[🇧🇩] Energy Security of Bangladesh

[Saif]

Quality gas and electricity supply for industries

The Financial Express reports (February 11, 2025) that the 'final economic growth for the last fiscal year was lowered by 1.60 percentage points to only 4.22 per cent as the real export earnings were much lower than the projected statistics of Bangladesh Bureau of Statistics (BBS) data showed. The

thefinancialexpress.com.bd

Quality gas and electricity supply for industries
Mushfiqur Rahman
Published :
Feb 16, 2025 21:57
Updated :
Feb 16, 2025 21:57

The Financial Express reports (February 11, 2025) that the 'final economic growth for the last fiscal year was lowered by 1.60 percentage points to only 4.22 per cent as the real export earnings were much lower than the projected statistics of Bangladesh Bureau of Statistics (BBS) data showed. The BBS preliminary estimation put the FY 24 Gross Domestic Product (GDP) growth at 5.82 per cent'

BBS data further confirm that the fall of industrial production and exports are the key reasons for the downward GDP growth rate. Published data indicate that the industrial sector growth of the country was reduced to 3.51 per cent in the final GDP data (estimates published a few months ago was 6.66 per cent) in the preliminary report). Different research groups and experts have attributed the poor industrial growth to political turmoil in 2024, lack of investors' confidence and absence of congenial business climate.

The readymade garments (RMG) manufacturing industries have been securing the country's major share of export earnings. With the growth of the RMG sector, textile (spinning and weaving) segments have flourished as a backward linkage of the garments sector in the country. The garments industry leaders have been raising concerns that the backward linkage industries have been losing competitiveness due to primary energy (natural gas) supply shortages and its higher cost. As a result, the RMG sector operators now prefer imported raw materials from India and China for their productions.

Various published reports based on studies by business chambers and trade bodies claim that industrial productions in Bangladesh suffer about 30-40 per cent losses due to gas and electricity supply shortages. Cost of industrial productions have increased due to high cost of energy. Poor quality supply of gas and electricity has been systematically harming the equipment and machinery, adding increased repairing and maintenance costs for industries. As the costs for energy has been increasing steadily, unreliable supply of gas and electricity put the industries in a disadvantaged situation. As the RMG sector is increasingly relying on imported raw materials, value addition is declining in the sector.

Business leader and President of Bangladesh Chamber of Industries Anwar-ul Alam Chowdhury in a recent interview with Energy & Power Magazine stated that 'the spinning and weaving industries had lost competitiveness despite increased productivity and enhanced fuel efficiency'. He further informed that the gas price had been increasing systematically for last couple of years and the industry owners had agreed to pay Taka 30 per MSCF on condition of quality gas supply. The gas price has been increased but the supply quality did not improve. The governmnet claims that the import LNG and its processing cost for gas supply involve more than double the price of gas the industry owners pay for per unit of supplied gas. Petrobangla sources inform that its losses reached approximately Taka 16,000 crores in the current fiscal and the dependence of Petrobangla has increased on the government subsidies. Generally, Petrobangla losses are linked with low sales prices (subsidised prices) of natural gas to different sectors of consumers. On the contrary, Energy Adviser of the present interim government Dr. Muhammad Fauzul Kabir Khan informed the media that the government spends Taka 72 per unit for importing gas and supply at Taka 30 per unit.

Reports on daily gas & condensate production and distribution of Petrobangla suggest that the total gas production in the country including imported LNG was 2,689.8 mmcfd. Imported LNG had only 781.6 mmcfd share. The share of LNG in the supplied gas is less than 30 per cent. Therefore, the import and processing costs for re-gasified LNG should not be fully transferred to industrial consumers.

Domestic gas productions from the existing 29 gas fields in Bangladesh have been steadily declining (approximately at a rate of 200 mmcfd per annum) since 2018 and reliance on imported LNG has been increasing. At the same time Petrobangla can not speed up LNG import as the existing LNG storage and processing facilities have maximum installed capacity of 1,000 mmcf per day. The proven gas reserve of the country has been declining fast (it is estimated that the country has 7.6 trillion cubic feet (Tcf) of gas reserve). The annual consumption if restricted within 1 Tcf gas from the domestic reserve sources, the domestic reserve may last maximum 7-8 years (if no more major viable gas reserve will be added). Thus the consumers have to increasingly rely on imported LNG (subject to availability and expansion of LNG storage and processing facilities).

Necessary initiatives are needed to accelerate the government organisations to explore all possible commercially viable energy resources in the country. Considering the limitations of rapid increment of quality gas supply for industries, businesses demand urgent initiatives for improvements in national electricity grid infrastructure and distribution systems for securing quality power supply for industries.

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

 

[Saif]

Power cuts for long hours feared in summer

Bangladesh braces for a difficult summer, feared to be hotter than ever before, faced with the prospect of long hours of power cuts due to outstanding energy bills.

www.newagebd.net

Power cuts for long hours feared in summer
Emran Hossain 17 February, 2025, 23:39

File photo

Unpaid bills exceed Tk 38,373cr in 6 months

Bangladesh braces for a difficult summer, feared to be hotter than ever before, faced with the prospect of long hours of power cuts due to outstanding energy bills.

The overall outstanding bill to 121 power plants stood at Tk 38,373 crore until January 7, 2025 with almost half of the ongoing fiscal remaining ahead, mostly lurking with humid summer days.

At the end of the last fiscal, barely a month before a student-led uprising that toppled the Sheikh Hasina regime, the outstanding bill had totaled at Tk 44,338 crore.

‘Massive dues to power producers against the likelihood of electricity demand rising by at least 5 per cent present frightening scenario,’ said Shafiqul Alam, lead energy analyst, Bangladesh, the Institute for Energy Economics and Financial Analysis.

‘Even a meticulous plan may not save the day,’ he said

The day temperature reached 32.4 degrees Celsius on February 16, almost two weeks before winter is supposed to be officially over. Load shedding occurred almost every hour on Monday despite the power demand hovering between 10,000MW and 11,000MW. Bangladesh’s overall installed power generation capacity is over 27,884MW.

In less than a month, the power demand is forecasted to surge by 6,000MW to 7,000MW, potentially catching the Muslim-majority nation in a serious predicament in the month of Ramadan.

An estimated 5,000MW is considered summer cooling demand. Irrigation during summer also requires a supply of about 2,000MW.

Power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan on Monday urged all not to lower AC temperature below 25C during summer in a bid to save up to 3,000MW to minimise the gap between demand and supply.

He said that power cuts would be equally distributed in villages and cities.

Frequent power cuts can bear serious food security consequences as the cultivation of Boro, the country’s main rice crop, overwhelmingly depends on lifting groundwater for irrigation.

Inability to release enough dollars rendered the 1,320MW coal-based Rampal power plant to shut down on February 14 while getting full supply from the 1,347MW Adani power plant remained uncertain due to non-payment of bills.

Bangladesh Power Development Board’s account of power plant-wise outstanding bills revealed that over 61 per cent of the outstanding bill or Tk 23,613 crore was owed as unpaid fuel bills.

Power purchase agreements require the BPDB, the sole buyer of all electricity generated, to supply energy, after entitling almost all power plants to capacity charge.

Coal-based power plants, however, import their fuel mostly on own arrangement and get paid by the BPDB.

In fuel bills, the BPDB owes more than TK 5,235 crore to coal-fired power plants, over Tk 5,942.86 crore to furnace oil-based power plants and Tk 12,023 crore to gas-based power plants.

Of the fuel bill dues to coal power plants, Tk 2,825 crore is owed to Adani Power, representing the highest amount of outstanding payment.

Adani halved its power generation in November last year citing non-payment of bills, months after it changed the law to exclusively supply power to Bangladesh after

Hasina had fled to India on August 5. Adani can now sell power in India. It reported machine problem after Bangladesh’s request to resume full power supply.

Gas, on the other hand, is entirely supplied under the government arrangement – 75 per cent from local gas fields and the rest imported as liquefied natural gas.

About 40 per cent of the import capacity remained unused ever since LNG was introduced in mid-2018 mainly because of its high expenses. The AL regime frequently hiked retail gas prices but did not help much amid a rapid depletion in the foreign currency reserve because of the import.

Bangladesh can supply close to 3,000MMCFD of gas in the best case scenario against the demand of 4,000MMCFD, facing the tough task of who to get the supply – power generation or industries.

Energy experts said that Bangladesh was in no position to increase its fuel supply to gas-based power plants, about half of which remain idle.

Furnace oil is imported by both the government and private power plants.

Of the overall power sector dues of nearly Tk 38,500 crore, Tk 23,283 crore was owed to privately owned power plants.

‘Our energy future could not be gloomier,’ Bangladesh Working Group on Ecology and Development member secretary Hasan Mehedi said.

Bangladesh loaned $2.1 billion from Jeddah-based International Islamic Trade Finance Corporation to meet its energy import needs in the current fiscal year.

In the previous fiscal year, Bangladesh took $1.4 billion from the same lender. The money was spent for oil imports.

Bangladesh also released bond worth Tk 12,000 crore to minimize its power sector debt.

The combined outstanding payment to Indian companies stood at Tk 6,823 crore.

Of the local power producers, Tk 3,120 crore was owed to the Summit Group, about TK 1,000 crore each to the United Group and the Orion Group, and Tk 841 crore to the Confidence Group.

Of the major base-load power plants, Tk 1,353 crore was owed to Payra power plant, Tk 576 crore to Rampal power

plant, Tk 160 crore to SS Power, Tk 216 crore to Matarbari power plant, Tk 477crore to Unique Meghnaghat Power and Tk 790 crore to Bhola power plant.

The overall outstanding bill also included Tk 545 crore owed to transmission authorities in Bangladesh and India.

At the end of last fiscal year, the BPDB could pay half of its dues with 78 per cent of the payment ending up in the pockets of 24 companies – all AL favorites.

During the Awami League regime for over 15 years, Bangladesh was steered on the path of aggressive expansion of fossil fuels, leading to the building of around 100 power plants, almost all of which were built without competitive bidding.

Frequent energy price hikes over the AL regime triggered the worst inflation in decades, turning Bangladesh to the International Monetary Fund for a $4.97 billion loan.​

 

[Saif]

Power to be disconnected if AC runs below 25C: adviser

Power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan on Monday urged the country’s people to run their air conditioners at 25 degrees Celsius or above during the upcoming month of Ramadan and summer season.

www.newagebd.net

Power to be disconnected if AC runs below 25C: adviser
Staff Correspondent 18 February, 2025, 00:13

Power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan on Monday urged the country’s people to run their air conditioners at 25 degrees Celsius or above during the upcoming month of Ramadan and summer season.

If otherwise, the government will take legal action or disconnect the electricity connection, he warned at a press briefing on the second day of the three-day annual conference of the deputy commissioners at the Osmani Memorial Auditorium in the capital.

The adviser’s warning came Bangladesh braces for a difficult summer, feared to be hotter than ever before, faced with the prospect of long hours of power cuts.

The adviser said that they had started to send letters to the members of the advisory council and already sent a letter to the adviser to the religious affairs ministry to inform the imams to follow the direction during the tarabi namaz during the month of Ramadan.

‘I will request the business organisations through the commerce adviser and all banks through the Bangladesh Bank to keep the AC’s temperature at 25 degrees Celsius or above,’ he said, adding, ‘I will send a letter to the cabinet secretary.’

Fouzul Kabir mentioned that the power demand in winter was 9,000 megawatts and the demand would increase to 17,000MW to 18,000MW in summer.

This gap of 8,000MW to 9,000MW is caused mainly for two major reasons, one of which is irrigation that required 2,000MW, he said.

‘Irrigation is mandatory for food production so this is our highest priority,’ he said.

‘Another reason for increased power demand is cooling loads by the ACs which requires 5,000MW to 6,000MW,’ he said.

‘If we run the ACs at 25 degrees Celsius or above, we can save 2,000MW to 3,000MW,’ the adviser said.

He said that special teams of the Power Division would work to monitor the situation.

‘I hope that power cuts will not take place. But, if it happens, it will be equally distributed in rural and urban areas, except the key point installations and hospitals,’ he said.

Fouzul, also the adviser to the ministries of road transports and bridges and railways, said that they also discussed the issue of reducing the number of road crashes and marked it as the highest priority issue.

He also said that the DCs discussed the issue of the construction of different roads and rail tracks and the repair of different roads.

‘I told the DCs about the limitations of our resources,’ he said and added that the government was facing difficulties in paying prices for fuels and electricity for this reason.​

 

[Saif]

Funding shortfall threatens renewable energy goals

Despite Bangladesh’s lofty aim of generating 40 percent of its energy from renewable sources by 2040, the country faces a significant funding gap, as only 3.6 percent of the required funds were allocated to the sector in 2023, according to a study.

www.thedailystar.net

Funding shortfall threatens renewable energy goals
Banks, NBFIs provided only 3.6% of required funds in 2023

Despite Bangladesh's lofty aim of generating 40 percent of its energy from renewable sources by 2040, the country faces a significant funding gap, as only 3.6 percent of the required funds were allocated to the sector in 2023, according to a study.

Despite the growing need for sustainable energy solutions, banks and financial institutions are providing minimal financing to this sector, said Khondkar Morshed Millat, a faculty member of the Bangladesh Institute of Bank Management.

In 2023, banks and non-banking financial institutions (NBFIs) financed Tk 742 crore for renewable energy projects, up by 62 percent from 2021, the study said.

However, quoting the BIBM's research, Millat said Bangladesh required funding of around Tk 20,500 crore in 2023 to stay on course to provide 40 percent of its energy from renewable sources by 2040.

He added that the annual requirement was likely to increase to Tk 49,400 crore in 2041.

"If this trend continues, domestic banks and financial institutions will contribute only 4 to 9 percent of the required annual funding by 2041, jeopardising the country's renewable energy goals," he added.

He raised these concerns while presenting a study titled "Renewable Energy Financing Trends in Bangladesh" during an event organised by Unnayan Shamannay, a think tank, at the Bishwo Shahitto Kendro in the capital's Banglamotor.

Currently, less than 1 percent of term loans from the banking sector go to renewable energy, he added.

The study further mentioned that, as per the central bank's annual report for FY23, total renewable finance by banks and NBFIs accounted for only 0.3 percent of total disbursed term loans.

Millat, also a former director of the Bangladesh Bank's Sustainable Finance Department, added that some policy challenges, including high import duties imposed on inputs and a lack of tax incentives for entrepreneurs, were major barriers to this sector.

He highlighted central bank initiatives, including policies on sustainable finance and refinancing schemes, but emphasised the need for further fiscal, budgetary, and monetary reforms to expand renewable energy financing.

Tashmeem Muntazir Chowdhury, head of sustainable finance at BRAC Bank, pointed out that domestic banks struggle to fund large-scale renewable projects, urging greater involvement from international development partners.

Mostafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association, stressed Bangladesh's vast potential for small-scale renewable initiatives like rooftop solar set-ups.

However, he lamented the financial constraints that pose a major hurdle to progress. "In some cases, we have to pay 72 percent tax on imported items, which is a major barrier for the renewable energy sector," said Mahmud.

Ragib Ibnul Asif, deputy director of the central bank's Sustainable Finance Department, underscored the importance of raising awareness among bank officials about the benefits of renewable energy to encourage increased funding.

He also highlighted the need to find other financial sources, such as the bond market.

The seminar was moderated by Zahid Rahman, senior project coordinator of Unnayan Shamannay, and featured open discussions with representatives of banks and NBFIs, renewable energy entrepreneurs, researchers, and university students.​

 

[Saif]

BARAPUKURIA: Coal stacks smoulder as power plant shuts down

Coal stacks three times the usual height, rising up to 15 meters, smouldered at the Barapukuria coal mine as the 525MW coal-fired Barapukuria power plant shut down its last two units since February 15 due to technical glitches triggered by years of lack of maintenance...

www.newagebd.net

BARAPUKURIA: Coal stacks smoulder as power plant shuts down
Emran Hossain 19 February, 2025, 23:51

Coal stacks three times the usual height, rising up to 15 meters, smouldered at the Barapukuria coal mine as the 525MW coal-fired Barapukuria power plant shut down its last two units since February 15 due to technical glitches triggered by years of lack of maintenance.

On Wednesday, power generation from the lone local coal-fired power plant plummeted to zero with chances of not resuming operation in at least two weeks.

The power plant is supposed to consume the mine’s production entirely.

A total of 2.80 lakh tonnes of coal was sitting in the coal stacks with its size growing by around 4,000 tonnes every day, barely leaving any room in the designated coal yards of the mine and the power plant authorities.

‘The standard practice is to keep coal stack height at maximum 6 meters,’ said Shaiful Islam Sarkar, managing director, Barapukuria Coal Mining Company Limited.

Coal stacks are susceptible to self-combustion the chances of which occurring grow with the growth in the height of the stack, he explained.

‘We already spotted smokes on several occasions at the stacks while a flame was also seen once,’ said Shaiful.

Disrupted production at the coal-fired power plant led to the massive stacks over the last month, he said, adding that lately the power plant had been using on average 2,000 tonnes of coal daily because of its reduced generation capacity.

Both the BCPCL and the Bangladesh Power Development Board, the owner of the coal plant, were busy spraying water on their coal stacks continuously as the dry season of winter presumably facilitated self-combustion.

The coal mine has been exclusively supplying fuel to the power plant, the main source of electricity for many areas in the northern region.

‘The power plant has been a patchwork for a while now since there has been no maintenance after it started operating in 2018,’ said Mohammad Abu Bakar Siddique, the chief engineer of the plant.

The plant’s first unit, which originally had the capacity to generate 125MW but could now produce about 75MW due to lack of maintenance, was the last to close down at 2:43pm on Tuesday.

Leak in the boiler’s super heater tube led to the closure, Abu Bakar said.

Repairs of the first unit have to wait for two weeks because of the closure, leaving the plant extremely heated at around 1,000C.

Leaks were also behind the closure of the third and the biggest unit of the plant worth 275MW on February 15. Pipe connecting the boiler with the turbine developed the leaks.

‘The pipe has been leaking slightly for a long time. It suddenly just went out of control,’ said Abu Bakar.

Heater for heating up air also malfunctioned besides a bearing that broke down while four out of the five coal mills at the 3rd unit were barely operational.

A two-week deadline has been fixed to repair the 3rd unit.

The second unit of the plant with 125MW capacity, which has been out of operation since 2020, badly needed an overhauling.

The company responsible for the plant’s maintenance never performed its duty during the past Awami League regime, overthrown by a student-led uprising in July-August last year.

‘Sudden closure will keep haunting the power plant even if it returns to operation for the time being,’ said Abu Bakar.

He said that the BPDB asked the BCPCL to sell its coal outside after keeping a certain stock.

With the crisis at Barapukuria, the power sector witnessed yet another grim development, barely days after the 1,320MW imported coal-based Rampal power plant shut down due to fuel shortage triggered by the dollar crisis.

Bangladesh has also not seen any progress regarding its request to the 1,347.54MW Adani power plant to run at its full capacity. The power plant has been running at its half capacity since November last year due to outstanding bills.

After the request, the Adani power said that it could not start full operation due to a technical glitch.

The BCPCL authorities warned that they would not be able to suspend coal mining as the move would have serious consequences.

Suspending operations at the coal mine mean paying demurrage to the Chinese company running the mine with 1,100 local and 250 Chinese staff.

After a phase of mining begins, its abandonment halfway through means leaving the coal exposed to self-combustion, the plant authorities said.

‘The entire phase has to be sealed off,’ said Shaiful Islam.

The current phase under mining at the Barapukuria contains nearly 5 lakh tonnes.

Time is running out fast for Bangladesh to ensure measures to take its current production of 11,000–18,000MW by the time the coming summer peaks in. Bangladesh’s current installed power generation capacity is 27,884.7MW. But load shedding persisted even during winter, when the electricity demand remained around 10,000MW.

The temperature already started rising. In 200km of Barapukuria in Dinajpur, the day temperature reached 32C on Wednesday, placing the area as the hottest place in the country on the day.

At 6:00pm on Wednesday, the Bangladesh Meteorological Department said that the Dhaka air contained 49 per cent humidity.​