[🇧🇩] Energy Security of Bangladesh

[Saif]

Summit urges govt not to cancel its FSRU deal

Summit Group yesterday urged the interim government to withdraw its recent decision to terminate an agreement over the establishment of the group’s second floating regasification plant for liquified natural gas (LNG) imported by Bangladesh.

www.thedailystar.net

Summit urges govt not to cancel its FSRU deal

Summit Group yesterday urged the interim government to withdraw its recent decision to terminate an agreement over the establishment of the group's second floating regasification plant for liquified natural gas (LNG) imported by Bangladesh.

Summit LNG Terminal II Co (SLNG II), a unit of Summit Group, did not breach any conditions precedent of agreements signed with Petrobangla to build the "Floating Storage and Regasification Unit (FSRU)", said a Summit press release.

A condition precedent is an event that must come to pass before a specific contract is considered to be in effect, according to investopedia.com.

SLNG II said they received a notice from Petrobangla on October 7 notifying of the termination of the project situated at Moheshkhali in Cox's Bazar.

They said the notice mentioned that SLNG II did not submit a "performance bond" by June 28 or within the stipulated 90 days as per prior agreements.

A performance bond is a bond issued by a bank or other financial institution guaranteeing the fulfilment of a particular contract.

Summit, Petrobangla and Rupantarita Prakritik Gas Company had finalised a "Terminal Use Agreement" and "Implementation Agreement", it said.

The two documents were vetted and approved by the cabinet committee and signed on March 30 this year, said the statement.

"But the date (June 28) fell on a Friday (not a banking day in Bangladesh), the performance bond was delivered on the next possible working day, with acknowledgement by Petrobangla," said SLNG II.

"Our lawyers have confirmed that SLNG II had not breached any CPs (conditions precedent) of the agreements," it said.

"Even if any CP was delayed, Petrobangla did not notify SLNG II (about it) within the agreed 30-day window and had therefore deemed the CP as accepted," it added.

Summit Group is the largest private sector investor in Bangladesh's energy sector with a proven track record of developing long-term infrastructure projects, said SLNG II.

It urged the government to uphold the sanctity of contracts and to ensure that investors' rights are protected and treated fairly and equitably.

The statement said the last government took a strategic decision to make a transition from coal-fired power generation to natural gas, a cleaner energy source, in late 2020.

Following the decision, Summit Group submitted a proposal October 11, 2021 to implement an FSRU on a "Build, Own, Operate, and Transfer" (BOOT) basis, it said.

The proposal was approved on June 14, 2023, followed by two years of extensive negotiations and consultations with international law firms to address the contractual and technical challenges, it added.

In addition, a long-term "Sale and Purchase Agreement" was signed to supply 1.5 million tonnes of LNG per year, starting in October 2026.

"To fulfil the initial conditions precedent of the agreements, SLNG II has committed to invest approximately $15 million to implement the country's third FSRU," reads the press release.​

 

[Saif]

Bangladesh can generate 5 per cent electricity by 2030: report

Bangladesh can generate maximum 5 per cent of its electricity from renewable energy by 2030 given the pace the country is adopting the technology, said a report released by the Paris-based International Energy Agency on Wednesday...

www.newagebd.net

Bangladesh can generate 5 per cent electricity by 2030: report
Staff Correspondent 10 October, 2024, 05:42

Bangladesh can generate maximum 5 per cent of its electricity from renewable energy by 2030 given the pace the country is adopting the technology, said a report released by the Paris-based International Energy Agency on Wednesday.

By 2030, solar photovoltaic is projected to become the largest renewable generation technology.

Bangladesh’s renewable energy share in power generation stands at a mere 1.6 per cent, far behind its regional counterparts, the report said.

The IEA’s ‘Renewables 2024’ report highlights that while solar PV technology is expected to account for a staggering 80 per cent of global renewable capacity growth, countries in the Asia Pacific region, including Bangladesh, are struggling to keep pace.

China alone is set to account for a 60 per cent of the global renewable capacity growth.

Nations like India are leading the change with rapid renewable expansion, securing over half of the Asia Pacific region’s renewable growth from 2024 to 2030.

Philippines, Thailand, and South Korea are also set to see their variable renewable energy shares rise significantly, yet Bangladesh is mired in slow adoption and infrastructural challenges.

This stagnation not only hinders Bangladesh’s energy security but also limits potential economic benefits associated with renewable energy deployment.

As the IEA notes, the accelerated deployment of low-cost renewable technologies, especially solar PV and wind, could provide Bangladesh with substantial economic and environmental advantages.

The country’s ongoing reliance on imported fuels for power generation, however, exacerbates its energy security concerns, further emphasising the urgent need for a robust transition to renewable energy sources.

‘Policymakers are embracing solar and wind like never before, but they are still two steps behind the reality on the ground. The market can deliver on renewables, and now governments need to prioritise investing in storage, grids, and other forms of clean flexibility to enable this transformation. The next half decade is going to be one heck of a ride,’ Ember’s director of global insights Dave Jones quoted in a press release issued on the occasion of the report’s release.

To avoid falling further behind in this global energy revolution, Bangladesh must urgently implement supportive policies and investment strategies aimed at boosting its renewable energy capacity, the report said.​

 

[Saif]

Petrobangla to import LNG worth Tk 6.57 billion from Singapore

State-owned Petrobangla (Bangladesh Oil, Gas and Mineral Corporation) will import a cargo, containing 3.37 million MMBtu of liquefied natural gas (LNG) from the international spot market at a total cost of Tk 6.57 billion. Gunvor Singapore Pte Ltd will supply the amount of LNG and per MMBtu price

thefinancialexpress.com.bd

Petrobangla to import LNG worth Tk 6.57 billion from Singapore
UNB
Published :
Oct 09, 2024 19:45
Updated :
Oct 09, 2024 19:50

State-owned Petrobangla (Bangladesh Oil, Gas and Mineral Corporation) will import a cargo, containing 3.37 million MMBtu of liquefied natural gas (LNG) from the international spot market at a total cost of Tk 6.57 billion.

Gunvor Singapore Pte Ltd will supply the amount of LNG and per MMBtu price will be $13.93, according to UNB.

Advisers Council Committee on Government Purchase (ACCGB) approved a proposal for the purchase during a meeting on Wednesday with Finance Adviser Dr Salehuddin Ahmed in the chair.

The ACCGB also approved four other proposals, including imports of lentils, and fertiliser.

The committee also approved a proposal of the Trading Corporation of Bangladesh (TCB) to procure 10,000 metric tons (MT) of lentil from Payel Traders of Chottagram at a cost of Tk 963.9 million.

The supplier was selected through an open tender.

A proposal of Bangladesh Agriculture Development Corporation (BADC) received approval of the committee to import 30,000 MT of TSP fertiliser from OCP SA of Morocco at a cost of Tk 1.49 billion with each MT at $415.

The Ministry of Agriculture moved the proposal to import the bulk fertiliser under a state-level contract.

Two proposals of Bangladesh Chemical Industries Corporation (BCIC), moved by Industries Ministry received the nod of the ACCGB to import urea fertiliser.

Under the proposals, the BCIC will import 30,000 MT of bulk granular urea fertiliser from SABIC Agri-nutrients Company of Saudi Arabia at a cost of Tk 1.28 billion with each MT at $356.17.​

 

[Saif]

Government no longer sets gas prices: Energy adviser

The government does not determine the price of gas, says Power, Energy and Mineral Resources Adviser Fouzul Kabir Khan. During a visit to the Begumganj-4 (West) drilling site in the Sonaimuri Upazila of Noakhali On Saturday, Fouzul explained that the Bangladesh Energy Regulatory Commission is resp

thefinancialexpress.com.bd

Government no longer sets gas prices: Energy adviser
Published :
Oct 12, 2024 21:49
Updated :
Oct 12, 2024 22:13

The government does not determine the price of gas, says Power, Energy and Mineral Resources Adviser Fouzul Kabir Khan.

During a visit to the Begumganj-4 (West) drilling site in the Sonaimuri Upazila of Noakhali On Saturday, Fouzul explained that the Bangladesh Energy Regulatory Commission is responsible for setting gas prices.

“The government used to set gas prices in the past, but it no longer does. The Bangladesh Energy Regulatory Commission now determines the pricing by consulting with both consumers and LP gas importers,” the adviser said in response to questions about the two recent price hikes of bottled gas during the interim government's two-month tenure.

The adviser, while accusing previous administrations of widespread corruption, committed to maintaining a corruption-free environment, bdnews24.com reports.

“Everyone knows there has been plundering in the country. While in the interim government, we will remain above corruption. Our secretaries will also be expected to remain above corruption,” said Fouzul.

“If any corruption is detected, immediate action will be taken,” he added.

The adviser acknowledged the impact of the gas crisis on industrial production and the difficulties faced by households.

“There is a severe gas crisis in the country. We need 4,000 million cubic feet of gas, but we are only receiving 3,000 million cubic feet. As a result, we have to import gas when necessary,” he said.

Fouzul said there are no plans for new gas connections to households at this time.

“At this moment, assuring gas supply to homes would be a false promise. However, if gas supply increases in the future, we will consider this issue.”

He also said 150 wells will be drilled through the state-owned company Bangladesh Petroleum Exploration and Production Company Limited, or BAPEX, to alleviate the energy crisis.​

 

[Saif]

Bangladesh likely to keep power deal with Adani

Bangladesh is likely to set aside pricing concerns and retain a power purchase pact with India’s Adani Power in the face of supply worries and gloomy prospects for a legal challenge, two sources with direct knowledge of the matter said.

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Bangladesh likely to keep power deal with Adani
Reuters
Dhaka/New Delhi
Published: 12 Oct 2024, 12: 35

Bangladesh is likely to set aside pricing concerns and retain a power purchase pact with India’s Adani Power in the face of supply worries and gloomy prospects for a legal challenge, two sources with direct knowledge of the matter said.

The new government has set up a panel to gauge whether its predecessor's contracts adequately protected the nation's interests, particularly projects faulted for lack of transparency that were initiated under a special expediting law.

One contract being scrutinised over price concerns is a 2017 deal to buy electricity for 25 years from Adani's $2-billion, 1,600-MW power plant in India's eastern state of Jharkhand that exclusively supplies Bangladesh.

The project meets nearly a tenth of Bangladesh's demand for power, so cancelling the Adani deal outright would be difficult, however, said one of the sources. Both spoke on condition of anonymity as the matter is a sensitive one.

Also, a legal challenge in an international court was likely to fail without strong evidence of wrongdoing, the source added.

While an exit may not be possible, the only feasible option could be a mutual agreement to reduce the tariff, the second source said.

Asked for comment on the remarks, Muhammad Fouzul Kabir Khan, the power and energy adviser, or de facto minister in the interim government, said, "The committee is currently reviewing the matter, and it would be premature to comment."

The Adani power costs Bangladesh about Tk 12 ($0.1008) a unit, an official of the Bangladesh Power Development Board said, citing the latest audit report for financial year 2023/24.

That is 27 per cent higher than the rate of India's other private producers and as much as 63 per cent more than Indian state-owned plants, he added.

Under the deal, Bangladesh has been sourcing electricity since April 2023 from Adani, along with about 1,160 MW from other Indian plants.

Adani has had "no indication" that Bangladesh is reviewing the agreement, a spokesperson in India said.

"We continue to supply power to Bangladesh despite mounting dues, which are of significant concern and are rendering plant operations unsustainable," the spokesperson said.

Dhaka is struggling to clear dues of $800 million to Adani Power, among more than $1 billion owed to Indian power companies, because of difficulty in accessing dollars to make payment.

"We are in constant dialogue with senior officials of the Bangladesh Power Development Board and the government, who have assured us our dues will be cleared soon," the Adani spokesperson added.

Adani Power was confident Dhaka would fulfil its commitments, just as the company had met its contract terms, the spokesperson added, but did not respond to a query on why its rates exceeded those of other suppliers.

Nevertheless, domestic critics, such as the Bangladesh Nationalist Party (BNP) of former premier Khaleda Zia, say pricing concerns make a review of the deal necessary.

"The deal with Adani has raised serious concerns about overpricing from the start, and it’s a positive step that the government is now reviewing it," said senior party leader Zainul Abdin Farroque.

"I hope they make the right decision."

The interim government led by Nobel laureate Muhammad Yunus took power in Bangladesh in August after deadly protests prompted then Prime Minister Sheikh Hasina to resign and flee to neighbouring India.

It has since scrapped projects such as a floating LNG terminal planned by domestic conglomerate Summit Group, with officials saying more cancellations are possible.​

 

[Saif]

Two more Palli Bidyut officials put on remand over destabilising power sector

A Dhaka court on Saturday placed two more officials of Palli Bidyut Samity (PBS) on a two-day remand each in a sedition case filed on charges of their involvement in destabilising the power sector. Dhaka Metropolitan Magistrate Akhteruzzaman passed the order as police produced the duo before the c

thefinancialexpress.com.bd

Two more Palli Bidyut officials put on remand over destabilising power sector
Published :
Oct 19, 2024 20:59
Updated :
Oct 19, 2024 20:59

A Dhaka court on Saturday placed two more officials of Palli Bidyut Samity (PBS) on a two-day remand each in a sedition case filed on charges of their involvement in destabilising the power sector.

Dhaka Metropolitan Magistrate Akhteruzzaman passed the order as police produced the duo before the court with a prayer for 10 days remand.

The remanded PBS employees are Deputy General Manager (DGM) Ali Hasan Mohammad Ariful Islam, 48, and Assistant General Manager of Brahmanbaria SK Shakil Ahmed, 31, according to a BSS report.

Earlier on Thursday, another court of Dhaka placed six PBS officers on a three-day remand each in two separate cases.

The six officers are Rajon Kumar Das, Asaduzzaman Bhuiyan, Dipak Kumar Singha, Rahat, Monir Hossain and Belal Hossain.

Of them, Belal Hossain was accused in a sedition case, while the five others were accused in the other case.

Bangladesh Rural Electrification Board (BREB) Director (admin) Arshad Hossain filed the cases against them with capital's Khilkhet Police Station on Thursday (October 17).​

 

[Saif]

Renewable energy can play a major role in meeting challenges of environmental degradation: Speakers

Speakers at a seminar on Saturday said that renewable energy can play a major role in meeting the challenges of environmental degradation caused by climate change. They also said that the use of fossil fuels, such as oil, gas and coal, emits large amounts of carbon dioxide (CO₂) and other gre

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Renewable energy can play a major role in meeting challenges of environmental degradation: Speakers
UNB
Published :
Oct 19, 2024 22:27
Updated :
Oct 19, 2024 22:31

Center for Atmospheric Pollution Studies (CAPS) and Pratichhabi, an organization working for the environment, jointly organized the seminar at Dhaka Reporters Unity. Photo : UNB

Speakers at a seminar on Saturday said that renewable energy can play a major role in meeting the challenges of environmental degradation caused by climate change.

They also said that the use of fossil fuels, such as oil, gas and coal, emits large amounts of carbon dioxide (CO₂) and other greenhouse gases, which are extremely harmful to the environment.

Center for Atmospheric Pollution Studies (CAPS) and Pratichhabi, an organization working for the environment, jointly organized the seminar titled "What to do to deal with environmental disasters and risks caused by climate change in the development and progress of Bangladesh" at Dhaka Reporters Unity.

With president of Pratichchbi, Mohammad Masudur Rahman, in the chair, the seminar was addressed by president of Bangladesh Institute of Planners (BIP) Dr. Adil Mohammad Khan, Professor of Electrical and Electronic Engineering Department at BIP SM Mustafa Al Mamun; Sharif Jamil, member secretary of Amara Raksha Dharitri; Professor of Mathematics and Natural Science Department at BRAC University M Mahbub Hossain, and Additional Secretary of the government, as well as gene scientist, Mohammad Mahfuzul Quader (Helal).

In the seminar, Ahmad Kamruzzaman Majumder, chairman of Atmospheric Pollution Study Center (CAPS), presented the keynote speech at the seminar.

Dr. Adil Mohammad Khan said that it is important to work to prevent climate change rather than talking about climate change in the current situation.

"It is up to us to change our destiny. To rebuild our new Bangladesh, we have to start from the streets. We need to change the strategy of urbanization and let the youth face the occupiers to bring about a positive change," he added.

Prof. Ahmad Kamruzzaman Majumdar said that the use of fossil fuels, such as oil, gas and coal, emits large amounts of carbon dioxide (CO₂) and other greenhouse gases, which are extremely harmful to the environment.

He observed that the amount of greenhouse gas emissions resulting from the use of fossil fuels is identified as one of the main causes of climate change.

"Therefore, renewable energy can play an important role in solving this crisis. A target has been set to reduce global carbon emissions by 90% by 2050, which can only be achieved through renewable energy", he added.

Sharif Jamil, Member Secretary of Dharitri Rakkhay Amara (Dhara) said that the people have to understand the environment in very simple terms.

"We have to understand the climate change and also realize its adverse effects. Only then can we become an environmentalist".

He said all the plans made about Bangladesh should be implemented and not just left as plans. We have to work to protect the coastal areas of our country from climate change.

Professor of Electric and Electronic Engineering Department SM Mostafa Al Mamun said that we are all victims of environmental disaster. We must work together to improve the way we have destroyed the environment for our own luxury.​

 

[Saif]

Power sector must belong to us, not conglomerates and foreign actors | The Daily Star

With the collapse of the autocratic regime and appointment of a pro-renewable power and energy adviser, the current challenge lies in effectively implementing the goal of using renewable energy to tackle energy crises and achieve zero emissions. We must reflect on past events to understand the...

thegreatwave.thedailystar.net

Power sector must belong to us, not conglomerates and foreign actors
Moshahida Sultana

Do you find any newspaper opinion on power and energy these days that doesn't support using renewable energy to tackle energy crises and achieve zero emissions? With the heavy power and energy debt burden, everyone today argues for the promotion of renewable energy, notably solar, wind, and biogas. But even five years ago, it was difficult to persuade people that we needed to begin developing the infrastructure to promote solar.

After becoming heavily indebted to foreign countries by introducing coal, nuclear, and liquefied natural gas (LNG) into the energy mix, the country began to understand that the installed capacity exceeded our needs. As a result, people are well aware of the capacity charge, which gradually transfers their money to the private sector. Although the process began in early 2010, public sentiment against capacity charges grew in recent years, as increasing installed capacity failed to alleviate the crisis, owing mostly to the over-reliance on imported energy sources such as coal, LNG, and oil.

With the collapse of the autocratic regime and appointment of a pro-renewable power and energy adviser, there is no longer a need to emphasise the importance of renewable energy sources. Instead, the current challenge lies in effectively implementing this goal. With 6,604 MW (21.39 percent of the energy mix) coal-based, 6604 MW (21.39 percent) oil and diesel-based, and 12,194 MW (39.5 percent) natural gas and LNG-based power capacity, Bangladesh already has excess capacity. In addition, a 2,400-MW nuclear power plant is currently under construction and scheduled for commissioning in 2026. When we focus on adding new solar capacity, we also need to consider the existing capacity.

We must reflect on past events to understand the reasons behind the adoption of coal, oil, LNG, and nuclear power. This will enable us to clearly formulate short-term and long-term strategies to overcome the current crisis and break the vicious cycle of energy insecurity.

We can attribute the current situation to a series of incremental policies implemented to address crises at different stages. Since independence, the country has never had a clear vision for implementing a long-term power and energy plan. When the power sector reform in the 1990s failed to resolve the electricity crisis, despite Bangladesh's abundant gas resource potential at that time, the government recognised the necessity for a plan. As a result, Bangladesh commissioned Japan International Cooperation Agency (JICA) to create its first master plan in 2005. This plan included proposals to diversify energy sources by incorporating LNG and domestic coal extraction. The same agency prepared successive master plans in 2010, 2016, 2018 (a revised one), and 2022 (latest). The common policies suggested in those plans primarily focused on increasing reliance on imported energy.

Even throughout the 2010s, when the cost of solar was declining worldwide, the JICA plans did not stress on the need for solar adoption. Bangladesh adopted a systematic planning approach that led to its reliance on imported energy and energy infrastructure, such as oil, LNG, coal, and nuclear power. Japan particularly had an interest in promoting coal and LNG because of its strategic decision to create a market for coal technology as well as LNG trade and shipping.

Meanwhile, despite strong opposition from people, Bangladesh built the Rampal power plant near the Sundarbans. The autocratic government, backed by India’s strategic interest in coal projects, remained stubborn throughout the entire period. It initially emphasised the cost-effectiveness of coal, the environmental benefits of super-ultra-critical technology, and an environmental management programme to reduce environmental risks. But the administration failed to establish a firm consensus with society. Eventually, it turned out that coal became expensive, and coal supply got uncertain due to scarce foreign exchange reserves. The current predicament involves determining the course of action for this project, given the substantial financial investment.

I believe we should address not just the invested funds but also the project's future operational expenses, coal import payments, environmental management expenses, and above all, the impact of the coal power plant on the Sundarbans. The government may consider cancelling the project and replacing it with large utility-scale solar power. This will not only save the Sundarbans and foreign currency, but it will also set an example of a carbon-free initiative.

The Rooppur power plant is another questionable project that started during the Hasina government's tenure. A report from the website “Global Defense Corp” has raised a new controversy about embezzlement of about $5 billion from the $12.65-billion project. The report lacks credibility because it claims that funds were transferred to a foreign account without providing any tangible proof of embezzlement. The Russian ambassador has also denounced it as a rumour.

However, due to the questionable cost escalation, the report, coupled with the ambassador's subsequent reaction, prompts a review of the project's expenses. In February 2011, when the first agreement was signed, the initial estimated cost was $1.5 billion - $2 billion for each unit. In 2014, the Ministry of Science and Technology proposed a cost of $6 billion. In May 2016, the cost reached $12.65 billion. This unprecedented change within just five years is questionable. Therefore, the government's lack of accountability and transparency during the project's inception necessitates an investigation into this case.

The interim government can form an independent committee to investigate the cases of overpricing. All relevant authorities must examine the records of purchase orders, invoices, and money transfers in a transparent manner. Even the pillow corruption, despite its meagre amount, warrants scrutiny to prevent overpricing. It is a serious issue because people will have to pay the extra money to Russia in the future. The nation must witness a trial of all those involved in this project's corruption.

Now, let us delve into the question of how the interim government will delegate decisions of phasing out existing plants and replacing them with solar and wind power. Can we just keep adding solar power plants and not care about the old establishments? Should we allow the market to determine which power plants to phase out? Mentionable, the need to balance demand and supply did not drive the construction of power plants during Hasina’s 15-year regime. The suppliers and their partners' rent-seeking motivations were primarily responsible. Conscious policy choice is necessary now, but this has become more difficult than ever because of the rapidly depleting foreign currency reserve and our diminishing ability to import expensive energy from the international market. We find ourselves firmly locked-in in the use of fossil fuels. The country has already invested billions of dollars and secured substantial loans for coal, LNG, and nuclear projects while neglecting exploration of domestic gas. Therefore, there is no scope for waiting to see the inefficient and expensive suppliers phasing out automatically without any government intervention.

Based on the aforementioned observations, I have identified several crucial tasks that the interim government can undertake. The first can be establishing a planning committee, which should include individuals from diverse backgrounds such as engineers, researchers, data analysts, accountants, and representatives from various organisations such as the Power Development Board (PDB), Sustainable Renewable Energy Development Authority (SREDA), Petrobangla, BAPEX, Power Cell, Hydrocarbon Unit, as well as academics, social scientists, entrepreneurs, politicians, civil society, and planners. Their job will be to deliver an immediate action plan to optimise energy use, subject to existing resource constraints (foreign currency and annual budget). This will allow us to maximise electricity generation by minimising foreign currency expenditure.

Even if the interim government does not assume responsibility for an extended period, it is its duty to establish an accountability structure and develop a check-and-balance mechanism to prevent various interest groups from exploiting the situation during a crisis. In the crisis period, we have witnessed various rental and quick rental owners take advantage of non-competitive bidding in the name of immediate crisis resolution, thereby benefiting from both subsidies and capacity charges. In this respect, we welcome the government's suspension of the quick enhancement of the Power and Energy Supply (Special) Act 2010.

However, this is not enough to ensure long-term energy security. To avoid having to rely on a foreign country to develop our own plan, the government must establish an institutional system for long-term planning. Our past experience shows that one incremental policy leads to another crisis, and a hurriedly taken incremental solution leads to the next crisis. Our power and energy sectors suffered a long, vicious cycle of crises. Only national capacity building may solve this problem in a systematic way. We need to develop the capacity of BAPEX with greater effort.

This year, the state-run oil, gas, and mineral corporation Petrobangla floated an offshore bid in 2024 to explore the country’s maritime area for hydrocarbons. This initiative, in response to the gas crisis, represents an attempt to explore domestic gas. Even if the interim government does not have the jurisdiction to sign a production-sharing contract, it may form an independent committee to explore whether, instead of signing a PSC with a foreign company, Petrobangla can lead the exploration by having full control over the management and contracting out some of the tasks to international companies. The same committee may reevaluate the contract with the Indian company ONGC and disclose the progress made since signing it in 2014. This committee must also re-evaluate the contracts with Gazprom, which was assigned to dig wells in the gas fields at a very high cost.

The government's decision to cancel S Alam Group's proposal to install Eastern Refinery Limited (ERL) Unit-2 is definitely a praiseworthy initiative. However, this should not lead to any other private company getting the contract. The public sector should have full control over the construction and management of the second refinery unit.

I welcome the government suspending a recent amendment of Bangladesh Energy Regulatory Commission (BERC) Act, which restricted people’s voice in price change. In addition to this, the government should also restructure BERC and identify a mechanism through which it can ensure democratic institutional practices in the decision-making process.

The interim government prioritises renewable energy generation, but it is also important to remember that implementing renewable energy should not come at the expense of the environment and society. The zero-carbon target should encourage no enforced evictions or unlawful use of agricultural land. Bangladesh needs to re-evaluate all the power and energy sector agreements with private and foreign entities and publish a report on why the cost of solar has been high. We learn from various sources that the cost of land, high tariffs, and costly panels are some of the reasons for the high cost of solar. However, there is no clear data on the existing solar plants to explain why the cost is high for utility-scale solar power. Should the government demonstrate a serious commitment to solar adoption, we must analyse the cost components of all existing solar plants to determine the justification of the existing purchasing power agreements.

Let us delve into the question of how the interim government will delegate decisions of phasing out existing plants and replacing them with solar and wind power.

Can we just keep adding solar power plants and not care about the old establishments?

A lack of societal trust stemming from previous unsuccessful rooftop projects can explain people's reluctance to install solar rooftops. The existence of syndicates selling low-quality rooftop solar panels also lowered public trust. The government needs to devise a strategy to cultivate this trust. We can encourage more people to use rooftop solar in residential, administrative, and industrial buildings by setting some good examples.

Society has been suffering from collective trauma for many years. People are deeply frustrated by the revelation of money leakage and costly and low-quality services. For an interim government to bring back trust is a real challenge. However, it is not impossible if the government stays on the right track and restructures the institutions to ensure mechanisms of accountability and transparency. Only by doing so can the government value the lives of hundreds of martyrs and many more injured in the July uprising. The debt to the martyrs is now much higher than the debt to the foreign countries and their banks. While taking future decisions we must not forget that.

Moshahida Sultana is assistant professor of Department of Accounting and Information Systems, University of Dhaka.​

 

[Saif]

Dearth of reliable energy a major concern for businesses

The shortage of reliable energy is a big concern for Bangladesh due to the country’s dwindling natural gas reserves and the escalating global prices of fossil fuels, according to energy experts, as they advocated for alternatives such as renewables and liquefied petroleum gas (LPG).

www.thedailystar.net

Dearth of reliable energy a major concern for businesses
Experts say

The shortage of reliable energy is a big concern for Bangladesh due to the country's dwindling natural gas reserves and the escalating global prices of fossil fuels, according to energy experts, as they advocated for alternatives such as renewables and liquefied petroleum gas (LPG).

At a meeting held yesterday at the Pan Pacific Sonargaon Dhaka, the experts said the nearly identical commercial energy usage in FY22 and FY23 shows the acuteness of the energy shortage faced by the industrial sector.

"For a developing country, this is not a positive sign for industrialisation," said Ijaz Hossain, former dean of the Bangladesh University of Engineering and Technology (Buet), during a presentation at the event organised by the Foreign Investors' Chamber of Commerce & Industry (FICCI).

"Despite an increase in the number of factories and their production, gas supply to the industrial sector has remained constant over the past decade. This demonstrates the acute energy crisis in industrial units," he added.

Referring to Petrobangla data, Hossain warned that if the current gas consumption continues, the country's gas supply could be depleted by 2030.

According to him, discovering new gas wells is urgent.

The energy expert said without drilling at least ten new wells annually, Bangladesh may become heavily reliant on imported liquefied natural gas (LNG).

According to Hossain, Bangladesh is also losing around 10 percent of the national grid supply to illegal connections, which equates to $1 billion per year.

"This is simply theft," he added. "It has become extremely shocking."

The energy expert suggested that if illegal gas connections to domestic households were factored in, the estimated losses would be even higher.

He suggested replacing the domestic gas supply with LPG gradually, even by offering subsidies to encourage its use.

Regarding renewable energy, the former Buet teacher said Bangladesh is likely the only country worldwide where the share of renewable electricity in total electricity generation has decreased over time.

He said the contribution of renewables to national power generation declined from 11 percent in 1990 to 1.33 percent in 2023.

"Importing energy is more expensive than importing food," said Hossain. "If the government allowed around 1 percent of farmland for solar panels, around 50,000 megawatts of electricity could be generated."

At the programme, Energy Adviser Muhammad Fouzul Kabir Khan criticised the previous government's energy tariffs.

"The previous government set exuberant tariffs by claiming the sector was in emergency. But how long can an emergency persist?" he questioned.

"We have dismantled the corrupt practices established by the previous government over the past 15 years," he claimed. "The previous government bypassed the Bangladesh Energy Regulatory Commission (BERC) for setting prices, but we have restored the commission's authority.'

Khan mentioned that the current government is revising renewable energy policies. It is developing a renewable energy park in Jabalpur, where the government will provide land and transmission lines to the private sector.

The government's primary objective is to reduce subsidies in the power sector by lowering the cost of power procurement, he said.

Zaved Akhtar, president of FICCI, said investment decisions by entrepreneurs are heavily influenced by the availability of reliable energy solutions.

He called for a comprehensive roadmap for renewable energy development.

Similar to Hossain, Badrul Imam, an honorary professor at the Department of Geology at Dhaka University, suggested that Bangladesh should prioritise gas exploration, as it has not invested sufficiently in this area.

M Rezwan Khan, a professor emeritus at the Department of Electrical and Electronic Engineering at United International University, proposed allowing industries to install solar panels on their factory premises.

Mollah Amzad Hossain, editor of the Energy & Power Magazine and Nowshad Ali, country manager of GE Vernova Bangladesh, were also present.​

 

[Saif]

Bangladesh needs greater focus on renewable energy

Energy experts at a meeting in the capital Dhaka on Sunday urged the interim government for taking pragmatic actions for renewable energy projects amid growing demands for power and energy as...

www.newagebd.net

Bangladesh needs greater focus on renewable energy
Staff Correspondent 20 October, 2024, 22:40

Power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan, former BUET dean and chemical engineering department professor Ijaz Hossain, GE Vernova Bangladesh country manager Nowshad Ali, Dhaka University honorary professor Badrul Imam, former United International University vice-chancellor and professor emeritus M Rezwan Khan and Energy and Power Magazine editor Mollah Amzad Hossain are present at a luncheon meeting hosted by the Foreign Investors’ Chamber of Commerce and Industry at the Pan Pacific Sonargaon in Dhaka on Sunday. | Press release photo

Energy experts at a meeting in the capital Dhaka on Sunday urged the interim government for taking pragmatic actions for renewable energy projects amid growing demands for power and energy as the country has been losing its gas reserves fast.

Speaking at the meeting on urgent energy challenges in Bangladesh and sustainable energy options, they said that the government should make investments in rooftop solar photovoltaic (PV) projects flexible, rein in gas supply for domestic use and accelerate exploration of natural gas.

The Foreign Investors’ Chamber of Commerce and Industry organised the meeting at a Dhaka hotel where investors requested the government for accessible industrial lands, net metering system and congenial atmosphere for investment.

Addressing as chief guest, power, energy, and mineral resources adviser Muhammad Fouzul Kabir Khan said that the government had taken several steps to ‘dismantle the whole architecture of corruption’ in the country.

‘Instead of independent power producer or IPP options, we are encouraging the merchant power policy mechanism to break monopoly in the sector,’ Fouzul said.

He added that the government would provide investors with land and transmission facilities in Jamalpur district-based solar power park.

Presenting his keynote paper, former dean of engineering at Bangladesh University of Engineering and Technology, Ijaz Hossain, said, ‘Bangladesh stands on a very difficult juncture as the country’s gas reserves will deplete by 2031.’

He warned that Bangladesh’s energy supply chain would be ruined if the government continued importing expensive liquefied natural gas to feed domestic consumers and CNG-run three-wheelers, depriving industries.

GE Vernova Bangladesh’s country manager Nowshad Ali moderated a panel discussion where professor emeritus of United International University M Rezwan Khan, while replying to a question, recommended that processing investments in rooftop solar PV and net metering systems should be made flexible.

‘About 8,000MW power could be generated if solar PVs cover the existing industrial unit rooftops. The amount could be raised to 12,000MW if the government relaxes the terms and conditions on rooftop power installations,’ Rezwan said.

Dhaka University’s honorary professor Badrul Imam put emphasis on low-carbon emitting energy sources while Energy and Power Magazine editor Mollah Amzad Hossain requested the interim government to review its recent decision that suspends developing several letters of intent-secured renewable power plants.​

 

[Saif]

New gas reserve found in another Sylhet well

A new gas reserve has been found in another well in Sylhet Gas Field, Managing Director of Sylhet Gas Fields Limited (SGFL) Mizanur Rahman said on Tuesday. He said the new gas was found at the Well No. 7 of the gas field after completion of the drilling. He said the field is expected to produce 7

thefinancialexpress.com.bd

New gas reserve found in another Sylhet well
UNB
Published :
Oct 22, 2024 20:10
Updated :
Oct 22, 2024 20:19

A new gas reserve has been found in another well in Sylhet Gas Field, Managing Director of Sylhet Gas Fields Limited (SGFL) Mizanur Rahman said on Tuesday.

He said the new gas was found at the Well No. 7 of the gas field after completion of the drilling.

He said the field is expected to produce 7-8 million cubic feet of gas per day (MMCFD). “The new gas was discovered at a depth of 1,200 meters in the well.”

He also noted that on August 14, gas was found from a similar structure of the well at the depth 2010 meters from which primarily 6 to 7 MMCFD is being produced.

“Now the new gas is an addition to the previous one, “ he said adding, “We hope that new gas will be possible to add to the national grid shortly.”

The BGFL officials said that following drilling of a number of wells, some 60-70 MMCFD gas was obtained which is now being supplied to the national grid.

Earlier, on May 24 of this year, 21 MMCFD gas was found in well No. 8 of Kailashtila gas field in Sylhet after drilling to a depth of 3,440 meters in the well.

Before this, on January 27, a new gas structure was found in well No. 2 of Rashidpur under Sylhet gas field which has a reserve of about 157 billion cubic feet (BCF).

The gas fields operated under the SGFL have been supplying more than 100 MMCFD gas to the national grid.

The officials said they have been working to increase the production level to 150 MMCFD by completing a few more projects this year.

If all the work is completed by 2025 as per the time set by the government, it will be possible to add 250 MMCFD gas to the national grid from the fields under the SGFL alone, said a top official.​

 

[Saif]

Gov to buy two cargoes of LNG from spot market

The advisory committee on government purchases yesterday approved the import of two cargoes of liquified natural gas (LNG) from the spot market..Switzerland-based MS TotalEnergies Gas & Power Ltd will supply each million British thermal units (MMBtu) of the first consignment at $13.94 and

www.thedailystar.net

Gov to buy two cargoes of LNG from spot market

Bulk carrier M/V Razoni, carrying a cargo of 26,000 tonnes of corn, leaves Ukraine’s port of Odessa, en route to Tripoli in Lebanon, yesterday, amid Russia’s military invasion launched on Ukraine. Photo: AFP

The advisory committee on government purchases yesterday approved the import of two cargoes of liquified natural gas (LNG) from the spot market.

Switzerland-based MS TotalEnergies Gas & Power Ltd will supply each million British thermal units (MMBtu) of the first consignment at $13.94 and the second at $13.57.

Each cargo is equivalent to 33.60 lakh MMbtu.

The first consignment will cost Tk 657.61 crore and the second Tk 640.15 crore, according to the meeting minutes.

"The committee approved the purchase after getting quotations from the companies, which signed the Master Sale and Purchase Agreements with Petrobangla in line with the Public Procurement Rules 2008," the minutes read.

The government also approved the purchase of 30,000 tonnes of muriate of potash (MOP) fertiliser.

Around 30,000 tonnes of MOP will be supplied by Russian Company JSC Foreign Economic Corporation "Prodintorg" at a price of $289.75 per tonne.

Finance Adviser Salehuddin Ahmed, who is currently in the US to take part in the annual meetings between the World Bank and the International Monetary Fund, joined virtually.​

 

[Saif]

‘They got capacity charges for 16yrs. Not anymore’

A retired bureaucrat, Muhammad Fouzul Kabir Khan has been tasked with heading three significant ministries for the economy: power, energy and mineral resources; road transport and bridges; and railways.

www.thedailystar.net

‘They got capacity charges for 16yrs. Not anymore’
Says Energy Adviser Fouzul Kabir Khan about power plants

A retired bureaucrat, Muhammad Fouzul Kabir Khan has been tasked with heading three significant ministries for the economy: power, energy and mineral resources; road transport and bridges; and railways.

The Daily Star sat down with him for a comprehensive interview on his plans for the three ministries, which are mired in allegations of mismanagement and corruption by the previous Awami League-led government.

The Daily Star: What has your experience been so far?

Adviser: People have heard stories of development over the years -- that the per capita income has soared, the GDP growth is high, the economy has grown and so on. But people could not relate themselves to those big numbers -- their way of life was contrary to the numbers.

The Awami League government had created a chain of corruption. Those who belonged to the chain were the beneficiaries only. As a result, people wanted an overhaul of the system -- an end to all types of corruption. So, our main focus is on what people want and what their expectations are.

DS: What is the situation in the power sector now?

Adviser: A network of corruption was created here too and the anchor of that architecture was the Indemnity Act of 2010 (Quick Enhancement of Electricity and Energy Supply-Special Provisions).

The decisions made under this act were without proper scrutiny -- some were given all the benefits. So, we decided that we would not continue that act. We have formed an independent committee to review all the deals signed under this act.

We have suspended new projects that were taken up under this act and we are scrutinising projects that have started or nearing completion.

We are floating tenders and following the Public Procurement Rules 2008 in taking up new projects or procurements.

DS: What is the fate of the power plants that have been taking capacity charges without producing electricity?

Adviser: We are not extending any agreement with such power plants. We have said that no plant will get a tenure extension. Some came to me saying that if we don't extend the tenure, it may create problems in particular areas. But we asked them how a deal signed for five years was extended to 16 years. You enjoyed capacity charges for 16 years -- not anymore. Due to those quick rental plants, the power tariff has increased.

DS: How do you see the power sector when you leave your position?

Adviser: The main problem in this sector is the lack of energy supply. Our gas production is declining. We are emphasising gas extraction through BAPEX. The plan is to drill 50 wells next year and 100 wells the year after.

Our next strategy will depend on the success of the drilling process. If we get at least 1-2 trillion cubic feet of gas reserves, we will take a strategy. If not, we will import liquefied natural gas.

If needed, we will set up two more floating storage regasification units. One will be installed in the south and another in Moheshkhali. But we will go through the tendering process.

We are also trying to figure out how we can import fuel at a cheaper rate. Besides, we are trying to reduce the subsidy burden of the Bangladesh Power Development Board without increasing the power tariff.

Initiatives have been taken to float tenders for 40 renewable energy projects and those will reduce the power tariff.

DS: What is the current debt status of the power and energy sector?

Adviser: When we took charge, several companies wrote to us that if we don't pay their dues within a certain period, they will stop the supply. India's Adani Power also stressed their payments.

There were dues of about $1.2-1.5 billion only in the energy sector. That has now dropped to $700 million. The situation is fairly satisfactory now.

DS: You have curtailed the power of the ministry in setting fuel prices to make Bangladesh Energy Regulatory Commission stronger, but prices of some products like diesel, petrol and jet fuels are still being set by the Bangladesh Petroleum Corporation. Is there any plan to let BERC deal with such products in future?

Adviser: We need to think more about it. Sometimes, the fuel price shoots up in the global market and sometimes it drops drastically. There is a method for fuel pricing -- if the price goes up too much in the global market, the government may want to keep it normal by providing subsidies. But if the responsibility is given to BERC, they will go for manual pricing and the public interest may be compromised. We will discuss it more.

DS: Electricity customers are fed up with the charges of prepaid and postpaid meters. Do you have any plans?

Adviser: I am facing questions on this from even my relatives. All types of consumers are fed up with this meter charge. We told BERC to identify the problem first -- let's see what we find.

DS: People want to know the status of the mega projects and their future.

Adviser: I have been visiting such project sites myself. I get disappointed everywhere as public interest was not considered while taking most of those million-dollar projects. Most of them were taken up considering the vested interests of some groups.

It was never considered how the projects would serve the people and how many people would they serve. For example, the Padma rail link project was taken at a cost of Tk 40,000 crore. I asked the officials what their revenue target was and they said about Tk 1,400 crore a year. When I wanted to know the current revenue, I found that the project fetched Tk 37 crore in the first six months.

Although the revenue will increase when the line connects Jashore from Bhanga, but how much? It may rise to Tk 80 crore or Tk 100 crore, but where will Tk 1,400 crore come from?

Let us have a look at another project in the Matarbari area of Cox's Bazar. There was supposed to be a port and an export processing zone (EPZ) built in the area and those would require electricity. It's very logical.

But when I visited the area, I saw that there was no port or EPZ. However, the power plant has already been completed. Why is this? It's because someone involved with the corruption network wanted a power plant and got it. Where is the public interest here for a Tk 42,000 crore project? It remains on paper only.

DS: How do you define such projects and what will be their fate when they are already completed?

Adviser: All are vendor-driven development in the name of public interest. The vendors wanted work and the government awarded them. There was no collaboration between the projects. For instance, there is a power plant but the transmission line is yet to be completed. If there is a pipeline, the gas supply is absent. We are trying to create a linkage between the completed projects to get the result with lower costs.

DS: Let's talk about the transport sector.

Adviser: It's the same, the characters of the projects are no different. The cost of repairing a road is huge. Though they followed the PPR and initiated a good practice of e-tendering, we have seen some loopholes in the process. E-tenders have changed the culture of using muscle power to win tenders. But the people to whom the tenders are submitted or who lead the process have become corrupt -- this has been acting as a bigger deterrent than muscle power.

DS: Can you provide us with examples?

Adviser: Some of the project directors let the vendors know the base price of the quotation. Some tender notices are designed in a way that a pre-selected vendor is awarded. As a result, the winners of the tenders are the same partisan people who were involved with the government.

Besides, there is a clause that requires experience. As a result, strategies were adopted to benefit those who are experienced. And for the next project, the conditions are set in such a way that only those blessed ones are eligible. This is how oligarchs were created in every sector.

DS: Does it mean that the PPR will be reviewed?

Adviser: Yes, we have formed a committee of advisers including Wahiduddin Mahmud, AF Hassan Ariff, Syeda Rizwana Hasan and Adilur Rahman Khan. I am also there to review the PPR. We are now reading working papers.

DS: Extension of project tenure has become a regular occurrence.

Adviser: It has become a culture. There are some arguments to increase the tenure but most of them are illogical. We have taken a position here: projects must be completed within the allotted time.

DS: What is the condition of the railway?

Adviser: There are problems related to the train schedule and routes. Many complain about not getting tickets online. We have taken the initiative to probe if there are irregularities in the ticketing app Shohoz. We have a shortage of locomotives and carriages, and deficiencies in lines. There are unnecessary projects here, too.

DS: One metro rail has been built in Dhaka. What will be the fate of the other metro projects taken by the previous government?

Adviser: There are no plans to cancel metro initiatives. However, the project costs will be reviewed.

We are trying to set the right people in the right places. Interestingly, the former managing director of Dhaka Mass Transit Company MAN Siddique has created a rule that nobody except former secretaries will be able to hold the post and he didn't create his successor. This is a technical place -- how can a former secretary be effective here?

Those who have knowledge about metro rail operations will lead the management of the metro rail company in Dhaka. There are many Bangladeshis abroad. We will form a technical committee to find the right person.

DS: There is little time and public expectation is huge from this government. The results are not visible yet.

Adviser: People don't see the work behind the scenes. The results will be visible soon -- people will feel it.​

 

[Saif]

We agree with the power adviser

Capacity charge payments to idle power plants must stop

www.thedailystar.net

We agree with the power adviser
Capacity charge payments to idle power plants must stop

Visual: Star

We are pleased to note that the interim government has decided to terminate agreements with power plants that have been collecting capacity charges without producing electricity. In an interview with this daily, Muhammad Fouzul Kabir Khan, who currently oversees three ministries under the interim government, said that this decision was made in the public interest—a sentiment we fully support. For years, we have voiced concerns about the previous government's costly decision to pay idle power plant owners through capacity charges, wasting significant taxpayer funds and channelling resources into the hands of individuals politically connected with the former Awami League regime.

The adviser expressed his surprise at how a five-year agreement was extended to 16 years. He also revealed that a network of corruption had developed within the power sector, rooted in the structure of the Quick Enhancement of Electricity and Energy Supply Act of 2010. This indemnity law, originally intended to provide short-term relief from power shortages, ultimately became a permanent arrangement. As a result, decisions made under this act lacked proper scrutiny, enabling one-sided benefits for power plant owners at the expense of public interest. According to some estimates, from 2009 to the fiscal year 2023-24, Tk 1,37,000 crore has been paid for capacity charges or rentals without utilising the production capacity. Clearly, the country could ill afford such waste. And even our current economic predicament can, to a large extent, be attributed to this. Which is why the decision by the interim government to not extend any agreement with such power plants was extremely necessary.

Furthermore, according to the adviser, such criminal networks have also established themselves in other sectors of the country. This is what made the Awami League's megaprojects—undertaken without proper consideration of their true benefits—so costly for the public. Such corruption has made nearly all public projects much more expensive than they should have been, while simultaneously creating a corrupt culture that is proving difficult to change.

Despite the enormity of the task of rooting out such corruption, it is essential for the current government to reform these sectors urgently. Given the economic constraints that Bangladesh already faces, it cannot afford to continue losing such exorbitant funds to corrupt practices.

In line with that, while the government's decision not to pay capacity charges is a positive step, it should go further and repeal the power indemnity law that has drained the economy. The government should also amend the regulatory commission law to restore its right to hold meaningful public hearings before any increase in energy prices. At the same time, the commission should work to eliminate inefficiency and corruption to ensure an uninterrupted energy supply without any further unjustified price increases.​

 

[Saif]

Beza may build solar parks in Mirsharai EZ

The Bangladesh Economic Zones Authority (Beza) is considering utilising unused land to establish solar power parks at the Mirsharai Economic Zone in Chattogram, the largest industrial enclave in the country.

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Beza may build solar parks in Mirsharai EZ

The Bangladesh Economic Zones Authority (Beza) is considering utilising unused land to establish solar power parks at the Mirsharai Economic Zone in Chattogram, the largest industrial enclave in the country.

The agency aims to establish the renewable energy project under a public-private partnership (PPP) model, said Ashik Chowdhury, the newly appointed executive chairman of both Bangladesh Investment Development Authority (Bida) and Beza.

Beza has already allocated around 5,400 acres out of 16,800 acres for the establishment of factories among 156 investors.

As per the plan, factories will be established on 55 percent or 9,240 acres of the land. Another 25 percent, or 4,200 acres, will be used for roads, utilities, lakes and vegetation while the remaining 20 percent will be left vacant for lakes and afforestation.

Chowdhury said the agency wanted to ensure that investors who have already availed land can execute their plans.

"We are looking at development on a phase-by-phase basis. Once the phasing plan is confirmed, we will consider solar projects," he said.

This means that a portion of the 3,840 acres available for establishing factories could be repurposed for solar power parks.

"There is no benefit in leaving the land unused for 15 years, Chowdhury said, adding that they have already shared the idea with the Ministry of Power, Energy and Mineral Resources and received a positive response.

Beza could provide land while the Bangladesh Power Development Board and a development partner could implement the project through a joint venture, he added. Financial support will be sought from the multilateral lenders, the Beza executive chairman added.

Although they are still in the planning stage and costs are yet to be estimated, Chowdhury was keen to install the solar panels by 2027.

Besides, investors there can install their own solar panels, he said.

Beza will first decide which project to press for implementation in the next five years on the basis of prioritisation. "We will make a clear plan in this regard," he said.

"Likewise, we will implement the projects phase by phase," said Chowdhury, adding, "I want to make honest and clear promises that investors can trust."

"I do not want to make any promises that are not fulfillable," he stressed.

He also said they would determine specific points around the zone where investors would be able to avail of all utility services, starting with electricity, from 2028.

"We will give investors a clear picture of where they can set up their industries. That's why I want to make honest and clear commitments like phase 1, phase 2 and phase 3," he added.​

 

[Saif]

Renewed emphasis on renewable energy

The scrapping of 42 power-plant projects including 37 renewable in the pipeline by the interim government could give a wrong message to both investors and the people here but for its evaluation. Now it has made the right choice for shifting to sustainable renewable energy policy. Under the previous

thefinancialexpress.com.bd

Renewed emphasis on renewable energy
FE
Published :
Oct 28, 2024 21:57
Updated :
Oct 28, 2024 21:57

The scrapping of 42 power-plant projects including 37 renewable in the pipeline by the interim government could give a wrong message to both investors and the people here but for its evaluation. Now it has made the right choice for shifting to sustainable renewable energy policy. Under the previous regime, the governing motive, more or less, was to set aside lumps of personal benefits out of dubious deals on such projects. This has been perilously highlighted by the continuation of the non-transparent "Speedy Enhancement of Power and Energy Supply (Special Provision) Act 2010. The interim government did not have any option other than look at the issue of renewable power general afresh because under that much maligned provision, transparency was made a casualty. This also explains why power plants ---thermal and renewable---take a far longer time than in other countries for completion. Budget overrun and consequent more personal gains in such inordinately delayed project execution followed with the outcome of increased power tariff for the consumers.

In this context, the concern is that Bangladesh neither possesses the required technology nor have the capacity to invest in establishment of renewable energy plants. On the positive side, though, it has abundant sunshine almost throughout the year, a vast coastal belt fit for setting up wind power. But again, it is constrained by a lack of land on which large solar power plants can be set up. The interim government has cited public lands but some experts are of the opinion that large water bodies such as wetlands can be gainfully used for the purpose without disturbing the ecosystem there. In a land-scarce country, such innovative methods have to be found out in order to attract private investments ---both local and foreign. Overcoming the country's physical and spatial constraints is, however, no guarantee for investors beelining for accepting Bangladesh offers.

Something particularly lucrative has to be on offer for investors. Tax holiday or incentives are what exactly can do the trick. The government is moving to that direction in order to make the country's transition to clean energy generation. At a time nations are rushing for decarbonisation ---some by 2035, others by 2040-50, Bangladesh cannot stay behind. Some of the countries including a few in Africa and Latin America apart from the more advanced Nordic countries and a couple of West European nations, have made phenomenal progress in generation of renewable energy. Iceland heads the list by producing almost 100 per cent of its power. It is blessed with its geothermal energy source. Bangladesh can take cue from Morocco and Kenya where progress in generation of solar and wind power has been phenomenal. China, the largest global carbon polluter, intriguingly has become the global leader in renewable energy generation. Its transformation can also provide for a lesson.

Now the finance and energy ministries have agreed to the formula of issuing open tender but the tax rebate has to be endorsed by the National Board of Revenue (NBR). Happily, the NBR has already started processing the Statutory Regulatory Order (SRO) under which tax breaks can be given a formal shape. Now that the bureaucratic red tape appears to have disappeared, the procedural part of the matter would move fast to create a transparent environment for investment in the renewable energy sector.​

 

[Saif]

Renewable energy firms to enjoy tax holiday from 2025

Renewable energy producing companies are going to enjoy tax holiday facilities from next year...

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Renewable energy firms to enjoy tax holiday from 2025
Bangladesh Sangbad Sangstha . Dhaka 30 October, 2024, 22:46

Renewable energy producing companies are going to enjoy tax holiday facilities from next year.

The companies will get tax holiday benefits at different rates for the next ten years from the date of production.

The government has taken the decision to encourage more investment in this sector, NBR sources said.

The National Board of Revenue recently issued an order in this regard. NBR chairman Md Abdur Rahman Khan signed the order.

According to the government decision, tax holiday would be applicable for the companies which would go for production between July 1, 2025 and June 30, 2030.

As per the NBR notification, 100 per cent tax waiver will be applicable up to the first five years of commercial production while tax exemption will be available at the rate of 50 per cent for the next three years and 25 per cent for the next two years.

This order will be effective from July 1, 2025. Under the Private Sector Power Generation Policy of Bangladesh, the power plant has to be constructed under Build Own Operate method.

Currently there are tax holiday facilities for various sectors, such as agricultural machinery, automatic bricks, automobiles, bicycles, furniture, leather and leather products, household products like LED TVs, fridge TVs, toys, mobile phones, medicines, tires and textile machinery.

Currently, various types of services in the IT sector are also enjoying tax exemption benefits. These include- software development, software application customisation, digital content development and management, digital animation development, website development, website services, overseas medical transmission services, call centre services, etc.

Some major infrastructure construction sectors also get tax holiday benefits.​

 

[Saif]

Ctg grapples with frequent power cuts

Frequent power cuts over the last week have left residents of Chattogram suffering.

www.thedailystar.net

Ctg grapples with frequent power cuts

Frequent power cuts over the last week have left residents of Chattogram suffering.

"Load-shedding takes place 8-9 times a day. I have to keep using a hand fan as my four-year-old cannot sleep at night due to the heat amid power cuts," said Shubhechchha Ghosh, a resident of Askar Dighir Par area.

Like her, thousands of the port city area residents of Chawk Bazar, Panchlaish, Katalganj, Sulakbahar, Bakalia, Kazir Dewri, Love Lane, Jubilee Road, Teri Bazar, Hazari Goli, Andar Killah, Dewan Bazar, Room Ghata, Dewanji Pukur Par, Sub Area, Nawab Sirajuddaullah Road, Telipatti Road, Lal Chand Road, Joy Nagar, Munshi Pukur Par, Hamzarbagh, Bibirhat, Oxygen, Chatteshwari Road and Lalkhan Bazar are suffering.

"Despite it being autumn, the temperature is quite high," said Dipankar Barua of Oxygen area.

According to Chattogram Met Office, the highest temperature in the city was recorded as 32.7 degrees Celsius yesterday, while average humidity was 65 percent.

"When humidity is higher than 50 percent, people feel more heat," said Ismail Bhuiyan, forecast officer of Chattogram Met Office.

According to Power Development Board officials in Chattogram, the demand for power in the port city considerably exceeds the national grid supply.

Akbar Hossain, assistant director of PDB, Chattogram, said they are getting 150MW less than the daily demand.

Chattogram's average daily demand is 1,200MW in peak hours and 1,100MW in off-peak hours.

"Last Thursday, it was 1,189MW at 11:00am, while 1,042MW power was available, causing a deficit of 147MW, resulting in load-shedding," he said.

The 22 power plants in Chattogram region -- including five units of Kaptai, two units of Raozan, two units of Shikalbaha, and Matarbari Power Plant -- jointly generated 1,637MW on Thursday -- significantly higher than Chattogram's daily demand.

"Electricity generated by power plants are directly supplied to the national grid and we receive power from them, not directly from the power plants," Akbar explained.​

 

[Saif]

Govt to drill 19 new gas wells in Bhola by 2028

Power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan on Friday said that the government had a plan to drill 19 more natural gas wells in Bhola by 2028 as part of its plan to...

www.newagebd.net

Govt to drill 19 new gas wells in Bhola by 2028
Bangladesh Sangbad Sangstha . Bhola 02 November, 2024, 00:58

Power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan on Friday said that the government had a plan to drill 19 more natural gas wells in Bhola by 2028 as part of its plan to intensify the country’s gas production efforts.

‘As part of our plan, we will drill five gas wells in the district by 2025 and more 14 wells by 2028 respectively,’ he said while visiting Ilisha-1 gas field in Bhola.

‘There is a shortage of gas in the country. As a result, huge amount of foreign currency has to be spent on importing gas. Now we need 4,000 MMCFD of gas. But we are now getting only 2,000 MMCFD against the demand,’ the adviser said.

‘We are currently importing gas from various countries spending huge amount of foreign currencies. LNG is being imported annually at a cost of Tk 6,000 crore to meet the shortfall. Efforts are underway to develop new gas fields and moving towards gas production,’ he continued.

‘From now on, no project will be taken without open competition and the work will be awarded to whom, who will give the best proposal through open tender. Later, expert committee opinions will be taken in this regard.’

‘We have taken up all big projects. But people’s priorities were not given importance in this regard. So corruption has increased in such big projects. We want to focus on people’s need,’ Fouzul Kabir said.

About the demand of gas supply to every household, he said that the matter would be considered subject to increase of gas supply in future. ‘Since I will not do politics, I will not give the people such false assurance.’

The adviser assured to solve Bhola’s electricity problem and establish gas-based factories in the district.

During his day-long stay in the coastal district, he visited Shahbazpur gas field, Bhola North-1, North-2 and Ilisha-1 gas fields in Borhanuddin upazila.

The adviser also visited gas-based 225 and 220 MW combined power plant in the upazila.

Energy secretary SM Moin Ahmed, chairman of Pettobangla, deputy commissioner of Bhola Md Azad Jahan and senior officials were present, among others.​

 

[Saif]

Policy shift necessary to resolve gas crisis

Gas shortage hitting industries, households hard

www.thedailystar.net

Policy shift necessary to resolve gas crisis
Gas shortage hitting industries, households hard

VISUAL: STAR

We are concerned about the acute gas crisis that has hit the country in recent times. While it has severely affected the industrial sector, the situation is also dire for households and filling stations in Dhaka and across the country, causing public sufferings. The condition of the industrial sector is particularly alarming, with textile and other factories being forced to reduce their production. The crisis is said to be increasingly severe in Gazipur, Narayanganj, Savar, Chattogram and Narsingdi.

Currently, daily gas deficit in the country is approximately 1.35 billion cubic feet, with industries receiving 30 percent less gas than their demand. Industry owners say they are having to run factories at additional costs for using alternative energy sources. If the situation persists, industrial production will face a severe crisis, potentially leading to many factory shutdowns. And if factories close or cannot pay salaries, a large number of workers may lose their income.

Among the affected industries, the textile sector is perhaps the most vulnerable, with its production down by 65 percent compared to the capacity. In many factories, gas pressure remains low or absent throughout the day, hindering production, while reliance on diesel instead of gas only inflates production costs. In Chattogram, the production of steel, cement, and glass is also being hampered by the gas crisis. Gas-based power plants are also struggling to generate electricity due to supply shortages. These plants require 1.2 billion cubic feet of gas daily to maintain normal electricity supply in the country, but they are currently receiving only about 920 million cubic feet.

The question is: why has the situation reached this critical point? Clearly, the previous government's flawed energy policy is to blame. The Awami League government focused heavily on importing LNG while overlooking exploration of domestic gas reserves, despite its significant potential. On the one hand, this negligence has led to reduced gas production; on the other hand, the demand for gas has increased, culminating in this acute crisis. Even importing adequate LNG has become difficult due to the dollar crisis. Many factories have already closed down due to these problems, and many owners are also contemplating keeping their operations shut, as remaining open leads only to losses.

Therefore, the government must urgently devise a solution to ensure adequate gas supply to the industries and households. For a long-term resolution, it needs to revise the energy policy, prioritising the exploration of domestic gas sources and reducing its over-dependence on imports.​

 

[Saif]

Plan ahead for steady power supply

The government must take timely steps to keep the power plants running and the power supply uninterrupted.

www.thedailystar.net

Plan ahead for steady power supply
The government must take timely steps to keep power plants running

VISUAL: STAR

Amid the ongoing gas crisis in the country that has hit us on several fronts, including power generation, it is worrying that the coal-based power plants are also scaling down production, owing to a number of issues. According to a report in this daily, these power plants have been reducing production, and in some cases completely shutting down, due to financial, legal or technical difficulties. This has led to increased power outages in the country, especially in rural areas, affecting not just households but also businesses.

Per the report, Bangladesh gets power from seven coal-fired power plants, which have a combined generation capacity of 7,099MW. But lately they have been producing less than half—around 3,199MW. Production in Matarbari and Barishal power plants are completely off, while Rampal, SS Power, and Barapukuria are operating at a significantly reduced capacity. These power plants have been hit with either coal shortage, mechanical problems or maintenance issues. Only the Payra power plant has been operating at full capacity. Meanwhile, the Adani Godda power plant in India's Jharkhand cut its power supply by half on October 31 and has threatened to stop supply completely if Bangladesh does not clear its outstanding dues by November 7.

As a result, except for Barishal division, which is covered by Payra, the country has been experiencing increased power outages, which are impacting people's lives and livelihoods, especially in the rural areas. One onion trader in Dinajpur said he lost half of his imported produce due to frequent load-shedding. A rice miller in Mymensingh said his mill's output dropped significantly due to four to five hours of power cut daily. This does not bode well for the country.

The press secretary to the chief adviser said the government was working to expedite payment to Adani. This ought to help with the resumption of supply from Godda power plant. But what about the ones that can't operate due to coal shortage? Officials said coal procurement had been delayed by legal issues that were raised due to a change of supplier. They said it's unlikely that the Matarbari plant would resume production before mid-December. Given the time of the year, when power consumption is typically less due to reduced demand, we may not see the situation take a critical turn now. However, if it continues to persist, we are looking at a potentially worse situation from March onwards when the temperature is supposed to rise, and especially if the gas shortage continues. The government needs to figure out—and quickly—how to resolve the current situation. It should plan ahead to keep the power supply across the country stable and ensure that further power shortages are averted.​

 

[Saif]

Power generation halves amid coal crisis

The AL government went for coal powered plants citing cheaper production cost. However, these plants failed to go into production within the stipulated time

en.prothomalo.com

Power generation halves amid coal crisis
Mohiuddin
Dhaka
Published: 05 Nov 2024, 13: 12

Payra coal-fired power plant in Patuakhali File photo

The country has a power generation capacity of more than 7000 MW from coal powered plants. However, power generation from coal powered plants has declined to less than 3000 MW.

Relevant people say the power plants are struggling to maintain a supply as per the demand due to the pending bills, dollar crisis and complications over tender.

As a result, two of the seven coal power plants of the country were forced to shut their operations. Besides, power generation has been greatly hampered in four other coal powered plants.

Despite objections from the environmentalists, the Awami League government opted for coal powered plants citing cheaper production cost.

However, these plants failed to go into production within the stipulated time. The Power Division could not clear the bills regularly after these plants went into production. As a result, these plants are under pressure now with mounting pending bills. The interim government is increasing payments for pending bills in phases.

Sources in the Power Development Board (PDB) say the demand for electricity is comparatively low as the temperature is falling due to season change. The highest demand at night is 13000 MW at the moment.

Efforts is being made to increase production from oil powered plants at a higher cost due to the decline in production at coal powered plants. Despite that, the demand is still higher than the supply. So the PDB is being forced to impose load shedding in many places outside Dhaka. The country witnessed the highest 700 MW load shedding per hour on Sunday.

The three units of the Barapukuria Coal Based Thermal Power Plant, the lone plant in the country which produces coal from its own mine, have a power generation capacity of 525 MW per day together.

However, two of these mostly remain closed due to the coal crisis. At the moment, two of these units are in production. These two units generate 220-230 MW electricity together.

The plant needs 5,000 tonnes of coal per day to become fully operational. This power plant now supplies half the demand. The remaining six power plants are run on imported coal. The PDB is struggling to arrange the money for imports.

Two plants completely shut down

The Matarbari Coal Power Plant in Maheshkhali of Cox’s Bazar has been completely shut down since 31 October. The 1200-MW-power-plant is likely to resume production by next March. One of the two units of this power plant is scheduled to return to production next month.

Speaking to Prothom Alo, Monowar Hossain Majumdar, supervising engineer of the power plant, said this plant would remain closed until coal import resumes.

The Coal Power Generation Company sources say coal import has been delayed as the prevailing tender-related complications have been taken into the cognisance of court to reach a settlement. Already the purchase order to supply 3.5 million tonnes of coal for a year has been issued.

The power plant needs 300,000 tonnes of coal every month. The two units of the power plant went into commercial production on 18 December last year and 28 August this year respectively.

However, the power plant is yet to be granted any bill. It could not pay the bills as it does not have any Power Procurement Agreement with the PDB, which is likely to be signed soon.

Apart from these, production at the 307-MW-power-plant in Amtali of Barguna has been completely shut down since 27 October for maintenance works. It will take two months to resume power generation at this plant.

Adani pressurising for loan repayment

Indian power company Adani and PDB have been exchanging letters concerning the due bills. However, the issue has not been resolved. According to Adani’s claims more than 850 million (85 crore) dollars are due.

The Adani Group is putting in pressure for repayment of the unpaid bills of the power plants. Adani closed down one of the units on last 31 October.

More than 700 megawatts of electricity is being supplied from the remaining unit. If the matter of arrear bills repayment is not resolved, Adani can close this one as well.

The power plant of Adani is located in Godda area in the Indian state of Jharkhand. This coal-based power plant has a capacity of 1,600 megawatt.

There are two units with the capacity of 800 megawatts each in this plant. Bangladesh is supposed to buy the electricity produced there for 25 years. The first unit started producing electricity commercially in April last year while the second unit went into production in June the same year.

Two officials from PDB told Prothom Alo, the amount of bills repayment has been increased than before. Their electricity bills was USD 87 million (8.7 crore) last month.

Meanwhile, USD 97 million (9.7 crore) has been paid including the arrear. Earlier, the bills used to be paid through the Sonali Bank. An initiative has been taken to pay the bills through letter of credit (LC) at the Krishi Bank now. Ten million (1 crore) dollars was to be paid on Monday.

PDB chairman Md Rezaul Karim told Prothom Alo that it’s not possible to pay the total dues at once. Apart from that there’s no steady supply of dollars according to the demand. So, the amount of arrear bills repayment is being increased in phases.

Shortage in supply of coal

Since it went into production, Payra 1320 Megawatt Thermal Power Plant in Patuakhali has been supplying electricity uninterruptedly according to the demand. However, the plant had to keep the production of electricity closed for a month last year as the bills for coal went into dues for the crisis of dollars. Right now, this plant is in production as the only coal-based power plant running on full capacity. This plant is running under Bangladesh and China’s joint initiative.

After ten years of the construction of Rampal 1320 Megawatt Power Plant being started, one of the units has gone into production. Afterwards, this plant has remained closed several times so far. Among the reasons there were technical errors and crisis in coal purchase for lack of dollars as well. Right now, less than 600 megawatts of electricity is being supplied from one unit of this power plant built jointly by Bangladesh and India.

Meanwhile, one of the units of SS Power 1224 Megawatt Power Plant in Banshkhali of Chattogram is running at present. Currently, it’s producing 400 to 460 megawatt of electricity. The other unit is left closed for quite a few days. Since the arrear bills are piling up, the coal supply cannot be retained to normalcy. There’s not enough coal at the plant to run both units.

If the coal-based power plants cannot be kept running, the demand of electricity will soar in next March and the situation might get even worse. In this regard, former professor at BUET Ijaz Hossain told Prothom Alo that the dependency on import has increased. Now arrangements must be made to collect the dollars required for coal import and to repay the bills.

* The report, originally published in the print and online edition of Prothom Alo, has been rewritten in English by Ashish Basu and Nourin Ahmed Monisha​

 

[Saif]

Adani cashing in on a ‘one-sided’ deal

Moreover, within a week of Sheikh Hasina’s resignation last August, Adani established an alternative market for selling electricity by amending the contract in India

en.prothomalo.com

Adani cashing in on a ‘one-sided’ deal
Mohiuddin
Dhaka
Updated: 01 Nov 2024, 18: 54

Adani power plant File photo

The situation with the Indian power company Adani Group remains complicated. Since last July, Adani has been charging electricity bills based on the increased price of coal used in its power plants.

Additionally, the company is putting pressure on Bangladesh to pay outstanding bills, having already reduced electricity production to less than half. Observers have noted that Adani is taking advantage of a “one-sided” deal signed during the government of Bangladesh Awami League.

Adani’s power plant is located in Godda, Jharkhand, India. Last year, before power generation began, there was significant controversy surrounding the price of coal.

The Power Development Board (PDB) refused to pay the high coal prices, prompting Adani to agree to reduce them. The company also promised to supply coal at a lower price than the Payra and Rampal power plants. However, a year later, Adani is now demanding a 22 per cent increase in price.

On 28 October, Adani sent a letter to the PDB amid ongoing disputes over the price hike and demands for payment of dues. The letter stated that the PDB must take measures to pay the dues by 30 October as promised; otherwise, Adani would be forced to stop power supply from 31 October, citing a working capital crisis.

According to PDB sources, the letter of credit (LoC) for power imports from Adani was supposed to be opened by 30 October, facilitated by Krishi Bank, but this did not occur. The PDB has requested additional time. As a result, Adani shut down one of its units on Thursday.

Currently, a little over 500 MW is being generated from the operational unit, which has a capacity of 750 MW. Meanwhile, the Matarbari power plant is closed due to a lack of coal, and production has decreased at the Rampal and Banshkhali power plants due to outstanding issues. There was a load shedding of over 1,500 megawatts per hour on Thursday.

According to sources from the Power Development Board (PDB), the 1,320 MW power plant at Payra in Patuakhali is charging USD 75 per tonne of coal. In contrast, the coal prices at Chattogram’s Banshkhali SS Power Plant and Bagerhat’s Rampal Power Plant are both under USD 80 per tonne.

Adani, however, is requesting USD 96 per tonne of coal, which is USD 16-21 more per tonne than the prices at Payra and Rampal.

Adani’s coal-based power plant has a capacity of 1,600 MW, and Bangladesh has committed to purchasing the generated electricity for 25 years.

Commercial power generation from the first unit began in April last year, with the second unit starting in June of the same year.

In February, an Adani delegation held a meeting with the PDB to discuss coal prices, which resulted in billing based on the actual price of coal for one year. Since last July, Adani has been billing in accordance with the agreement.

In a written response to the public relations agency of Adani Group in Dhaka, the company stated that it has been submitting bills based on the coal price index since July, asserting that there has been no change in the pricing structure. Thus, they believe complaints about high coal prices are unfounded.

Sources within the power department and the Adani power plant indicate that Adani’s weekly bills range from USD 22-25 million, while the PDB is only able to pay about USD 18 million. Previous repayments were even lower, and as of October, the PDB owes approximately USD 850 million.

Two PDB officials informed Prothom Alo that the board has deposited Tk 10 billion in a bank to settle outstanding bills for Indian power plants, including Adani.

However, banks are struggling to process regular payments due to a dollar shortage. Despite Adani’s submission of increased coal price bills, these have yet to be considered. There are suggestions to amend the contract if necessary.

Muhammad Fouzul Kabir Khan, an adviser to the Ministry of Power, Energy, and Mineral Resources, told Prothom Alo that Adani’s billing does not alter the situation.

He emphasised that there is no question of paying extra, and the PDB will review the issue of increased coal prices professionally and impartially, in line with international norms. A contract review committee has already begun its work on this matter.

Adani reaps additional benefits

Adani appears to be gaining extra advantages from its contract due to the methods used to determine coal prices. The pricing relies on the Australia (Newcastle Index) and Indonesia Index, which are key indicators since both countries are major coal exporters. These prices are regularly published online.

However, insiders indicate that the announced prices often include special discounts based on the purchase agreements. For instance, the Payra power plant benefits from specific pricing arrangements.

According to two officials from the Power Division and the PDB, costs are calculated based on coal purchase bills from all other power plants. The PDB’s power purchase agreement with Adani specifies that the average price will be derived from the index of Indonesia and Australia, resulting in higher bills for Adani. This means that even if Adani purchases coal at a discounted price, the PDB does not benefit from those savings.

Concerns have been raised regarding the rushed signing of the electricity purchase agreement with Adani in 2017, under the guidance of the Power Division. At that time, no imported coal-based power plants were operational in the country, which limited the PDB’s ability to adequately scrutinise coal pricing.

PDB relied on Adani Group’s experience in operating coal mines and constructing large coal-fired power plants in India, allowing Adani to leverage PDB’s inexperience and its own governmental connections.

Once the Payra and Rampal power plants began operations, the issue of coal pricing became more prominent for the PDB. It notes that the prices for coal of varying quality (calorific value) are published in two international indexes. Adani calculates the average price of high-quality coal from these indices; however, based on the quality of coal used, prices could potentially drop by USD 20-25 per tonne.

In response, Adani representatives claim they are charging according to calorific value and that there is no basis for calculating costs based on higher-quality coal.

However, a PDB officer contested this claim by drawing an analogy: say the market price for one kilogram of hilsa fish, with each fish size is 1kg, is Tk 2,000, and the price of one Kg fish, with each being 700-gram, is Tk 900 to Tk 1,000; the cost of one Kg hilsa of 700-gram size each would be Tk 1,400, if it is calculated considering the price of fish with 1kg size each.

This, the official argued, is similar to how Adani is pricing coal.

Adani takes other advantages

Officials from the Power Division and the PDB indicate that Adani’s dues have been accumulating for long. However, the recent political changes following ouster of Sheikh Hasina’s government have increased pressure to collect these dues.

Adani has even sent a letter to the chief adviser of the interim government requesting payment, to which the adviser responded with a promise to repay the dues.

Moreover, within a week of Sheikh Hasina’s resignation last August, Adani established an alternative market for selling electricity by amending the contract in India.

According to the agreement, all power plants have a capacity charge that must be paid regardless of whether they produce electricity or not. This charge remains high during the initial years and it gradually decreases.

In Adani’s case, the charge remains constant for the first seven years of the contract before tapering off. Cancelling the contract at this stage would result in financial losses for the PDB.

A review of the power purchase agreement signed between the PDB and Adani, alongside insights from an expert at Bangladesh University of Engineering and Technology (BUET), reveals that Adani has secured maximum benefits in the contract by leveraging its experience.

Notably, the contract with Adani stipulates a steep interest rate of 15 per cent per annum for delay in bill payments, which is not the case with the Payra power plant.

Additionally, PDB bears all costs associated with Adani’s power plant, and interest rates on investments will be determined by India rather than Bangladesh.

Furthermore, water consumption charges must be paid, a stipulation not found in the Payra agreement. Adani has also entered into contracts with two other companies within its own group for coal import, port management, and transportation, raising concerns about a lack of transparency in the process. Experts in the power sector have suggested that this agreement should be reviewed in the national interest.

Committee reviews contract

The last Awami League government enacted the Rapid Increase in Supply of Electricity and Fuel (Special Provisions) Act, 2010 (Amended 2021), which allows for contracts to be awarded without a competitive tendering process.

Decisions made under this Act are not subject to legal challenge, leading to its designation as the ‘Impunity Act’. In response, the interim government is establishing a national committee to review agreements made under this legislation.

On 28 September, the National Review Committee convened and decided to collect data from 11 power plants, including those operated by Adani in India.

The Power Division has instructed relevant authorities to supply all necessary data and documents to the committee.

Shamsul Alam, energy advisor for the Consumers Association of Bangladesh (CAB), told Prothom Alo that the contract with Adani includes numerous additional costs that have been gradually introduced, allowing Adani to siphon substantial amounts of dollars out of the country.

He described the agreement as one-sided and argued that Adani is exploiting the situation.

Alam urged the government to withdraw from this agreement immediately, warning that CAB would take legal action if the government fails to cancel it.

* This report, originally published in Prothom Alo print edition, has been rewritten in English by Farjana Liakat​

 

[Saif]

Coal conundrum stages a comeback

The sheer folly of the country's master plan on the power sector that had envisaged generation of thousands of megawatts using coal as primary fuel was evident right from the beginning. It was considered a folly primarily due to the fact that the previous government had decided that it would not ut

thefinancialexpress.com.bd

Coal conundrum stages a comeback
Syed Mansur Hashim
Published :
Nov 05, 2024 21:28
Updated :
Nov 05, 2024 21:28

The sheer folly of the country's master plan on the power sector that had envisaged generation of thousands of megawatts using coal as primary fuel was evident right from the beginning. It was considered a folly primarily due to the fact that the previous government had decided that it would not utilise its own coal reserves and embark on an import-only policy. Well, the year is now 2024, and the country's present government is stuck with the very expensive Matarbari power plant project that has been built with Japanese loans and it is out of production due to shortage of coal.

Experts at the time had stated that this import-dependent policy to source primary energy raw material was fraught with danger. First, it would put Bangladesh at the mercy of foreign coal producers and suppliers. Second, the infrastructure to handle the millions of tonnes of coal that would have to be imported did not exist and would have to be built from scratch. Hence, millions more would have to be borrowed to build that infrastructure. In fact, that is precisely what happened.

The Matarbari coal-fired power plant has been sitting idle since October 25. Implementation of the project has cost the national exchequer Tk 570 billion. The power plant is a state-of-the-art facility and is capable of producing 1,200 megawatts (MW) of power. Yet it sits idle because the Bangladesh Power Development Board (BPDB) is in no position to import coal. While there have been some indications of importing coal before the end of the year, the situation with the country's foreign exchange remains fluid at best.

The problem with this project and with all the other coal-fired power plants is essentially the same. Why did the country's policymakers take the suicidal decision to import its primary energy in the first place? It is now obvious that the idea of embarking on such expensive mega projects was to line the pockets of foreign contractors and those in power at the time.

While these plants remain idle, the country is bereft of the reliable power that could have been produced. Unless the plants go into operation, industrial production will continue to suffer further hampering economic recovery. Without sufficient power, many productive sectors of the country, some of which are exporting in nature, will not stay in operation. What does that mean for foreign exchange earnings? Everything is tied to reliable power supply and the future is looking bleak.

Yet, one still hears about how Bangladesh must not explore its own proven reserves of its coal because it will destroy the environment. Now that is very funny. It is alright to let thousands of illegal brick kilns operate all over the country - spewing out black smoke and soot into the air, causing all sorts of health and environmental problems. It is alright for industrial waste to enter the water supply untreated wreaking havoc on both marine life and drinking water and even that is acceptable. But should we extract coal using open pit mining? No, we must not. It will destroy Bangladesh; at least that's what people have been duped into thinking. Until the time comes when policymakers decide to get their collective heads out of the mud and start calculating how they are going to pay back those billions of dollars in foreign loans, nothing will change. There is no choice but to start mining coal domestically if the objective is to pull off an economic recovery. All this will take a few years, but that's the price one pays for short-sighted energy policies of the past.​

 

[Saif]

‘Domestic gas exploration is the most economical option’

Dr Badrul Imam, honorary professor at the Department of Geology in the University of Dhaka, talks about the reasons behind the ongoing gas crisis and the possible way out in an exclusive interview with Naznin Tithi of The Daily Star.

www.thedailystar.net

‘Domestic gas exploration is the most economical option’

Dr Badrul Imam, honorary professor at the Department of Geology in the University of Dhaka, talks about the reasons behind the ongoing gas crisis and the possible way out in an exclusive interview with Naznin Tithi of The Daily Star.

Our industrial sector has been suffering due to gas shortage for the past few years, but lately the crisis has become acute. It is also severe in residential areas. What factors contributed to this situation?

The main reason behind the ongoing gas shortage is that we only depend on the available reserves. We have not discovered any new gas reserves for a long time, while our existing gas reserves are depleting quickly due to increased demand. Generally, in countries with significant gas reserves, exploration is done continuously so that if one source is depleted, another source can replace it. In Bangladesh, however, exploration is minimal. So, once the production drops, it's difficult to increase it again. This, in my view, is the main reason for the current crisis.

You have always emphasised the importance of becoming self-reliant in gas resources, for which exploration is urgent. What is stalling exploration in Bangladesh?

There is a serious lack of initiative and urgency among the authorities responsible for gas exploration in Bangladesh. There needs to be a visionary leader in this sector, someone who understands our vast potential for gas reserves. We also need experts who truly understand the technicalities of the energy sector to lead exploration drives. Many countries with similar geological formations like ours—Nigeria, parts of the US, and Indonesia—have successfully tapped into their gas resources. There's no reason to believe that Bangladesh has less potential. However, achieving self-sufficiency in gas resources requires a robust exploration policy, which we are lacking. Our past governments were content with small-scale explorations that yielded enough to meet the immediate demand only. They did not implement any comprehensive long-term plan. To make a significant impact, we need a massive exploration drive. If our local companies can conduct the exploration, the cost will be minimal. Even if we engage foreign companies, it will still be cheaper than importing liquefied natural gas (LNG). So, domestic gas exploration is the most economical option to meet our energy needs.

In the Sylhet region, for instance, surrounding the Surma basin, which includes large gas fields like Habiganj and Bibiyana, there are still enough scopes for exploration. Bibiyana, in particular, is a giant gas field in the global context. Exploration in these areas is still in the primary stage. If we could explore these fields, I believe we could get even larger reserves than we currently have.

Do we have the required technology and resources for gas exploration?

Well, our resources are limited. Our state-run company, Petrobangla, does not have the capacity to conduct such extensive exploration alone. To overcome this limitation, we need to bring in foreign companies with the expertise and equipment for large-scale exploration. Engaging reputable international companies could lead to significant discoveries. But even if we start exploration today, it could take at least five years to see significant results.

What could be the short-term solution to the current crisis?

As I have said, in the short term, we can reactivate the old gas wells that have not been fully utilised. These wells have already been drilled so we can start producing gas from them with minimal work. Ideally, we should not go for LNG import because it is much more expensive. Relying on imports is also not sustainable in the long run, especially given our high dependency on gas. However, to immediately manage the crisis, LNG import may be unavoidable.

Quite a few. Each of our gas fields has at least four to five wells that can be reactivated. That means there are about 20-25 wells in five fields that can be put to use. A substantial amount of gas can be extracted from these wells.

What is the status of our offshore exploration?

Unfortunately, exploration of offshore gas reserves has not progressed much. There were talks of exploration years ago, but it did not happen. So, this area remains largely unexplored. Dividing the Bay of Bengal into exploration blocks and launching competitive bidding for them could yield great results. What we need is a strong push to initiate international bidding and invite foreign companies to explore these offshore blocks.

If we go for both onshore and offshore exploration on an urgent basis, how long do you think it may take for us to achieve self-sufficiency in gas resources?

It's hard to give an exact time frame. If we had started five years ago, we would likely be self-sufficient by now. Even if we had started exploration three years ago, we would have seen some results by now. Gas exploration takes time. For the areas that have already been explored, production can start within one to two years, but for new exploration, it will take more time.​