expect the new plant to begin contributing to the national grid on the first week of March and production at its second unit of equal capacity was expected to begin by the end of May.

Sources close to the project said the total installed capacity of the grid-based power plants in the country is about 27,740 MW.

Of this, the capacity of coal-based power plants is 5,683 MW. If the capacity of the RNPL-run plant is added, the total capacity of coal-based power plants would stand at 7,000 MW, they said.

Regarding coal stocks for the new power plant, Bhuiyan said when the plant starts generating electricity, 12,000 tonnes of coal would be required on an average per day for the two units.

An agreement has already been reached with Singaporean company Yantai to supply 1 million tonnes of coal.

Under that agreement, 1.28 lakh tonnes of coal have reached the new power plant. More coal will arrive in January. In this way, coal will be imported in phases according to demand.

He said in an attempt to minimise environmental damage, high-quality coal from Indonesia would be used in this new plant. It is a state-of-the-art power plant, where more electricity will be generated by burning less coal compared to conventional power plants.

Regarding the price of electricity, he said the production cost of this new plant will be lower than that of Adani, Rampal, Banshkhali and other thermal power plants.

Considering the current price of coal ($77), the price of electricity per unit can be around Tk 9.85 on an average.

Md Toufiq Islam, project director and chief engineer of the RNCL-run plant, said if everything goes well, the first unit would be fully operational by early March and the second unit by June.​

 

[Saif]

Govt won’t raise power tariff despite pressure from IMF: energy adviser

The energy adviser explained that while the IMF recommended a tariff hike to ease the subsidy burden in the power sector, the government emphasised the adverse effects such a move would have on citizens already grappling with high inflation

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Govt won’t raise power tariff despite pressure from IMF: energy adviser

The interim government will not increase power tariffs despite a recommendation from the International Monetary Fund (IMF), said Power and Energy Adviser Dr Fouzul Kabir Khan today.

"We will not raise power tariff despite IMF's suggestion," Fouzul told reporters after a meeting with an IMF delegation at the finance ministry.

The delegation, led by IMF Mission Chief to Bangladesh Chris Papageorgiou, held a meeting as part of the IMF's third review under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF). Finance Adviser Dr Salehuddin Ahmed and Fouzul were present during the discussions.

The energy adviser explained that while the IMF recommended a tariff hike to ease the subsidy burden in the power sector, the government emphasised the adverse effects such a move would have on citizens already grappling with high inflation.

The government is focusing on reducing subsidies by cutting production costs in the energy sector, the adviser said.

He also highlighted several reforms aimed at improving efficiency and transparency in the power sector.

The government has repealed the Speedy Increase of Power and Energy Supply (Special Provision) Act, 2010, and removed bureaucrats from the boards of directors in various power companies, he noted.​

 

[Saif]

Adani pressed by Bangladesh to reopen power deal

Bangladesh’s interim government has accused energy supplier Adani Power of breaching a multi-billion-dollar agreement by withholding tax benefits that a power plant central to the deal received from New Delhi, according to documents seen by Reuters.

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Adani pressed by Bangladesh to reopen power deal

A general view of the Adani Corporate House in Khodiyar village near Ahmedabad in India’s state of Gujarat on November 21, 2024. Photo: AFP/file

Bangladesh's interim government has accused energy supplier Adani Power of breaching a multi-billion-dollar agreement by withholding tax benefits that a power plant central to the deal received from New Delhi, according to documents seen by Reuters.

In 2017, the Indian company controlled by billionaire Gautam Adani signed an agreement with Bangladesh to provide power from its coal-fired plant in eastern India. Dhaka has said it hopes to renegotiate the deal, which was awarded by then-Prime Minister Sheikh Hasina without a tender process and costs Bangladesh far more than its other coal power deals, according to Bangladesh power agency documents and letters between the two parties reviewed by Reuters, as well as interviews with six Bangladesh officials.

Dhaka has been behind on payments to Adani Power since supply started in July 2023. It owes several hundred million dollars for energy that has already been supplied, though the two sides dispute the exact size of the bill.

Bangladesh's de facto power minister Muhammad Fouzul Kabir Khan told Reuters the country now had enough domestic capacity to cope without the Adani supply, though not all domestic power generators were operational.

Nobel peace prize laureate Muhammad Yunus took power in August after a student-led revolution ousted Hasina, who critics accuse of stifling democracy and mismanaging the economy. She ran Bangladesh for most of the last two decades and was a close ally of Indian Prime Minister Narendra Modi.

Reuters is reporting for the first time that the contract came with an additional implementation agreement that addressed the transfer of tax benefits. The news agency is also revealing details about Bangladesh's plan to reopen the 25-year deal, and that it hopes to use the fallout from US prosecutors' November indictment of Adani and seven other executives for their alleged role in a $265 million bribery scheme to press for a resolution.

Adani Power has not been accused of wrongdoing in Bangladesh. A company spokesperson said in response to Reuters' questions that it had upheld all contractual obligations and had no indication Dhaka was reviewing the contract. The company did not answer questions about the tax benefits and other issues raised by Bangladesh.

Adani Group has called the US allegations "baseless."

TAX EXEMPTIONS

Adani Power's Godda plant runs off imported coal and was built to serve Bangladesh.

The company said the Bangladesh deal helped further Indian foreign policy objectives and Delhi in 2019 declared the plant part of a special economic zone. It enjoys incentives such as exemptions on income tax and other levies.

The power supplier was required to inform Bangladesh swiftly of changes in the plant's tax status and to pass on the "benefit of a tax exemption" from India's government, according to the contract and implementation agreement signed on November 5, 2017 between Adani Power and the state-run Bangladesh Power Development Board (BPDB).

But Adani Power did not do so, according to letters sent by BPDB on September 17, 2024 and October 22, 2024 that urged it to remit the benefits.

The agreements and letters are not public but were seen by Reuters.

Two BPDB officials, who spoke on condition of anonymity because they were not authorised to talk to the media, said they did not receive responses.

BPDB estimates savings of roughly 0.35 cents per unit of power if the benefit was passed on, the officials said. The Godda plant supplied 8.16 billion units in the year to June 30, 2024, according to an undated Bangladesh government summary of power purchases seen by Reuters, suggesting potential savings of about $28.6 million.

Power minister Khan said the savings would be a key part of future discussions with Adani Power.

'NEGOTIATED HASTILY'

Bangladesh in November scrapped a 2010 law that allowed Hasina to award some energy deals without a competitive bidding process.

The absence of tenders is unusual, said Tim Buckley, director of Australia's Climate Energy Finance think-tank, adding that auctions ensure "the best price possible."

In September, Yunus's government appointed a panel of experts to examine major energy deals signed by Hasina. A Bangladesh court has separately ordered a probe of the Adani deal.

Another panel asked to study the economy said in a white paper submitted to Yunus on December 1 that the US charges against Adani meant Bangladesh should "scrutinise" the power deal, which it described as "negotiated hastily."

Hasina, who has not been seen in public since she fled to India, could not be reached. Her son and adviser Sajeeb Wazed told Reuters he was not aware of the Adani Power deal but that he was "sure there was no corruption."

"I can only assume the Indian government lobbied for this deal so it was made," he said in response to allegations of political interference.

Modi's office and other Indian officials did not respond to requests for comment.

HARDBALL

On October 31, Adani Power halved the power supply from Godda in response to the payment dispute with Bangladesh.

The company in a July 1 letter seen by Reuters also rejected a request from BPDB to extend a discount it had offered until May - resulting in savings of about $13 million for Bangladesh. It said it would not consider further discounts until payment was cleared.

Adani Power contends it is owed $900 million, while BPDB says arrears are about $650 million. Bangladesh suffers from a dollar shortage and BPBD officials told Reuters they haven't been able to obtain sufficient foreign currency for payment.

The halving of supply particularly angered Bangladesh, BPDB Chair Md Rezaul Karim said, because it came after Dhaka in October remitted $97 million to Adani Power - its highest monthly payment this year.

The dispute revolves around how power tariffs are calculated, with the 2017 agreement pricing off an average of two indices.

The unit cost of energy from Godda was 55 percent above the average of all Indian power sold to Dhaka, according to the summary of Bangladesh's power purchases.

Bangladesh is pressing for Adani Power to use other benchmarks that would lower the tariff after one of the indices was revised last year, said three BPDB sources.

Adani Power has rejected that, one of them said, adding the two sides were meeting soon.

The agreements stipulate that arbitration be carried out in Singapore, but Khan said Bangladesh's next move depended on the outcome of the court-ordered investigation.

"If it is proven that bribery or irregularities had happened, then we will have to follow the court order if any cancellation happens," he said.​

 

[Saif]

13 out of 18 Summit Group power plants operational

Of the 18 power plants operated by Summit Group, 13 remain operational while five are currently shut down, the company revealed in a statement. Summit Corporation Limited owns and operates a total of 18 power plants with a total capacity of 2,255 MW and also operates Bangladesh’s second Floa

thefinancialexpress.com.bd

13 out of 18 Summit Group power plants operational
FE ONLINE DESK
Published :
Dec 19, 2024 22:28
Updated :
Dec 19, 2024 22:28

Of the 18 power plants operated by Summit Group, 13 remain operational while five are currently shut down, the company revealed in a statement.

Summit Corporation Limited owns and operates a total of 18 power plants with a total capacity of 2,255 MW and also operates Bangladesh’s second Floating Storage and Regasification Unit (FSRU) with a capacity of 500 million standard cubic feet per day (mmcf/d), reports UNB.

Summit Power Limited (SPL), a publicly listed company, along with Summit Corporation Limited, owns 15 power plants with a total 976 MW installed capacity.

Presently, three Unit I Power Plants in Ashulia, Madhabdi and Chandina (a total of 33 MW) are in shutdown mode due to gas supply limitations, though these power plants have Power Purchase Agreement (PPA) till November 21, 2028 under “No Electricity, No Payment” basis without guaranteed off-take.

Meanwhile, Madanganj Power Plant (102 MW, HFO fired) located in Narayanganj is in shutdown mode as BPDB has not placed any electricity demand since mid-August 2024.

The Jangalia Power Plant (33 MW gas-fired) is in shutdown mode since initial expiry on June 24, 2024 of the Power Purchase Agreement (PPA) with BPDB. Furthermore, BPDB has not informed any step for renewal of PPA or resumption of operation.

The remaining 10 power plants of SPL with installed capacity of 808 MW are in operation.

Separately, three turbine power plants, Summit Meghnaghat Power Company Limited, Summit Meghnaghat II Power Company Limited, and Summit Bibiyana Power Company Limited with a total installed capacity of 1,279 MW are operational as well as the Floating Storage and Regasification Unit (FSRU).

Summit Power Limited (SPL) has requested a time extension till March 31, 2025 for providing year-end (on June 30, 2024) audited financial statements and declaring dividends.

SPL is expecting the Annual General Meeting (AGM) to be held between April and May 2025, said the Summit Group.​

 

[Saif]

Pathways to green energy

BANGLADESH stands at the forefront of the global fight against climate change. As one of the most climate-vulnerable countries in the world, it faces rising sea levels, increasing...

www.newagebd.net

Pathways to green energy
by Musharraf Tansen 22 December, 2024, 00:00

BANGLADESH stands at the forefront of the global fight against climate change. As one of the most climate-vulnerable countries in the world, it faces rising sea levels, increasing temperatures, erratic weather patterns and a higher frequency of natural disasters. These challenges threaten the country’s economy, ecosystems and the livelihoods of millions. To combat these threats, Bangladesh must embrace green energy as a cornerstone of its strategy. Transitioning to renewable energy offers a dual opportunity: mitigating the impacts of climate change and fostering sustainable development.

Climate crisis

BANGLADESH’S geographic and socio-economic conditions make it exceptionally vulnerable to climate change. With about one-third of the population living in coastal areas, rising sea levels pose an existential threat. Saltwater intrusion into arable land is already compromising agriculture, which employs 40 per cent of the labour force. Moreover, extreme weather events like cyclones and floods are increasing in intensity and frequency, displacing millions and exacerbating poverty. According to the Global Climate Risk Index, Bangladesh consistently ranks among the most affected countries by climate-induced disasters.

Bangladesh’s contribution to global greenhouse gas emissions is, however, negligible — less than 0.5 per cent. The paradox of being a victim of emissions largely caused by industrialised nations underscores the importance of developing a resilient and low-carbon energy infrastructure within the country.

Case for green energy

GREEN energy, derived from renewable sources such as solar, wind, hydropower and biomass, represents more than just a mitigation strategy; it is a comprehensive solution aligned with the Sustainable Development Goals. For Bangladesh, adopting green energy offers numerous benefits that span environmental, economic and social dimensions. Transitioning to renewable energy sources is critical for ensuring environmental sustainability. Unlike fossil fuels, renewable energy sources do not emit carbon dioxide or other harmful pollutants, making them a cleaner alternative. This is particularly crucial for Bangladesh, where air pollution poses a growing threat to public health and environmental well-being. By reducing greenhouse gas emissions, the country can make significant strides in combating climate change and protecting its natural resources.

In addition to environmental benefits, renewable energy strengthens energy security. Bangladesh currently relies heavily on imported fossil fuels, leaving its economy vulnerable to fluctuating global energy prices. Harnessing the country’s abundant renewable resources can decrease dependency on imports, ensuring a more stable and self-sufficient energy supply. Economic opportunities also abound in the renewable energy sector. Investments in green energy have the potential to create thousands of jobs in areas such as manufacturing, installation, maintenance, and research. Decentralising energy production through solar and wind systems can further empower rural communities, stimulate local economies, and foster inclusive development.

Improved access to energy is another compelling advantage of green energy. Technologies such as solar power are particularly suited to off-grid applications, addressing the needs of rural areas where extending the national grid is often impractical and expensive. Decentralised solar energy systems can provide affordable and reliable electricity, transforming lives by enabling better education, healthcare, and economic activities. By embracing renewable energy, Bangladesh can tackle pressing challenges while advancing toward a greener, more equitable, and prosperous future.

State of renewable energy

BANGLADESH has already made some progress in renewable energy, particularly in solar power. The Infrastructure Development Company Limited has installed over six million solar home systems across rural areas, benefiting more than 20 million people. The country has also launched initiatives to develop solar mini-grids, solar irrigation systems, and rooftop solar solutions.

Despite these successes, renewable energy constitutes only about 3 per cent of Bangladesh’s total energy mix. The government’s Power System Master Plan 2016 originally prioritised fossil fuels, particularly coal and natural gas, to meet growing energy demands. However, recognising the environmental and financial costs, the government needs to revisit its approach to emphasise renewables.

Challenges to scaling green energy

WHILE the potential for green energy in Bangladesh is immense, several challenges must be overcome to fully realise its benefits. Financial constraints are among the most significant barriers, as renewable energy projects demand substantial initial investments. For a developing country like Bangladesh, mobilising the necessary resources can be daunting, particularly in the absence of favourable financing mechanisms. The lack of incentives for private sector investment further compounds the issue, leaving many promising projects underfunded or stalled.

Policy and regulatory barriers also hinder the growth of green energy. Despite progressive measures such as the Renewable Energy Policy of 2008 and the goal to generate 10 per cent of electricity from renewables by 2030, the pace of implementation has been slow. Streamlining regulatory frameworks, reducing bureaucratic hurdles and introducing more robust incentives are essential steps to accelerate renewable energy adoption. Technological limitations pose additional challenges, particularly the intermittent nature of solar and wind energy, which requires advanced storage solutions and modernised grids for effective integration. Unfortunately, Bangladesh’s current energy infrastructure is not yet equipped to handle large-scale renewable energy deployment, necessitating significant upgrades.

Land availability is another critical issue in a densely populated country like Bangladesh, where space for large-scale solar and wind farms is scarce. Innovative solutions, such as installing floating solar panels on water bodies, could help address this constraint, but these technologies require additional research and investment. Public awareness and acceptance further complicate the transition to green energy. Many people remain unaware of the benefits of renewable energy or are sceptical of its feasibility. Comprehensive education campaigns and active stakeholder engagement are crucial to building public support and driving behavioural change. Addressing these challenges through coordinated efforts from the government, private sector, and civil society is essential for scaling up green energy and advancing toward a sustainable energy future in Bangladesh.

Pathways to green energy future

TO OVERCOME the challenges and unlock the potential of renewable energy, Bangladesh must adopt a comprehensive and multi-pronged strategy. Policy reforms and incentives are a crucial starting point. The government should revise its energy policies to place a stronger emphasis on renewables by introducing measures such as feed-in tariffs, tax breaks, and subsidies for renewable energy projects. These steps can create an attractive environment for private investment. Clear and consistent policies are essential to instil confidence among investors and developers, ensuring long-term commitment to the sector.

International collaboration offers another pathway to progress. Bangladesh can leverage support from organisations like the Green Climate Fund and enter bilateral agreements with renewable energy leaders such as Germany and Denmark. These partnerships can provide much-needed technical and financial assistance to finance and implement large-scale projects. At the same time, innovation and technology transfer will be vital in addressing the technological gaps. By investing in research and development and fostering collaborations with global technology leaders, Bangladesh can acquire and adapt advanced renewable energy technologies. Encouraging local innovations, such as solar-powered boats and community-based micro grids, will also play a key role in creating tailored solutions for the country’s unique challenges.

Capacity building is equally important to ensure the sustainability of the renewable energy sector. Developing a skilled workforce through training programmes and academic courses focused on renewable energy technologies and project management will help build local expertise. This will not only strengthen the sector but also create employment opportunities for thousands of Bangladeshis. Alongside this, community-centric approaches should be prioritised to foster local acceptance and ownership. Engaging communities in the planning and implementation of renewable energy projects ensures their sustainability. Community ownership models, such as cooperatives managing solar mini-grids, can enhance social equity and provide direct benefits to those involved.

Finally, private sector participation is indispensable for scaling renewable energy efforts. Public-private partnerships can mobilise the resources and expertise required for large-scale projects. The private sector’s ability to drive innovation, streamline processes, and manage risks makes it a valuable partner in achieving Bangladesh’s renewable energy goals. By combining these strategies, Bangladesh can chart a sustainable energy future, addressing its environmental challenges while promoting economic and social development.

Vision for future

IMAGINE a Bangladesh where solar panels glisten on rooftops, wind turbines spin along coastal areas, and rural communities thrive with access to clean and reliable energy. Renewable energy can power industries, schools, and hospitals, reducing carbon footprints while driving economic growth. The vision is not just aspirational; it is achievable with concerted efforts.

The energy transition in Bangladesh is shaped by political ambition and economic necessity but faces significant obstacles, including fossil fuel dependency, financial barriers and governance challenges. A balanced approach that integrates renewable energy development with equity and affordability considerations is essential for a successful transition. Green energy represents a transformative opportunity for Bangladesh to address the dual challenges of climate vulnerability and energy demand. By prioritising renewable energy, Bangladesh can reduce greenhouse gas emissions, enhance energy security and foster sustainable development. However, achieving this vision requires bold leadership, robust policies and collaboration across sectors. As a climate-vulnerable nation, Bangladesh has a moral imperative and a practical necessity to lead the transition to green energy. The time to act is now — for the sake of the environment, the economy and future generations.

Musharraf Tansen is a development analyst and former country representative of Malala Fund.​

 

[Saif]

The current gas crisis needs governmental focus

How does the government plan to tackle the looming gas shortfall in the upcoming summer?

www.thedailystar.net

The current gas crisis needs governmental focus

VISUAL: ANWAR SOHEL

Why and how did we arrive at the current precarious state of the gas crisis? The answer lies in how the last government managed the sector. To achieve rapid economic growth, industries were allowed to be built without adequate assurance of energy. Additionally, all gas-consuming sectors were allowed to grow, while the relevant authorities knew full well that a severe gas shortfall was looming. Bangladesh Oil, Gas and Mineral Corporation, also known as Petrobangla, started to produce more and more gas at the behest of the government; gas production per day went up from approximately 1,400 MMcf to 2,800 MMcf—doubling in less than eight years. This was only possible because the international oil companies (IOCs) were managing several gas fields, including the large Bibiyana field. During this rapid production growth period, there was practically no addition to gas reserves; the remaining reserves are less than 10 Tcf, projected to be nearly exhausted by 2030. Continuing production from the existing reserves with no exploration activities meant that we would hit a peak, after which the production would start to decline. That is exactly what has happened: the annual production has fallen from the high 2,800 MMcfd to just above 1,900 MMcfd.

As can be seen from Petrobangla's gas demand projection, prepared several years back, the demand for gas would be 3,777 MMcfd in 2024-25. However, Petrobangla now estimates that it is actually closer to 4,000 MMcfd. The supply of gas on December 8 was 2,740 MMcfd, of which domestic production was 1,919 MMcfd and imported LNG was 821 MMcfd. Therefore, even compared to the conservative demand projection, there is a shortfall of more than 1,000 MMcfd—the actual shortfall is more than 1,200 MMcfd. Demand in all sectors except fertiliser is increasing. Therefore, the situation in the middle of next year, when power demand is expected to surge, may be alarming, especially for industrial customers.

It is interesting to study Petrobangla's natural gas demand forecast. According to this, the share of the power sector is projected to decrease from 38.5 percent in FY2024-25 to 37.4 percent in FY2030-31. However, the industry's share including captive generation is projected to increase from 41.3 percent to 46 percent during the same period. This increase will mainly come from a reduced share of the domestic and CNG sectors. Therefore, it is already in Petrobangla's plans to decrease the share of gas to the domestic and CNG sectors. Needless to say, this plan was chalked out to protect industries and the economy. The question is: will the government adhere to Petrobangla's plan for gas supply?

Then again, how does the government plan to tackle the looming gas shortfall in the upcoming summer? Whenever this issue was raised, the previous administration mentioned the drilling of 50 wells by this year and 100 more in the coming years. These kinds of reassurances seem encouraging, but will the required actions follow these promises? Are enough rigs active to accomplish this task, and are the requisite funds being provided on time? Most experts and those knowledgeable with how the government works doubt whether the full implementation of the drilling of 100 wells within the stipulated time is possible. Even if the drilling of 100 wells is accomplished, what is the certainty of finding enough gas? The other question that arises is, even if we find significant quantities of gas, how long will it take to add that to the grid? It would appear that the authorities are trying to weather out the next year without firm plans to tackle the situation.

Since the liquefied natural gas (LNG) supply will be limited by the capacities of the two regasification units now being managed by Excelerate Energy, it is imperative to import the maximum possible quantity of gas so that a constant supply of 1,100 MMcfd can be maintained throughout the year. Moreover, all efforts should be made to import coal so that all the coal-fired power plants are running at full capacity. Additionally, import from the Adani power plant as well as the previously contracted electricity import from the Indian grid have to be kept fully active. These sources of electricity will lessen the power sector's gas demand and allow more gas to be supplied to the industry sector, which is vital for our export earnings. To prevent further increases in the price of electricity and/or to keep subsidies to a minimum level, oil-fired power plants must be limited to the peak hours. Of course, some load-shedding will become inevitable when the demand becomes very high, but that can be kept at a tolerable level with planning.

There are several things that the government can do to improve the situation and prepare for long-term stability, such as: i) reduce system loss of gas; ii) encourage more rooftop solar PV panel installations; iii) help build more solar power plants; iv) encourage more use of liquefied petroleum gas (LPG); and v) promote energy conservation and energy efficiency.

System loss has become a cancer in the gas supply system. System loss, which Petrobangla calls "unaccounted for gas" (UFG), has been an average of 9.8 percent for the years 2020, 2021 and 2022. In a situation where the country cannot find enough dollars to meet all its obligations, this loss must be accounted for in LNG cost terms and needs to be given utmost importance. Of course, not all of it can be attributed to theft or pilferage, because there is a technical system loss of four to five percent due to leaks in pipes and valves. UFG is acknowledged by Petrobangla, but there is another gas pilferage hidden in the domestic sector consumption. The domestic sector is shown to consume 11-13 percent of the total gas; since there is no metering, this consumption figure is the result of a theoretical calculation based on hypothetical gas consumption per household. Sector experts believe the actual domestic sector consumption is no more than six to seven percent. Therefore, nearly five percent is unauthorised usage. If this is added to the theft/pilferage portion of UFG, the total gas loss is nearly 10 percent. The magnitude of the problem can be appreciated from the following calculation: assuming the daily supply of 2,800 MMcfd and regasified LNG price of $12 per MMBtu, this loss amounts to $1.2 billion annually.

The role of solar PV in alleviating the energy crisis in Bangladesh can hardly be overemphasised. Neglecting gas exploration and promoting renewable energy in the last decade have been two actions that are at the root of the primary energy crisis and are completely against the national interest. Even after years of efforts, the contribution of solar PV electricity to the national grid is less than one percent. Setting up rooftop solar panels is as simple as buying a refrigerator or TV these days. Achieving 500MW of rooftop solar PV in a matter of months is possible if willingness is there. Grid-tied solar parks have been a bane for Bangladesh. Successive governments have failed to achieve the acceptable level of penetration. Land availability, high tax on solar panels, inverters and accessories, transmission infrastructure requirements, and bureaucratic bottlenecks are some of the issues that have hindered progress. The new government has cancelled the ongoing 40 solar park projects as they were initially awarded without bidding. If these projects are quickly revived, then another 500MW can be easily set up within a short time. Rooftop solar PV and solar parks can substantially lower the need for oil-fired power plants, thus lessening some of the burden of purchasing heavy fuel oil (HFO).

LPG is an excellent fuel that can readily replace gas for cooking and transport, thus lessening the demand for gas. If promoted properly, LPG can be the fuel of choice for both cooking and transport. Even though LPG is more expensive than LNG, its use is being advocated because there is no pilferage or other system loss associated with its supply and distribution. Moreover, because it is more expensive than gas, the consumers use it frugally. The main reason for advocating its use for cooking, however, is that Petrobangla and the distribution companies are unable to control misuse, pilferage and leaks in the distribution system.

Energy conservation and energy efficiency are important measures that can save energy, thus assisting in managing the primary energy crisis. In the future, as the Paris Agreement comes into force for all countries, energy transition will be essential to meet commitments to tackle climate change. Therefore, a solid programme in energy conservation/efficiency must be developed. In the short term, it will help in managing the gas and electricity shortfalls, and in the long term, it will deliver the desired goals of achieving net zero emission. Energy conservation measures are behavioural things—such as switching off light bulbs and fixing dripping taps—while energy efficiency involves technical measures, many of these are no/low-cost actions that can easily be driven through awareness campaigns.

Dr Ijaz Hossain is former dean of engineering at Bangladesh University of Engineering and Technology (BUET).​