[🇧🇩] Energy Security of Bangladesh

[Saif]

Sinopec to explore gas in Sylhet at Tk 444cr

The government on Wednesday appointed the Sinopec International Petroleum Service Corporation of China to drill an exploratory well and a development of a well in Sylhet...

www.newagebd.net

Sinopec to explore gas in Sylhet at Tk 444cr
Staff Correspondent 04 July, 2024, 00:32

The government on Wednesday appointed the Sinopec International Petroleum Service Corporation of China to drill an exploratory well and a development of a well in Sylhet.

Presided over by finance minister Abul Hassan Mahmud Ali, the decision was taken by a cabinet committee on the government purchase at the secretariat under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010 (with the latest amendment of 2021).

The Chinese company has been appointed at Tk 444.85 crore for developing Well 11 in Sylhet and exploratory work in Rashidpur Well 13 under the state-owned Sylhet Gas Field Limited.

An energy expert, however, said the deal amount looked high.

Badrul Imam said that the local company could execute such work almost half of the amount.

The gas exploration at high cost eventually increases the production cost transferred to consumers, he said.

Referring to country's large neighbour, Badrul Imam said that India always engaged local experts to gas and oil exploration to grow their capacity.

The trend in Bangladesh is opposite as the government often engages foreign companies, mainly from the US, Russia and China, in local gas exploration, he lamented.

He noted that local agents of the foreign companies mainly benefitted from such deals by getting commission.

Cabinet Division secretary (coordination) Mahmudul Hossain Khan at a briefing said that the Chinese company would implement the deal as the turnkey basis.

The Chinese company will sign a deal with the Sylhet Gas Field Limited soon.

Mahmudul Hossain said that the committee also approved a proposal from Petrobangla to import one cargo of liquefied natural gas from spot market.

M/s Excelerate Energy LP of the US will supply the LNG with per unit costing $13.558, higher from the last one cargo LNG purchased at $12.9697 per unit.

By the latest proposal, the government completed importing process of 21st LNG cargo.

The cabinet committee also approved seven other proposals, including import of diammonium phosphate and muriate of potash from Saudi Arabia and Russia on state-level deal, the purchase of two packages under the Greater Dhaka Sustainable Urban Transport Project and building a multi-storied residential building for the cleaners of the Dhaka North City Corporation at Gabtali.​

 

[Saif]

Bangladesh eyes electricity generation from hydrogen by 2035: PM tells parliament

Prime Minister Sheikh Hasina on Wednesday told the parliament that the government is mulling electricity production from hydrogen and ammonia alongside the production of solar and wind power in the country. “It is expected that it would be possible to use hydrogen energy on a pilot basis in

thefinancialexpress.com.bd

Bangladesh eyes electricity generation from hydrogen by 2035: PM tells parliament
BSS
Published :
Jul 03, 2024 21:13
Updated :
Jul 03, 2024 22:00

Prime Minister Sheikh Hasina on Wednesday told the parliament that the government is mulling electricity production from hydrogen and ammonia alongside the production of solar and wind power in the country.

"It is expected that it would be possible to use hydrogen energy on a pilot basis in the country by 2035," she said replying to a question from Awami League lawmaker Habibur Rahman (Sylhet-3).

Speaker Dr Shirin Sharmin Chaudhury tabled the question-answer session in the House.

The prime minister said a cell has been formed at the Rupantarita Prakritik Gas Company Limited (RPGCL) under Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) to collect the results of ongoing research and the data of the activities undertaken in the developed world over sustainable and reliable methods of producing hydrogen as energy.

The cell will design a project proposal after receiving reliable information in this regard, she added.

Besides, the Premier hoped that the 1,200-megawatt first unit of the 2,400-megawatt Rooppur Nuclear Power Plant would go into commercial production by the end of this year.

A target was set to generate 40 per cent of electricity from clean energy (renewable) by 2041 in the country, she added.

Replying to separate questions from ruling party lawmakers, Alauddin Ahmmad Chowdhury (Feni-1) and Farida Yasmin (Woman Seat-35) regarding the Asrayan Project and beneficiaries, the Prime Minister said a total of 8,67,977 landless and homeless families have been rehabilitated under the Ashrayan project.

She said the total number of beneficiaries is more than 43.39 lakh. "So far 58 districts and 464 upazilas have been completely freed from the landless and homeless people. Five divisions -- Dhaka, Mymensingh, Sylhet, Khulna and Rajshahi -- are now completely freed from landless and homeless people. That means, there are no landless homeless people in all these districts, upazilas and divisions," she added.

In response to another query from AL lawmaker Ali Azam (Bhola-2), the Prime Minister said the government is committed to ensuring justice on the basis of equality for all, irrespective of the rich and poor, and establishing justice in the society by making visible improvements in the judiciary system.

She said the present government has been relentlessly working to establish the rule of law in the country by providing assurance of fair trial to alleviate the suffering of the people seeking justice.

A total of 1,429 judges were recruited in lower courts since 2009, she added.

Answering a question from AL lawmaker SM Ataul Haque (Satkhira-4), the prime minister said the allocation for the social safety sector has been increased by 9.12 times from Tk 138.45 billion in the 2008-09 fiscal year to Tk 1262.72 billion in the current fiscal year of 2023-24, which is 16.58 per cent of the total national budget.​

 

[Saif]

Energy price fluctuations and implications for Bangladesh

There is no denying that maintaining Bangladesh's macroeconomic stability and achieving its development goals requires consistent and uninterrupted energy supply. Bangladesh's energy landscape is predominantly shaped by fossil fuels, with natural gas including Liquefied Natural Gas (LNG), coal, and

thefinancialexpress.com.bd

Energy price fluctuations and implications for Bangladesh
ABDUR ZABBAR SAKIL AND MD TUHIN AHMED
Published :
Jul 05, 2024 21:02
Updated :
Jul 05, 2024 21:02

There is no denying that maintaining Bangladesh's macroeconomic stability and achieving its development goals requires consistent and uninterrupted energy supply. Bangladesh's energy landscape is predominantly shaped by fossil fuels, with natural gas including Liquefied Natural Gas (LNG), coal, and oil accounting for over 98 per cent of the nation's electricity generation. Despite efforts to diversify the energy mix, renewable sources such as hydro, solar, and wind contribute only marginally to the overall power generation. However, the high dependency on imported fossil fuels leaves Bangladesh vulnerable to fluctuations in global energy prices, which can have far-reaching implications for the country's macroeconomic stability and developmental aspirations.

In the fiscal year (FY) 2020-21, Bangladesh consumed 45,080 kilotonnes of oil equivalent (ktoe) of energy, primarily in the residential (51 per cent), industrial (33.4 per cent), and transport (10.7 per cent) sectors. A significant portion of residential energy consumption is met by biofuel, accounting for 66.1 per cent of its total usage. The industrial sector relies heavily on natural gas and coal, with 43 per cent of its energy needs met by natural gas and 30.3 per cent by coal. Notably, the industry sector is the sole consumer of coal, predominantly used by the brick industry. In the transport sector, energy demand is entirely fulfilled by oil and natural gas, with oil making up 77.9 per cent and natural gas 22.1 per cent of its total energy use (SREDA, 2021).

To meet its overall energy demand, Bangladesh relies on both domestic production and imports. Specifically, the country depends on imports of coal, oil, and petroleum products, with over 90 per cent of the coal and oil supply and 100 per cent of the petroleum product supply being imported. However, Bangladesh can find some relief in the natural gas sector, as 78.6 per cent of natural gas is produced domestically, while only 21.4 per cent is imported. Despite the relatively low volume of natural gas imports, the amount has rapidly increased since its introduction in FY 2018-19 (SREDA, 2021).

On the other hand, fossil fuel energy prices on the international market are highly volatile. According to the IMF's primary commodity price data, the average price of crude oil surged from USD 44.20 per barrel in Q4 2020 to USD 85.20 per barrel in Q4 2022. Similarly, the average price of natural gas skyrocketed from USD 5.36 per thousand cubic feet (tcf) in Q4 2020 to USD 20.99 per tcf in Q4 2022. Average coal prices increased significantly, from USD 70.10 per metric ton in Q4 2020 to USD 310.01 in Q4 2022. LNG prices jumped from USD 8.18 per million metric British thermal units (mmbtu) in Q4 2020 to USD 28.56 per mmbtu in Q4 2022. This rapid increase in energy prices can be largely attributed to the COVID-19 pandemic and the Russia-Ukraine war.

The question now is how energy price fluctuations affect the macro economy. Energy, along with labour and capital, is a critical factor of production. On the demand side, when energy prices increase, consumption of these resources tends to decrease. This reduction in consumption leads to a decline in the aggregate demand or output.The magnitude of this impact depends on the economy's ability to substitute energy with other factors such as labour or capital, including substitution among various energy sources (coal, gas, or crude oil). The short-term impact of rising energy prices is typically stronger than the long-term impact. While the economy can adjust its production process in response to factor prices, its ability to substitute input factors is limited.

An increase in energy prices has a more pronounced impact on the supply side than on the demand side. Higher energy prices compel producers to reduce energy usage in production, lowering output levels. Consequently, the productivity of other input factors decreases due to the reduced availability of energy sources. At this stage, nominal wages/interest rates may remain unchanged due to rigidity, resulting in a higher overall price level and lower real wages/interest rates. The higher overall price level prompts consumers to curtail their consumption, thereby affecting overall demand. The impact of energy prices on the supply side is greater because energy prices directly influence the production system. As a result, the economy experiences lower output and a higher overall price level.

Increase in energy prices deteriorates the balance of payment, especially for a country like Bangladesh which depends fully on oil importation. First, the direct increases in oil price increase the cost of oil importation, as a result, reduced imported raw materials cause production crunch. Second, an increase in oil prices in the international market reduces demand in developed countries that are major export destinations for Bangladesh, which results in reduced export income. So, increase in oil prices eats up national income since the rise in the cost of importing oil is greater than the rise in national income.

Bangladesh has been experiencing consistently high inflation since August 2022, with rates mostly exceeding 9 per cent. Despite efforts, the central bank has been unable to contain it. The root cause of this inflation surge can be traced back to a combination of post-COVID-19 supply shortages and the Russia-Ukraine war. The COVID-19 pandemic had a twofold impact on the global economy that significantly contributed to the inflation scenario. Firstly, during the pandemic, trade restrictions, factory closures, and the China-USA trade war caused disruptions in the global supply chain, leading to supply shortages. Secondly, as economies began recovering from COVID-19 and businesses reopened, there was a surge in global demand. To meet this increased demand, factories required more energy, which in turn drove up energy prices. Compounding this situation, the Russia-Ukraine war introduced another significant shock. Following Russia's invasion of Ukraine in late February 2022, prices of oil, natural gas, and coal surged, peaking around June and July of that year. Given that Russia is a major exporter of oil and gas, and that 45 per cent of the EU's gas supply was sourced from Russia, the sanctions imposed by the USA and its allies on Russia led to a rapid increase in energy prices. Consequently, the production and transportation costs of goods escalated sharply, directly impacting Bangladesh's inflation.

Higher energy prices significantly impact a country's foreign currency reserves, particularly for a net energy-importing country like Bangladesh. The effect is predominantly negative. Since the lifting of COVID-19 restrictions and the reopening of businesses, Bangladesh's reserves of US dollars have been steadily decreasing. As of April 2024, Bangladesh's foreign reserves stood at 19.98 billion dollars.

In addition to policy failures by the central bank, the lack of remittance inflows through formal channels, and low foreign direct investment (FDI), the rise in energy prices contributes to the depletion of foreign reserves. Since mid-2022, Bangladesh has been meeting its energy demands by purchasing oil, coal, and natural gas at elevated prices. However, the country's productivity has remained relatively unchanged. As a result, Bangladesh is producing the same amount of export goods but at higher import costs, which deteriorates its balance of payments. In other words, Bangladesh is purchasing more dollars from the international market, increasing the supply of taka and the demand for dollars. This phenomenon also causes the taka to depreciate against the dollar. A depreciating domestic currency influences trade balances with other countries, as the dollar is the standard currency for international trade. Depleting foreign reserves and a depreciating domestic currency further exacerbate inflation by raising the cost of intermediate goods and raw materials. This, in turn, increases overall production costs, leading to higher prices for consumers and additional economic challenges for the country.

The constant threat of a volatile energy market and its impact on the domestic economy can be mitigated by diversifying the domestic energy mix towards renewable energy. While renewable energy has high installation costs, these costs are offset by the absence of ongoing fuel purchases, leaving only operational and maintenance expenses. Additionally, the high installation cost positively impacts the domestic economy by creating more jobs. Permanent employment opportunities will also arise for maintaining the facilities and providing jobs for thousands of unemployed graduates. This shift towards renewable energy can yield benefits in two significant ways. First, the country will need to import fewer fossil fuels, thereby spending fewer dollars. This will reduce the pressure on foreign reserves and potentially increase them significantly. Second, Bangladesh will no longer face uncertainty regarding its essential energy supplies, leading to a more stable domestic market with stable prices. Although these changes will not entirely eliminate inflationary pressure, they will certainly lessen a portion of it.

Abdul Zabbar Sakil is Research Analyst at International Food Policy Research Institute (IFPRI). Md. Tuhin Ahmed is Lecturer of Economics at Mawlana Bhashani Science and Technology University and Senior Research Associate at SANEM.​

 

[Bilal9]

Bangladesh faces massive load-shedding as India\'s Adani cuts power supply

Bangladesh, which watched a humid heatwave intensify over almost half of its districts on Tuesday, suffered up to 16 hours of power cuts in places after the power supply from the coal-fired power plant run by Adani Power in India was drastically reduced without a pre-announcement...

www.newagebd.net

Bangladesh faces massive load-shedding as India's Adani cuts power supply
Emran Hossain 25 June, 2024, 23:12

View attachment 6615

Bangladesh, which watched a humid heatwave intensify over almost half of its districts on Tuesday, suffered up to 16 hours of power cuts in places after the power supply from the coal-fired power plant run by Adani Power in India was drastically reduced without a pre-announcement.

With 27,515MW of installed power generation capacity, Bangladesh fell short of 1,887MW of electricity to meet the demand of 14,800MW at 2:00am on Tuesday, the hour the country recorded its peak load-shedding.

Just 24 hours ago, the power shortage stood at 278MW against the demand of 14,380MW.

Since the ongoing heatwave began three days ago, leading to a rise of about 4,000MW in power demand, load-shedding has undergone an astronomical rise from almost zero.

An ongoing economic crisis has seriously limited Bangladesh's energy use for more than two years now.

The current crisis is unique given that almost all baseload power plants are running at half or one-third of their capacities for one reason or another, with no hope of the situation improving anytime soon, especially after one of Bangladesh's two floating storage and regasification units remains out of order since the cyclonic storm Remal hit on May 28.

'The shutdown of a floating storage and regasification unit put us in a crisis that only worsened after Adani shut down one of its two units beyond schedule,' power secretary Habibur Rahman told New Age.

Bangladesh owes over $3 billion to power producers at home and abroad, according to the power ministry, including $500 million owed to Adani Power in outstanding bills.

The public relations agency that was looking after Adani Power's media relations in Bangladesh, however, claimed that the shutdown of one of the units at the 1,600MW Godda power plant was for maintenance and scheduled.

The explanation lacked consistency because the remaining unit still in operation has the capacity to generate at least 800MW.

On June 24, Bangladesh received only 371MW from Adani's Godda power plant.

On June 19, the day Adani shut down its second unit, as revealed by the daily electricity generation report of the Power Grid Company of Bangladesh, Bangladesh received 1,060MW.

The power supply from Tripura also remained below 100MW, often less than 80MW, due to unpaid electricity bills, according to Indian media reports.

A unit of the 1,320MW coal-based Payra power plant is also currently under maintenance.

The 1,320MW coal-fired Rampal power plant supplied 593MW in the evening peak hour on June 24, saying that it had shut down its second unit, about which there was no explanation from the power ministry.

The newly-built 1,200MW Matarbari coal-based power plant had one of its two units under maintenance, according to the PGCB.

The 586MW Unique Meghnaghat power plant remained completely shut down because of a gas shortage.

The 1,224MW newly-built coal-based SS Power plant supplied only 481MW on June 24.

The 307MW coal-based Barishal power plant generated 200MW on June 24 due to a coal shortage.

An analysis of the daily power generation report released by the PGCB showed that 114 out of 150 power plants were either partially or completely out of operation for one reason or another on June 24.

Only about 25 per cent of Bangladesh's current installed generation capacity could smoothly operate, the PGCB report revealed.

On June 24, a total of 33 power plants faced technical problems, such as engine or machine problems, while a fuel shortage affected operations at 46 gas- and furnace-oil-based power plants.

A dozen power plants were under maintenance, while 18 did not operate because their contracts expired.

On June 24, Bangladesh produced 5,655mw using gas at the peak load-shedding hour at 2:00am. The installed gas capacity is 11,880. Before the FSRU malfunctioned, Bangladesh produced a maximum 7,000MW using gas.

The installed coal capacity, on the other hand, is 5,108MW. But the maximum electricity generated from coal was mostly about 3,000MW, though it dropped to about 1500MW occasionally.

The installed furnace-oil-based capacity is 6,035MW. At the peak load-shedding hour on June 24, furnace oil generated 3,202MW.

An online provider of fuel prices, Trading Economics, showed that coal was sold at $131.91 per tonne on June 25 following an 8 per cent fall in its price this month.

The US natural gas price was around $2.8/MMBtu on June 23. The crude oil price held just below $82 per barrel on June 24.

Indian heatwaves and geopolitical unrest have kept fuel prices somewhat unsteady, but energy experts found them very affordable unless the economic situation was really bad.

The Bangladesh Meteorological Department said that a mild to moderate heatwave was sweeping over Dhaka, Rajshahi and Khulna divisions, covering 31 out of 64 districts.

Bangladesh's highest temperature of 38C was recorded in Rajshahi on Tuesday.

New Age staff correspondent in Rajshahi reported that people in rural areas in the districts have been suffering from around 16 hours of power cuts for the past three days.

Mominul Islam, a college student of Anupampur village under Charghat upazila in Rajshahi, said that he could not sleep at all on Monday night because of power cuts amid a humid heatwave.

'Seven to eight power cuts occurred on Monday night,' he said.

Mehedi Hasan, a resident of Shekherpara village under Godagari upazila in Rajshahi, told New Age that they had also been experiencing power cuts of up to 14 to 16 hours for the past few days.

'There is no need for power for irrigation. Why is there load-shedding now?' he asked.​

This is what happens when you rely on Indians to supply something crucial as electricity.

Bad decisions buying Indian goods and services, one after another - by this woman.

 

[Saif]

This is what happens when you rely on Indians to supply something crucial as electricity.

Bad decisions buying Indian goods and services, one after another - by this woman.

Is she a woman? Everybody addresses her as 'Sir'.

 

[Bilal9]

Is she a woman? Everybody addresses her as 'Sir'.

When you surround yourself with uneducated and semi-educated people, that is what happens. Everyone with half a brain will not work for her.

Former peons and ardalees are now MP level people....

 

[Saif]

Industries reeling from persistent gas crisis

The country that was once thought to be floating on gas is unable to make available sufficient volume of this fossil fuel to domestic consumers of various categories. The industrial consumers are worst-hit. The textile mills that need a large volume of gas in recent days have aired their grievances

thefinancialexpress.com.bd

Industries reeling from persistent gas crisis
Published :
Jul 08, 2024 22:07
Updated :
Jul 08, 2024 22:07

The country that was once thought to be floating on gas is unable to make available sufficient volume of this fossil fuel to domestic consumers of various categories. The industrial consumers are worst-hit. The textile mills that need a large volume of gas in recent days have aired their grievances on a number of occasions through their associations. The domestic consumers don't have a voice for they are not organised under the umbrella of any such entity. The last fiscal year was a disappointing one for the industrial sector, as it recorded only 6.66 per cent growth, the lowest in last four years. The rate of growth was 8.37 per cent in the preceding year. Non-availability of sufficient volume of gas was one of the main reasons for such a poor performance. The gas crisis is still hurting the industries and the situation is unlikely to change for the better anytime soon. Quite a big number of factories in the key industrial belts like Narayanganj, Savar and Gazipur are dependent on gas for their operations. The gas crisis has been pushing up their cost of production, making it more challenging for manufacturers and exporters to ensure the supply of products in time. Industry leaders have already expressed their concern and written to the relevant ministries seeking an early resumption of gas supply to run their factories at an optimal capacity.

The main reason behind the gas crunch is the flawed energy policy that the government has been pursuing over the years, demonstrating an inexcusable indifference to experts' suggestion to go for extensive domestic exploration for hydrocarbon. The government has been more interested in importing LNG since 2015 to produce power and feed domestic industries partially than putting in its best efforts for offshore exploration. The cost of LNG import, however, has increased sharply since 2022 as the global energy market became volatile amidst geo-political tensions like the Russia-Ukraine war and the Middle-East conflicts. At home, foreign exchange reserves started depleting at a fast pace for both external and domestic reasons. The local currency also depreciated sharply, making the payments for the import of LNG in US dollar expensive. The crisis of greenback coupled with dwindling value of Taka forced the government to slow down the import of LNG. The net outcome has been a cut in the supply of gas to industry and power units. The government after a prolonged foot-dragging announced new oil and gas exploration move early this year. The results of the exploration work could go either way --- positive or negative. But the country would surely need uninterrupted supply of gas to help the wheels of industrial units running. And the government will have to ensure it, by any means.

The immediate reason behind the current crisis is the damage caused to one of the two floating terminals at Maheshkhali in Cox's Bazar used for regasification of imported LNG. Cyclone Remal caused damage to a terminal on May 27, which was then sent to Singapore for repair. The Petrobangla authority is hopeful of terminal's return by the middle of this month, which it feels, will resolve the gas crunch problem. This particular development also underscores the risks and limitations of over-reliance on energy imports instead of exploring multiple options efficiently. It is expected that the authorities will revisit the energy policy and redesign it keeping in view the long-term needs of the country. The gas crisis is not only affecting the country's export market but it is also significantly pushing up the cost of living of the common consumers.​

 

[Saif]

Gas crunch leaves BD in frequent power cuts

A nationwide gas shortage is causing frequent power cuts as around three dozen gas-fired power plants are currently out of operation for a lack of input. Power outages are worst in rural areas, while urban areas are experiencing increased load shedding. Officials say the situation is unlikely to

thefinancialexpress.com.bd

Gas crunch leaves BD in frequent power cuts
Situation unlikely to improve until mid-July
Published :
Jul 09, 2024 10:22
Updated :
Jul 09, 2024 10:22

A nationwide gas shortage is causing frequent power cuts as around three dozen gas-fired power plants are currently out of operation for a lack of input.

Power outages are worst in rural areas, while urban areas are experiencing increased load shedding.

Officials say the situation is unlikely to improve until July 15, when the Summit Group's liquefied natural gas (LNG) terminal is expected to resume operations.

A 500 million cubic feet per day (mmcfd) shortfall in gas supply to the national grid has resulted from the shutdown of Summit's floating storage and regasification unit (FSRU).

This gas shortage has forced nearly all major gas-fired power plants to shut down, including the recently commissioned and efficient Unique Meghnaghat 584 megawatt and Summit Meghnaghat 583 megawatt electricity plants.

Cyclone Remal, which struck the southern parts of the country in late May, damaged Summit's FSRU. After the cyclone, authorities discovered the damage on May 29 and reduced LNG regasification to zero by the morning of May 30.

Due to the reduced LNG re-gasification capacity -- down to around 600 mmcfd from 1,100 mmcfd before the cyclone damage, state-run Petrobangla was forced to cancel four spot LNG cargoes scheduled for June deliveries.

The country's overall natural gas output dipped to around 2,600 mmcfd, including around 606 mmcfd of re-gasified LNG, on July 7. This is down from around 3,100 mmcfd before Cyclone Remal, according to Petrobangla data.

To cope with the power shortfall, state-run electricity marketing and distribution companies have been enforcing load shedding for periods ranging from one to several hours, according to a senior official at the Bangladesh Power Development Board (BPDB).

The overall electricity generation on July 7 was around 12,608 MW during peak day hours and 14,521 MW during peak evening hours against the total generation capacity of 26,815 MW, according to BPDB data.

The senior BPDB official acknowledged that rural areas are currently experiencing the worst of the power outages.

The gas crisis is having a wider impact, jeopardising industrial output, slowing down the filling of compressed natural gas (CNG) vehicles and causing increased hardship for household consumers.

Household consumers in Dhaka and surrounding areas allege that gas pressure drops in the morning and remains low throughout the day until evening. This limited gas pressure forces them to restrict their cooking to nighttime hours.​