[🇧🇩] Energy Security of Bangladesh

[Saif]

Offshore gas exploration fails to attract foreign firms

Seven global oil and gas companies purchased tender documents for gas exploration in the Bay of Bengal, but none submitted the papers within the deadline, which ended yesterday.

www.thedailystar.net

Offshore gas exploration fails to attract foreign firms
Seven purchased tender documents, but ultimately none showed up

Seven global oil and gas companies purchased tender documents for gas exploration in the Bay of Bengal, but none submitted the papers within the deadline, which ended yesterday.

The deadline was initially set for September 9 before being extended by a month. Yet, no company turned up with the documents.

Petrobangla Chairman Zanendra Nath Sarker confirmed the matter to The Daily Star.

At the same time, two other companies did not buy tender documents but purchased seismic survey data, information that indicates the potential for gas and oil exploration in an area, he said.

Gas exploration in the Bay of Bengal was also a long-discussed topic during the previous government's 15-year tenure.

Insiders say the past government was reluctant about exploration, instead focusing on importing high-cost liquified natural gas (LNG).

On March 10 this year, Petrobangla floated the tender, inviting international oil companies to explore Bangladesh's maritime area -- the first major initiative to exploit the natural resources from the sea after maritime border disputes were settled with India in 2012 and with Myanmar in 2014.

The tender process was opened for nine out of the 11 blocks of the shallow sea and all 15 deep sea blocks.

Only foreign companies with experience in offshore daily production of at least 15,000 barrels of oil or 150 million cubic feet of gas a day (mmcfd) were allowed to participate.

The model "production sharing contract" (PSC) attached to the new tender was made more attractive than previous contracts, allowing international companies to a greater share of profits.

This time, the gas price -- which used to be fixed in the past -- was set at 10 percent of the present price of Brent Crude, an international benchmark for oil prices.

Other attractive features of the tender include full repatriation of profits, no signature bonus or royalty, and determination of oil prices based on the fair market value prevailing in South and South East Asia.

In 2019, Petrobangla finalised a PSC but did not float the tender, citing a lack of interest from global companies.

This time, before floating the tender notice, the government conducted a two-dimensional multi-client seismic survey, the absence of which was also blamed for the lack of interest on the part of foreign companies during previous attempts.

Prof Badrul Imam, a renowned geologist, was surprised after hearing the news.

"I don't know if there was any weakness in our campaigning or if there is any lack in promotional packages or the advertising process," he said, adding that the Bay of Bengal is a "textbook example" of a region with huge gas resources.

Petrobangla Chairman Sarker said the state-owned energy company needs to analyse why the companies purchased the tender documents but did not submit any papers.

Petrobangla needs to sit with the companies in official and unofficial discussions, he said.

"We will find out the gaps in the process, discuss those with the government high-ups and then re-evaluate the tender documents," Sarker added.​

 

[Saif]

AL crony keeps raking in abnormal profit

One of the Awami League cronies, who made it to the recently published White Paper on economy for raking in abnormal profit, continues to do so with its business monopoly as an independent power producer, while paying less for years for the gas it uses in its plants...

www.newagebd.net

AL crony keeps raking in abnormal profit
Emran Hossain 10 December, 2024, 00:28

One of the Awami League cronies, who made it to the recently published White Paper on economy for raking in abnormal profit, continues to do so with its business monopoly as an independent power producer, while paying less for years for the gas it uses in its plants.

The United Power Generation and Distribution Company Limited that owns two commercial independent power plants, which are the only power plants of this kind in the country, has refused to pay for years the legitimate price for the gas it uses for power generation.

Years of paying less since January 2018 has led to the piling up of the company’s dues to the state-owned Titas Gas Transmission and Distribution Company Ltd to Tk 486 crore by October 2024, eight months after the Appellate Division had ruled against it holding back the payment.

The company commercially producing power was not supposed to receive the gas in the first place, considering the 2008 policy to enhance private sector participation in the power sector, amidst rapidly depleting gas reserve and staggering energy crisis.

The story of how the company, which fetched, almost without failing, 50–74 per cent annual profits over the last decade, used the scarce national resource for commercial purpose is a telltale sign of Awami League’s brazen favouritism, according to energy experts.

The United Power that purchased gas for Tk 988 crore between 2017–18 and 2023–24, earned Tk 3,799 crore from electricity sale.

‘The United has refused to pay legitimate price for rather a long time. Its gas supply should be disconnected,’ said Shahnewaz Parvez, managing director, Titas.

But business monopoly stood in the way, he said, reminding that the United Power was the only company supplying electricity in the Dhaka and Chattogram export processing zones. The power plants, with installed capacity of 164MW, were established with Bangladesh Export Processing Zone Authority’s approval in 2008 and 2009, just around the time Awami League assumed power. The two plants’ establishment cost was over Tk 1,005 crore.

Energy experts explain that a commercial power plant is essentially different from other power producers such as independent power producers, given that the government takes no risk and responsibility for the commercial one, leaving its construction and business to be operated on its own. Independent power producers, also known as IPPs, on the other hand, enjoy privileges from government, such as, guaranteed fuel supply and electricity sale. The government buys electricity from all the IPPs in the country.

The ‘Policy guidelines for enhancement of private participation in the power sector, 2008’ states that commercial power plants’ investors will have to arrange their own fuel and energy.

The policy, however, also allows commercial power plants to obtain licence as an independent power producer. But such a licence, known as COIPP, combining two types of power plants, was awarded only to one company: United Power.

The White Paper released by the interim government cites United Power as a member of Awami League’s favoured groups that received special terms. The company receives gas at the IPP rate of Tk 15.75 per meter cube instead of the captive rate of Tk 30.75 per meter cube, the paper says.

‘…selling power at the commercial rate to the Dhaka and Chittagong EPZ, thus raking in abnormal profit,’ reads a line of the White Paper.

A year before the United Power obtained the licence in October 2009, it had signed a deal with the Titas for purchasing gas at the captive rate for its Dhaka EPZ power plant.

The captive rate for purchasing gas, applicable to captive and commercial power plants, has always been higher than the IPP rate. In 2009, the difference in gas prices for the IPP and captive was Tk 1.12 per unit, which is Tk 15 at the moment.

The United Power started paying the IPP rate after obtaining the licence and continued to do so until August, 2022, when the High Court ruled that the company must pay separate rates—the captive rate for electricity sold commercially and the IPP rate for electricity sold to the government.

The High Court order came following a legal battle triggered by Titas asking for separate rates in 2019.

The United Power’s outstanding bills resulting from paying less stood at Tk 377 crore in 2022 when the High Court ordered in favour of the Titas to charge separate rates. In December 2022, the United Power agreed to pay back the dues in 40 instalments, only one of which—Tk 30 crore—has so far been paid.

But after the company had started paying the separate rates from August 2022, it stopped paying higher heating value which is obligatory under the contract when the supplied fuel produces heat higher than contracted. Fuels with higher heating value yields more production.

The United Power had tried to have the High Court order reviewed by the Appellate Division, but its petition was discharged in February this year.

Still, the company did not clear its dues.

‘The bill the company paid was barely half of what it had owed,’ said Hasan Mehedi, member secretary of Bangladesh Working Group on Ecology and Development, analysing data obtained from the Titas.

How much the United Power owed to the Karnaphuli Gas Distribution Company Limited is unknown.

The working group’s analysis also revealed that 23 per cent of the power produced between 2017–18 and 2023–24 was supplied to the national grid, while the rest went as a commercial supply to the Bangladesh Export Processing Zones Authority.

Last year, the United Power declared 20 per cent profit. Its profit stood at 74 per cent in 2018, followed by similar profits made in 2016 and 2017. In the other years, since 2013, the company reported 50 per cent or more profit.

Neither the Bangladesh Power Development Board nor Titas or Bangladesh Energy Regulatory Commission officials have any idea about the rates at which the United Power sells power commercially.

BERC officials recalled the pressure under which they issued the COIPP licence to the United power. There are seven other commercial power plants, all holding COPP licence, which is awarded exclusively for commercial power production, despite desperate attempts to have it changed to COIPP.

The United Power has been lobbying for some time now for a COIPP licence for its third commercial power plant, Leviathan Global Bd Ltd, a 53MW power station under construction at Karnaphuli EPZ.

‘The United Power is enjoying absolute monopoly in business,’ said energy expert Mohammad Tamim, who was a member of the committee that prepared the White Paper on the state of economy made public on December 2.

The United Power did not have to look back after its venture of the two COIPP power plants made eye-watering profits. Since 2011, the United Power set up seven more power plants—all IPPs—with installed generation capacity of 1,041MW.

United Power’s company secretary Elias Howladar told New Age that he did not have any comments about any of the matters.​

 

[Saif]

undefined | The Financial Express

thefinancialexpress.com.bd

Gas and oil exploration: yet another failed bid
FE
Published :
Dec 09, 2024 23:43
Updated :
Dec 09, 2024 23:43

Belying expectations of the Petrobangla officials, this time also the international bid Bangladesh floated to woo international oil companies (IOCs) has drawn a blank. Not a single IOC did come for bidding for bay hydrocarbon exploration. The head of the state-run Petrobangla, according to an FE report, was clueless about the lack of response. But market insiders have blamed the lack of confidence and inadequate data on offshore blocks for IOCs becoming non-responsive. The officials concerned have time and again made public statements claiming that the incentives offered to the prospective IOCs this time are far more attractive than before. If it is so, they need to explain the reasons for the latest debacle.

The offer made by the Petrobangla to intending IOCs is no doubt lucrative. A total of 24 offshore blocks — of which 15 are deep sea and the rest nine shallow-sea — are on offer for exploration. Production-sharing contracts (PSCs) are more attractive than ever before. The question is, if the tender has been reviewed well by energy experts in order to protect the country's long-term interests. After all, the instruments of contracts to be signed for exploration of gas and oil between Petrobangla and the successful IOCs were prepared during the previous regime known for leaving leeway for extracting commissions or to put otherwise, graft. Even some IOCs at times proved they are not as credible as they claim to be. The long-drawn litigation between the Scimitar

Exploration Limited and Bangladesh provides for a strong evidence of strained relations and creation of bad blood. Hopefully, the inexperience the ministry concerned showed in the early 90s when the Scimitar was awarded the contract will not recur this time while signing any oil exploration deal.

Let the positive vive as demonstrated by the IOCs sustain for the nine-year period of exploration. Regarding the energy crisis Bangladesh is now facing, it would be wiser had the drilling of a few of the offshore blocks been completed meanwhile. Faulty energy policy pursued by the previous government has drained the country's forex reserve and will continue to do so until the companies engaged in exploration hit offshore gas or oil or both reserves and go for production. Even this intervening period will stymie the country's growth potential.

There are no two opinions about the country's need for achieving self-sufficiency in energy. Bangladesh now faces the dilemma over its options for fossil fuels and renewable energy. Not only the developed countries but also some developing and underdeveloped ones have embarked on ambitious plans for production of targeted green energy by specific periods. Already countries like Costa Rica, Uruguay and Kenya have made tremendous progress in meeting their electricity need from renewable energy. But the world's largest carbon emitter China is also the leading global investor in and producer of renewable energy. On that count Bangladesh lags far behind. Because the Azerbaijan climate conference failed to make any headway in bridging the difference between the developed world and poor and vulnerable countries, Bangladesh will get ample time to make rational use of its offshore gas and oil if and when produced. But it should carry on its renewable energy programmes undeterred.​

 

[Bilal9]

Why is Rampal power plant not being shut down?​

Kallol Mustafa
Published: 27 November 2024, 02:56

The interim government has decided to cancel unprofitable and unimportant projects of the previous government for political reasons. A list of 35 such projects has been prepared, which will be canceled, funding suspended or cost cut. The total cost of these projects is more than one lakh crore taka.

Of the 35 projects that are going to be canceled or suspended, some are in the middle of their work, some have just started, some have not started yet, and some are in the approval stage. The government has said that the projects taken during the previous government are being canceled considering three aspects. These are -

One. To what extent has the project been taken for the needs of the people.
Two. What will be the benefits from the project.
Three. Whether the project is harmful to the environment or not. ( Prothom Alo , 10 November 2024).

We welcome the interim government's decision to cancel unnecessary, unprofitable, and environmentally harmful projects. We also believe that the three considerations that are being used to cancel projects under construction or planning should also be applied to projects that have already been launched.

Planning and Education Advisor Wahiduddin Mahmud's words are important in this regard. In a meeting with officials of the Planning Ministry on August 19, he said, "Just because a project is ongoing doesn't mean it should be kept. If the remaining money is spent, it should be considered whether there will be a profit or a loss. This is economic rationality. If there is a loss, it is better to drop it."

In this regard, if a project is unnecessary, if it is proven to be harmful from an environmental perspective, it must be canceled even after it is built. Because, the longer the harmful project continues to operate, the greater the damage will be. Rampal Power Plant is one such project, which is unnecessary on one hand, and on the other hand, the economic and environmental impact it will have on the Sundarbans is immense.

The Rampal power plant is not essential to meet the country's electricity demand. About 40 percent of the power plants in the country are idled and capacity charges are paid. Apart from that, the power plant is often partially or completely shut down due to technical faults and coal shortages. The fact that the construction of the Rampal power plant at the expense of the Sundarbans is unnecessary has been said by the National Committee for the Protection of Oil, Gas, Mineral Resources and Power and Ports, as well as many others, including Syeda Rizwana Hasan, the current government's advisor on environment, forests and climate change.

He and his organization Bangladesh Environmental Lawyers Association (BELA) had opposed the construction of the Rampal power plant since 2012. He questioned why a polluting coal-based project like Rampal was needed even though the country had overcapacity in electricity. (Daily Star Online Bangla, July 6, 2021)

Therefore, the environmental advisor clearly understands how harmful the Rampal power plant is to the Sundarbans. Now it is necessary to take steps to quickly close the power plant to protect the Sundarbans. It has already started having a harmful effect on the Sundarbans. Citing a report by the government organization Center for Environment and Geographic Information Services (CEGIS), news has been published that the waste water of the power plant is being discharged into the Maidara and Pashur rivers of the Sundarbans without any treatment.

According to this CEGIS report, completed from February to April 2024, coal is being transported without being properly covered. The construction of coal storage sheds, coal stack yards and ash silos has not been completed as planned. As a result, the environment of the Sundarbans is being polluted and the amount of pollutants mercury, nitrates and phosphates in the river water has increased more than before. (New Age, 2 November 2024; Daily Star, 10 November 2024)

This CEGIS, however, conducted an environmental survey of the Rampal power plant and declared it environmentally friendly. As a result, there are questions about how much the actual picture of the pollution of the power plant will be revealed in this organization's report. Even so, what has emerged in the report is quite worrying.

Apart from the deposed dictator and his cronies, the Rampal power plant was opposed by all political, social and cultural circles of the country at that time, including the National Committee for the Protection of Oil, Gas, Mineral Resources and Power and Ports, the National Committee for the Protection of the Sundarbans, various environmental organizations and many domestic and foreign independent experts. The then main opposition party BNP and the 20-party alliance also demanded the cancellation of the Rampal power plant. BNP Chairperson Khaleda Zia held a press conference in August 2016 and presented a picture of the negative impact the Rampal power plant could have on the environment, economy and above all the Sundarbans. (BBC Bangla, 24 August 2016)
The United Nations organization UNESCO also urged the government to withdraw from the construction of the Rampal power plant, which is harmful to the Sundarbans. But the government, desperate to protect India's strategic interests in exchange for support to stay in power, built the Rampal power plant in an authoritarian manner, ignoring all public opinion. In this regard, Syeda Rizwana Hasan once said, 'The Rampal power plant has no acceptance among the people, it has been imposed by force.' ( Prothom Alo , 10 July 2020)

There is a consensus within the country that the Rampal power plant is harmful to the Sundarbans. The current government, like the previous government, has no responsibility to look after India's interests. Therefore, before further damage is done to the Sundarbans, the interim government should take the initiative to close the Rampal power plant and initiate the necessary legal process for it.

● Kallol Mustafa is a Writer and Analyst

 

[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.

www.thedailystar.net

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.​