[🇧🇩] Energy Security of Bangladesh

[Saif]

BD struggling to get LNG cargoes for regasification

Bangladesh has been grappling to receive LNG (liquefied natural gas) cargoes for regasification after purchases due to a halt in the operation of Summit LNG Terminal at Moheshkhali following accidents. One spot cargo vessel carrying around 3.36 million British thermal unit (MMBTu) of LNG has remai

thefinancialexpress.com.bd

BD struggling to get LNG cargoes for regasification
M AZIZUR RAHMAN
Published :
Jul 26, 2024 00:49
Updated :
Jul 26, 2024 00:49

Bangladesh has been grappling to receive LNG (liquefied natural gas) cargoes for regasification after purchases due to a halt in the operation of Summit LNG Terminal at Moheshkhali following accidents.

One spot cargo vessel carrying around 3.36 million British thermal unit (MMBTu) of LNG has remained stranded in deep sea over the past 10 days and another has been deferred for this prolonged operational delay.

A senior Petrobangla official disclosed this to the FE.

He said the spot LNG cargo of Excelerate Energy LP has been waiting in deep sea since July 15 to deliver the fuel to one of the country's two floating, storage and regasification units (FSRUs).

The state-run Rupantarita Prakritik Gas Company Ltd (RPGCL) purchased it from the US energy giant at $13.55 per MMBTu totalling Tk 6.09 billion.

The government has been counting fiscal penalty to be paid to Excelerate Energy as demurrage for not receiving the LNG cargo in time, the official said without figuring out the amount of the penalty.

Meanwhile, the RPGCL deferred the cargo of Total Energies Gas and Power Ltd, which was scheduled for release during the July 24-25 delivery window, according to an RPGCL official.

The government has purchased the spot LNG cargo at $12.58 per MMBTu totalling the cost of Tk 5.83 billion.

Had Summit's FSRU not encountered the latest accident of tearing down its messenger rope on July 11, both cargoes would have been delivered to the FSRUs for regasification, the RPGCL official said.

Earlier, the government had to cancel four cargoes for June delivery following the initial technical issue of Summit's FSRU due to the Remal mayhem. The terminal shut operations on May 30 after spotting damage to its FSRU.

The RPGCL cancelled three spot cargoes of Gunvor Singapore Pte Ltd and one of QatarEnergy Trading LLC for June delivery windows.

Gunvor was awarded contracts to deliver these spot cargoes for June 07-09 and June 09-11 and June 28-29 delivery windows at $10.4622 per MMBtu, $10.4622 per MMBtu and $12.9697 per MMBtu respectively. QatarEnergy was supposed to deliver the cargo at $10.30 per MMBtu for June 19-21 delivery window.

According to market insiders, Remal's savagery to Summit's FSRU turned out as a boon for the government as it could save around $150 million due to cancellation of the four cargoes, said.

"As cyclone Remal hit the coast, a broken stray steel structure weighing hundreds of tons banged the Summit LNG Terminal, causing significant damage," said a Summit statement earlier.

Summit LNG Terminal returned from Singapore on July 10 after repair, but it suffered a fresh blow the next day of reaching Moheshkhali mooring facility.​

 

[Saif]

1,320MW coal power plant in Patuakhali to fire up in October

A 1,320-megawatt (MW) coal-based thermal power plant located in Kalapara upazila of Patuakhali is ready to begin commercial operations by the end of this year, officials said..The first of the plant’s two units, which can generate 660 MWs daily, will commence production in October while th

www.thedailystar.net

1,320MW coal power plant in Patuakhali to fire up in October

The second 1,320-megawatt coal-based thermal power plant in Kalapara upazila of Patuakhali is all set to begin commercial operations from October this year. In this aerial view, it is seen that much of the plant's main infrastructure is now complete. The picture was taken recently. PHOTO: Sohrab Hossain

A 1,320-megawatt (MW) coal-based thermal power plant located in Kalapara upazila of Patuakhali is ready to begin commercial operations by the end of this year, officials said.

The first of the plant's two units, which can generate 660 MWs daily, will commence production in October while the second will start in December.

This is the second 1,320 MW coal-based power plant in Kalapara upazila, with the Payra Thermal Power Plant situated nearby.

Norinco Intl Cooperation Ltd, a Chinese heavy construction company, and the state-owned Rural Power Company Limited built the plant under a joint venture called RPCL-Norinco Intl Power Limited (RNPL).

Costing Tk 27,000 crore, construction of the 950-acre plant began in August of 2019.

It is located on the banks of Ramnabad river, just two kilometres north of the Payra plant.

Project Director Taufiq Islam said all the ancillary work, including physical structure, is complete.

He also said a 20-kilometre double circuit transmission line has been established to connect the plant with the national grid using Payra plant's existing transmission line. Also, a switching station has been constructed in Amtali upazila of Barguna.

Ashraf Uddin, the plant's supervising engineer, said the plant can produce enough electricity for catering to 10 percent of the country's annual demand.

Currently, Bangladesh has a power generation capacity of around 27,000 MW and the peak-hour demand is around 17,000 MW, according to data of Bangladesh Power Development Board.

Of the total demand, coal-based power sources account for about 25 percent or 6,600 MW.

Shawkat Osman, the plant's executive engineer (mechanical), said instead of using solid coal, they will use powdered coal as it is more efficient and reduces the emission of harmful substances, such as carbon dioxide.

Against this backdrop, Shahriar Hasan, assistant engineer, said it is an ultra-modern power plant, where more electricity will be produced by burning less coal, thereby causing less environmental pollution.

According to sources at RPCL-Norinco, the plant features a fly ash silo, fuel-well pump, rain water reservoir, fire station service and fire-fighting water tank aside from usual elements such as a boiler, power house, turbine, generator, chimney and so on.

Construction of waste water storage basins, administrative building, engineering building, multipurpose hall, workshop and other infrastructures are complete, they said.

Also, the construction of a modern jetty with a conveyor belt for unloading imported coal to be used by the plant alongside the workers' dormitory, canteen and mosque are also complete.

Besides, the plant's main transformer has been installed, they added while informing that there are currently 5,979 people working on the project, comprising 972 foreigners and 5,007 Bangladeshis.​

 

[Saif]

https://thefinancialexpress.com.bd/views/columns/promises-made-on-energy-turn-hollow

Promises made on energy turn hollow
Syed Mansur Hashim
Published :
Aug 02, 2024 21:59
Updated :
Aug 02, 2024 21:59

Sadly, the power situation in the country has gone from bad to worse since Covid-19. While the pandemic has come and gone, the energy crisis refuses to go away. While policymakers keep raising tariffs on the promise of steady supply of requisite energy to industry and retail consumers, the assurances have turned hollow and the economy as a whole continues to suffer. Loss of production has led to factory closure causing ultimately unemployment and lower economic growth. A bleak future thus stares in the face of Bangladesh because the supply of energy, i.e. the bulk of fossil fuels that power our industry and power plants have become import-dependent.

Is it not ironic that the country has become overwhelmingly dependent on the whims of foreign energy markets, while significant reserves of natural gas remain unexplored in the country? What has compelled the government to turn a blind eye to several surveys done by international companies about potential gas reserves that are available onshore and which can be made available with acceptable levels of investments? Why is there no enthusiasm on exploring and extracting own reserves of energy? Frankly, it is easier to fleece consumers ---industrial or otherwise---by importing coal, oil and liquefied natural gas (LNG) because the country is a captive market. The government is the sole provider of energy and there are no competitors, unlike the situation in some other countries in the region where state-owned enterprises compete with private ones to sell energy to industry.

Getting back to the crisis in hand, there simply isn't enough energy to go round. Domestic gas is depleting at a fast rate and the import of all types of fossil fuels is hamstrung by a shortage of foreign exchange. There is no way that economic development can continue in a situation where there is a dearth of both energy and power for industry. While the readymade apparel sector (RMG) contributes about 80-85 per cent of the export earning, other important industrial sectors have developed too and also require energy. Though there have been arguments that fertiliser can always be imported and there is no need to keep supplying gas to old, gas-guzzling fertiliser factories, the situation has changed over time with the retirement of old factories and introduction of new ones that are more energy-efficient. Besides, fertiliser is an essential agricultural input that cannot be left to the whims of foreign market fluctuations - both pricewise and availability. Moving on from fertiliser, hundreds of billions of Taka have been poured into the ceramic industry and the country boasts a vibrant sector that practically serves the entire demand of the country. The Achilles heel is that it is entirely gas-run. So, this sector with massive export potential is also facing mothballs in the near future.

What the government isn't telling bulk and retail consumers is that the situation is not going to improve before 2030. Let's look at some facts on the ground. While it is difficult to measure exact demand, the general consensus is that it is hovering around 4,000 MMCFD (million cubic feet per day) and as per published data, supply of the gas on July 13-14 was 2,600 MMCFD. According to media reports, "Of this, the contribution of imported LNG was 604 MMCFD. The production from local gas fields was 1,996 MMCFD. Of these 1,209 MMCFD gas came from gas fields operated by international oil companies. Bibiyana Gas field operated by Chevron alone supplied 996 MMCFD. The current recoverable reserve of the field has depleted below 1.0 TCF" (trillion cubic feet). Again, according to a recent report published in Energy & Power Magazine, "installed generation capacity of grid connected power is 27,504MW (megawatt). Breakdown of this capacity is as follows: Gas-based: 11,180MW (43%), furnace oil: 6,035MW (22.30%), coal: 5,108MW (18.80%), hydroelectricity: 230MW (0.85%), grid-connected solar: 519MW (1.90%), and import: 2,656MW (9.80%)". The net result of all this "foreign" energy dependence is that Dhaka and other major urban centres suffered 2-3 hours of load shedding (while rest of the country suffered between 6 to 8 hours) during the hottest summer days of July.

Import-dependent energy supply is a recipe for disaster. This has long been brought to the notice by Bangladeshi energy experts and for long policymakers have ignored it. Simply because there is much opacity built in certain energy policies and hefty commissions can be paid to fatten the pockets of certain groups of people, the nation's energy security has been thrown out the window. This is the reality we live in today and the suffering has just begun.​

 

[Saif]

Power supply to Bangladesh to be unaffected, Adani says

The recent amendment to India’s Power Export Guidelines will not affect the existing power purchase agreement (PPA) between Adani Power and Bangladesh Power Development Board (BPDB), said Adani Group yesterday.

www.thedailystar.net

Power supply to Bangladesh to be unaffected, Adani says

The recent amendment to India's Power Export Guidelines will not affect the existing power purchase agreement (PPA) between Adani Power and Bangladesh Power Development Board (BPDB), said Adani Group yesterday.

A PR agency appointed by Adani Group in Bangladesh, in a statement, said the amendment aims to connect all Indian power stations, which export electricity to neighbouring countries, to the Indian national grid.

"We have been providing uninterrupted power to Bangladesh from our Godda plant. Adani Power is committed to fulfilling contractual obligations as per BPDB's demand schedule and provisions of PPA and would look forward to continuing reciprocal fulfilment by BPDB," the statement reads.

An internal federal power ministry memo, dated August 12 and seen by Reuters, amends 2018 guidelines governing generators supplying electricity "exclusively to a neighbouring country".

Currently only one plant in India -- Adani Power's 1,600 megawatt (MW) Godda plant in eastern Jharkhand state -- is under contract to export 100 percent of its power to Bangladesh.

The memo states that "the government of India may permit connection of such generating station to the Indian grid to facilitate the sale of power within India in case of sustained non-scheduling of full or part capacity".

The sale of power to the local grid might also be allowed if there is a delay in payments, it said.

The move, which comes nearly a week after longtime Prime Minister Sheikh Hasina fled Bangladesh after deadly protests, could also benefit future projects where all output is locked into export contracts.​

 

[Saif]

It’s time to form an energy audit commission

Despite having built up an over-capacity of power generation in the energy sector), the past government did little to ensure a cheap and reliable supply chain of primary energy, over which it would have total control. That is the irony of the $460 billion dollar economy in Bangladesh. Opinions diff

thefinancialexpress.com.bd

It’s time to form an energy audit commission
Syed Mansur Hashim
Published :
Aug 16, 2024 22:01
Updated :
Aug 16, 2024 22:01

Despite having built up an over-capacity of power generation in the energy sector), the past government did little to ensure a cheap and reliable supply chain of primary energy, over which it would have total control. That is the irony of the $460 billion dollar economy in Bangladesh. Opinions differ about actual demand for power in the country, but it is around 16,000 MW (megawatts). Despite this, power plants were built and commissioned and today, the grid connected power generation capacity stands at slightly above 27,000 MW. Over the course of the last one year or so, the past government has had to take expensive high-interest, short-term loans from international lending institutions simply to defray payments for energy purchases. A ridiculous situation and one that threatened macro-economic stability in the mid to long term!

According to an article published in Energy & Power magazine: "The highest-ever generation was 16,477MW on 30 April 2024. In the peak hours on that day, the deficit was 1,000MW. The unit cost of generation in FY 2022-23 was Tk 12.13. The average power tariff was Tk 7.04 per unit" On top of that, the erstwhile government had decided that subsidy on power sector would be removed in phases within the next two years. It is the bulk and retail consumer who would bear the burden of subsidy withdrawal. While consumers could curtail energy consumption by reducing usage, energy-efficiency transformation of industry cannot happen overnight and there is also a cost factor involved.

The arrogance with which the ministry of power & energy and policymakers had ramrodded the entire process was sad to see. The explanation, if any, was that utility companies were running into billions of Taka worth of losses and these had to be covered with ever-increasing rise of tariff. During the golden days of economic development, subsidies on power increased by leaps and bounds in the name of "capacity payment". According to a study by the Centre for Policy Dialogue (CPD), over the last seven years, capacity charge jumped from Tk50 billion to Tk320 billion.

One would have thought that with so much financial outlay, generation cost would be managed. The Bangladesh Power Development Board (BPDB) "forecasted that the generation cost would be reduced to Tk10.50/unit." Why so? Because one major element in all these calculation was not shared publicly. Yes, the power generation capacity (on paper) increased dramatically over the last 14 years, but as experience had shown that little thought had gone into awarding of contracts. There was no audit to calculate whether contracted power companies were actually delivering stated power outputs as per contract. The only thing that mattered was awarding of contracts with zero oversight and this is what has landed the nation in the mess it is in today!

As pointed out by a member of the Bangladesh Energy Society, the capacity charge clause necessitated the unnecessary payment on huge reserve margins that shot up the generation costs. This is supported by the fact that the former state minister of energy had informed the last parliament that the government had to pay beyond Tk 1,000 billion as capacity charge for the past 13 years. Perhaps it was a pipedream that policymakers believed in that international markets for three primary energy sources: liquid fuel, coal and LNG would remain stable for eons to come. It simply goes to show that greed overtook common sense and the economy had become dependent on an energy plan that could be undermined at any time.

Every nation strives for energy self-dependence, regardless of the source of energy. In the case of Bangladesh, it was fortunate to have gas and coal reserves - but these are finite resources, regardless of the reserve size. Yet, we have witnessed the obtuseness of policymakers in making energy plans that was focused on making the country import-dependent while disregarding the very basics of energy-efficiency, curbing wastage and unbridled corruption that would overwhelm the state of finances within a short period of time.

The current government has landed on this mess and it must tackle the severe energy crisis. Much has already been written on the formation of a banking commission to deal with the runaway corruption in the financial sector. It is time to form a proper energy audit commission comprising renowned energy experts of the country and people who understand the energy affair. The task of this commission would be to sift through the evidence of how and where subsidies went, who got what under "capacity charge" and precisely, what is the actual power generation capacity of the various power plants commissioned. Only with such data in hand, can a proper energy policy be formulated and the road to recovery may begin. Recovery will be both painful and time-consuming but this can no longer wait.​

 

[Saif]

Scrap, amend key energy laws, demand energy experts

The reform that Bangladesh now seeks to establish the rule of law following the ouster of Sheikh Hasina ending her autocratic rule should begin with scrapping and changing the...

www.newagebd.net

Scrap, amend key energy laws, demand energy experts
Emran Hossain 18 August, 2024, 00:23

The reform that Bangladesh now seeks to establish the rule of law following the ouster of Sheikh Hasina ending her autocratic rule should begin with scrapping and changing the key energy laws, energy experts said.

In the last 14 years, they said, until Hasina’s fall on August 5, the Awami League government made almost all power and energy deals behind the scene under the protection of an indemnity law named ‘Quick enhancement of electricity and energy supply act, 2010’.

The law handed unprecedented power to the minister for power and energy, which was Hasina herself, enabling her to award power and energy deals without any tender while ensuring that her decisions could not be challenged in any court of law.

The law came to be known as the indemnity law which was enacted in 2010 for two years. Its tenure was later extended four times, giving it a lifetime of 16 years until 2026, ignoring widespread demands from energy and legal experts for throwing it out.

The law oversaw unabated fossil fuel expansion at exorbitant prices further facilitating corruption and inefficiency, channeling a huge amount of public money into private pockets by creating a power system suffering from 50 per cent overcapacity.

‘The cancellation of the indemnity law should be the first step in the reform of the state,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development.

The call for reform emerged with the uprising that toppled the Hasina regime.

The ‘Quick enhancement of electricity and energy supply act, 2010’ was passed on October 12 in 2010 for two years as an emergency measure to tackle an acute energy crisis after the past Awami League government had assumed power in 2009.

In 2012, the law was given two years’ extension, followed by four year’s extension awarded in 2014, three years extension in 2018 and five years extension in 2021.

The law allows awarding any companies without tender any power and energy projects, including the import of natural gas, coal, liquefied natural gas and petroleum products, as well as the extraction of mineral resources. The law also covers electricity generation, transmission and distribution projects.

In the section 9, the law states that the legality of any activity or measure or order taken or given under it cannot be challenged in any court of law.

No legal action can be taken against any employees and officials who have operated under the law or its subordinate rules or any general or special orders given under it, states section 10 of the law, considering all actions done under it performed in good faith.​

After taking permission from the minister, the subsection 2 of the section 6 states, a special committee can contact and negotiate with a limited number of parties or a single party to process any procurement or investment proposals in the power and energy sector.

The special committee comprising top officials of the energy ministry and the state-owned power end energy entities.

Under the law, the government indiscriminately approved projects, increasing the installed power generation capacity to over 28,000MW in June this year from less than 5,000MW in 2009.

Energy experts frequently said that the rapid expansion of the power generation capacity was unnecessary and harmful and based on flawed growth projection.

The power projects offered riskless investment, guaranteeing huge profits, with capacity charge entitlement, which is a provision to pay investors regardless of power produced by their power plants.

‘The law should not have existed in the first place. It violates standard practices of public procurement around the world,’ said energy expert Ijaz Hossain.

He said that the government has a tough choice to make about holding the past Awami League government accountable for projects implemented under the indemnity law as it implies dealing with international power purchase agreements.

‘The move might bear financial consequences for some parties might choose to go to international courts,’ he said.

The mass uprising, however, has offered an opportunity as well exposing the past government’s acts against the interest of the state and people, giving the interim government the opportunity to renegotiate terms and conditions in existing power and energy deals, said Ijaz.

The past government under the law set up 151 power plants, including dozens of furnace oil, diesel, coal and gas-fired power plants, and two floating, storage and re-gasification units. Drilling of a dozen of onshore gas-wells by local and international oil companies were also conducted under the law. Oil-carrying pipelines were also installed, among other initiatives.

Not a single power and energy agreement was ever made public. The Awami League government also kept all environmental impact assessment a secret.

An analysis of the power projects passed by the Awami League showed that only one power project went through bidding since 2010. The bid, however, carried no significance for its winner was paid higher price through negotiation anyway.

Another result of having such a law is evident in the establishment of the Bosila 108MW power plant, owned by CLC power company, a sister concern of Maisha Group, owned by former Awami League lawmaker Aslamul Haque, who died in 2021. The furnace oil-based Bosila power plant began commercial operation on February 22, 2017, years after it was supposed to be operational. The power plant was set up encroaching river for which it was never made accountable. And the power plant was out of operation for the last four years but its permission was never cancelled.

Consumers Association of Bangladesh energy adviser Shamsul Alam said that the new government should suspend the indemnity law and amend the Bangladesh Energy Regulatory Commission act to ensure people’s right to public hearing before energy price hikes.

The past Awami League government turned the regulatory commission a lame duck in 2022 since when electricity and gas prices were frequently increased under executive orders.

Shamsul Alam demanded that the commission should work to reduce inefficiency and corruption to ensure uninterrupted energy supply without increasing prices.

‘The interim government should first announce that energy prices will not be increased during its tenure and then ensure it through reforms or providing subsidy,’ he said.

 

[Saif]

Power sector’s indemnity act suspended

All the activities under the much-criticised Quick Enhancement of Electricity and Energy Supply Act 2010, commonly known as the Indemnity Act, in the power and energy sector will remain suspended, said the newly-appointed energy adviser to the interim government.

www.thedailystar.net

Power sector’s indemnity act suspended

The government believes the country's power coverage would be 100 percent by 2021. Star/File

All the activities under the much-criticised Quick Enhancement of Electricity and Energy Supply Act 2010, commonly known as the Indemnity Act, in the power and energy sector will remain suspended, said the newly-appointed energy adviser to the interim government.

Initiated in 2010 when the power sector was struggling to meet the country's demand, the act stipulates there is no need to float any tender to award any power plant construction activities.

Procurement under this act does not need to go through the standard Public Procurement Rules that are followed by other ministries.

Though the process was meant to be for a short time, the Awami League government never abolished it. In 2021, it was extended for another five years.

Thanks to this act, hefty amounts were paid as capacity charges to the power plants.

All previous activities under this act will be reviewed by the interim government, said M Fouzul Kabir Khan, the adviser to the ministry of power, energy and mineral resources, at a media briefing in the secretariat yesterday.

"It will be decided by the advisory council whether the act will be abolished or not. But from now on, the pending works under this act will remain suspended," Khan added.

Different media outlets published articles about the anomalies of the sector, especially under this act, which may raise questions among people, said a press release from the ministry.

Under this circumstance, all the negotiations, projects and purchase activities will remain temporarily closed.

However, the contracts that were done under this act will continue.

The interim government will not take any decision regarding hiking the power or energy tariffs by bypassing the Bangladesh Energy Regulatory Commission (BERC).

Last year, the Awami League government amended the BERC Act and incorporated a clause to set the energy prices by themselves without any public hearing.

They have increased the power price several times since this clause was rolled out.​

 

[Saif]

CPD suggests 3 steps to fix energy sector

The Centre for Policy Dialogue yesterday proposed a three-step pathway for energy transition under the interim government that would holistically reform Bangladesh’s energy sector.

www.thedailystar.net

CPD suggests 3 steps to fix energy sector

The Centre for Policy Dialogue yesterday proposed a three-step pathway for energy transition under the interim government that would holistically reform Bangladesh's energy sector.

The think-tank proposed an initial 100-day plan where the interim government would announce key priorities, followed by significant reforms over the next six months.

The reforms would include abolishing certain acts, implementing new policies such as energy audits, renewable energy laboratory and centralising databases on pricing and investment.

The CPD identified four critical acts and policies that need to be revised immediately to ensure competition, efficiency, transparency and accountability in the power and energy sector.

These are the Quick Enhancement of Electricity and Energy Supply Act, the Bangladesh Energy Regulatory Commission Act, the Renewable Energy Policy and the Integrated Energy and Power Master Plan (IEPMP).

"These acts and policies were initiated to benefit vested interest groups in the sector," said Khondaker Golam Moazzem, research director of CPD, while presenting the keynote paper at a media briefing titled "Power and Energy Sector Reform Agenda for the Interim Government".

Under the Quick Enhancement Act, the government awarded public works to conglomerates without issuing any tender notices.

"No public procurement rules were followed under this act. The faulty procurement and bidding process of the major power projects such as the Adani deal, Payra and Rampal power plants cost us an additional Tk 35,000 crore."

Moazzem also called for an international audit of all companies under the ministry of power, energy, and mineral resources to uncover anomalies and corruption from the past government.

"There was no transparency in the information available in this sector. Companies provided different information to different authorities, and all details were kept top secret during the Awami League-led government. All deal documents should be made public."

The data on power generation cost, power purchase tariff, efficiency level, plant factor, fuel cost, capacity payment, date of contract expiration, and oil and LNG import costs must be updated regularly on the respective websites.

CPD emphasised the need for all government activities to be conducted under the Public Procurement Act 2006 and Public Procurement Rules 2008.

They urged the government to review all procurement and bidding processes of power plants, phase out inefficient and quick rental power plants and prioritise the identification and assessment of renewable energy resources.

Additionally, CPD recommended forming a probe body to identify anomalies in pre-paid meters and restructuring the power, energy and mineral resources ministry to empower the Sustainable and Renewable Energy Development Authority (SREDA) as the sole authority for implementing upcoming energy transition issues.

In the final phase, spanning 12 to 36 months, CPD suggested the government prioritise investment in advanced grid technologies, modernise grid infrastructure and shift focus from LNG imports to domestic gas exploration.

"The past government has made Bangladesh Energy Regulatory Commission a toothless authority," Moazzem said.

The laws were amended to adjust gas and electricity prices without holding a public hearing multiple times a year.

Without the process, there are two types of problems: it creates a non-transparent market and frequent tariff changes discourage investors.

In the IEPMP, the government had projected faulty energy and power demand, the keynote paper said.

Besides, the policy paper incorporated hydrogen and ammonia co-firing with carbon capture and storage systems, which is a 'false solution' of energy transition.

CPD demanded the review of the market-based pricing formula saying the formula has anomalies. "We need to get rid of subsidy-based power and energy but under a transparent process."​

 

[Saif]

CPD calls for phasing out inefficient power plants

The Centre for Policy Dialogue yesterday urged the interim government to phase out all inefficient power plants as early as possible.

www.thedailystar.net

CPD calls for phasing out inefficient power plants

The Centre for Policy Dialogue yesterday urged the interim government to phase out all inefficient power plants as early as possible.

During a media briefing, titled "Power and Energy Sector Reform Agenda for the Interim Government", at its office, the CPD outlined a comprehensive operational reform strategy for the power sector.

The think-tank asked the government to revise power purchase contracts and incorporate the "no electricity no pay" clause to lessen the burden of capacity payments.

"The government paid a total of around Tk 105,000 crore in the last 14 years as capacity payments to power plant owners up to August 2023," said Khondaker Golam Moazzem, research director at the CPD.

He provided a list of 28 inefficient power plants -- which have a total capacity of 3,655 MW -- based on net electricity generation, generation cost and carbon dioxide emissions, which can be phased out after their contracts end by 2030.

Most of them are quick rental power plants that the previous government promised to phase out. But it failed to do so.

All 16 quick rental power plants were supposed to be phased out by 2023, but as many as 13 are still operational. Of them, two have been getting capacity payment facilities and 11 are operating under the 'no electricity no pay' provision, Moazzem said.

According to the CPD, there is an over-generation capacity of 41 percent at present, significantly higher than the maximum required reserve margin of 30 percent.

"There is a scope to reduce the capacity of 6,677MW without having any major adverse effect on the electricity supply in the country," Moazzem said, adding the previous government did not maintain the retirement schedule of power plants.

Despite providing high subsidies and upward tariff revision, the Bangladesh Power Development Board has still been unable to come out of losses.

He added that no further power tariff revision should be made in the name of subsidy adjustments.

"The previous government had drawn up a plan to increase the price of electricity four times a year for the next three years to withdraw all subsidies in the power sector. They raised the price in February, but through such an adjustment, the burden is fully passed to the consumers -- households, agriculture, industry, businesses, services and other economic activities."

The CPD termed the automated fuel pricing formula, launched in March this year, as unclear. "The price calculation mechanism of petroleum is unclear and there are a few hidden charges without any proper justification."

As the procurement process was non-competitive and confidential, fairness could not be ensured regarding issues such as the determination of power purchase rate and capacity payment. It also led to extensions of contracts with inefficient power plants, it said.

So, the CPD asked the government to review the procurement and bidding process of the power plants.​

 

[Saif]

Energy reforms are long overdue

CPD’s three-step proposal deserves consideration

www.thedailystar.net

Energy reforms are long overdue
CPD’s three-step proposal deserves consideration

VISUAL: STAR

The Awami League government's questionable policies in the power and energy sector badly affected the economy over the last 15 years, prompting experts to frequently call for reforms but to no avail. Now that the interim government has taken charge, we hope to see the initiation of some much-needed actions in that regard. The three-step proposal given by the Centre for Policy Dialogue (CPD) shows where the focus should be. It has put forth a 100-day plan highlighting the key priorities, followed by significant reforms stretching over the next six months.

In particular, four acts and policies highlighted by the CPD need immediate revisions since those were made primarily to benefit vested interest groups. For instance, through the enactment of the Quick Enhancement of Electricity and Energy Supply Act, also known as the Indemnity Act, the erstwhile government awarded public works to conglomerates without issuing any tender notices, while no public procurement rules were followed either. This act should be repealed immediately. The other acts that need revisions are the Bangladesh Energy Regulatory Commission (BERC) Act, the Renewable Energy Policy, and the Integrated Energy and Power Master Plan (IEPMP).

The need for the BERC to operate independently cannot be stressed enough. The amendment to the relevant act, done in 2022 to empower the government to set power and energy tariffs on its own under "special circumstances," without holding any public hearing, was a shady decision that frequently shot up energy prices. This needs to change. In addition, the IEPMP needs to be revised because the government allegedly projected faulty energy and power demand in it. Moreover, the suggestion to link the Sustainable and Renewable Energy Development Authority with the chief adviser's office also deserves consideration, as it will hopefully speed up phasing out of the fossil fuel-based power plants.

Phasing out the inefficient power plants should be another goal for the interim government. According to the CPD, the Awami League government paid a total of around Tk 105,000 crore as capacity payments to power plant owners in the 14 years up to August 2023, which is outrageous. So much money was squandered while citizens were either deprived of power or forced to pay exorbitantly for it. Revising the power purchase contracts and incorporating a "no electricity, no pay" clause will lessen the burden of capacity payments.

These are just a few key areas that need immediate attention from the interim government. There are many other short- and long-term suggestions given by the CPD which are quite well-thought-out, and can, if properly implemented, ensure competition, efficiency, transparency and accountability in the power and energy sector.​

 

[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’