[🇧🇩] Energy Security of Bangladesh

[Saif]

Govt debt swells over Tk 16.97t

Government debt had accumulated to Tk 16.97 trillion until March 2024 in an increase by Tk 840 billion or 5.0 per cent year on year, as Bangladesh grapples to meet its fiscal deficits. The sharp rise in government debts signals growing financial strains on the economy, potentially affecting infl

thefinancialexpress.com.bd

Indian ONGC likely to abandon hydrocarbon exploration in Bay
M Azizur Rahman
Published :
Aug 22, 2024 00:20
Updated :
Aug 22, 2024 00:20

Indian oil and gas exploration company ONGC Videsh Ltd (OVL) is set to abandon its hydrocarbon exploration efforts in two Bangladeshi offshore gas blocks after a decade of operations.

OVL -- the sole international contractor assigned to delineate hydrocarbons in Bangladesh's offshore blocks -- has neither sought to extend its contract tenure nor initiated new well drilling projects before the contract expiration in February 2025, according to a senior Petrobangla official.

Instead, it requested to relocate its two shallow sea blocks to more promising areas in the Bay of Bengal and increase gas prices, the official told The Financial Express on Wednesday.

"It is a clear indication that the Indian firm is not interested in continuing exploration in Bangladesh," said a senior official of the Energy and Mineral Resources Division under the Ministry of Power, Energy, and Mineral Resources.

State-run Petrobangla has never increased tariffs after signing production-sharing contracts (PSCs) or allowed block relocation.

OVL is currently the only international oil company (IOC) with rights to explore two untapped shallow offshore blocks in the Bay of Bengal.

But it has halted its well-drilling activities for the past two years, violating contractual obligations, said the Energy and Mineral Resources Division official.

"After a failed exploration attempt at Kanchan under the SS-04 block in Moheshkhali Island a few years ago, the Indian company did not proceed with its exploration works," said a senior Petrobangla official.

It could not find any commercially viable hydrocarbon resources at Kanchan after drilling a well, he said.

Under the PSC with OVL, the oil and gas exploration company has contractual obligations to drill two more wells: 'Titly' in block SS-04 and 'Moitree' in block SS-09. But OVL management has yet to engage a contractor for the well drilling.

With only a few months remaining in its PSC tenure, the Indian firm is unlikely to complete drilling within the given time, said sources.

They added that the firm has a budget of US$65 million for drilling the wells.

Delays and failures

OVL signed two PSCs with Petrobangla in February 2014, securing rights to explore shallow sea blocks SS-04 and SS-09. These contracts were initially set to expire in February 2019.

Petrobangla extended the PSC tenure twice to boost offshore exploration -- first until February 2023 and then to February 2025. Both extensions were granted at OVL's request following failed exploration attempts.

At Kanchan gas well, OVL drilled beyond its targeted depth of around 4,228 metres in search of a commercially viable gas deposit. But all its efforts found only huge deposits of clay and shell-stone sequence and no sandstone, meaning there is no gas reserve there.


The Kanchan well was up for the first offshore drilling in the country's maritime territory in the last seven years.

Obligations and progress

OVL is the operator of blocks SS-04 and SS-09, having a participating stake of 45 per cent. Block SS-04 covers an area of 7,269 square kilometres, while block SS-09 stretches over an area of 7,026 square kilometres. The water depth of both the blocks ranges between 20 metres and 200 metres.

As per the PSC, the firm is committed to conducting 2,700 line-kilometre 2D seismic-data acquisition and processing as well as drilling one exploratory well in block SS-04.

Also, it has to do the same for another 2,700 line-km 2D seismic- data acquisition and processing as well as drill two exploratory wells in block SS-09.

The OVL owners will be allowed to operate and sell oil and gas for 20 years from an oil field and 25 years from a gas field under the deals. The company has already completed around 3,100 line-km 2D seismic surveys for both blocks.

Currently, the country has no producing offshore gas wells, as its entire natural gas output comes from onshore fields and the import of liquefied natural gas (LNG).​

 

[Saif]

Power sector deserves priority attention

The interim government headed by Dr Muhammad Yunus has been reviewing the activities of various ministries along with other important issues related to law and order situation and macroeconomic management of the country. Secretaries of the ministries of the government are now busy preparing positio

thefinancialexpress.com.bd

Power sector deserves priority attention
Mushfiqur Rahman
Published :
Aug 19, 2024 22:07
Updated :
Aug 20, 2024 20:59

The interim government headed by Dr Muhammad Yunus has been reviewing the activities of various ministries along with other important issues related to law and order situation and macroeconomic management of the country. Secretaries of the ministries of the government are now busy preparing position papers on the priority issues of their respective ministries requiring policy decisions of the government.

Power and Energy Divisions of the Ministry of Power, Energy and Mineral Resources are now in a difficult situation due to shortage of both greenback and local currency. The payment of pending bills against the import of liquid fuel and LNG, purchase of power from neighbouring countries and capacity charges of the private power plants remains a major pressing issue for the government.

As reported by the Bangladesh Power Development Board (BPDB), there are grid connected installed power plants having a cumulative 28,089 MW power generation capacity. Among them 62 plants with 11,246 MW (40 per cent) capacity are installed in the public sector (BPDB, EGCB, APSCL, NWPGCCL, RPCL, B-R Power Gen and CPGCBL). Two power plants that are joint venture initiatives (BCPCL and BJFCL) have been installed with a cumulative capacity of 2,468 MW (9 per cent of total generation capacity). Private sector has installed 87 power plants with a capacity of 11,718 MW (42 per cent of installed generation capacity). In addition, 2,656 MWs electricity are being imported from India under contracts with BPDB (9 per cent). It was reported that installation of 27 more power plants with a total capacity of 9,277 MW is nearing completion. Clearly, the country does not have any problem with power generation, rather the question that is troubling every mind is how to rationally utilise the installed capacity.

Generally, the average daily demand for power is around 14,000 MW during the peak hours. On April 30, 2024, there was the record high generation and consumption of 16,477 MW power in Bangladesh (during the peak hours). It is clear that a huge reserve margin of installed power generation capacity has been created during the recent years, but there were little efforts to analyse why the unutilised power generation capacity remained idle and how far the country would be able to pay the capacity charges to the private power plants.

Also, some power plants installed under various loan agreements in the public sector need funds for loan and interest payments. A few of those plants remain idle or operate well below their capacity due to non-supply of primary fuels.

Experts in the relevant sector believe that installation of 25 per cent maximum reserve margin would have been sufficient for ensuring stable power supply system in the country. The wasteful resource allocation and flawed planning have pushed Bangladesh Power Development Board (BPDB) into serious financial crisis. Former State Minister for Power, Energy and Mineral Resources Mr Nasrul Hamid had informed the now- dissolved parliament a few months back that the government had to pay Tk. 1.0 trillion in capacity charges over the past 13 years. Energy sector analysts believe that the huge capacity charge obligations of BPDB have contributed to higher power generation costs. Repeated power tariff increase could not help BPDB become financially solvent. BPDB has now nearly US$ 5 billion worth outstanding payment obligations. The immediate past government while approving the national budget for the financial year 2024-2025 allocated Taka 400 billion as subsidy for the power sector. Clearly, the subsidy allocation is not enough for the BPDB to meet its soaring budget deficit.

Sector experts, independent research organisations and policy analysts have been offering suggestions to focus on various issues related to power and energy sectors. It is important to analyse why the over capacity of power generation (more than 40 per cent) have been created and who are accruing benefit from it. It is also important to see whether the installed power generation capacity related data are authentic and if the basis of capacity charge payments are based on authentic reports on plant-wise real generation capacity and their idling hours.

It may be mentioned that data tuning and use of inaccurate and obsolete data by the government departments have been causing problems for the decision makers not only for economic management but also for making development plans for various sectors. Economists and researchers have been raising concerns about the quality of official data. Dr Salehuddin Ahmed, the Finance and Planning Adviser of the interim government, in a meeting held on August 13, 2024 assured that 'accurate up-to date data on economic and social indicators will be released'. He further added that 'discrepancies in economic indicators will no longer occur'.

An unbiased power and energy sector review, rationalisation of power plants installation initiatives and reserve margin justification is urgently needed. The government may consider re-negotiating tariff under existing power purchase agreements (for those plants who have failed to meet their implementation deadlines) and penalising the contractors for their non-performance.

Besides, it is very much important to conduct necessary scrutiny of the costs involved in the implementation of large-scale power projects in public sector within the scope of government to government agreements in the past. Media have been revealing financial irregularities in the implementation of 'mega projects' and the lack of transparency. For instance, media report revealed that implementation of four large coal fired power plants in the country involved a cost of about Tk. 1.25 trillion. Of that amount, allegedly, Tk.617 billion was either wasted or misappropriated. Only professional assessments may find out the actual cost of large power plant projects that were implemented bypassing the competitive bidding processes.

Mushfiqur Rahman is a mining engineer. He writes on energy and environment issues.​

 

[Saif]

Bangladesh's Summit reviewing cross-border power deals after India rule change

Bangladesh's Summit Group plans to renegotiate preliminary deals to import renewable power from India after a recent rule change by New Delhi allowed generators that exclusively export their electricity to sell locally, the utility's chairman said

www.thedailystar.net

Bangladesh's Summit reviewing cross-border power deals after India rule change

Bangladesh's Summit Group plans to renegotiate preliminary deals to import renewable power from India after a recent rule change by New Delhi allowed generators that exclusively export their electricity to sell locally, the utility's chairman said.

India amended its power export rules less than a week after former prime minister Sheikh Hasina fled Bangladesh early this month amid deadly protests, enabling Adani Power to connect its Godda coal-fired plant -- the only generating station under contract to export all its output -- to India's domestic grid.

"After the policy change, my partners in India might be more willing to sell in India. Our company will be investing in transmission in Bangladesh and we will have to assume more risks," Summit Group Chairman Aziz Khan told Reuters.

The conglomerate, which operates over a dozen fossil fuel-based power generation plants, signed preliminary deals with Indian partners including Tata Power Renewable Energy Ltd last year to construct and source supply from 1,000 megawatts (MW) of renewable projects.

A spokesman for Tata Power declined to comment on Summit's plans.

Green power imports are crucial for slashing emissions in Bangladesh, which gets nearly 99% of its electricity from fossil fuels. Land scarcity in the densely-populated country of over 170 million has constrained higher solar additions.

Summit Power International, the Singapore-based holding company for Summit Group's power generation assets, is exploring options including delaying investments until there is more policy clarity, and renegotiating financial terms to account for higher risks, Khan said.

"Such quick changes in policies are always a matter of concern as they have long-term implications," Khan said, referring to India's rule change.

Summit's plans to import clean electricity via India from 700 megawatts of hydro power plants it planned to build in Bhutan and Nepal as a part of $3 billion in regional clean power investments also face uncertainty due to a new government in Bangladesh, Khan said.

No final decisions on the cross-border investments have been taken yet, Khan said, adding that the company would continue to invest within Bangladesh.

Khan said the new Bangladesh government's decision to suspend a law allowing awards of power supply contracts without tenders also contributed to his decision to review projects.​

 

[Saif]

Govt seeks budgetary support from ADB for energy imports

The interim government has sought budgetary support from the Asian Development Bank to pay outstanding dues to foreign energy companies and make more imports of power and energy. The request was made by Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan when a delegation of the

thefinancialexpress.com.bd

Govt seeks budgetary support from ADB for energy imports
FE ONLINE DESK
Published :
Aug 22, 2024 21:06
Updated :
Aug 22, 2024 21:06

The interim government has sought budgetary support from the Asian Development Bank to pay outstanding dues to foreign energy companies and make more imports of power and energy.

The request was made by Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan when a delegation of the multilateral donor agency, led by its country director Edimon Ginting, met him at the ministry’s conference room on Thursday, reports UNB.

Welcoming the ADB delegation, he informed them that he had made several decisions very quickly soon after taking charge.

He said the interim government will make decisions based on facts rather than just relying on statistics.

He also informed the delegation that from now on, to ensure transparency, he has also given instructions to the ministry officials to go through the tender process to make any kind of procurement.

“The provisions of Public Procurement Act, 2006 and Public Procurement Rules, 2008 shall be used in all procurement processes”, he told the delegation.

He also noted he has suspended the ongoing operations under the Speedy Power and Energy Supply (Special) Act, 2010, and suspended the concerned provision of the Bangladesh Energy Regulatory Commission (Amendment) Act, 2023 that allows the government to raise power and gas tariff by executive order.

Fouzul Kabir, who is also adviser of the Ministry of Road Transport and Bridges and the Ministry of Railway, said that the current government has undertaken plans to increase the use of renewable energy.

Congratulating the adviser on his new role, the ADB Country Director in Bangladesh said that they are the biggest partner of the government in the power and energy sector.

He expressed interest in working wholeheartedly with the present government. They will seriously consider the current government's request for budgetary assistance in the power and energy sector.

Senior Secretary of Road Transport and Highways Division Md. Ehsanul Haque, Senior Secretary of the Power Division Md. Habibur Rahman, Senior Secretary of Bridges Division Md. Manjur Hossain, Railway Ministry Secretary Mr. Abdul Baki, and Energy and Mineral Resources Division Secretary Md. Nurul Alam were present on the occasion.​

 

[Saif]

Tackling energy problems will be tricky

The energy advisor has stated on the first day of joining office that the Speedy Supply of Power and Energy (Special Provision) has been put on hold with the promise of not raising tariffs on energy prices and alongside bringing past contracts under review. This is a welcome move but the fact remai

thefinancialexpress.com.bd

Tackling energy problems will be tricky
Syed Mansur Hashim
Published :
Aug 23, 2024 21:42
Updated :
Aug 23, 2024 21:42

The energy advisor has stated on the first day of joining office that the Speedy Supply of Power and Energy (Special Provision) has been put on hold with the promise of not raising tariffs on energy prices and alongside bringing past contracts under review. This is a welcome move but the fact remains that the country is presently burdened with a US$5.0 billion energy-debt and it is the task of the interim government to navigate the country out of this situation.

As stated, umpteen number of times by energy experts in the country, the open flouting of rules that the Act allowed in terms of public procurement had become the norm and it created the perfect opportunity for a total lack of oversight in procurement of energy supplies and power contracts. The full scope of the graft that had occurred over the course of more than a decade will remain a work in progress but that is a separate subject of discussion.

While arguments have been made both in last parliament and in the public sphere that there is nothing wrong with 'capacity payment', one cannot overlook the public disclosure made by the former minister for energy and power that the state had paid Tk 1.06 trillion as capacity payment to the private energy sector. The crux of the problem lies elsewhere i.e. correct demand forecasting. For years, policymakers went on building one power plant after another in what is now totally obvious - over and above the power needs of the economy! As capacity payment or charge takes into account return on investment, interest payments on loans (both domestic and foreign), capacity payment as a whole went on rising and today, by an average estimate the energy sector is burdened with around 10,000 MW (megawatts) of excess power generation capacity.

Again, as energy planners wilfully chose to divert energy sourcing from national to international at the expense of sustained exploration of own natural resources and concentrating on an import-driven fuel supply, external shocks like a war in Europe pushed the production cost of energy through the roof. None of this helps the present government though because it is now burdened with multi-billion-dollar debt in foreign currency because these energy supplies have to be paid in foreign exchange.

The question is what will the government do about these unnecessary power plants, particularly those that were commissioned after 2017? Since, there is no need for a lot of these plants, what will the decision about keeping them operational? Whatever may be the contractual obligation under the said Act, can the country afford to keep paying capacity charge? The answer obviously is a resounding NO! This is evidenced by events over the last one year when the previous government had resorted to taking short-term hard interest loans from foreign institutions simply to defray the payments to foreign suppliers of liquefied natural gas (LNG) and to meet import of fossil fuels. The situation today has taken years in the making and by putting a cap on energy prices for now will not make the problem go away.

Many years ago, Pakistan had followed the same path to prove power for its economy. It had landed in the same mess as Bangladesh. A skewed energy policy that was overly dependent on independent power plants which increasingly became the dominant suppliers of energy! That country too had reached a situation where it couldn't afford to pay off the producers of power or the suppliers of energy and indeed the country was going bankrupt and this was avoided by a generous bailout from the Kingdom of Saudi Arabia.

Bangladesh presently isn't on the verge of bankruptcy but it is in serious economic trouble. As pointed out by numerous energy experts in the country, there has to be a shift in policy to take energy exploration seriously. The country is now energy-starved. Entire sections of industry are now facing ruin because natural gas production in the country has been waning for some years now. With state-owned exploration companies effectively sidelined as policymakers had moved towards procuring energy supplies from the international market, natural gas can no longer be supplied to either industry or power generating plants. For more than a decade, we have become less energy-independent and that is where the focus must now return. The energy advisor is tasked with the unenviable job of rejuvenating the exploration of on-shore and off-shore natural gas. While it may be politically expedient for some in government to forgo the issue of coal extraction, can Bangladesh be choosy? Pragmatism demands that Bangladesh must explore all its domestic natural resources if it wishes to preserve the economy and move forward.​

 

[Saif]

Navigating energy efficiency for Bangladesh’s energy security

At this time, it would be prudent to change the highly import dependent energy model.

www.thedailystar.net

Navigating energy efficiency for Bangladesh’s energy security

The government’s efforts in the last one and a half decades contributed to economic growth; however, the road ahead is still bumpy. VISUAL: BIPLOB CHAKRABORTY

According to the International Energy Agency, a fundamental tenet of energy security is having a steady supply of energy at reasonable prices. Between 2009 and 2024, Bangladesh primarily focused on scaling up power infrastructure, while efforts to develop energy resources fell short. The country's exposure to the volatile international fossil fuel market increased during this time, leading to challenges in maintaining a steady energy and power supply. Soaring tariffs amid inflationary pressure in the last two years made energy less affordable to the low and lower-middle-income groups.

The government's efforts in the last one and a half decades contributed to economic growth; however, the road ahead is still bumpy, with fuel imports likely to spiral, which in turn might worsen the country's energy security.

At this time, it would be prudent to change the highly import dependent energy model. With different energy-consuming sectors providing significant energy efficiency (EE) opportunities, Bangladesh's approach to accelerating energy security should include EE at its core. Going forward, enforcing EE policy instruments and creating a favourable ecosystem for them to thrive in will be all-important to promote EE.

Bangladesh's energy efficiency and conservation master plan up to 2030 shows viable EE and conservation potential of 21% and 28.8% in the industry and household sectors respectively. However, a 10% efficiency gain on grid electricity consumption could lessen the country's power demand between 1,500 megawatts (MW) and 1,700MW (based on day and evening peak power demands during April to July 2024). Demand management could offer a multitude of benefits, such as delay or lessen the investment in new and large fossil-fuel-based power plants, and minimise fossil fuel import bills on the back of reduced demand for power.

Usually, Bangladesh has competing priorities in the power sector. It feels the burgeoning pressure to consistently invest in incremental power generation capacity and to improve transmission and distribution (T&D) systems. As EE provides relief by delaying the immediate demand for capital-intensive and large fossil-fuel-based power plants, the country can use freed-up resources to bring down T&D losses. This investment appears timely, given that the country registered T&D losses of around 10.3% in fiscal year (FY) 2022-23 against the global average of less than 8%. IEEFA's analysis concludes that a 1% improvement in T&D losses will reduce the country's energy generation needs by 884 gigawatt-hours (based on FY2022-23 data). This will help avoid oil import bills worth Tk 12.38 billion ($106.3 million) per annum (assuming the average fuel cost of producing electricity from oil-fired plants is Tk14/kilowatt-hour).

Moreover, industries and households display a notable gas-saving opportunity. IEEFA's study substantiated that EE in industrial captive power generation can reduce liquefied natural gas (LNG) import bills of $460 million per annum. EE in industrial processes demonstrates additional gas-saving potential. Likewise, due to billing systems for gas burners in most households not accounting for consumption quantity, people often exhibit wasteful gas consumption behaviours. If such behaviours are rectified through raising awareness, it could contain spiraling gas consumption and result in substantial national resource savings.

While EE can optimise energy consumption and accelerate energy security, Bangladesh needs to focus on policy enforcement to achieve the desired results.

The energy audit regulations (EAR), issued in 2018 and revised in 2024, specify guidelines for performing energy audits and the certification of energy auditors and managers. Furthermore, the Sustainable and Renewable Energy Development Authority (SREDA) declared 189 enterprises as large energy consumers (designated consumers) that are mandated to carry out energy audits and submit periodic reports.

A logical progression should ensure that designated consumers carry out energy audits and submit reports to the SREDA periodically. However, this step will only generate data on the EE potential of audited consumers and can at best motivate some consumers to implement a few energy-saving measures. Instead, setting up annual or periodic energy-saving targets for designated consumers will guide them towards EE for compliance purposes. SREDA should crosscheck the annual EE results of designated consumers and prescribe corrective measures to underperforming consumers.

The government could consider increasing energy savings targets of the designated consumers and enlarge their base. Verification and proper enforcement of EAR will encourage industries to establish a systematic energy management practice to achieve the highest level of efficiency.

On the other hand, the Bangladesh government issued the EE labelling regulations in 2023, laying the foundation for assessing the minimum energy performance standards (MEPS) of different appliances. Energy efficiency labels should be introduced, based on MEPS, to help consumers make informed decisions while purchasing lights, fans, air conditioners and other appliances.

Once labels for appliances are available, the Bangladesh Standards and Testing Institution should regularly monitor the market to phase out appliances that do not meet the MEPS.

Energy-efficient refrigerators and air conditioners with inverters are already costlier than their counterparts without inverters. As the FY2024-25 national budget has imposed higher minimum import duties on imported compressors that have inverters, consumers will find energy-efficient refrigerators and air-conditioners more expensive. The government should revisit the duty imposed on imported compressors with inverters and develop an ecosystem to encourage the use of efficient appliances. Once the country achieves adequate manufacturing capacity to meet local demand, the government could reimpose such duties.

If the country builds on its strong EE potential, it can reduce imported energy dependence and utilise monetary savings to upscale clean energy and enhance energy security. Furthermore, higher energy prices make the investment in EE expedient.

Shafiqul Alam is Lead Analyst, Bangladesh Energy, at the Institute for Energy Economics and Financial Analysis (IEEFA)​

 

[Saif]

Govt must do away with burden of power overcapacity

THE rental and quick rental power plants that have reared the ugly head since 2009 riding an indemnity law that the now deposed Awami League enacted to plunder the power and energy sector have now run to a constraining pass, warranting an immediate government action. While the law — the Quick...

www.newagebd.net

Govt must do away with burden of power overcapacity
28 August, 2024, 00:00

THE rental and quick rental power plants that have reared the ugly head since 2009 riding an indemnity law that the now deposed Awami League enacted to plunder the power and energy sector have now run to a constraining pass, warranting an immediate government action. While the law — the Quick Enhancement of Electricity and Energy Supply Act 2010 the tenure of which has been extended in phases until 2026 — has all along safeguarded actors and their action in the sector by keeping them above the customary law, what happened under the protection of the law has had two major implications of creating a situation to increase power bills and giving more subsidy in the sector. Rental power plants have also become expensive because of the use of expensive diesel and furnace oil and the capacity charge entitlements laid out in the power purchase agreements by way of which the government pays the plants for the installed power capacity that the plants do not produce. Heavy fuel oils were four times more expensive than gas and 37 per cent more expensive than coal in producing a unit of electricity in 2023. The average power generation cost in oil-fired plants was about Tk 23 a unit against the average power system cost of Tk 11.5 a unit. Some oil-fired plants even spent Tk 40 on producing a unit of electricity.

The Awami League government — which extended the lifetime of the rental power plants three times their recommended efficient operating life and paid them about Tk 330 billion in 2009–2023 — has paid in all the power producers Tk 1,000 billion since 2009 in capacity charge for the power not produced, thus, transferring public money into private hands without being questioned. Rental and quick rental power plants have also been blamed for mounting losses of the Power Development Board which in 2023 stood at Tk 435.39 billion. The action in the power sector that could not be questioned, however, increased the installed generation capacity from 5GW in 2009 to more than 28GW as of June, but more than a half of the capacity could not be used and was not required. The authoritarian government of the Awami League did not heed what experts have said all these years. In the changed political context after August 5, when the Awami League government was overthrown, it has, therefore, become imperative for the interim government to assess the power and energy situation and establish the generation capacity that the country would need to meet all its needs, which should include the standard level of power overcapacity, and then do away with the remaining overcapacity that the government has so far paid for. The government should do away with rental power plants and the burden of power overcapacity associated with such plants.

Whilst the government must take early steps to do away with the burden of power overcapacity after a thorough assessment of the reality on the ground, including the needs and the capacity that should logically be there, it must also repeal the indemnity law and hold to account all the actors and their action that have pushed the power and energy sector to such a pass.​

 

[Saif]

Govt's executive authority to raise power and gas prices cancelled through ordinance

The government issued a gazette notification cancelling its executive authority to raise power and gas prices without public hearing by the Bangladesh Energy Regulatory Commission (BERC). The gazette, issued by Ministry of Law, Justice and Parliamentary Affairs, dated on August 27, 2024, said that

thefinancialexpress.com.bd

Govt's executive authority to raise power and gas prices cancelled through ordinance
Published :
Aug 27, 2024 23:25
Updated :
Aug 27, 2024 23:25

The government issued a gazette notification cancelling its executive authority to raise power and gas prices without public hearing by the Bangladesh Energy Regulatory Commission (BERC).

The gazette, issued by Ministry of Law, Justice and Parliamentary Affairs, dated on August 27, 2024, said that through this amendment the section 34Ka of the BERC Act 2003 will be abolished.

Officials of the Power and Energy Ministry said that this Section 34Ka was introduced by the previous Awami League government giving the government an authority to set the prices of power and gas through executive power without a public hearing.

The new amendment came in line with the Advisor of the Ministry Power, Energy and Mineral Resources of the interim government Dr Muhammad Fouzul Kabir Khan’s recent statement that the government will not raise gas and power prices without public hearing, UNB reports.

After this latest amendment, if any entity of the government wants to raise the price of power or gas, it has to submit a proposal to the BERC and then after examination BERC will hold a public hearing and then announce its decision on the issue within 90 days.​

 

[Saif]

Corruption and irregularities permeate power and energy sector, says adviser

Adviser for Power and Energy, and Road Transport and Bridges Muhammad Fouzul Kabir Khan has condemned widespread corruption and irregularities in the power and energy sector. Speaking to the media after a meeting with senior officials at Petrobangla's headquarters in the city on Wednesday, Khan ex

thefinancialexpress.com.bd

Corruption and irregularities permeate power and energy sector, says adviser
FE ONLINE REPORT
Published :
Aug 28, 2024 21:35
Updated :
Aug 28, 2024 21:35

Adviser for Power and Energy, and Road Transport and Bridges Muhammad Fouzul Kabir Khan has condemned widespread corruption and irregularities in the power and energy sector.

Speaking to the media after a meeting with senior officials at Petrobangla's headquarters in the city on Wednesday, Khan expressed grave concerns about the pervasive nature of corruption.

“Wherever I look, I see evidence of irregularities and corruption,” Khan said.

The adviser warned the officials to rid themselves of corrupt practices and emphasised that stern actions would be taken against those involved in such activities.

Mr Khan said from now on the secretaries of the power division and the energy and mineral resources division will be no longer chairman of state-run power and energy companies, unless an unavoidable situation arises, to avoid contradictories.

The interim government will also form an independent committee, headed by a retired justice, to review the projects and agreements inked under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 (Amended 2021), he said.

The government has already suspended special laws used by the previous government to accelerate deals and projects in the power and energy sectors bypassing competitive biddings, annulled the law cutting government authority to regulate natural gas and power tariffs avoiding stakeholders’ opinion, the adviser continued.

As per Mr Khan, the suspension of the special law has put several multi-billion dollar power and energy deals and projects that were in the pipeline at risk, including proposed fossil fuel and renewable energy-based power plants, liquefied natural gas (LNG) import terminals, long-term LNG deals, and petroleum product import contracts, and spot LNG purchase modalities.

The adviser stressed that the public demands LNG and petroleum products be imported at more rational and reduced costs.

Regarding the resumption of operation of Summit LNG Terminal, Mr Khan said that a specific timeframe has been sought from the contractor to ensure the coming back online of the FSRU.

Summit has informed that the FSRU will come online within September 7-10, he said.

The LNG terminal has been shut since May 30 after it was hit by a floating pontoon during the cyclone Remal mayhem.

The country’s overall natural gas supply will increase after resumption of LNG re-gasification in Summit’s FSRU, the adviser expressed hope.​

 

[Saif]

‘বাদ হবে মিটারের অযৌক্তিক চার্জ’

 

[Bilal9]

Bangladesh's Summit reviewing cross-border power deals after India rule change

Bangladesh's Summit Group plans to renegotiate preliminary deals to import renewable power from India after a recent rule change by New Delhi allowed generators that exclusively export their electricity to sell locally, the utility's chairman said

www.thedailystar.net

Bangladesh's Summit reviewing cross-border power deals after India rule change

View attachment 7719

Bangladesh's Summit Group plans to renegotiate preliminary deals to import renewable power from India after a recent rule change by New Delhi allowed generators that exclusively export their electricity to sell locally, the utility's chairman said.

India amended its power export rules less than a week after former prime minister Sheikh Hasina fled Bangladesh early this month amid deadly protests, enabling Adani Power to connect its Godda coal-fired plant -- the only generating station under contract to export all its output -- to India's domestic grid.

"After the policy change, my partners in India might be more willing to sell in India. Our company will be investing in transmission in Bangladesh and we will have to assume more risks," Summit Group Chairman Aziz Khan told Reuters.

The conglomerate, which operates over a dozen fossil fuel-based power generation plants, signed preliminary deals with Indian partners including Tata Power Renewable Energy Ltd last year to construct and source supply from 1,000 megawatts (MW) of renewable projects.

A spokesman for Tata Power declined to comment on Summit's plans.

Green power imports are crucial for slashing emissions in Bangladesh, which gets nearly 99% of its electricity from fossil fuels. Land scarcity in the densely-populated country of over 170 million has constrained higher solar additions.

Summit Power International, the Singapore-based holding company for Summit Group's power generation assets, is exploring options including delaying investments until there is more policy clarity, and renegotiating financial terms to account for higher risks, Khan said.

"Such quick changes in policies are always a matter of concern as they have long-term implications," Khan said, referring to India's rule change.

Summit's plans to import clean electricity via India from 700 megawatts of hydro power plants it planned to build in Bhutan and Nepal as a part of $3 billion in regional clean power investments also face uncertainty due to a new government in Bangladesh, Khan said.

No final decisions on the cross-border investments have been taken yet, Khan said, adding that the company would continue to invest within Bangladesh.

Khan said the new Bangladesh government's decision to suspend a law allowing awards of power supply contracts without tenders also contributed to his decision to review projects.​

All the brothers in Summit Group are in really intense hot water for negotiating 'unfair' power deals to benefit Hasina and Adani and indirectly, Modi's Hindutva apparatus.

One of the clauses of the signed power supply agreement between Adani and the Bangladesh PDB says that Bangladesh will be bound to pay Adani 35% of the negotiated monthly electricity charges even if Adani does not supply one unit of electricity to Bangladesh!

I am surprised the Bangladesh Govt. has not officially notified Indian Govt and the Adani organization that this agreement is null and void already....

 

[Saif]

I am surprised the Bangladesh Govt. has not officially notified Indian Govt and the Adani organization that this agreement is null and void already....

Bangladesh cancelled the energy deal with Adani? What's your source?

 

[Saif]

Much-cherished oil refinery building thru fresh bidding

A much-cherished crude-oil refinery will now be built through fresh competitive biddings as the interim government Thursday cancelled controversial S Alam Group's deal and made the latest decision. The long-delayed refinery project, 'installation of ERL unit -2', will be implemented under

thefinancialexpress.com.bd

Much-cherished oil refinery building thru fresh bidding
Interim govt scraps proposed SA Group deal
M Azizur Rahman
Published :
Aug 30, 2024 00:37
Updated :
Aug 30, 2024 00:37

A much-cherished crude-oil refinery will now be built through fresh competitive biddings as the interim government Thursday cancelled controversial S Alam Group's deal and made the latest decision.

The long-delayed refinery project, 'installation of ERL unit -2', will be implemented under public procurement rules (PPR) -2008, the energy and mineral resources division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) decides.

State-run Bangladesh Petroleum Corporation (BPC) will estimate the overall project cost by taking into account the latest foreign-currency rate, prepare the development project proposal (DPP) and send it to the Planning Commission for approval.

An MPEMR meeting, chaired by adviser for power and energy, and road transport and bridges Muhammad Fouzul Kabir Khan, made the decision.

Officials said prior to the fall of the previous authoritarian government, the then prime minister's office had approved a proposal on building the new oil refinery under public-private joint venture with majority stakes going to the acquisitive S Alam Group.

Earlier, the BPC had sought necessary funds worth around US$2.0 billion from the government to build the proposed 3.0-million-tonne-capacity crude-oil refinery in Chattogram.

Eastern Refinery Ltd (ERL), a wholly owned subsidiary of BPC, is set to implement the project.

Sources said Bangladesh had 'failed' to build any crude-oil refinery over the past half a century after its independence, resulting in huge waste foreign currencies gone into import of refined oils from the international market.

Only 'negligence' on part of the authorities concerned is to blame, they added-in an indication of dominance of rent-seeking import lobbies.

The country's currently operational maiden refinery - Eastern Refinery Ltd - was built way back in 1968 by French company Technip, three years before the emergence of Bangladesh from the Pakistani rule.

The volume of petroleum-oil imports has increased around threefold over the past five decades to feed growing consumption in transport, industries and other commercial outlets with the expansion of the country's overall economy.

Technip carried out the front-end engineering and design (FEED) a couple of years back for the new refinery. The BPC had been in talks with Technip over the past several years to have the refinery built through a negotiation bypassing tender process.

The contractor of ERL's existing refinery was interested to build the proposed refinery under an unsolicited deal-in line with the precedence of quick-rental deals in the energy sector, now ditched with the regime change.

An Indian consulting firm, Engineers India Limited (EIL), had been engaged with the proposed project as consultant for the past several years until early 2024 before the emergence of upstart S Alam Group to lay stakes on the project, they added.

The Indian consultancy, EIL, had estimated that the cost might be around $1.80 billion if the engineering, procurement and construction (EPC) contractor was selected through competitive tendering.

The EIL's consultancy cost for the project was around Tk 2.56 billion.

The Technip-done FEED work was also reviewed and accepted by the BPC in consultation with the EIL, which was carried out at a cost of around Tk 3.72 billion.

Once implemented, the new refinery can help the country save $220 million per annum, trebling the country's crude-refining capacity to 4.5 million tonnes from the existing 1.5 million tonnes per year, market-insiders say.

To implement the project the BPC purchased land for the refinery at Tk 2.30 billion from the Ministry of Industries.

"It is sheer negligence from the government high-ups as it could not build a new refinery even over the past 50 years," energy adviser of the Consumers Association of Bangladesh (CAB) Prof M Shamsul Alam told the FE.

"A vested quarter having nexus with government high-ups has been lingering the project's execution to earn money as commission," he says, in tune with usual quips over import preference.

"Consumers are the ultimate losers," he laments.

Building the oil refinery through competitive bidding will ensure execution of the project in a transparent and accountable manner, says energy-expert Prof M Tamim, who was a special assistant of a previous caretaker government.​

 

[Saif]

Ministry denies claims of gas export to India

The Ministry of Power, Energy, and Mineral Resources has dismissed as a rumour claims on social media that Bangladesh exports natural gas to India via pipelines. In a press release on Thursday, the ministry said no natural gas has ever been exported to India, either under the previous Awami League

thefinancialexpress.com.bd

Ministry denies claims of gas export to India
FE Online Desk
Published :
Aug 29, 2024 22:41
Updated :
Aug 30, 2024 00:32

The Ministry of Power, Energy, and Mineral Resources has dismissed as a rumour claims on social media that Bangladesh exports natural gas to India via pipelines.

In a press release on Thursday, the ministry said no natural gas has ever been exported to India, either under the previous Awami League government or at any time.

It also rejected as false and misleading the demand to shut down gas lines to India's northeastern states.​

 

[Bilal9]

Bangladesh cancelled the energy deal with Adani? What's your source?

They did not cancel the deal, but word is rife in Energy ministry, PDB and other high level sources that there will at least be a severe rate revision sought.

Bangladesh has not paid Adani for a while for the power it already supplied to Bangladesh, which logically means there may be something serious (like rate revisions) is in the offing.

I did not predict a cancellation, but situation is not in favor of Adani at present. Adani's FMCG business in Bangladesh may also be affected.

 

[Saif]

Ulterior motive behind faulty energy plan

Successive governments from 2009 onwards were headed by the same party and the country ended up paying billions of dollars for establishing several mega projects that were supposed to generation of 40 Gigawatts (GW) of power by 2030. If the biggest scam over the last 15 years centred around the ban

thefinancialexpress.com.bd

Ulterior motive behind faulty energy plan
Syed Mansur Hashim
Published :
Aug 30, 2024 21:10
Updated :
Aug 30, 2024 21:10

Successive governments from 2009 onwards were headed by the same party and the country ended up paying billions of dollars for establishing several mega projects that were supposed to generation of 40 Gigawatts (GW) of power by 2030. If the biggest scam over the last 15 years centred around the banking system, then the energy scam follows close behind. Energy experts and the government's own energy professionals working in the sector were effectively silenced by disinformation. The use of certain civil society groups to whip up the myth of catastrophic environmental degradation if open-pit method of coal mining was done helped fuel this fallacy.

There is no denying that coal mining has its demerits, but the technological advancements made in the field were simply not taken into account. Then why were all these expensive coal power plants built? There was no way that Bangladesh could handle the millions of tons of coal which would be needed to keep these plants in operation from two vital points. First, huge investments would be needed in terms of setting up the physical infrastructure to transport coal and second but equally important, confrontation with a lack of requisite finance to sign long-term coal supply contracts internationally.

The idea that Bangladesh could always buy coal from the spot market was not only wrong but quite absurd because a handful of countries were both largest buyers and consumers of international coal and this included China, India, the United States and some other nations. Not only did these nations have deep pockets but also had the infrastructure and finance in place to buy up coal from far-off lands like Australia, Indonesia, etc. for many years in advance.

The idea of producing thousands of megawatts of power from coal was a pipedream, or was it? As one sifts through the emerging data in the aftermath of the change in government, it is now abundantly clear that the past regime was interested only in import. That's where the profits lay for a small coterie of business interests and corrupt officials. There was no intention to develop the economy. Developing own natural resources would have brought no profit at the individual or company level. What good would it serve if people did benefit, if industry developed or employment generated? That would mean no personal wealth for buying the $25,000 designer watch, no holidays in the Swiss Alps, no "Begum Para" in the developed world.

The scene was set for a Yeltsin-type era in Bangladesh. The country would serve the interests of a few hundred thousand people who would rip off this country in the name of development while the rest of the population would barely eke out a living. Former policymakers were dead wrong on the coal issue. If one looks at the Asia Pacific region, the global coal production reached an epic 179 exajoules (EJ), surpassing the previous year's record. Indeed, according to an article published in Forbes magazine, "The Asia Pacific region contributed nearly 80% of the global output, primarily driven by Australia, China, India, and Indonesia, which together accounted for 97% of the region's production." This is further explained in the '2024 Statistical Review of World Energy' published by the Energy Institute in June this year.

Coal didn't decline, its consumption has been rising over the last decade. Only our policymakers used the "environmental" argument to cripple the economy while rest of Asia was galloping ahead to use coal for spurring their economies. The second argument on international coal prices is that the demand has reduced over the last decade. But as stated before, global economic giants in Asia like China (followed by India) were in a competition to lock future outputs of major coal producing nations years in advance. How could an emerging economy like Bangladesh ever hope to compete at that level?

Our needs were a pittance compared to those countries. Why would any major seller even bother with our demands? It should be noted here that both high and low quality have been used in both these countries. Yes, there has been environmental fall-out, but it was deemed a national priority in both China and India to develop their economies first and invest in cleaner coal technologies to mitigate some of the environmental fallouts. Without strong economies, policymakers in those countries could not lift millions of people out of poverty and jobs would not be generated without cheap power.

Bangladesh missed the entire point of cheap, reliable power. Today, the interim government is stuck with this problem of multiple, multi-billion-dollar coal-fired plants that are sitting idle. We have wasted precious years when the coal mines could have been developed and there is no money to buy the coal from the international market now. There is no silver bullet to solve this mess and the only way out for Bangladesh is if the billions of dollars siphoned off and laundered abroad can be brought back. Then perhaps, some sort of financial settlement can be reached before seeking an exit from these contracts and investing in development of natural gas fields. A tall order, but there is no other option for today's policymakers.​

 

[Saif]

Adani says it supplies electricity to Bangladesh at cheapest rate

Adani Power, an Indian multinational power and energy company, says it supplies electricity to Bangladesh at the cheapest rate among all other imported coal-based plants, according to a CNBC report. In response to claims of supplying costly power to Bangladesh, the company pointed out the comparat

thefinancialexpress.com.bd

Adani says it supplies electricity to Bangladesh at cheapest rate
FE ONLINE DESK
Published :
Aug 30, 2024 14:26
Updated :
Aug 30, 2024 14:26

Adani Power, an Indian multinational power and energy company, says it supplies electricity to Bangladesh at the cheapest rate among all other imported coal-based plants, according to a CNBC report.

In response to claims of supplying costly power to Bangladesh, the company pointed out the comparative power costs detailed in the Bangladesh Power Development Board’s report for the 2022-2023 fiscal year.

The company sources stated that it supplies electricity to Bangladesh at a rate of Tk 14.02 per unit, compared to Tk 16.02 per unit from the Payra Power Plant and Tk 14.12 per unit from the Rampal Power Plant.

The company also referenced the average power prices over the last 12 months, as per the merit order dispatch data.

The average per unit price of electricity provided by Adani Power in last 12 months was Tk 11.89. Meanwhile, the average price of Matarbari Power Plant in the period was Tk 13.36, Payra’s price was Tk 12.00, and Rampal’s price was Tk 13.57 per unit. The cost per unit includes capacity charge, fuel cost and variable cost.

Fully commissioned in July 2023, Adani Power's Godda plant uses imported coal and supplies about 7 to 10 per cent of Bangladesh’s total power demand.

As per company sources, Bangladesh currently has long-term Power Purchase Agreements (PPAs) with four other imported coal-based power generators—Payra, Rampal, Matarbari, and Barisal Electric Power.​

 

[Saif]

Want to breach the structure of irregularities in power sector: Adviser Fouzul Kabir

Muhammad Fouzul Kabir Khan, the interim government’s adviser for Power, Energy, and Mineral Resources, has said that they want to reconstruct the power sector breaking the existing structure of irregularities in the sector. Besides, a committee will be formed to investigate the allegations o

thefinancialexpress.com.bd

Want to breach the structure of irregularities in power sector: Adviser Fouzul Kabir
Published :
Aug 31, 2024 19:04
Updated :
Aug 31, 2024 19:04

Muhammad Fouzul Kabir Khan, the interim government’s adviser for Power, Energy, and Mineral Resources, has said that they want to reconstruct the power sector breaking the existing structure of irregularities in the sector.

Besides, a committee will be formed to investigate the allegations of irregularities in this sector, he told reporters after an exchange meeting with officials in the conference room of Rupsa 800 MW Combined Cycle Power Plant located in Khalishpur, Khulna on Saturday.

“It should be remembered that this is a new Bangladesh. Everyone has equal opportunities here. As there are risks, there are solutions,” he added.

The advisor said, so far a development story was being read in our country that our per capita income and GDP is increasing and we are moving from a low-income country into a middle-income country. It now appears that this was false, said the adviser.

A power plant has been built in Khulna at a cost of around Tk 80 billion (Tk 8,000 crores), which has been added to the national GDP. Even if the GDP increases, the gas-based power plant does not seem to be able to generate electricity immediately.

“Tk 8,000 crore was spent on setting up the power plant but people are not getting any benefit from it. This is the fallacy of development.”

The meeting was attended by Senior Secretary of Power Department Md Habibur Rahman, Secretary of Water Resources and Mineral Resources Department Md Nurul Alam, Bangladesh Power Development Board Chairman (Acting) Md Rezaul Karim, Khulna Deputy Commissioner (Acting) Md Yusup Ali and officials of power and water sector.​

 

[Saif]

Offshore oil and gas exploration delayed further

Offshore exploration for oil and gas in the Bay of Bengal is being delayed again as after not receiving satisfactory response, the immediate past government had approved the proposal to extend the deadline to participate in the tender by three months.

en.prothomalo.com

Offshore oil and gas exploration delayed further
Mohiuddin Dhaka
Published: 01 Sep 2024, 10: 47

Offshore oil and gas explorationFile Photo

Offshore exploration for oil and gas in the Bay of Bengal is being delayed again as after not receiving satisfactory response, the immediate past government had approved the proposal to extend the deadline to participate in the tender by three months.

In the meantime the government has changed hands. Once the interim government issues directives, the tender deadline will be extended. This was learnt from sources in the energy and mineral resources division.

With multi-client survey revealing potential of offshore gas, a number of foreign companies last year expressed their interest in carrying out oil and gas exploration. The energy and mineral resources division sources have said 55 companies were invited to take part in the tender. Six companies have bought tender documents. The dead line to participate in the tender is 9 September.

The maritime territory dispute with India was settled in 2012 and with Myanmar in 2014. Though new Production Sharing Contracts (PSC) were drawn up in 2019, no tenders were floated. Then three years were taken to finalise PSC-2023. On 10 March this year Bangladesh Oil, Gas and Mineral Resources Corporation (Petrobangla) floated an international tender. Previously the last tender had been floated in 2016.

Petrobangla chairman Zanendra Nath Sarkar told Prothom Alo on Wednesday, approval has been taken from the energy and mineral resources division to extend the tender deadline by three months. After approval of the power, energy and mineral resources division is taken, a new notice will be issued.

In the meantime, tenders have been called for 15 deep sea blocks and 9 shallow blocks. Petrobangla officials have said, facilities have been considerably increased this time to attract foreign investment. Interests of the investing companies are also being given importance along with the interests of the country.

Due to political instability, foreign companies didn't want to come. Now the situation has improved. If the deadline is extended by three months, perhaps there will be a good response Badrul Imam, geologist.

It has been learnt that among the multinational oil and gas companies, the US companies ExxonMobil and Chevron, Malaysian company Petronas, Norway and France's joint venture TGS and Schlumberger, Japan's Inpex Corporation and JOGMEC, China's CNOOC, Italy's Eni SPA, Singapore's KrisEnergy and India's ONGC have shown interest at various times and have contacted Petrobangla.

According to Petrobangla officials, after completing the tender process, the contract can be signed in the first half of next year. Then it will take a couple of more months for them to being their vessels and equipment. However, some say after finishing all the details, exploration may begin in 2026.

There are 26 blocks in the Bay of Bengal, 15 deep sea and 11 shallow sea. On 2010 ConocoPhillips got the contract to work on two offshore blocks. They carried out 2D survey but left because their demand for an increase in gas price was not met. Similarly, Australia's Santos and South Korea's Posco Daewoo also abandoned work after signing the contract. Now only the Indian company ONGC is carrying out exploration in two blocks in the shallow sea.

A Petrobangla official, on condition of anonymity, said according to contract, ONGC has up till next February. They drilled one well and found no gas. They are supposed to drill another well. Investment has increased more than planned. In inviting tender thrice for drilling well, they got abnormal rates and so they have not applied to extend their term. They are likely to leave in February.

Petrobangla sources say, Germany's Schlumberger was tasked with carrying out a preliminary feasibility study for offshore prospects. Any interested company can buy the information of the survey. Petrobangla also has details of the ConocoPhillips 2D survey. This too indicates the presence of gas in the Bay of Bengal, though extractable gas reserves cannot be determined without drilling exploratory wells. Till now no well has been drilled in the deep sea. But the two neighbouring countries India and Myanmar have both discovered gas in the same sea.

Geologist Badrul Imam, speaking to Prothom Alo, said that it has already very late. But due to political instability, foreign companies didn't want to come. Now the situation has improved. If the deadline is extended by three months, perhaps there will be a good response. After that, it would not be right to extend the time any further.

*This report appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir​

 

[Saif]

Significant impact of cut on fuel prices unlikely

Under the monthly fuel adjustment introduced by the deposed government in March last, the first such revision to the relief of some has been effected by the interim government. The relief is because of the downward adjustment of fuel oil prices. However, the slashing of oil prices is unlikely to be

thefinancialexpress.com.bd

Significant impact of cut on fuel prices unlikely
Published :
Sep 02, 2024 23:04
Updated :
Sep 02, 2024 23:04

Under the monthly fuel adjustment introduced by the deposed government in March last, the first such revision to the relief of some has been effected by the interim government. The relief is because of the downward adjustment of fuel oil prices. However, the slashing of oil prices is unlikely to benefit all strata of society. With a nominal cut by Tk 1.25 on a litre of kerosene and diesel for the month of September without any such adjustment in August by the previous administration, the more deserving lower segments of society will hardly benefit from the move. These segments are the major consumers of these two types of fuel oil. Petrol and octane are considered luxury fuels for reasons understandable and the two have become significantly less costly by Tk 6.0 a litre from Tk 127 down to Tk121 and from Tk 131 to Tk 125 respectively.

The inescapable fact is that the poorer segments of society reeling from unrelenting inflation and lately from the impact of floods in several areas of the country needed some pragmatic move towards lessening their sufferings. If farmers who need diesel for operation of irrigation pumps or boatmen for trawlers or mechanised boats as well as public buses, trucks and covered vans for running them could enjoy a substantial cut on this particular type of fuel, it would have a beneficial impact on production of crops and transportation of commodities. This would ultimately reflect on the galloping inflation. Petrol used in cars, on the other hand, much as it may become cheaper, will have no or little impact on the economy. Had the price tags for different types of oil been reversed, it would make an immediate impact on transport fair and carrying costs of commodities including the daily essentials. Under the guideline on automatic oil pricing the Bangladesh Petroleum Corporation (BPC) prepared, the prices between diesel and petrol/octane have to vary by at least Tk 10. There is no bar to have a higher price differential between those. In fact, the price gap is of Tk 15.50 between kerosene/diesel and petroleum and of Tk 19.50 between octane and the former cheaper variety now costing Tk105.50 a litre.

Effective from September 1, the new fuel prices are unlikely to give enough cause for celebration by the common people. There is a need for a comprehensive review of the requirements of fuel oils in different areas in order to assess the priority sectors in terms of production and contribution to the economy. Bangladesh's domestic oil production is next to nothing and hence it must prioritise the use of imported fuel for reaping the optimal benefits.

In this context, it is worth noting that oil import in 2023 declined by 20 per cent not because prices went up but because devaluation of Taka and dollar crunch did not allow the import of a little over 10 million tonnes it imported in 2022. With almost similar amount of expenditure, the country ended up importing 8.26 million tonnes in 2023. Since there is no scope for import of oil by private companies other than the BPC, industrial units with reduced availability of fuel had to curtail production. This explains why a contractionary monetary policy was followed and the economy shrank. So there is no alternative to rationalising use of fuel oils.​

 

[Bilal9]

Adani says it supplies electricity to Bangladesh at cheapest rate

Adani Power, an Indian multinational power and energy company, says it supplies electricity to Bangladesh at the cheapest rate among all other imported coal-based plants, according to a CNBC report. In response to claims of supplying costly power to Bangladesh, the company pointed out the comparat

thefinancialexpress.com.bd

Adani says it supplies electricity to Bangladesh at cheapest rate
FE ONLINE DESK
Published :
Aug 30, 2024 14:26
Updated :
Aug 30, 2024 14:26

View attachment 7977

Adani Power, an Indian multinational power and energy company, says it supplies electricity to Bangladesh at the cheapest rate among all other imported coal-based plants, according to a CNBC report.

In response to claims of supplying costly power to Bangladesh, the company pointed out the comparative power costs detailed in the Bangladesh Power Development Board’s report for the 2022-2023 fiscal year.

The company sources stated that it supplies electricity to Bangladesh at a rate of Tk 14.02 per unit, compared to Tk 16.02 per unit from the Payra Power Plant and Tk 14.12 per unit from the Rampal Power Plant.

The company also referenced the average power prices over the last 12 months, as per the merit order dispatch data.

The average per unit price of electricity provided by Adani Power in last 12 months was Tk 11.89. Meanwhile, the average price of Matarbari Power Plant in the period was Tk 13.36, Payra’s price was Tk 12.00, and Rampal’s price was Tk 13.57 per unit. The cost per unit includes capacity charge, fuel cost and variable cost.

Fully commissioned in July 2023, Adani Power's Godda plant uses imported coal and supplies about 7 to 10 per cent of Bangladesh’s total power demand.

As per company sources, Bangladesh currently has long-term Power Purchase Agreements (PPAs) with four other imported coal-based power generators—Payra, Rampal, Matarbari, and Barisal Electric Power.​

We really do not need Adani's "cheap" electricity. We have plenty of surplus power generation options already.

Scrap the deal I say, good riddance. Stop financing Adani and indirectly, Modi.

Rampal for that matter - can go as well. Meaning the Indian consultants and their operational help as per voidable agreement.

Just use the "escape clause".

 

[Saif]

Hydropower import from Nepal: India seeks 'variable' transmission charge

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational. The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of

thefinancialexpress.com.bd

Hydropower import from Nepal: India seeks 'variable' transmission charge
Syful Islam
Published :
Sep 04, 2024 09:45
Updated :
Sep 04, 2024 09:45

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational.

The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of electricity from Nepal into Bheramara of Bangladesh in addition to Tk 0.09 as 'trade-in' margin.

Trade-in margin is a fixed charge and has to be paid in Indian rupee while the transmission charge will remain flexible and be paid in US dollar.

Nepal will get Tk 7.32 as hydropower price in US dollar for selling 40-megawatt electricity from its two power plants.

In June this year, the power division got tariff approval from the cabinet committee on government purchase for importing electricity from the Himalayan country.

Officials concerned told the FE that power adviser M. Fouzul Kabir Khan Monday approved a power-division proposal to go forward making a tripartite deal among Nepal Electricity Authority, NTPC Vidyut Vyapar Nigam Limited, and Bangladesh Power Development Board to begin inflow of electricity.

The five-year agreement is expected to be completed in a few weeks, according to Power Division officials.

Before advancing for the tripartite agreement, the Power Division sought opinion from the Finance Division, Financial Institutions Division, the National Board of Revenue, and the central bank, as payment in foreign currency and duty and taxes are involved with the power trade.

Sources have said the power division has so far received opinion from the finance division where the custodian of the coffer insisted that the transmission charge should be fixed one like the other charges.

Unless the transmission charge is fixed, India can raise it "arbitrarily at any time, causing trouble in cost estimation for the finance division".

The finance division suggested the power division to renegotiate the charge and make it fixed instead of variable.

Power Division Senior Secretary Habibur Rahman could not be reached for a comment in this regard despite repeated attempts.

However, a senior Power Division official told the FE that the transmission charge has been kept flexible in line with the rules of the Central Electricity Regulatory Commission of India that was enacted in 2018.

"We have to follow Indian rules if we want to use its transmission line,' said the official, seeking anonymity.

The official thinks the tripartite deal will open a new avenue for Bangladesh for cross-border power trade, creating scope to import more low-cost electricity from Nepal and Bhutan.

However, a finance official has said so far India has no deal for cross- border electricity transmission and Bangladesh had enough scope to negotiate and fix the transmission charge instead of keeping it changeable.

"If we sign the deal keeping the transmission charge flexible, India will take the advantage and raise the charge as and when it wants," he says.

According to purchase committee's approval, Bangladesh will have to spend Tk 1.30 billion annually to import power from Nepal. Of the total sum, India will get Tk 120 million as transmission charge and Tk 14 million as trade-in charge.

If the transmission charge is increased any time during the deal tenure, the cost will go up further, a Finance Division official says.​

 

[Saif]

Energy sector graft to be identified in White Paper

The White Paper Preparation Committee is expected to find out the irregularities and corruption committed in the energy and power sector during the tenure of the immediate-past government, committee chief Dr Debapriya Bhattacharya said on Tuesday. "If necessary, we would review the agreements with

thefinancialexpress.com.bd

Energy sector graft to be identified in White Paper
Committee chief says as areas of work selected in its second meeting
FE REPORT
Published :
Sep 04, 2024 00:31
Updated :
Sep 04, 2024 00:31

The White Paper Preparation Committee is expected to find out the irregularities and corruption committed in the energy and power sector during the tenure of the immediate-past government, committee chief Dr Debapriya Bhattacharya said on Tuesday.

"If necessary, we would review the agreements with foreign companies and parties in the sector," he told journalists, following the second meeting of the committee in the capital. The first meeting was held on August 29.

Dr Debapriya, also a distinguished fellow of the Centre for Policy Dialogue (CPD), said that the reasons and extent of the capital flight from Bangladesh would also be reflected in the paper.

"We have selected some areas and sectors to prepare the paper," he said. These are: macro economy, energy sector, health and education, and some institutional issues like banking sector, tax administration, capital flight, mega projects, poverty, inequality, and regional disparity will be reflected there.

"In today's meeting, we have assigned our members specific areas of coverage. The method of writing reports has also been determined," he added.

The committee members will hold discussion with different expert groups, including researchers and professors in Dhaka and outside Dhaka and even outside Bangladesh for preparing the reports, said the committee chief.

"We will collect information from different sources. Then we will verify the sources critically. We will also compare the available information with the best global practices to ensure a standard form. We will also find our better research on the areas being touched," he added.

He said the committee is expected to complete its preliminary work within the next two months before finalising the white paper.​

 

[Bilal9]

Hydropower import from Nepal: India seeks 'variable' transmission charge

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational. The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of

thefinancialexpress.com.bd

Hydropower import from Nepal: India seeks 'variable' transmission charge
Syful Islam
Published :
Sep 04, 2024 09:45
Updated :
Sep 04, 2024 09:45

View attachment 8056

India has prevailed upon negotiators to keep transmission charge "variable" for using its line to transmit electricity from Nepal into Bangladesh which the finance division finds irrational.

The Power Division negotiated with India that it will get Tk 0.76 per unit for trans-border transmission of electricity from Nepal into Bheramara of Bangladesh in addition to Tk 0.09 as 'trade-in' margin.

Trade-in margin is a fixed charge and has to be paid in Indian rupee while the transmission charge will remain flexible and be paid in US dollar.

Nepal will get Tk 7.32 as hydropower price in US dollar for selling 40-megawatt electricity from its two power plants.

In June this year, the power division got tariff approval from the cabinet committee on government purchase for importing electricity from the Himalayan country.

Officials concerned told the FE that power adviser M. Fouzul Kabir Khan Monday approved a power-division proposal to go forward making a tripartite deal among Nepal Electricity Authority, NTPC Vidyut Vyapar Nigam Limited, and Bangladesh Power Development Board to begin inflow of electricity.

The five-year agreement is expected to be completed in a few weeks, according to Power Division officials.

Before advancing for the tripartite agreement, the Power Division sought opinion from the Finance Division, Financial Institutions Division, the National Board of Revenue, and the central bank, as payment in foreign currency and duty and taxes are involved with the power trade.

Sources have said the power division has so far received opinion from the finance division where the custodian of the coffer insisted that the transmission charge should be fixed one like the other charges.

Unless the transmission charge is fixed, India can raise it "arbitrarily at any time, causing trouble in cost estimation for the finance division".

The finance division suggested the power division to renegotiate the charge and make it fixed instead of variable.

Power Division Senior Secretary Habibur Rahman could not be reached for a comment in this regard despite repeated attempts.

However, a senior Power Division official told the FE that the transmission charge has been kept flexible in line with the rules of the Central Electricity Regulatory Commission of India that was enacted in 2018.

"We have to follow Indian rules if we want to use its transmission line,' said the official, seeking anonymity.

The official thinks the tripartite deal will open a new avenue for Bangladesh for cross-border power trade, creating scope to import more low-cost electricity from Nepal and Bhutan.

However, a finance official has said so far India has no deal for cross- border electricity transmission and Bangladesh had enough scope to negotiate and fix the transmission charge instead of keeping it changeable.

"If we sign the deal keeping the transmission charge flexible, India will take the advantage and raise the charge as and when it wants," he says.

According to purchase committee's approval, Bangladesh will have to spend Tk 1.30 billion annually to import power from Nepal. Of the total sum, India will get Tk 120 million as transmission charge and Tk 14 million as trade-in charge.

If the transmission charge is increased any time during the deal tenure, the cost will go up further, a Finance Division official says.​

IMHO - depending on power transmission via or through India from a third country (Nepal or Bhutan) or power generated from within India (like Adani) is a strategic security risk for Bangladesh.

Any leverage given to India which they have control of - they will end up using to their full advantage.

Indian whims will mean Bangladesh will run short of power which is sometimes critical for industrial production, especially for exports.

We should invest more in power generation within our borders, and that should (increasingly) be renewables like Solar energy.

One or two deals with Nepal can exist where they supply token power, Nepal as a friendly nation are in need of revenue as well of course.

 

[Saif]

Restoring power to the people: A step towards a fair energy pricing system

For nearly two years, Bangladeshi consumers have suffered under an executive system that gave the government unchecked power to set energy prices without their input.

www.thedailystar.net

Restoring power to the people: A step towards a fair energy pricing system

A major issue is the inefficiency within companies like BPC, where operational problems, such as fuel leakages, are passed on to consumers through higher prices. FILE PHOTO: REUTERS

Exactly 10 days after taking office, the interim government of Bangladesh made a significant shift in the power and energy sector by announcing the discontinuation of the Quick Enhancement of Energy and Power Supply Act, 2010 and the cancellation of its executive authority to raise power and gas prices without a public hearing by the Bangladesh Energy Regulatory Commission (BERC). This much-needed shift towards transparency and accountability repeals the controversial clause, which allowed the Ministry of Power, Energy and Mineral Resources to unilaterally set energy prices, and will help restore BERC's authority. This reinstatement of public hearings marks a return to democratic principles in energy governance and reflects a broader commitment to safeguarding consumer interests.

For nearly two years, Bangladeshi consumers have suffered under an executive system that gave the government unchecked power to set energy prices without their input. The 2022 amendment to the BERC Act was intended to stabilise energy supply and address economic needs quickly. Instead, it led to repeated price hikes, straining household budgets and causing widespread dissatisfaction. In 2024 alone, the former government raised electricity tariffs four times without offering any public justification.

The now-repealed Section 34 (A) of the BERC Act bypassed the regulatory oversight intended to check government power, undermining transparency and public participation. By sidelining BERC, the government weakened the commission's role as a regulatory authority and eroded public trust. Without public hearings, consumers felt powerless and excluded, leading to a sense of injustice and disenfranchisement.

Repealing the ministry's price-setting powers and reinstating BERC's role is more than just restoring procedure—it represents a commitment to public involvement in crucial decisions. This move underscores the government's dedication to transparency and good governance, particularly in the energy sector. However, while reintroducing public hearings is a positive step, it alone cannot ensure fair or rational energy pricing. The existing challenges, along with BERC's diminished authority since the 2020 amendments, raise doubts about the effectiveness of this approach in truly serving the public interest.

In addition to electricity and gas prices, BERC should also take responsibility for setting fuel oil prices, a role currently held by the Bangladesh Petroleum Corporation (BPC). BPC's dual role as both the sole importer and regulatory authority raises concerns about the credibility of its price determinations, especially for petrol, diesel, octane, and kerosene. Since BERC already regulates the price of imported LPG, extending this responsibility to other fuels would be a logical and necessary step.

Public hearings enhance transparency by involving stakeholders in the price-setting process, but transparency alone does not guarantee rational tariff outcomes. Anomalies in the financial accounts of public authorities raise questions about financial transparency and credibility. The data provided, especially by the BPC, must be rigorously scrutinised to ensure it reflects the true financial state of the energy sector. Concerns are growing that information from BPC and the Bangladesh Power Development Board (BPDB) may not be accurate, with discrepancies in financial reports potentially leading to misguided decisions.

A major issue is the inefficiency within companies like BPC, where operational problems, such as fuel leakages, are passed on to consumers through higher prices. These inefficiencies should not become a public burden. Instead, they must be measured, reported, and resolved at the source to ensure that price adjustments reflect actual costs, not the inefficiencies of the providers.

To achieve true fairness and effectiveness in energy pricing, BERC's original powers from the 2003 act must be reinstated. Before the 2023 amendments, BERC had the authority to conduct energy audits, enforce standardisation, introduce competitive bidding, and hold both government and private entities accountable. The legislative weakening of BERC has significantly undermined its role as an independent regulator. To ensure an effective energy transition, these crucial powers must be restored.

Additionally, competitive pricing should align with international market standards to ensure that Bangladesh's energy prices reflect global trends. Pricing mechanisms must also account for the broader impact on the transport and power sectors, which are heavily reliant on energy costs. Any new pricing structure should be implemented with careful consideration of its ripple effects across these critical sectors to avoid unintended economic disruptions.

Helen Mashiyat Preoty is senior research associate at the Centre for Policy Dialogue (CPD).​