[🇧🇩] Energy Security of Bangladesh

[Saif]

Govt must fish renewable energy sector out of ills

PROGRESS in the renewable energy sector, which has even failed to take off in 16 years since the adoption of the renewable energy policy in 2008, has been mired...

www.newagebd.net

Govt must fish renewable energy sector out of ills
03 April, 2024, 00:00

PROGRESS in the renewable energy sector, which has even failed to take off in 16 years since the adoption of the renewable energy policy in 2008, has been mired in inexperience and mismanagement, which has over the years let in a group of entities largely composed of owners of poultry business, feed mill, real estate trade, infrastructure development and construction, apparel factories, a medical college hospital and a human resources export agency. Experts, who blame the situation for a slow expansion of the renewable energy market and costs far higher than the global average, say that this has happened because of lucrative tariffs that promise high profits, mostly effected in an intransparent manner, holding off well-meaning companies that could meaningfully take the sector forward. Experts say that a solar power project should ideally take 13 months for completion, but because of what the sector is mired in, it takes years to begin the construction after the signing of the power purchase agreement with the Power Development Board. The whole process, as experts say, often involve hidden costs and much of lobbying which stops reputed entities from investing in renewable energy. There are only 10 solar power plants with a combined capacity of 459.3MW in operation while the government had plans for a 10 per cent of its power from renewable sources by 2020.

The renewable energy sector in Bangladesh, as experts say, is too lucrative and it could attract investors of all kinds. This is why some investors in renewable energy are local giants that are also involved in the business of fossil fuel, which accounts for about 97 per cent of the installed power generation capacity of about 26.85GW. They are said to have earned millions of dollars in capacity payment, for the power not produced, and in other costs since 2008, as fossil fuel-based generation capacity has jumped more than five times since then. In such a situation, energy experts fear that the inordinate delay in the implementation of renewable energy projects, which spans up to eight years as is observed in Bangladesh projects, is deliberate as delayed renewable projects mean more use of fossil fuel and more profits. Renewable power tariff is also high keeping to global standards. The International Renewable Energy Agency in 2022 estimated the global average cost of solar power at Tk 5.42 a unit while tariff in Bangladesh ranges from Tk 7.68 to Tk 20.87, averaging more than Tk 10 a unit. An Institute for Energy Economics and Financial Analysis expert says that reasonable solar power tariff in Bangladesh should be Tk 8.5 a unit, which can be reduced to Tk 6.5 with some government initiatives. Because of all such problems, not a single quality renewable power project has been implemented in more than a decade and a half.

The renewable energy sector, thus, appears to be another handle of the government to transfer public money to private pockets riding on ill designs and mismanagement. The government must, therefore, purge the energy sector of all ills without delay.​

 

[Saif]

Problem of gas shortage that govt should look into

INDUSTRIES, mainly export-oriented textile, ceramic, knitting and apparel, are reported to be in a difficult situation so much so that insiders say that production in most of the factories has almost...

www.newagebd.net

Problem of gas shortage that govt should look into
08 February, 2025, 00:18

INDUSTRIES, mainly export-oriented textile, ceramic, knitting and apparel, are reported to be in a difficult situation so much so that insiders say that production in most of the factories has almost halved because of continued gas shortage. About 4,000mmcfd of gas is required, but the current supply remains below 3,000mmcfd, leaving both government and industry authorities struggling. Factories located in industrial hubs of Dhaka, Narayanganj, Gazipur, Narsingdi, Manikganj and Mymensingh do not receive uninterrupted gas supply. Many of the industries, especially ceramic industries, which require a supply with the pressure of 15 pounds per square inch, usually receive supply with the pressure of two to three pounds per square inch. Industry owners allege that the pressure sometimes declines to zero. The Textile Mills’ Association says that persistent gas shortage has already forced the closure of a half of the textile mills, noting that with no early action on part of the government, the situation would worsen in no time that could prompt the workers to take to the streets. Most of the industries say that they have been forced to run to half their capacity because of the gas shortage.

Owners further say that gas prices increased by about 345 per cent in nine years since 2015, with promises for an adequate supply, but it has not happened. Apparel factories which run on captive power plants say that the gas shortage has caused a 25 per cent decline in the sectoral production. Ceramic product manufacturers and exporters say that they count Tk 3 billion in losses every month because of the problem. The situation does not only affect production, harming product export, but also puts owners in distress in repaying bank loans, running the risk of becoming non-performing, damages machines and reduces their useful economic life, and increases maintenance costs. Four industry associations in January wrote to the government, seeking a resolution of the problem and describing the uncertainty and problems that the gas shortage has caused to the industries. Industry owners say that the government is diverting gas to fertiliser factories as it did not import fertiliser on time. This remains an issue for the government to look into. Petrobangla is reported to have envisaged no early improvement without adequate import of liquefied natural gas or gas extraction from new fields. The energy adviser has recently said that the situation at hand is unlikely to improve until new gas fields are developed.

A reserve crunch is holding back an adequate import of gas and no hydrocarbon exploration for long has only compounded the matter. The government should, therefore, tie loose ends here and there to improve the supply situation in the short run and earnestly get down to hydrocarbon exploration in the long run.​

 

[Saif]

India’s adani plant: Bangladesh asks for full power supply

Bangladesh has asked Adani Power to fully resume supplies from its 1,600-megawatt plant in India, a Bangladesh official said, after more than three months of reduced sales with supplies halved due to low winter demand and payment disputes.

www.thedailystar.net

India’s adani plant: Bangladesh asks for full power supply

The logo of the Adani group is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021. File photo: Reuters

Bangladesh has asked Adani Power to fully resume supplies from its 1,600-megawatt plant in India, a Bangladesh official said, after more than three months of reduced sales with supplies halved due to low winter demand and payment disputes.

Adani, which signed a 25-year contract under former prime minister Sheikh Hasina in 2017, has been supplying power from its $2 billion plant in India's Jharkhand state. The plant, with two units each of 800 megawatts capacity, sells exclusively to Bangladesh.

The Indian company halved supply to Bangladesh on October 31 due to payment delays as the country battled a foreign exchange shortage. This led to the shutdown of one unit on November 1, resulting in the plant operating at about 42 percent capacity.

Subsequently, Bangladesh told Adani to keep supplying only half the power.

The state-run Bangladesh Power Development Board (BPDB) said it had been paying $85 million a month to Adani to clear outstanding dues and has now told the company to resume supply from the second unit.

"As per our requirement today, they have planned to synchronise the second unit, but due to the high vibration, it didn't happen," BPDB Chairperson Md Rezaul Karim told Reuters, referring to some technical problems that stopped the unit from restarting on Monday.

"Right now, we are making a payment of $85 million per month. We are trying to pay more, and our intention is to reduce the overdue. Now there is no big issue with Adani."

BPDB and Adani officials were due to meet virtually yesterday following another meeting recently to work out various issues between them, said a source with direct knowledge of the matter who did not want to be named as he was not authorised to talk to the media.

An Adani Power spokesperson did not immediately respond to a request for comment. In December, an Adani source said BPDB owed the company about $900 million, while Karim said at the time the amount was only about $650 million.

The pricing dispute revolves around how power tariffs are calculated, with the 2017 agreement pricing off an average of two indexes. Adani's power costs Bangladesh about 55 percent more than the average of all Indian power sold to Dhaka, Reuters has reported.

A Bangladesh court has ordered an examination of the contract with Adani by a committee of experts, with results expected this month. This could potentially lead to contract renegotiations.

Last year, Bangladesh's interim government accused Adani of breaching the power-purchase agreement by withholding tax benefits that the Jharkhand plant received from New Delhi, Reuters reported in December citing documents. Bangladesh officials also said they were reviewing the contract.

A spokesperson for Adani told Reuters at the time that it had upheld all contractual obligations with Bangladesh and had no indication Dhaka was reviewing the contract.

Karim has not replied to Reuters' questions on whether the two sides have resolved their differences.

In November, US prosecutors indicted Adani Group founder Gautam Adani and seven other executives for their alleged role in a $265 million bribery scheme in India. Adani Group has called the US allegations "baseless".

In September, the Bangladesh government appointed a panel of experts to examine major energy deals signed by Hasina, who fled to New Delhi in August after deadly student-led protests.​

 

[Saif]

SPECIAL ENERGY FUNDS: Most of Tk 53,000cr misused by AL govt

Most of the special energy funds worth Tk 53,000 crore was misused by the Sheikh Hasina government, ousted in August past year amid a mass uprising, through breaching policies and guidelines during its 15 years of authoritarian regime.

www.newagebd.net

SPECIAL ENERGY FUNDS: Most of Tk 53,000cr misused by AL govt
Emran Hossain 11 February, 2025, 23:31

Most of the special energy funds worth Tk 53,000 crore was misused by the Sheikh Hasina government, ousted in August past year amid a mass uprising, through breaching policies and guidelines during its 15 years of authoritarian regime.

The funds — power sector development fund, gas development fund and energy security fund — were created with money kept aside from gas and electricity sales every month.

Reducing power and energy sector expenses by investing in least-cost power production, natural gas exploration and production and energy efficiency was the main target of creating the funds.

Until June past year, except for the amounts stuck in different stages of transaction and money deducted as tax, the aggregate size of the three funds was Tk 47,700 crore.

Of the amount, 97 per cent was used by the ousted AL government, showed Bangladesh Energy Regulatory Commission data, and about three-fourths of it was spent breaking the policies and guidelines stipulating the use of the funds.

Only Tk 1,500 crore was found with the funds operated by the Bangladesh Power Development Board, Petrobangla and BERC at the end of past financial year.

The use of the funds featured huge imports of liquefied natural gas with 44 per cent of the money or Tk 21,000 crore spent for the purpose. LNG import is blamed for plunging Bangladesh, to a great extent, into the dollar crisis and unprecedented inflation that have been around for over two years.

‘The past government did not care for any rules or laws in conducting its affairs. People never enjoyed the benefits of creating the funds,’ said M Shamasul Alam, energy adviser at the Consumers Association of Bangladesh.

The oldest of the funds, Gas Development Fund, was created on August 1, 2009, immediately after the past government had assumed power and increased the gas price by 11.22 per cent. The fund was created by keeping aside Tk 0.42 from the proceeds of selling a cubic metre of gas.

A good portion of the GDF, which was Tk 20,000 crore, was used for paying tax, though the fund was originally created under the condition of not being taxable.

Highlighting the trend of a rapid depletion in the reserve of gas, accounting for 73 per cent of commercial energy consumption, the GDF policy primarily focused on enhancing natural gas exploration and production.

Exploration projects used Tk 6,800 crore from the fund managed by the Petrobgangla.

In complete violation of the GDF policy, Tk 6,000 crore was taken as loan by the government from the fund for importing LNG.

Petrobangla data showed that past year the import of LNG to meet about a third of the gas demand raised the overall cost of gas by five folds.

Past year Petrobangla bought a unit of gas from state-owned oil companies at Tk 1.5 while the cost of buying the same amount of gas from international oil companies lifting gas from local fields stood at Tk 4.5. The import cost of a unit of LNG, on the other hand, was Tk 62. Imported LNG is blended with local natural gas for supply through the national grid.

‘Spending the GDF for LNG import despite frequent gas price increases was against all logic,’ said Shafiqul Alam, lead energy analyst, Bangladesh at the Institute for Energy Economics and Financial Analysis.

Since the beginning of LNG import in 2018, household consumers have seen their gas bills rise up to 35 per cent while hotels and restaurants have observed a 79 per cent rise in their prices. Industries, however, saw a 179 per cent increase in the gas prices in one go past year. The price hikes were always justified with increased expenses for LNG import.

‘A careful assessment is needed to find out what necessitated the use of the GDF for LNG import,’ said Shafiqul.

Energy experts have long expressed their frustration over the government’s reluctance to explore its own resources, particularly gas reserve, which is believed to be in abundance in the offshore. The reluctance is often linked to strong influence by global fossil fuel lobby, dictating Bangladesh’s power and energy policy over the past two decades.

Petrobangla even transferred Tk 3,000 crore from the GDF to the national exchequer under the controversial special law allowing the government to take away fund sitting idle with state-owned entities. The law, surplus fund act, came into force in 2022 when the past government was battling with a severe economic crisis.

The requirement of taking BERC permission to invest the GDF fund was never fulfilled.

The power sector development fund was created on February 1, 2011 by channelling Tk 0.15 on each unit of bulk electricity sales. The amount that the fund had available for use was Tk 15,700 crore until June past year.

Created with the objective to be invested in low-cost power generation projects, Tk 5,060 crore from the fund was used in five power generation projects, including Tk 1,184 crore going to the project of the coal-based 1,320MW Payra power plant.

A key condition of using the PSDF was that it ensures low-cost power generation. But projects taken under the fund added to the BPDB’s financial burden, particularly due to capacity charge entitlement of the power plants that were not needed in the first place. The past government even could not match the construction of the Payra power plant with required transmission network, keeping it idle for over one year.

The BPDB also took Tk 10,257 crore as loan from the PSDF.

‘Taking loan from the PSDF was the most outrageous move,’ said Shamasul Alam.

‘First, state-owned BPDB took a loan illegally from a fund created with money taken directly from the people’s pocket, and then it passed the responsibility of paying back the loan onto the shoulder of people,’ he observed.

He said that the use of the fund in coal-based power plants went against the spirit that led to the formation of the fund. The fund was primarily meant to be used for gas-based and renewable power generation.

No significant renewable energy investment was made under the PSDF.

Created on September 1, 2015, Tk 15,200 crore was deposited with the energy security fund until June past year. The fund received Tk 0.40 from per cubic metre of gas sales. Almost the entire fund — Tk 15,000 crore — was used for importing LNG on loans.

Established on April 10, 2018, the ESF guidelines said that its main goal was to protect future generation from potential energy crisis arising from using up natural gas reserve. The fund permitted LNG import, but said that it could also be used for the purpose of exploration, extraction, purification, transmission and distribution of natural gas.

The fund, also operated by the Petrobangla, could be used for achieving energy efficiency.

BERC officials said that interests on loans taken from the funds remained largely unpaid, without the authorities even caring to explain their decision of not paying back loans.

‘Energy funds’ administration is a microcosm of how things were done in the power and energy sector during AL’s regime,’ said Hasan Mehedi, member secretary of the Bangladesh Working Group on Ecology and Development, a platform of green activists.​

 

[Saif]

Adani reports machine trouble after Dhaka seeks full supply

The 1,346MW coal-based Adani power plant reported encountering technical trouble in starting its second unit following Bangladesh’s request to run the power plant in India’s Jharkhand at its full capacity.

www.newagebd.net

Adani reports machine trouble after Dhaka seeks full supply
Staff Correspondent 11 February, 2025, 23:34

The 1,346MW coal-based Adani power plant reported encountering technical trouble in starting its second unit following Bangladesh’s request to run the power plant in India’s Jharkhand at its full capacity.

The Adani power plant shut down one of its two units in early November after Bangladesh failed to clear its dues, the amount of which is debated by the two parties.

Bangladesh is expecting a surge in its power demand soon with the last month of the winter season passing amid forecast of the temperature soon going up.

‘There was a technical problem after Adani had started full operation on February 10, a day after we made the request to increase their supply,’ Bangladesh Power Development Board’s chairman Rezaul Karim told New Age.

A special team of engineers is expected to examine the problem today, he said, adding that the starting of full operation depended on fixing the technical glitch.

Bangladesh owes $550 million to Adani, the boss of the state-owned BPDB said.

A request sent to the company responsible for Adani’s public relations for a comment over the matter was not answered.

Earlier in September, last year the group’s chairman Gautam Adani wrote to interim government chief adviser Muhammad Yunus to clear his $800 million outstanding bills.

On Tuesday, Adani supplied about 740MW of electricity, maintaining the level of supply since it reduced its supply citing non-payment of dues in early November last year.

The BPDB officials said that they were making regular payments but there were some controversies that they expected to resolve through negotiations.

Bangladesh expressed its surprise and shock after Adani gave a fresh deadline to get a road map on the payment of its dues by November 7 or face complete suspension in power supply.

This was the second deadline given by the company. The earlier deadline expired on October 31, leading to the suspension of one of the two units.

Experts said that Bangladesh could have managed its power demand without receiving any supply from the Adani power plant had it provided enough supply of fuel for other plants.

The dollar crisis is standing in the way of providing uninterrupted energy supply to power plants.

While issuing the second deadline, Adani claimed that its outstanding bill amounted to $850million, Indian media reported.

Bangladesh at the time said that the actual amount was over $600 million.

Power deal signed with Adani has been described as hugely discriminatory by energy experts.

Bangladesh would have to buy 34 per cent of electricity of the plant’s capacity or would have to face fines under the deal with Adani.

Even if Bangladesh had bought the required amount, the country would have to pay capacity charge.

The agreement has also deprived Bangladesh of taking any action if Adani abruptly suspends its operation.

The power development board has already accused Adani of inflating its bill by about a third taking advantage of the power purchase agreement signed under the direct supervision of then prime minister Sheikh Hasina, ousted on August 5 amid a student-led mass uprising, and her Indian counterpart Narendra Modi.

The agreement, which allowed Adani to greatly manipulate coal prices also made headlines in the national and international media for clauses highly discriminatory to Bangladesh. Under the PPA, the plant was established with a $2 billion investment to earn Adani $12 billion in its lifetime of 25 years.

Bangladesh’s current installed capacity is 27,884MW.

The current maximum demand is around 11,500MW. The demand is set to rapidly rise by March, when the Muslim fasting month of Ramadan is set to begin.

Even with the demand remaining so low, nearly 100MW of load shedding was recorded on Tuesday.

Immediately after Hasina fled to India after the overthrow of her government, India changed its power export rules allowing Adani, which set up the power plant exclusively for producing power for Bangladesh, to sell electricity domestically.​

 

[Saif]

13-hr gas outage to hit parts of Dhaka on Thursday

A 13-hour gas outage is set to hit several parts of Dhaka from Thursday afternoon to Friday morning, according to the Titas Gas authorities. The outage will affect the Kurmitola Hospital, Hotel Radisson, RPGCL, Dhaka Regency, Khilkhet, Concord City (until the river side), the Le Meridien Dhaka hot

thefinancialexpress.com.bd

13-hr gas outage to hit parts of Dhaka on Thursday
Published :
Feb 12, 2025 12:03
Updated :
Feb 12, 2025 12:03

A 13-hour gas outage is set to hit several parts of Dhaka from Thursday afternoon to Friday morning, according to the Titas Gas authorities.

The outage will affect the Kurmitola Hospital, Hotel Radisson, RPGCL, Dhaka Regency, Khilkhet, Concord City (until the river side), the Le Meridien Dhaka hotel, Balaka Bhaban, Haji Camp, Kawla's Airport Catering House, Civil Aviation Quarters, and surrounding areas from 1:00 pm on Thursday to 2:00 am on Friday, according to a statement on Wednesday, reports bdnews24.com.

The Titas Gas authorities say that the gas supply will be suspended due to the transfer and readjustment of a gas pipeline for the underground sections of the Dhaka Mass Transit Company Limited metro rail MRT Line-1’s Airport and Khilkhet stations.

“In addition, the gas pressure may remain low near Joar Sahara, Nikunja and nearby areas,” the statement said.

Titas Gas has apologised to its customers for the temporary inconvenience caused by the outage.​