[🇧🇩] Energy Security of Bangladesh

[Saif]

HC to deliver verdict over quick rental law Nov 14

Sections 9 and 6(2) of the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 protect rental and quick rental power plants from legal challenges

www.thedailystar.net

HC to deliver verdict over quick rental law Nov 14

File photo of Bangladesh High Court

The High Court today fixed November 14 for delivering the verdict on a writ petition that challenged the constitutionality of two sections of the quick rental law.

Sections 9 and 6(2) of the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 protect rental and quick rental power plants from legal challenges and give the energy minister sole authority to approve electricity purchase plans, according the petition.

Today, the HC bench of Justice Farah Mahbub and Justice Debasish Roy Chowdhury set the date for passing the judgement after concluding the hearing on the petition.

Following the petition, the HC on September 2 this year asked the authorities concerned of the government to explain why sections 9 and 6(2) of the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 should not be declared unconstitutional.

Section 9 states that no question about any action done or deemed to be done, and any order or direction given under this law, cannot be raised before any court.

Section 6 (2) says that any planning or proposal related to the buying or investment decisions has to be approved by the energy minister and sent to the cabinet committee for approval after communicating and bargaining with one or more institutions following section 7 of the act.

The HC issued the rule following a writ petition filed by Supreme Court lawyers Dr Shahdeen Malik and Md Tayeb-Ul-Islam Showrov challenging the legality of sections 9 and 6(2) of the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010.

Lawyer Shahdeen Malik placed arguments on the petition while Attorney General Md Asaduzzaman and Deputy Attorney General Md Tanim Khan represented the state during the hearing.​

 

[Saif]

Renewable energy push lacks clarity

Bangladesh’s efforts to adopt renewable energy do not have clarity over the goal, and renewable financing has also proved to be largely inadequate, according to a study.

www.thedailystar.net

Renewable energy push lacks clarity
Shows study while revealing huge financing gap

As of June 2023, renewable resources, including solar, wind, hydro and biomass, collectively hold an installed capacity of 1,183MW, constituting a meagre 4.5 percent of the country’s total installed capacity. Photo: Star/file

Bangladesh's efforts to adopt renewable energy do not have clarity over the goal, and renewable financing has also proved to be largely inadequate, according to a study.

"So, it will not be possible to attain the renewable energy goal if the targets are not aligned with reality and adequate investment is not ensured," said Shah Md Ahsan Habib, professor at the Bangladesh Institute of Bank Management (BIBM).

While presenting the findings of the study, titled "Renewable Energy Financing in Bangladesh: Alignment with the National Policies", at a workshop in Dhaka yesterday, he said, "The government should align the target first. Then the plan from where you will get the investment and resources."

The Bangladesh Institute of Bank Management (BIBM) organised the workshop at its auditorium in the capital's Mirpur.

Referring to the findings, Habib said the government has set a target for achieving a 40 percent renewable energy share in total energy production by 2041 in the Mujib Climate Prosperity Plan (MCPP).

Despite initial targets of generating 5 percent of its electricity from renewables by 2015 and 10 percent by 2020, Bangladesh has fallen well short of its goals

On the other hand, in the Integrated Energy and Power Master Plan (IEPMP) 2023, the government has set a lower target of achieving 8.8 percent renewable energy production by the same year 2041, he mentioned.

This means, he said the IEPMP was developed without taking into consideration the energy- mix suggested in the MCPP. It also shows a serious lack of coordination among government agencies, said Habib.

Bangladesh currently incorporates 2.93 percent of renewable energy, amounting to 650.14 MW, within the country's total energy production of 22,215 MW. A substantial portion of about 48 percent, or 10,678 MW, of the total power generation relies on natural gas, according to the study.

As of June 2023, renewable resources, including solar, wind, hydro and biomass, collectively hold an installed capacity of 1,183 MW, constituting a meagre 4.5 percent of the country's total installed capacity.

Here, solar power alone takes the lead, accounting for nearly 80 percent of all renewable sources, showed the study.

Habib said despite initial targets of generating 5 percent of its electricity from renewables by 2015 and 10 percent by 2020, as of June 2023, Bangladesh has fallen well short of its goals.

Citing another study of the local think tank Centre for Policy Dialogue (CPD), Habib said Bangladesh will require an estimated investment of $1.71 billion per year from 2024 to 2041 to achieve the ambitious 40 percent renewable energy target by 2041.

The Institute for Energy Economics and Financial Analysis (IEEFA), which studies energy markets, trends and policies, also estimates the annual investment at $1.53 billion to $1.71 billion.

This investment, however, does not cover the cost of grid modernisation and storage facilities.

INADEQUATE FINANCING

Despite improvement, financing for renewable energy production shows a visible gap, Habib shared.

He said small-scale local green entrepreneurs struggle to secure funding due to difficulties in proving creditworthiness, lack of proper documents and high transaction costs.

"Banks and finance companies often receive applications without proper documentation, eventually making it difficult to provide loans," said the BIBM professor.

Habib said banks and finance companies need to play a crucial role in ensuring adequate investment in the renewable energy sector to attain the nationally determined targets.

Habib said to achieve the 40 percent target, the country required Tk 20,520 crore investment in 2023, while banks and financial institutions disbursed only Tk 742 crore, leaving an investment gap of Tk 19,778 crore.

Whereas to achieve the 8.8 percent target set by the IEPMP, the country required Tk 4,514 crore investment in 2023, still falling short by Tk 3,772 crore from the amount disbursed in 2023, he mentioned.

Habib, who was among the five-member research team, said the yearly financing or investment gap needs to be covered by other sources like foreign direct investment (FDI) or by additional efforts by banks or finance companies.

Nurun Nahar, deputy governor of Bangladesh Bank, Md Akhtaruzzaman, director general at BIBM, Md Alamgir, associate professor, Md Ali Hossain Prodhania, supernumerary professor, SM Mahbub Alam, joint secretary of the Road Transport and Highways Division, Mohammad Delwar Hossain, joint director at Bangladesh Bank and other top officials also spoke at the event.​

 

[Saif]

Govt needs to up investments in renewable energy

AN OVERWHELMING dependence on imported fossil fuels for power generation and the absence of initiatives to promote cost-competitive renewable energy show a general disinclination...

www.newagebd.net

Govt needs to up investments in renewable energy
09 November, 2024, 00:00

AN OVERWHELMING dependence on imported fossil fuels for power generation and the absence of initiatives to promote cost-competitive renewable energy show a general disinclination towards renewable energy. A report by the United States-based Institute for Energy Economics and Financial Analysis says that Bangladesh had no significant investment in renewable energy in 2023. This suggests that there is a lack of sincerity and initiatives on part of the authorities to switch from fossil fuels to renewables for electricity production. Successive governments, especially the Awami League government toppled on August 5, came up with a number of road maps and promises for transition from fossil fuel to renewable energy in 5–15 years. But when it came to investment and real work, there was a marked disinclination. This is what is problematic and worrying. Talks about a transition to renewable energy appear to be nothing more than rhetorical. The Awami League government set a target to achieve a 40 per cent renewable energy share in the total energy production by 2041 in the Mujib Climate Prosperity Plan while in the Integrated Energy and Power Master Plan 2023, the government set a lower target of achieving 8.8 per cent renewable energy production.

The country as a signatory to the Paris agreement, moreover, is meant to generate 100 per cent electricity from renewable energy by 2050 as it has pledged in the Climate Vulnerable Forum. The government wanted to generate 5 per cent of its electricity from renewables by 2015 and 10 per cent by 2020. It now produces less than 5 per cent of its electricity from renewable sources. Studies show that the investment gap in achieving even the minimum target of producing 10 per cent electricity from renewables is huge. The Institute for Energy Economics and Financial Analysis estimates that Bangladesh needs an annual investment of $1.53–1.71 billion to achieve the ambitious 40 per cent renewable energy target by 2041. The government has, however, not been able to prioritise the issue and open up avenues or direct the banks to invest in this sector. The authorities have also been reluctant to explore vast possibilities of power generation from renewable sources such as solar and wind. The share of solar and wind in power generation in the country, in fact, dropped to 0.77 per cent in 2022 from 0.93 per cent in 2015, keeping to the Berlin-based think tank Agora Energiewende. The lack of promotion and the placement of barriers to rooftop solar systems have also held back the potential of solar power. An earlier report by the Institute for Energy Economics and Financial Analysis published in December 2023 says that Bangladesh lags way behind its neighbours in promoting rooftop solar energy and that 5GW can be produced using only the roofs of existing industries.

The authorities should, therefore, review its renewable energy policy and recommit to renewable energy. The authorities must invest adequately and facilitate private investment in the sector.​

 

[Saif]

Power master plan will strain the economy

Bangladesh will need to invest around $50 billion to implement its Integrated Energy and Power Master Plan, according to a report by Market Forces, an Australia-based global environment advocate.

www.thedailystar.net

Power master plan will strain the economy
Study finds Bangladesh will need $50b for LNG by 2041; researchers say inflated power demand was made for ‘earning’ capacity charge

Bangladesh will need to invest around $50 billion to implement its Integrated Energy and Power Master Plan, according to a report by Market Forces, an Australia-based global environment advocate.

This investment will go toward 41 LNG-based power projects and seven LNG import facilities by 2041.

The proposed 37,400 megawatts (MW) LNG-based power capacity would surpass the country's total existing power generation capacity of 27,086 MW. If the master plan is implemented, the nation's gas power capacity would triple in size, found the study.

The report titled "Expensive LNG Expansion: How Foreign Gas Interests are a Climate Disaster for Bangladesh" was released yesterday at a press conference at the Jatiya Press Club. Three local organisations -- Waterkeepers Bangladesh, Fossil Free Chattogram, and Dhoritri Rokkhay Amra (Dhora) -- co-authored the study.

The master plan for 2024-2050 estimates that the country needto increase its annual LNG import capacity to 30 million tonnes by 2041, which is four times the current capacity.

"By 2041, Bangladesh would face the additional cost burden of importing LNG that would be $7-11 billion per year, two to three times the cost of all fossil fuel imports today," reads the study.

The list of the 41 power projects was compiled by Market Forces based on data which was available up to 2023, from both internal and external sources.

Speakers at the press conference said some vested interest groups had used inflated power demand projections in different public policy documents during the Awami League rule to earn higher capacity charges.

Capacity charge is the bill the government pays to power producers for the time they sit idle.

According to the report, the estimated cost of the 41 power plants in Chattogram, Dhaka and Barisal divisions will be $36 billion, and the LNG import facilities like floating storage and regasification units will cost $14 billion.

It mentions that the 21 proposed plants in Chattogram are projected to release 1.3 billion tonnes of carbon dioxide equivalent (CO2-e) over their lifetimes (15 to 25 years), six times higher than Bangladesh's current annual emissions.

"These threaten at least 26 threatened species which rely on the local forests, including the Asian elephant, Clouded Leopard and a scaly anteater known as the Chinese Pangolin. There are mounting concerns over human rights of women and local community members following violations in similar gas developments," the report said.

"More than one million families rely on traditional livelihoods like tourism, fishing and dry fish, salt production, betel leaf cultivation and agriculture in the Cox's Bazar region in Chattogram. These critical industries, connected to the lifeline and livelihoods of the people in this area, are at threat of highly polluting carbon-intensive projects."

Prof Anu Muhammad, a central leader of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, said the previous governments, including those of the Awami League, always served the interests of some global multilateral energy groups.

"Instead of emphasising exploration of local gas, they went for high-cost LNG imports," he said, adding that it is clear now how the import of fossil fuels and LNG poses a financial burden on the country and is associated with the destruction of life and nature.

He demanded cancellation of the master plan, prepared mainly by Japanese experts.

"We must adopt a plan by local experts who will prepare it in favour of Bangladesh."

Shafiqul Alam, lead analyst for Bangladesh energy at the Institute for Energy Economics and Financial Analysis, said the government should focus on exploring local gas and implementing renewable energy projects.

"We are under an economic burden due to the import of LNG and other fossil fuels. It is not possible to stop the imports, but we must reduce the dependency on it and improve energy efficiency," he said.

Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said the power demand projection in the master plan is absurd.

"Only 17 years left before we enter 2041, but we estimated our power demand at 65,000MW, which is more than three times the current demand. The previous Awami League government increased the power generation capacity based on such false demand projections and paid capacity charges to power plants," he said.

He said the existing capacity of around 27,086 MW is enough to meet the power demand till 2030 and the demand will not exceed 27,000MW by 2041. "If we can set up new plants with a total capacity of around 33,000MW, it will be enough."

He demanded conducting energy audits in all government and non-government offices, curbing corruption, and ensuing the use of energy-efficient technologies.

The report, presented by Munira Chowdhury, Asia energy analyst at Market Forces, said the capital expenditure required to realise Bangladesh's LNG power plans could instead fund 62 gigawatts (GW) of new clean, renewable power, enough to replace most of the country's existing gas power fleet, or replace its coal power capacity four times over.

According to the study, Bangladesh has enormous renewable energy potential, with the capacity to install up to 240 GW of solar power and 30 GW of onshore wind.

DU teacher Moshahida Sultana, Megu Fukuzawa, Asia energy finance campaigner at Market Forces, and Amanullah Parag, South Asia mobilisation coordinator at 350.org, also spoke at the event.​

 

[Saif]

17 power plants spend Tk 1,500cr producing no power

Seventeen state-owned power plants that generated no electricity at all during the past fiscal year spent over Tk 1,549 crore and also consumed 56.78 lakh units of electricity from the national grid.

www.newagebd.net

17 power plants spend Tk 1,500cr producing no power
Emran Hossain 10 November, 2024, 00:35

Seventeen state-owned power plants that generated no electricity at all during the past fiscal year spent over Tk 1,549 crore and also consumed 56.78 lakh units of electricity from the national grid.

The 17 out-of-operation plants spent Tk 220 crore on fuel for giving their machines test runs, Tk 67.58 crore for maintenance, and over Tk 1,261 crore in salary and other costs, an account of the Bangladesh Power Development Board for 2023–24 shows.

Some of the plants, built in the 1970s and 1980s, finished their economic lives and their operation became a loss project due to excessive fuel consumption.

But some other power plants sat idle apparently owing to the indifference of the authorities that resulted in failure to do maintenance work in time, or failure to import spare parts, managers of these plants said.

‘Idle power plants did not supply power to the grid, but they needed power to periodically run many machines to keep them operable,’ said Zahurul Islam, chief engineer, Ghorashal power plant.

Three units of the seven-unit Ghorashal power plant did not produce any power, but required a large sum to pay salary to its 300 employees sitting idle.

The 65MW Unit-7 of the Ghorashal power plant remained out of operation since September 2022 for maintenance work which could not be completed over delay in importing spare parts.

The Ministry of Power, Energy and Mineral Resources took months to give the permission for the import, leaving the plant, commissioned on January 23, 2018 with 150 employees, out of operation for months.

The Unit-7consumed 26.48 lakh units of power from the national grid in the past fiscal for conducting test runs to keep the machines operable.

It also spent over Tk 21 lakh to buy fuel to run some of its machines, over Tk 7 crore for maintenance, and more than Tk 340 crore as fixed cost to cover staff salaries and other expenses, including hospitality expenditure.

The Ghorashal power plant’s 260MW Unit-3, commissioned on January 22, 2019, has remained out of operation since July 2021 due to a broken turbine blade.

The gas-fired plant ordered the import of the blade, but the process got stuck over a legal wrangle between the importer Smith Cogeneration and the government.

The Unit-3 required more than Tk 3.34 crore in maintenance cost and over Tk 277 crore as fixed cost in 2023–24.

The 110MW Unit-1 of the Ghorashal power plant, set up in 1974, was declared completely shut down on December 31, 2020.

But the BPDB account showed that the gas-based Unit-1 spent more than Tk 33 crore in maintenance, and over Tk 141 crore in fixed cost in 2023–24.

‘The expenses are actually for grid network. The Unit-1 does not exist but its premises accommodate a huge grid control room that is still functional,’ said Zahurul.

Energy experts have long questioned the economic viability of the Unit-1 and also some other aged power plants.

They said that Bangladesh could not afford spending such large amounts of money every year, especially in the current sorry state of its economy.

Bangladesh has drained its foreign reserve, particularly over the last decade, in power and energy sector, eventually seeking $4.7 billion in loan from the International Monetary Fund.

Mainly six gas-based power plants, including the three Ghorashal units that generated no electricity at all, caused large expenses. The 66MW Shahjibazar power plant, 115MW Shiddhirganj, and 330MW Shahjibazar are the three other plants.

The Unit-4 and 5 of Ghorashal are also sitting idle, though they are available for power generation, because of gas shortage.

The most striking case of wastage of resources, however, was presented by one of the eight diesel-based power plants that did not generate any electricity.

The 2MW Sandwip power plant spent over Tk 19 lakh in maintenance work and Tk 28.56 crore in fixed cost.

‘The fixed cost is unbelievable. The power plant is no more than a power generator,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development, commenting over the high fixed cost.

The 2MW Hatiya power plant spent over Tk 15.74 crore as fixed cost.

The 2MW Kutubdia power plant spent Tk 2.30 crore for fuel and Tk 22.53 crore in maintenance.

The diesel-based Bheramara, Saidpur and Barishal power plants, each with an installed generation capacity of 20MW, consumed substantial amount of electricity from the national grid.

Three wind-based power plants also did not produce any power during the past fiscal.

BPDB chairman Rezaul Karim did not respond to phone calls.

Bangladesh is struggling with a huge imbalance in its power generation system. With a currently installed capacity of 27,791MW, the country cannot steadily generate 12000MW.

Scores of power plants are sitting idle over fuel shortages and technical glitches.​