[🇧🇩] Energy Security of Bangladesh

[Saif]

The roadmap for energy sector must be changed

Govt must move away from import-loan-foreign company-dependent projects and adopt a cheaper, environment-friendly, and sustainable roadmap

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The roadmap for energy sector must be changed

VISUAL: ALIZA RAHMAN

The problems in the energy and power sector have not accumulated over just 15 years. It began in the early 1980s. At the root of the problem lies the neo-liberal ideological approach that since then turned the power sector into a profit-making enterprise for a handful of local and foreign businesses. The alternative approach is fundamentally different—where access to energy and power should be a public right, and resources kept in public ownership and not privatised or turned into private businesses. Under the alternative approach, essential services such as affordable electricity, gas, and water become available for all without discrimination.

In the early 1980s, the World Bank, in the name of development, recommended the neo-liberal reform of the energy sector, suggesting that foreign investment should be brought in. Their logic was that foreign investment would lower electricity and gas prices, reduce financial loss and waste, and increase efficiency through technology transfer. Reform started in the 80s along with structural adjustment programmes in the economy, and the signing of production-sharing contracts with multinationals began according to this roadmap—the first round in 1993, and the second round in 1997. Although the governments during those periods were different, the nature of the policy remained the same and the trend continued even during the regimes that came to power after 2000.

However, after a while, the World Bank's argument about the benefits of privatisation and foreign investment in the energy sector proved to be wrong. We saw gas prices rising, loss/subsidies/wastage increasing, power tariffs increasing, and the prices of other essentials escalating on a regular basis. Furthermore, we did not see technology transfer and capacity development. Rather, the opposite happened. Foreign companies' negligence—the US company in Magurchhara and the Canadian company in Tengratila—caused big explosions in our gas fields. They destroyed natural gas that could have generated power for almost 18 months, and we still haven't received appropriate compensation for that.

During the last regime, foreign investment and privatisation in the energy sector increased further. In 2010, a new law was passed that essentially made the contracts and the contract processes free from any accountability, meaning these contracts and the companies involved could not be questioned or taken to court. This legal indemnity made them untouchable. It became clear that the intentions behind these policies were not in the public interest. When we were told that the reason for this indemnity law was to tackle huge load shedding by establishing "quick rentals," we proposed alternative solutions that would not require "quick rentals." But the government did not show any interest in accepting the cheaper, sustainable solution that would use public-sector plants. They opted for the costly, unsustainable option only to give business to well-connected groups.

The past government took an irrational and aggressive path with regard to the "Power System Master Plan" (PSMP) prepared by the Japan International Cooperation Agency (JICA), which prescribed coal, nuclear energy, and imported LNG—all heavily import-oriented, requiring loan and reliance on foreign companies, including Japanese ones, which benefited from this plan. Since 2011, the construction of coal-fired power plants by companies from India, China, and Japan began all along our coast from the Sundarbans to Cox's Bazar. The coastal area is extremely vital for the country's defence against natural disasters; it is also one of the most vulnerable regions to natural disasters, environmental damage, and climate change. However, the government and the investors totally ignored this fact and began weakening the defence system of the coastal region including the Sundarbans, the largest mangrove forest in the world.

For instance, the $12 billion megaproject for Rooppur nuclear power plant was started in early 2010 by taking a huge loan from Russia and awarding the project to Russia's state-run atomic agency Rosatom. However, people were not informed about the extreme consequences and risks associated with such a plant. There are layers of protection needed against the dangers of a nuclear power plant, considering that this could put the lives of almost 10 million people at risk.

All these megaprojects, especially the coal and nuclear power plants, suffer from irregularities, high corruption, and a lack of transparency. Plus, they initiated surveillance against dissenting opinions. It is easy to see that these plants were not built to generate electricity. There were much better alternatives. Nevertheless, these projects were pursued by the authoritarian government to bag huge commissions for policymakers and profits for a select few. Moreover, the past government sought to stay in power without people's mandate, so they relied on, among other things, international support from some foreign countries. To sustain that support, the government allowed these countries to launch those costly and environmentally harmful megaprojects. As a result, the energy and power sector has now become a huge financial burden for the whole economy and a significant source of environmental damage.

In contrast to the government's approach, we, as part of the people's movement, had developed a real solution for the sector taking the help of independent experts at home and abroad. We prepared an alternative master plan in 2017, where it was explained that there was no need for expensive LNG, dirty coal, or dangerous nuclear power. Our findings showed that our needs could be sufficiently met by focusing on gas exploration onshore and offshore and making real efforts to develop renewable energy. The steps would not require much time and resources to empower BAPEX and build public institutions for renewable energy. We recommended clear plans to utilise a large number of university students graduating every year for this purpose. We need to increase our own capabilities to bring down import costs, reduce pressure on foreign reserves, and boost our confidence and pride as a nation.

To steer toward the right direction, we must put an end to the destructive journey we have had thus far. The interim government should start scrapping projects like Rampal, Rooppur, and Banshkhali. Some may argue about the financial loss if these projects are scrapped. However, my estimates show that the costs of discarding these projects are lower than the costs of keeping these projects active. These projects will endanger Bangladesh's existence. Thus, continuing them will not only be a financial burden but also jeopardise the safety and security of the country.

Finally, this sector as well as the economy require a fundamental shift in policy framework to ensure public ownership, increase the capability of public institutions, and create the space for active public roles to build a better future in the public interest. The government must move away from import-loan-foreign company-dependent projects and adopt a cheaper, environment-friendly, and sustainable roadmap with public interest—not corporate profit—as the decisive force.

Anu Muhammad is former professor of economics of Jahangirnagar University.​

 

[Saif]

Increased role of non-carbon energy-based power supply

The 68 MW Shirajgonj solar park has been supplying power to the national grid since July, 2024. Developed on 214 acres of land located on the flood plains of the river Jamuna (near the Jamuna Multi Purpose Bridge). the solar park has so far installed 156,576 units of interconnected solar panels wit

thefinancialexpress.com.bd

Increased role of non-carbon energy-based power supply
Mushfiqur Rahman
Published :
Sep 27, 2024 21:32
Updated :
Sep 27, 2024 21:32
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The 68 MW Shirajgonj solar park has been supplying power to the national grid since July, 2024. Developed on 214 acres of land located on the flood plains of the river Jamuna (near the Jamuna Multi Purpose Bridge). the solar park has so far installed 156,576 units of interconnected solar panels with the capacity of 545 watt each. The plant is being operated by the Bangladesh-China Renewable Energy Company Limited (BCRECL)-- a joint venture of North-West Power Generation Company of Bangladesh and China National Machinery Import and Export Corporation. BCRECL invested approximately US$ 90 million for implementing the plant and signed a contract with BPDB to supply power to BPDB grid for 20 years at a tariff of US 10.20 cents per unit.

At this stage BPDB has only 3 per cent (1 per cent from hydro and 2 per cent from the grid connected solar and wind power plants) power generation capacity from 15 plants using renewable energy sources. There are a number of renewable energy (mainly solar parks) based power plants under implementation at different locations of the country to generate and supply power to the national grid.

The solar parks have been encouraged to install plants in places that are generally recognised as 'non agricultural lands'. Despite technological advancements, approximately 3 acres of land are required in Bangladesh to generate one megawatt of electric power using solar energy. Power producers are hopeful that the solar panels (photovoltaic cells) have improved their efficiency and there will be a requirement for approximately 2 acres of land for generating one megawatt of power using solar energy in the near future.

Bangladesh has installed electricity generation capacity of 27,791 MW (BPDB, 31 August 2024) as against the demand for 11,370 MW (BPDB, 15 September 2024). BPDB calculated power distribution system loss (for 2023-2024) at 7.25 per cent. Media reports say, the required amount of stable power supply can not be ensured at the consumer end for various reasons. The BPDB and its power generation units have been suffering from systematic primary fuel (natural gas, liquid fuel, coal) supply shortages. Additionally, there are technical and management limitations in the power transmission and distribution systems.

A close review of the power plants' installed capacity shows that the 43 per cent of the total power generation capacity depend on natural gas as primary fuel. Petrobangla sources suggest that the total daily demand for natural gas (including the converted gas from imported LNG) in the country is approximately 330 MMCFD to 350 MMCFD. Fifty per cent of the demand for gas supply in the country comes from the power generation plants. But Petrobangla can supply approximately 250 MMCFD. As a result, the gas-based power generation units has to sit idle for fuel shortages. Published reports suggest that Petrobangla owes approximately US$ 607 million to Chevron (company under PSC contracts with Petrobangla) and the LNG suppliers in Qatar, Oman and other Spot LNG suppliers as on September 10, 2024.

Also, the power generation plants that use coal as primary fuel in the country (21 per cent of the total installed capacity) suffer from coal supply shortages and generate significantly less amount of power than the plants' capacity. Furnace oil (21 per cent plants use FO as primary fuel) and diesel (2 per cent plants use diesel as primary fuel) are costly fuels and the plants are generally discouraged to generate power for maintaining the government's subsidy (for generated power) limits for consuming the liquid fuel-based power. BPDB has currently valid contracts for importing 2,656 MW (approximately 9 per cent of the total capacity) of power from India. But the pending import bills are huge at this stage. As a result, the power export companies in India have been supplying less than their capacities and asking for settling their dues.

In the backdrop of the increased pressures for supplying uninterrupted electricity and in line with the global commitment to 'go green', Bangladesh has been trying to generate more power from renewable energy sources. Geographical limitations restrict Bangladesh to generate hydroelectricity. Wind capacity has its own limitations to expand in the country, as there are limited spots suitable for generating wind power on commercial basis. Hence, solar energy has become the main renewable source for generating commercially attractive power at an affordable price.

As the solar radiation availability and intensity varies during the day-time and at night, large-scale solar generation plants have been considering to develop storage capacity (with the help of installing batteries) along with the grid connected solar panels. Experts believe 20-30 per cent storage capacity support may enhance average solar power generation cost up to US 12-12.5 cents per unit. Despite the cost hike, such an arrangement may help stabilise the grid frequency and offset the need for using costly liquid fuel during the peak hours.

Over all, increased use of renewable and non-carbon energy-based power generation will contribute to the country's commitment for reduction in Green House gas emission, and also substantially raise the renewable energy capacity.

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

 

[Saif]

Thriving in business through energy transition

With climate change quickly becoming a global emergency, businesses need to contribute in both cooperative and coordinated way to address it.

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Thriving in business through energy transition

With climate change quickly becoming a global emergency, businesses need to contribute in both cooperative and coordinated way to address it. The historic Paris Agreement, in which Bangladesh is one of the signatory countries, aims to reduce greenhouse gas emissions and limit the global average temperature rise to 1.5º C above pre-industrial levels. Businesses can contribute to this goal by not only reducing their direct emissions, but also by focusing on how they use energy to produce and distribute their goods and services.

However, business leaders must assess their energy transition activities with respect to the business value they can create for their stakeholders – including customers, employees, investors and regulators. They should analyse their energy usage by considering two aspects -- sources of energy and efficient consumption of energy. While the sources of energy should get switched out by greener options, the optimised use of energy to produce goods and services is also crucial. These steps would help businesses to be resilient against the shocks pertaining to rapid rise in energy prices.

Transformation of the energy supply from greener sources for businesses will require more energy from wind and solar farms. At the same time, businesses need to explore the possibility of using alternative sources of energy, such as green hydrogen and biofuels. These alternative energy sources have been in use in specialised applications – e.g. hydrogen has been used as rocket fuel for several decades now. Moreover, their commercial viability to produce and supply energy for business processes has improved significantly in the recent years. For example, hydrogen can now be used in the cooling and heating systems of homes and commercial premises.

Businesses have an important role in catalysing the transformation of energy production and supply. By seeking to transition to the electricity produced from greener sources, businesses can influence energy suppliers to transform their production processes. Similarly, by adopting alternative fuels to run their business processes, businesses can catalyse the development of the alternative fuel market. In either scenario, businesses must conduct a cost-benefit analysis to understand how such energy transition is going to help their businesses commercially and deliver value to the stakeholders. A scientific assessment of the cost-benefit analysis – by estimating the energy supply mix and its cost – will help businesses to make prudent business decisions as well as make their business more resilient.

While the supply side of energy has been an area of focus from the beginning, it should also be noted that the effective management of demand is another important parameter of energy transition for businesses. From simple changes like changing the lighting within the entire factory or office from incandescent lamps to LED lamps, to a complete redesign of the business processes, there are ample opportunities to improve energy efficiency in most business operations.

According to a recent report published by the World Economic Forum in collaboration with PwC, improving energy efficiency at the demand side across buildings, factories and transportation can reduce the global energy intensity by up to 31 percent. Furthermore, the consequent monetary savings globally would be up to US$2 trillion. Evidently, businesses will be able to reap this benefit quickly by improving on their demand-side energy efficiency.

Apart from business leaders' collective focus, the policymakers and regulators also need to step in and catalyse the change. Promoting entrepreneurship for creating innovative sources of energy, incentivising the initiatives towards sustainable and transparent changes, and enabling the intersecting industries to collaborate and co-create innovative solutions for themselves and their stakeholders remain a few key focus areas where policymakers and regulators can help the businesses in their energy transition.

The need for rethinking business strategies in order to thrive post energy transition and stay relevant in the future is quickly becoming imperative. Therefore, the business leaders who are proactively embracing greener supply and pursuing efficient consumption of energy are going to set compelling examples for others to follow.

The writer is a partner with PwC. The views expressed here are his own​

 

[Saif]

Revisiting solar power

When the need for exploiting all sources of renewable energy including that of the tropical sun is being felt more than ever, the number of existing Solar Home Systems (SHSs) that converts solar energy into electricity through a photovoltaic (PV) module in use is declining. A survey by the Banglade

thefinancialexpress.com.bd

Revisiting solar power
SYED FATTAHUL ALIM
Published :
Sep 30, 2024 23:02
Updated :
Sep 30, 2024 23:02

When the need for exploiting all sources of renewable energy including that of the tropical sun is being felt more than ever, the number of existing Solar Home Systems (SHSs) that converts solar energy into electricity through a photovoltaic (PV) module in use is declining. A survey by the Bangladesh Bureau of Statistics (BBS) showed that in 2021, 2.25 per cent of the population used SHSs. But by the next two years, the number fell to 1.81 per cent in 2023.

Clearly, the SHS which saw its rapid expansion among the population between 2003 and 2013, has halted after grid power became available in the areas where solar power was earlier the only option. That could well be good news because it showed the then-government's ability to bring larger and larger sections of the population under the national power grid. But the approach at the same time was short-sighted, unsustainable and irresponsible. Short-sighted because being a net importer of fossil fuel, Bangladesh cannot continue the practise for long as it does not have enough hard currency to buy fossil fuels like Liquefied Natural Gas (LNG), furnace oil, coal etc., to fire its power plants. Neither was the government exploring and exploiting existing reserves for gas and coal. Unsustainable because in an era when globally there is a shift from fossil-based energy to renewable one for the dual reason of falling fossil energy reserves everywhere as well as deleterious effect of fossil fuel on the environment, the government chose an opposite path. Irresponsible because knowing full well that such path of national electrification was ill-conceived, the government went ahead with the plan to produce more power than the country needed through setting up new state-owned gas and oil-based power plants, privately-owned rental and quick rental power plants including even import of electricity from India, just to satisfy the tall ego of the head of the government as well as line the pockets of all those involved at the expense of the public exchequer. Notably, according to former state minister for power, energy and mineral resources Nasrul Hamid, during the past fifteen years of the previous government, capacity payments for the rental power stations alone cost the public exchequer Tk.105 billion. Among the highest recipients of the capacity charges were the Summit Group, United Group, Bangla Cat, RPCAL among others. These crony capitalists got the money without supplying any power to the public.

The unsustainable success story of covering the country's entire population by the fossil-fuel-based national grid did one thing: it put an early end to the prospect of supplying clean electricity to the people through SHSs and other renewable energy options.

According to an estimate, there are some 6 million homes in the country connected to SHSs.

The adviser to the ministry of power, energy and mineral resources of the interim government has stated that all projects and agreements implemented under special laws during the previous government will continue. That's understandable. But at the same time, the government should make serious efforts to wean the nation off the dirty habit of using electricity from fossil-fuel-run power plants.

To this end, the government should renew its focus on renewable energy including PV modules for households, solar rooftops, solar irrigation, floating solar power projects etc.

It may be recalled that providing power through SHSs started by the end of 1990s when most remote areas of the country were not connected to the national grid. People of those areas used kerosene lamps to light their homes in the evening. In 2003, started the World Bank (WB)-financed SHS projects by the Infrastructure Development Company Ltd (IDCOL). The installation of SHSs continued for a decade with ever increasing number of homes getting service. But as noted before, expansion of the national grid stopped the progress of SHS installations. Interim government's energy adviser should have a rethink.​

 

[Saif]

Bangladesh delegation in Nepal to sign contract to import 40 MW electricity​

[🇧🇩] Thread 'Nepal---A bosom Friend of Bangladesh'

Sep 29, 2024

Bangladesh, Nepal discuss cooperation in trade, commerce, hydropower sectors
UNB
Published :
Sep 30, 2024 00:10
Updated :
Sep 30, 2024 00:10

Bangladesh and Nepal have discussed cooperation in different areas including trade, commerce, hydropower and people-to-people level collaboration in particular in the area of education.

The two sides agreed to work together to address challenges as both the countries are slated to graduate to developing country status.

Ambassador of Nepal to Bangladesh Ghanshyam Bhandari met Foreign Secretary Md Jashim Uddin on Sunday at...​

• Saif

 

[Saif]

Reforms, policies that can mend the power and energy sectors

In the 15-plus years of the last government, the energy and power sectors of Bangladesh have been all but destroyed.

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Reforms, policies that can mend the power and energy sectors

VISUAL: ANWAR SOHEL

In the 15-plus years of the last government, the energy and power sectors of Bangladesh have been all but destroyed. It would not only require a long time to recover, but also many unpleasant and difficult decisions. The country has been made heavily dependent on imported fuels as well as power. Capacity charges for private power plants and payment to international oil companies (IOCs) for gas production have to be paid in hard currency. There are numerous other hard currency requirements, such as building transmission and distribution infrastructure, regasification charges, and gas exploration. To satisfy all energy and electricity demands in the country, more than $20 billion would be required annually, which will keep increasing as demand rises and gas production drops and is expected to exceed $30 billion by the end of the decade.

Wrong planning, bad management and corrupt practices by the last government have distorted the energy and power sectors, which may be linked to: i) the enactment of the special provisions law in 2010; ii) overcapacity in power generation and the oil-fired power plants; iii) arbitrary slowdown in gas exploration; iv) failure to control losses in gas transmission and distribution; and v) failure to increase renewable energy penetration.

The Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010 was meant to expedite the construction of oil-fired power plants and to supply liquid fuels (diesel and furnace oil) to these power plants to overcome the severe electricity shortage then. It was supposed to be a short-term measure to bypass the strict and time-consuming tendering process for public sector procurement. But the act was indiscriminately used for all significant procurements in the power and energy sectors. Using this law, the government started building power plant after power plant without regard to fuel availability or the actual demand for electricity. A decision that should have been technical in nature, made by engineers, was made by bureaucrats and politicians. Even though the country required a combination of different types (baseload, intermediate and peaking) of power plants, it was considered more profitable for politicians and their friends to build large baseload, combined-cycle, gas- and coal-based power plants, rather than the much-needed small or single-cycle gas-fired peaking power plants that can replace the very expensive oil-fuelled ones. The new megaprojects obviously meant hefty kickbacks and other benefits.

Construction of oil-fired power plants amounting to nearly 25 percent of the total power generation capacity was a grave offence made possible by the act. These additions caused the electricity price to go up and put enormous pressure on our foreign currency reserves. The grid was made to always be dependent on these oil-fired power plants. The fuel mix was designed in such a way that removing these power plants would lead to load-shedding and thus great public suffering. No effort was made to remove these expensive power plants, which were being used throughout the day, even at times when solar electricity was available. A calculation shows that strategic integration of solar power plants to the grid could have prevented the use of $500 million worth of liquid fuel annually.

Natural gas theft was always a significant issue in the energy sector of Bangladesh, but grew to gigantic proportions under the last government's rule of over 15 years. The Bangladesh Oil, Gas and Mineral Corporation, also known as Petrobangla, came up with a new term for the gas sector system loss called Unaccounted for Gas (UFG): the gas lost due to pilferage and leakages in the transmission and distribution lines. The UFG has grown in recent years: the average of the years 2020, 2021 and 2022 has been 9.8 percent. International good practices stipulate that this loss be below two percent. A gas network that has a technical system loss above three percent demands immediate remedial action. Non-technical system loss has been a problem because of gas theft in the industrial and domestic sectors. Domestic consumption is shown to be 11 percent, but no one knows the real amount, because most domestic connections are unmetered. Experts and sector insiders claim it cannot be more than six percent. Illegal lines and connections exist all over the country. Therefore, as much as five percent of the total gas is pilfered in the domestic sector. When we add this to the non-technical UFG, the gas loss amounts to more than 10 percent of the total gas supplied. The fact that we don't have enough gas to meet the demand and have to import liquefied natural gas (LNG) implies that any gas loss should be accounted as LNG loss. At the LNG price of $15 per MMBtu, this lost gas annually amounts to around $1 billion.

To prevent further occurrences of this kind of loss a set of reforms and/or policy changes are needed.

Power plant building policy

To prevent overcapacity of power plants and wrong generation planning, the following are recommended:

* Construction of new power plants should be decided by a committee, housed preferably at the Bangladesh Energy Regulatory Commission (BERC), composed of competent technical persons.

* Least-cost planning must be followed.

* Reserve margin (excess generation capacity over peak demand) should only be allowed to exceed 15 percent if sufficient justification is provided that it is required for accommodating intermittent renewables.

* Fuel supply must be ensured by the relevant authority before approval by BERC.

* Liquid fuel-based power plants can only be used as peaking power plants (maximum daily use must be less than four hours).

* During daylight hours, solar power plants must be used backed by either batteries or gas-fired simple-cycle power plants.


Gas exploration policy

Adequate funds must be provided to fully resume and continue gas exploration without hindrance until the point where experts and BERC are convinced that further exploration won't be cost-effective. This point may be reached when the exploration success ratio falls below 1:10, i.e., when more than 10 exploratory wells need to be drilled to yield one success.

Gas utilisation policy

One difficult issue that all governments in Bangladesh have faced is gas allocation to various sectors; the other issue they failed to tackle is to decide whether a sector should continue to exist. All sectors have been given equal priority. Prioritisation of supply to sectors critical to the economy has become an urgent issue. To ensure reliable supply of gas to the industrial sector, the possibility of the sector importing its own gas should be considered. Along with these policy reforms, rules and regulations to reduce system loss and to prevent theft are essential.

Renewable energy policy reform

The previous government failed miserably to increase the penetration of renewable energy. Even though there are several constraints in implementing renewable energy projects, most experts believe that 10 percent renewable energy in the fuel mix could have been achieved. The most blatant failure is the continuing use of fossil fuels in power generation during daylight hours; this could easily have been substituted by either rooftop solar PV installations or grid-tied solar PV power plants. A new policy must be formulated considering the realities of having to achieve net zero emission. Year-wise targets should be set for utilities, and fines must be imposed if the targets are not met.

Dr Ijaz Hossain is former dean of engineering at Bangladesh University of Engineering and Technology (BUET).​

 

[Saif]

Coal power plants charge astronomical costs for fuel

Coal-fired power plants enjoy free rein to unfairly influence the cost of its fuel on the one hand, while on the other, they burn coal having quality far less than the one the government has paid...

www.newagebd.net

Coal power plants charge astronomical costs for fuel
Emran Hossain 04 October, 2024, 00:22

Coal-fired power plants enjoy free rein to unfairly influence the cost of its fuel on the one hand, while on the other, they burn coal having quality far less than the one the government has paid for, revealed official documents and interviews with officials of major coal power plants and Bangladesh Power Development Board.

The wrecking of the economy as well as the environment by coal power plants is occurring almost silently, energy experts said, thanks to the controversial power deals and the sheer monitoring failure of the Power Development Board.

The country’s coal power plants mostly import their own fuel and there are instances in which the power development board could not even ask about the source of the coal, paying whatever the power plants demanded, furnishing invoices that were often believed to be manufactured.

The private coal import, energy experts said, also offers a golden opportunity for under and over invoicing since the import often takes place by a company related to the company owning the power plant.

‘The coal power plants are holding people hostage. There will be no relief from the situation unless the government fixes prices for importing coal of certain qualities,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development, a platform of green activists.

India’s Adani Power Limited is considered a classic example of how far the coal power producers can go in manipulating their fuel price.

Adani produced per unit power spending Tk 7.54 for fuel last year, the second highest among the fuel cost charged by six major coal power plants in the country.

The 1,600MW Adani power plant in Godda has boilers designed to burn coal with calorific value ranges between 3,500 kcal/kg and 5,000 kcal/kg, showed a document.

The power purchase agreement, however, allowed Adani to charge for coal with the calorific value of 6,322 kcal/kg. The power development board was not able to ask Adani about the coal’s source as its power purchase agreement with the Indian company omitted the provision for it to be informed about the source of the coal. Documents also revealed that coal with the same calorific value could be bought with varying prices on different markets.

Coal with the calorific value of 3,500 kcal/kg is the lowest quality of coal in the world, officials at coal power plants said, adding that the use of such low-quality coal is only viable when it is domestically sourced.

‘You never know. Maybe Adani is using coal mined in Jahrkhand, where the Godda power plant is located,’ said a power development board official seeking anonymity.

Jharkhand is one of the world’s largest coal miners.

On September 30, 2022, Adani floated an international tender for importing coal for the Godda power plant, selecting in December the same year the Adani Enterprise to import coal from the group’s Carmichael coal mine in Australia using sea port and railway owned, again, by Adani.

The highest fuel cost for producing a unit of power last year was reported by the 1320MW Rampal power plant, a joint venture between Bangladesh and India. Rampal spent Tk 8.16 for fuel in producing a unit of electricity, around 30 per cent more than the fuel cost spent by the 1200MW Matarbari power plant.

‘We import coal through open tender. There is nothing more to say about this,’ said Ziaur Rahman, chief procurement officer at Bangladesh India Friendship Company that owns Rampal power plant.

The Rampal plant’s boiler is designed to handle coal with calorific values ranged between 5,500kcal/kg and 5,800kcal/kg, plant authorities have said, claiming that they use coal with calorific values between 5,300 kcal/kg and 6,100 kcal/kg.

But New Age has obtained documents showing that the Rampal plant imported coal with calorific value of 5,036 kcal/kg in May and there were instances when it imported coal with less calorific value.

The documents also revealed that the Rampal power plant spent around $15 per tonne for carrying the imported coal from the Bay of Bengal to the power plant using lighterage vessels. PDB officials called the $15 freight charge as very high.

A lighterage vessel can carry 5,000 tonnes of cargo.

Bashundhara Group that imports coal for Rampal in 55,000-tonne capacity ships sends the cargo using lighterage vessels from the Bay of Bengal to the edge of the Sundarbans through 5–6 shipments every month.

‘High fuel cost could also imply lack of plant efficiency, suggesting waste of fuel,’ said Monowar Hossain, superintendent engineer of 1200MW Matarbari coal power plant.

At the Matarbari coal power plant in Cox’s Bazar, the boiler is designed to burn coal with calorific value between 4200kcal/kg and 5200 kcal/kg. The plant authorities say they mostly use coal with calorific value of 4600 kcal/kg.

Matarbari uses the least expensive fuel as it produced a unit of power spending Tk 6.13 last year.

At the 1320MW Payra power plant in Patuakhali, a mixture of coal is used as fuel. ‘We use a mixture of coal for power generation,’ said its plant manager Shah Abdul Moula.

Officials at major power plants interviewed for the report revealed that they all mixed coal for power generation trying to maintain an average calorific value in line with their design.

Coal prices greatly differ depending on their quality.

On October 1, the price range for five categories of coal in the Indonesian market was between $31.78 and $127.72.

‘Plants are expected to use the best quality coal,’ said Shafiqul Alam, lead energy adviser at the Institute for Energy Economics and Financial Analysis.

‘A higher calorific value coal will generate more energy compared with lower calorific value coal during combustion process. This means with a higher calorific value of coal, less fuel will be consumed,’ said Shafiq.

The power development board estimated that the fuel cost charged by the Adani Power could be lowered by a third by cutting off the unjust privileges awarded to them for importing fuel.

PDB officials refused to speak on record. A committee formed by the interim government is currently evaluating power deals signed during the tenure of the now ousted prime minister Sheikh Hasina’s repressive regime under the protection of an indemnity law.

The country’s power generation capacity increased by six folds over Hasina’s 15-year tenure, astronomically raising the power development board’s loss to 100 per cent.​

 

[Saif]

Govt should address prickly coal issues of power plants

THE use of coal having calorific values lower than what are stipulated or designed in producing power by independent coal-fired plants has greatly hampered power generation, adding...

www.newagebd.net

Govt should address prickly coal issues of power plants
05 October, 2024, 00:00

THE use of coal having calorific values lower than what are stipulated or designed in producing power by independent coal-fired plants has greatly hampered power generation, adding to the cost, draining the national exchequer, harming the environment and burdening consumers by way of increased tariff. Controversial power purchase agreements coupled with the oversight failure of government authorities have given the power producers free rein to unfairly influence their fuel cost. Plant owners import fuel on their own and leave the Power Development Board with no option to ask about the source of the coal imported, allowing the plants to charge the government at will with invoices that are often believed manufactured. Experts believe that private coal import has also offered the scope for under- and over-invoicing as the coal import takes place at the hands of the companies that run the plants. Experts, therefore, believe that the plants have held people hostage and see no way out from the situation unless the government sets the price of coal, the cost of its transport and the calorific values of coal. Power Development Board estimates show that the fuel cost that Adani Power charge could be lowered by a third by not dishing out the privileges it has so far been given for fuel import.

The 1.6GW Adani plant at Godda in India is designed to burn coal with calorific values in the ranges of 3,500–5,000 kilocalories a kilogram whilst the power agreement has allowed Adani to charge for coal having the calorific value of 6,322kcal/kg and the Power Development Board cannot ask anything about the source of the coal imported as the agreement has no such provision. The 1.3GW Rampal thermal power plant, which the joint venture Bangladesh India Friendship Company owns, is designed to handle coal having calorific values in the ranges of 5,500–5,800kcal/kg whilst plant authorities claim that they use coal having calorific values in the ranges of 5,300–6,100 kcal/kg. But documents say, as New Age reported on October 4, that the plant imported coal having the calorific value of 5,036 kcal/kg in May and there are instances of even coal with lower calorific values having been imported. The cost of the fuel that the Rampal plant uses is about 30 per cent costlier than the cost of the fuel that the 1.2GW Matarbari plant uses. The freight charge that the Rampal plant shows, as power board officials say, is also very high. A high fuel cost also implies lack of plant efficiency, suggesting the waste of fuel. Coal with high calorific value generates more energy and a low consumption of fuel in the combustion process.

The government is learnt to have set up a committee to evaluate the power purchase agreements signed during the 15 years of the Awami League government, toppled on August 5, under the shield of an indemnity law. The government should repeal the indemnity law and hold the people responsible for such a chaotic energy situation to account. But it should first urgently attend to the issues of the use of coal and its import for power plants.​

 

[Saif]

Banglalink launches new co-branded cards in collaboration with EBL, Mastercard

Banglalink, in collaboration with Eastern Bank PLC (EBL) and Mastercard, has launched three new co-branded cards exclusively for Banglalink Orange Club members. These cards – the Mastercard World Credit Card, Mastercard Titanium Credit Card, and Mastercard Prepaid Card – offer a range o

thefinancialexpress.com.bd

Spot LNG supply
Govt mulls over fresh int'l bid
M Azizur Rahman
Published :
Oct 08, 2024 00:23
Updated :
Oct 08, 2024 00:23

The interim government is eyeing to float an international tender afresh to seek expressions of interest (EoIs) from interested global players for the supply of liquefied natural gas (LNG) on a spot basis.

Officials said the state-owned Rupantarita Prakritik Gas Company Ltd (RPGCL), a wholly-owned subsidiary of Petrobangla, would float the tender soon.

The RPGCL is now carrying out all necessary work, including vetting from law ministry, before inviting the bid.

It will float the tender seeking EoIs in line with the government's policy to continue importing LNG through both long-term contracts and spot deals.

Currently, a total of 23 LNG suppliers are shortlisted by the RPGCL for supplying LNG from the spot market.

The RPGCL sought prices from all of them for purchasing LNG from the spot market, but only half a dozen suppliers took part in the bidding.

The government has moved afresh to float tender to ensure that more such global suppliers participate in the bidding and the purchasing price of LNG from the spot market becomes competitive.

Sources said the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources has not decided yet whether the existing 23 listed suppliers will be removed from the suppliers' list or not.

Like the existing ones, the RPGCL has planned to pick up a pool of LNG suppliers who would be interested in supplying LNG on a spot basis in line with the RPGCL's request, they added.

The shortlisted suppliers would be requested to submit price quotations for supplying LNG time to time, when Petrobangla would feel necessary, he said elaborating the process of buying LNG under spot terms.

LNG would be purchased from those shortlisted firms, whose offer would be best suited from the funds of the government of Bangladesh, the sources added.

They would be asked to supply lean LNG as per specification on a delivered ex-ship basis to LNG terminals-floating, storage and regasification units (FSRU) and land-based LNG terminal-of Petrobangla near Moheshkhali Island or any other place in Bangladesh.

LNG suppliers will be shortlisted based on but not limited to the age of the firm, historical LNG delivery experience both in FSRU-based and land-based terminals, and ability to delivery lean LNG.

Shortlisted LNG suppliers will be notified and provided with draft master sale and purchase agreement, and draft confidentiality agreement, which would be required to be signed for selection.

The interested LNG suppliers may either be a single or joint venture of more than one firm or associate firm may also be included, if necessary.

The imported spot LNG should have a gross heating value ranging 1,025-1,100 British thermal unit (Btu) per standard cubic feet, according to sources.

The imported spot LNG would require to be blended with locally produced natural gas, which is sulfur-free and sweet gas, before it is delivered to end-users.

The selected firms would supply LNG on a delivered ex-ship basis and the vessel size should range between 125,000 and 220,000 cubic metres.

Sources said the RPGCL would buy spot LNG based on market prices, availability of terminals, increased regasification capacity and downstream demand.

The RPGCL is in charge of the LNG purchase for the country.​

 

[Saif]

Gas discovery in Bhola could be a game changer

Bangladesh has recently made an extraordinary breakthrough with the discovery of a massive 2.5 trillion cubic feet (tcf) of natural gas reserves in the Bhola district. This discovery was achieved with the technological assistance of the Russian energy giant Gazprom, marking one of the most signific

thefinancialexpress.com.bd

Gas discovery in Bhola could be a game changer
Mohammed Imran Chowdhury
Published :
Oct 08, 2024 21:33
Updated :
Oct 08, 2024 21:33

A gas field in Bhola Photo : Agency

Bangladesh has recently made an extraordinary breakthrough with the discovery of a massive 2.5 trillion cubic feet (tcf) of natural gas reserves in the Bhola district. This discovery was achieved with the technological assistance of the Russian energy giant Gazprom, marking one of the most significant finds in the country's history. This new reserve not only provides a critical boost to Bangladesh's energy security but also holds substantial implications for its geopolitical positioning in the region and beyond.

A STRATEGIC ENERGY ASSET: The Bhola gas discovery comes at a crucial time when the country is struggling with energy shortages, frequent blackouts, and a reliance on imported energy. The newfound reserves will likely lessen the country's dependency on imported Liquefied Natural Gas (LNG) from countries like Qatar and Oman. With 5.1 tcf of natural gas now in its grasp, Bangladesh has the potential to meet domestic energy needs for the coming decades, powering industries, households, and transport sectors while significantly reducing its import bills.

This energy independence will enhance Bangladesh's strategic standing within South Asia. As one of the most densely populated countries, securing a stable domestic energy supply will bolster its economic growth and help sustain its industrial sectors, particularly textiles and agriculture, which are vital contributors to the nation's GDP.

GEOPOLITICAL SHIFTS AND REGIONAL DIPLOMACY: The discovery, facilitated by Gazprom, highlights Bangladesh's evolving ties with Russia, a country that has long been a significant player in the global energy sector. This partnership could mark a shift in Bangladesh's geopolitical alliances. While traditionally maintaining close ties with China, Bangladesh's collaboration with Russia on this gas project demonstrates the intent to diversify its international partnerships.

Moreover, as Bangladesh becomes more energy-independent, its bargaining power in regional diplomatic dialogues will increase. The country could adopt a more assertive stance in negotiations over cross-border energy issues, such as the import of electricity from neighbouring India and Bhutan or future energy grid connections with Southeast Asia.

Bangladesh's increased energy production could also give it an opportunity to become a regional energy hub. The gas from Bhola could be exported to neighbouring countries, such as India and Myanmar, enhancing Bangladesh's role in South Asia's energy market.

BALANCING RELATIONS WITH MAJOR POWERS: The involvement of Gazprom in this discovery signals a deepening relationship with Russia, but it also poses a delicate balancing act in Bangladesh's foreign policy. The U.S. and China, both of which are major stakeholders in Bangladesh's development, may view the growing Russian presence with some caution.

As Russia's influence in the region grows through energy ties, Bangladesh will need to navigate its relationships carefully to avoid alienating either of these global powers. This is especially important as Bangladesh remains a beneficiary of U.S. development aid and is a key partner in China's Belt and Road Initiative (BRI).

ECONOMIC BENEFITS AND INDUSTRIAL GROWTH: From an economic perspective, the discovery could help Bangladesh boost its industrial sector and reduce energy costs. Natural gas plays a critical role in powering Bangladesh's industrial zones, particularly in the production of fertilisers, power generation, and the country's thriving textile sector. With an abundant supply of natural gas, domestic industries will become more competitive, reducing production costs and making Bangladeshi products more appealing in international markets.

Additionally, the discovery has the potential to attract more foreign direct investment (FDI) into Bangladesh's energy sector. With proven reserves, international companies may see Bangladesh as a more attractive destination for energy exploration and development projects. Such investments could lead to new job opportunities, technology transfers, and improved infrastructure in the country.

CHALLENGES AND ENVIRONMENTAL CONSIDERATIONS: While the discovery is a significant achievement for Bangladesh, it also brings new challenges. The extraction, transportation, and distribution of natural gas require significant infrastructure investment. The government will need to ensure these activities are accomplished efficiently and transparently to avoid mismanagement and corruption, issues that have plagued many resource-rich nations in the past.

Furthermore, there is growing global pressure to move away from fossil fuels towards renewable energy sources. Bangladesh, like many developing countries, faces a difficult dilemma: balancing immediate energy needs and economic development with long-term sustainability goals. The country must ensure that while it takes advantage of these newfound gas reserves, it also invests in renewable energy projects to align with global environmental commitments.

Mohammed Imran Chowdhury is an ex-banker and a financial consultant.​