[🇧🇩] Energy Security of Bangladesh

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[🇧🇩] Energy Security of Bangladesh
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PUBLIC HEARING ON GAS PRICE HIKE: BERC blasted by consumers
Staff Correspondent 27 February, 2025, 00:12

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Frequent booing and screams of the word ‘shame’ filled the air inside the indoor venue in Dhaka where the Bangladesh Energy Regulatory Commission on Wednesday held its public hearing on the gas price hike proposal of up to 152 per cent.

The first public hearing in about two years and eight months, it attracted a huge gathering of consumers, who branded the BERC as a ‘public enemy’.

Consumers rallied in a human chain even before beginning the hearing in the morning. The first session of the hearing ended in complete chaos amidst slogans calling the hearing a ‘farce’ and ‘anti-people’ reverberating around the almost-packed venue.

On January 6, Petrobangla asked for the price hike, proposing that the per unit costs of gas used in industries and captive power plants be raised to Tk 75.72 from Tk 30 and Tk 31.50 respectively.

While energy experts found such a proposal unrealistic, consumers found the hearing reminiscent of the injustices and misrule of the Awami League, one of which was passing arbitrary energy prices onto consumers’ shoulders.

‘Those who presented the price hike proposal acted rather like a postman. Their presentations reflect no use of intelligence, conscience, and commitment to the country,’ said Consumers Association of Bangladesh’s energy adviser M Shamsul Alam.

‘This hearing cannot be held without righting the wrongs done to people during the past political regime,’ he said as he began his speech after completion of the presentations by Petrobangla, six distribution companies, and the BERC’s technical evaluation committee.

The presentations apparently left many in the venue outraged as they burst into booing, which eventually evolved into slogans just before the lunch break, demanding immediate cancellation of the hearing.

‘The price hike will destroy the country’s industry, turning it into a global export destination,’ said Shamsul Alam, likening the BERC to a public enemy.

‘We demand to know the identity of the people who came up with the idea of the price hike. Is this what freedom looks like?’ asked Shamsul Alam before leaving the venue after placing three demands, giving the commission three days to scrap the proposal.

In their proposals, the Petrobangla and its affiliated organisations argued that the gas price needs to be raised to increase gas supply by importing more liquefied natural gas to boost employment, business and industrial growth, echoing the justification invariably given by the past AL regime each time it raised energy prices.

The price hike is aimed at generating Tk 3,240 crore for LNG import.

AL raised energy prices frequently, often more than once a year, throughout its rule. The hikes that came since 2023 happened without public hearing after the AL curtailed BERC’s authority by amending its law.

Communist Party of Bangladesh general secretary Ruhin Hossain Prince surprised by the striking similarity in the price hike proposal with that of AL’s, lacking any forecast on its impact on the people and the economy.

‘I demand to stop this farce,’ he said.

‘This hearing should have been called to discuss the corruption of the ousted AL regime,’ the CPB leader said.

Industrialists recalled how the last public hearing, held in June, 2022, was used by the fallen AL regime to increase gas prices from over Tk 16 to Tk 30 per unit, without caring for any justification.

They recalled a meeting with the government in which the estimated justifiable price ranged between Tk 20 and Tk 22. But the government had raised the price to Tk 30 anyway.

‘I recall industrialists receiving a maximum 7psi of gas supply against their sanctioned load of up to 40psi,’ said Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem.

‘Does the commission want us to pay even more though the gas supply was never improved?’ asked Hatem.

Deliberating on the losses caused by the arbitrary energy pricing that left scores of factories either sick or closed down, the industrialists warned that the new proposal sent out a single message – stop industrial expansion.

Under the proposal, any new gas connection seekers in industries and captive power plants will have to pay the new price for their entire supply.

Those who were promised gas connections but are yet to get it will have to pay the new price for half of its sanctioned load and the old price for the rest.

Existing gas consumers will have to pay the new price if their consumption surpasses the sanctioned load, the proposal said.

‘How dare you! In the changed situation that cost sacrifices of so many lives, you come up with such a discriminatory proposal!’ wondered Bangladesh Terry Towel & Linen Manufacturers & Exporters Association president M Shahadat while addressing the commission.

Holding back new investments, which is very likely because of the prospect of Chinese industries relocating to countries like Bangladesh, implies losing out business to India and favouring ‘old AL oligarchs’ by allowing them to enjoy the old gas price.

‘Some vested group is surely working against our economy,’ said Bangladesh Chamber of Industries president Anwar-Ul Alam Chowdhury.

The industrialists, repeatedly demanding to know the names of the brains behind the price hike proposal, said that what the price hike would achieve was so much opposite to what the July-August movement wanted to achieve.

Leaders of the Bangladesh Ceramic Manufacturers and Exporters Association, the Federation of Bangladesh Chambers of Commerce and Industry, the Bangladesh Steel Manufacturers Association, the Bangladesh Textile Mills Association, the Bangladesh Garment Manufacturers and Exporters Association, liquefied petroleum gas businessmen, CNG Refueling Pump Owners Association, Bangladesh Incense Manufacturers Association, and Ganosamhati Andolan chief coordinator Zonayed Saki also spoke.

BERC chairman Jalal Ahmed ended the hearing by saying that views expressed at the hearing would be seriously considered before a decision on the matter.

Bangladesh’s current gas demand is about 4,000mmcfd, but the supply remains below 3,000mmcfd. In 2023-24, the average gas supply was 2,493mmcfd.

The TEC of the BERC concluded in its evaluation of the proposal that Tk 7.34 could be saved per cubic meter of gas by adjusting tax, which energy experts call illegal and excessive.​
 

Energy key to economic efficiency, says CA’s Press Secretary
FE Online Desk
Published :
Feb 26, 2025 18:26
Updated :
Feb 26, 2025 18:26

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CA’s Press Secretary Shafiqul Alam said on Wednesday energy is the key to economic efficiency and no economy can function optimally without fixing the sector.

Speaking at the ‘Development Journalist Forum of Bangladesh (DJFB) Talk’ at the NEC Conference Room in Sher-e-Bangla Nagar, he criticised the previous Awami League government for mishandling the energy sector, which he claimed led to large-scale corruption and mismanagement, UNB reports.

“The entire system, like the capacity charge, was an arrangement for organized looting,” Alam alleged.

Citing findings from the White Paper, the Press Secretary stated that around $234 billion was laundered abroad during the previous regime. “Had this money remained in the country, it could have been reinvested to create jobs and boost economic growth,” he said.

Shafiqul Alam highlighted the current government’s focus on restoring macroeconomic stability. “We are seeing positive results as inflation has been declining for two consecutive months. We expect it to fall to around 7 percent by June, bringing much-needed relief to the people.”

He said that commodity prices are coming down and a stable inflation rate is helping maintain a steady exchange rate, positively impacting the development budget.

Blaming the previous government for destabilising the economy, he criticised the 9 per cent cap on both deposit and lending rates, and described the banking sector’s condition under the former regime as “daylight robbery while everyone was asleep.”

Despite these challenges, Alam expressed optimism about the interim government’s reforms, including improvements in the labor sector, enhanced efficiency at Chattogram Port and efforts to attract more foreign investment.

“We are working to restore discipline in the energy sector, pursuing policies like ‘no electricity, no payment’ and increasing the focus on solar power and regional energy cooperation through the Bangladesh-India-Bhutan-Nepal (BIBN) SA Electricity Grid,” he explained.

The government is also prioritising faster gas exploration, digitalising administrative processes to curb corruption, and attracting more foreign direct investment (FDI).

Alam stressed the importance of FDI in tackling unemployment and said the current administration had addressed issues that previously hindered foreign companies from repatriating profits. “These initiatives send the right signal to foreign investors that Bangladesh is committed to efficiency and tackling corruption,” he said.

He expressed confidence that Bangladesh would become a top performer in the global economy with ongoing reforms in the labor sector, improved port efficiency and enhanced energy management.

On law and order, Alam said the government had already taken nine measures to improve the situation and expected significant progress soon.

He also assured that the central bank had been working to restore discipline in the banking sector and protect depositors in troubled banks.

Addressing agriculture, Alam said the interim government was taking farmer-friendly initiatives to ensure food self-sufficiency.​
 

Bangladesh's energy transition comes to halt
Emran Hossain 01 March, 2025, 00:02

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RE tender gets poor response

Bangladesh’s energy transition came to an abrupt stop with the country’s interim government struggling to find investors in renewable energy projects.

After assuming power following the fall of the Awami League regime amid a mass uprising in July-August, the interim government cancelled all 31 renewable energy projects in the pipeline with a combined capacity of over 2,600MW.

Just a step behind signing the power purchase agreement, the cancelled renewable energy projects had been awarded without tender, under the protection of an indemnity law.

But new tenders, floated in three phases since December 2024, sparked debate over the eligibility criteria, which energy experts found to be facilitating AL-era power investors, big companies and foreign investors.

The response to the tenders, however, has been very poor so far, prompting authorities to extend deadlines.

Only four renewable energy projects are currently under construction, scheduled to come online this year, with a capacity of about 100MW.

‘That’s probably all about new renewable energy projects to be implemented through next year,’ said Shafiqul Alam, lead energy analyst, Bangladesh, the International Institute for Energy Economics and Financial Analysis.

‘Investors are apparently unwilling to invest in Bangladesh now,’ he said.

Cancellation of the previous renewable energy projects, some of which involved foreign investors such as Marubeni Corporation, Total Gas, and Engreen Limited, caused trust issues, highlighting uncertainties in doing business in Bangladesh, energy experts said.

The foreign investors had spent millions, some of them $200 million, and over half a decade of their time in advancing their projects that were eventually cancelled.

The foreign investors scrapped agreements with banks, a prerequisite for signing PPA following the receipt of the letter of intent from the government to get the investment.

‘New renewable energy projects would not be bankable,’ said a former employee of one of the foreign investors, confirming the shutdown of their Bangladesh office.

Government guarantee is what made previous projects bankable, he said, adding that no such guarantee is achievable in the current process.

‘Getting assurance from the financially strained Bangladesh Power Development Board does not sound exciting,’ he said.

Floated on December 5, 2024, the first tender invited proposals for setting up 12 solar power plants with capacity between 10MW and 45MW in nine locations.

The deadline for the first tender was extended once due to poor response, prompting authorities to relax its eligibility criteria. The next deadline is March 5.

Initially, applicants, who could be individual firm or joint venture or consortium or association, would have to have experience in successfully implementing two ground-mounted grid-tied solar projects, each with a minimum capacity of 20MW.

One of the solar projects would have to be implemented outside the tenderer’s country, showed the tender document.

BD Rahmatullah, a former director general of the Power Cell, described the condition as discouraging to local investors while opening the market to big foreign companies.

‘Local renewable energy enthusiasts are desperately looking to find foreign partners, often in vain,’ he said.

During the past 15 years of the AL regime, 12 countries got involved in 75 renewable energy projects, including those that rolled into operation, with a combined capacity of 5,489.6MW.

China topped the list becoming engaged in building 22 power plants with a capacity of 1,601MW.

Bangladesh was involved in building 1,258MW, followed by Singapore co-financing solar power projects with a capacity of 728MW, the United Arab Emirates co-financing 470MW, Japan 400MW, India 250MW and Germany, the Netherlands, the United Kingdom, and Korea co-financing 100MW or a bit more each.

Countries like Norway, France, and the United States also invested in solar power projects with capacities of only 50MW each.

The second tender invited proposals for building 10 solar power plants with 50MW capacity each in seven locations. The tender will expire on March 10.

Proposals for constructing 19 power plants with capacities ranging between 70MW and 100MW in 13 specific locations were floated on January 27 with a deadline of March 31.

‘All tender deadlines are likely to be extended, by up to three weeks,’ said Golam Mortuza, the BPDB official in charge of taking care of the tenders.

He said that the eligibility criteria would be relaxed to make the bidding even more competitive.

Despite making announcements about providing land and a transmission network to facilitate future renewable energy projects, the interim government has come up with no such measures in the ongoing bidding.

The locations specified in the tenders refer to sub-stations from where the BPDB will receive electricity supply from the solar power plants to be built, the PDB official said.

There are at least seven potential AL-era investors who have land near the locations mentioned in the last tender. PDB officials said that these AL-linked investors were likely to get the solar projects.

Bangladesh’s current installed power generation capacity is 27,884.7MW. Of the capacity, renewable energy accounts for only over 993MW.

Except for a wind and a hydroelectric plant, there are 14 solar power plants currently in operation, 11 of them owned by private companies known as AL favourites. The biggest solar power plant is of 200MW.

‘The ongoing bidding is likely to favour AL favourites in many ways,’ said Bangladesh Working Group on Ecology and Development member secretary Hasan Mehedi.

‘Bangladesh’s energy transition has never been so uncertain,’ he said.​
 

Energy division seeks Tk 22.25b for dev projects
Fund sought for dev projects in FY26, Finance Division scrutinising proposal
FE REPORT
Published :
Mar 01, 2025 00:40
Updated :
Mar 01, 2025 00:40

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The energy division has requested the government to earmark Tk 22.25 billion in the next fiscal year for drilling wells to enhance gas and oil production, conducting seismic surveys, and exploring mineral resources, officials have said.

Energy and Mineral Resources Division Secretary Mohammad Saiful Islam in a recent letter to Finance Secretary Dr Md Khairuzzaman Mozumder made the plea.

Finance Division officials say they are now scrutinising the proposal based on the necessity of the projects.

A senior official of the division told The Financial Express, "The government is now facing a severe shortage of development funds. Allocating additional funds in the next fiscal year will be very tough."

In the fiscal year 2025-26, the energy division secretary sought an allocation of Tk 3.0 billion to install ERL unit-2, Tk 2.0 billion to construct the Bhola-Barishal-Khulna gas pipeline, Tk 1.0 billion to dig wells in five areas of Bhola district, and Tk 2.0 billion to conduct 3D seismic surveys in Charfesson, Monpura, and Hatia upazilas.

He also sought Tk 1.0 billion for capacity enhancement of well digging and seismic survey of Bangladesh Petroleum Exploration and Production Company Limited (BAPEX), Tk 6.0 billion to procure a new rig, Tk 1.0 billion to increase the capacity of Geological Survey of Bangladesh and implement seven more projects, Tk 500 million for capacity building and setting up new lab for the Department of Explosives, and Tk 500 million for enhancement of training capacity and constructing building for Bangladesh Petroleum Institute.

According to officials of the division, four projects got approval of the Executive Committee of the National Economic Council (ECNEC) in the fiscal year 2024-25.

Under one of those, the energy division will require Tk 100 million to make procurements and set up a gas processing plant with a capacity of 60 million standard cubic feet per day (MMSCFD).

Another approved project for 2D seismic surveys to explore blocks 7 and 9 will require Tk 200 million.

Moreover, the drilling of Rashidpur-11 well will require Tk 500 million, while some Tk 1.20 billion will be needed to dig Dupitila-1 and Kailashtila-9.

Finance Division officials say two more projects are awaiting ECNEC approval in the current fiscal year. One of those involves conducting 3D seismic surveys in Habiganj, Bakhrabad, and Meghna fields and will require Tk 750 million, while Tk 2.50 billion will be needed to dig two wells in Titas and Bakhrabad fields.​
 

Maximising energy efficiency is key to our industrial growth

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Although energy efficiency has many advantages, several obstacles hinder its widespread use in the industrial sector of Bangladesh. FILE VISUAL: ALIZA RAHMAN

The need to tackle climate change necessitates an increase in energy efficiency. Global energy intensity has been declining annually since 2015, with significant implications for businesses, governments, consumers, and the environment. Energy security, climate change, and economic stability are more pressing than ever, and both developed and developing countries must take action to address these issues amid rising concerns over energy price volatility and the worldwide focus on reducing carbon dioxide (CO2) emissions.

In developing countries, where energy consumption and the search for clean energy sources continue to grow, energy efficiency is becoming an increasingly important tool for both financial stability and energy security. Furthermore, in developing countries like Bangladesh, energy efficiency has emerged as a crucial component, owing to its commercial and industrial competitiveness and energy security advantages. In addition, the environmental benefits, such as lowering CO2 emissions, make it increasingly valuable.

In FY23, over 10.35 percent of Bangladesh's GDP was derived from its ready-made garment (RMG) industry. This sector employs millions of people and is the main driver of economic growth. Also, in terms of satisfying the increasing demand for environmental, social, and governance (ESG) standards for international clients, energy efficiency is essential for Bangladesh's industries. For example, Bangladeshi garment manufacturers need to meet foreign consumers' requirements to reduce greenhouse gas (GHG) emissions.

However, the pattern of energy use in Bangladesh indicates a significant reliance on non-renewable resources. Recent data shows that the industrial sector alone is responsible for a large amount of the overall energy consumption, with textiles, clothing, and chemicals being the main contributors. Collectively, the garment (15.4 percent), textile (12.4 percent), and chemical fertiliser (12.2 percent) sub-sectors account for over 40 percent of the total energy consumption of the industrial sector.

Given this high level of consumption, energy-saving strategies could significantly lower costs and improve these businesses' competitiveness globally. Limiting energy use in the industrial sector lowers operational costs, boosts economic efficiency, and frees up capital for growth and innovation. Reducing CO2 emissions and other pollutants also encourages environmental responsibility and helps the country meet its environmental commitments under international agreements. By lowering dependency on foreign fuels and increasing energy efficiency, national energy security and stability can be improved. Effective energy use also boosts Bangladeshi products' competitiveness in the global market, where sustainability is increasingly important for cooperation and trade.

Although energy efficiency has many advantages, several obstacles hinder its widespread use in the industrial sector of Bangladesh. Many industrial operators are unaware of the financial and environmental advantages of energy efficiency, and there is a lack of qualified workers to handle and deploy these technologies. Another major obstacle is the high upfront cost of energy-efficient technologies and the absence of financial incentives. Furthermore, energy performance requirements and incentive gaps persist, while enforcement of some laws to foster energy efficiency remains weak. Another barrier is the challenge for businesses to shift to modern energy-efficient systems without major investment and technical know-how, as many still cling to outdated equipment and manufacturing practices.

One of the key obstacles industries face is the high upfront costs associated with implementing energy-efficient technology. The swift development of energy-efficient technologies creates a knowledge gap since some industries do not have the expertise needed for successful deployment.

Existing infrastructures and legacy systems in industries may not readily integrate with newer, more energy-efficient technologies. Moreover, industries may be reluctant to comply with new laws or mandated guidelines meant to increase energy efficiency. In addition, a lack of knowledge about the advantages and opportunities accessible to organisations is a widespread obstacle to energy efficiency. A major gap still exists in the application of standardised frameworks for energy efficiency.

Governments worldwide understand the critical significance of energy-efficient technologies in combating climate change and decreasing industrial energy usage. Tax incentive schemes can encourage businesses to invest in energy-efficient equipment. Grants can fund projects that improve energy efficiency, encourage renewable energy integration, and develop novel technology with environmental benefits. Providing funding channels, incentives, and support systems helps reduce the initial investment burden. Mandatory energy efficiency targets encourage businesses to invest in technological upgrades, operational improvements, and environmentally friendly practices. International collaborations enable the exchange of knowledge and experiences, allowing countries to learn from one another's successes and failures in boosting energy efficiency.

Moreover, collaborative projects bring together experts from several countries, encouraging innovation and the development of cutting edge technology that improves energy efficiency and promotes waste reduction to help develop a more sustainable and environmentally conscious industrial landscape. Governments should foster a conducive environment for joint ventures, research collaborations, and knowledge-sharing. Also, increasing investment in research and development can address new technical problems and gaps, encourage innovation in energy-efficient technology, enhance existing solutions, and develop new techniques.

As Bangladesh aims to become a higher-middle-income country and be increasingly integrated into the global economy, maintaining growth and competitiveness will depend heavily on efficient energy use. To remove obstacles and realise the full potential of energy efficiency, government regulations, business dedication, and international assistance must come together. It's time to take action. For industries, the economy, and future generations, the risks are high, but so are the rewards.

Afia Mubasshira Tiasha is senior research associate at the South Asian Network on Economic Modeling (SANEM).​
 

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