Coal News of Phulbari – Bangladesh

News on coal resources & coal basins of Bangladesh

Archive for April, 2009

Generating power without government

Posted by phulbarinews on April 30, 2009

Nizam Ahmad

The government of Bangladesh has failed to ensure supplies in order to meet the energy demand of the populace. The country needs a radical energy policy. The best would be for the government to stand back and allow the market’s competitive forces to generate power.

While the government would probably take until 2021 to consider that option, they should begin importing gas from the surplus world market to operate the state-owned power plants starved of fuel. Many people as exporters or shopkeepers would be too willing to pay more but many may not. Nonetheless, a sweeping shift in power generation from an undependable ‘public-private partnership’ to a wholly private can overcome the present energy crisis both in the short- and the long-run.

The leaking gas fields of Bangladesh and constant disruptions to supply prove that contractors chosen by the government were either incapable, or had cheated it, or politics and nepotism decided all energy businesses. Bangladesh gas fields are not only ill-managed but also do not benefit from advanced technologies.

Mainstream economists, environmentalists, policy experts, and politicians always insist that government should play the leading role in energy, and in all matters. Such policy practices have created a vested ruling class and a mass dependent on government. Government, as they perceive, is almost a deity that fulfils all demands of the people, when qualified technocrats advise it and dedicated elected officials run it. Destined are people to submit to this authority for collective deliverance.

The planners advise mobilisation of resources to develop energy. This means high taxes, which is a severe burden on the people. They also instruct the government to borrow capital from foreign governments and non-market institutions. This method has not only failed to develop our energy, or the economy, but also brought in an ugly culture of corruption and inefficiency. It is only rational that a cut in government’s economic authority will minimise corruption but elite experts and elected leaders of the people oppose it.

Our coalfields could be a good source for power but remains bogged down with faulty contracts, and blockades from environmentalists who prefer darkness and poverty to foreign investors utilising our natural resources. Our ‘eco warriors’ and those wary of big neighbours can afford to dwell in Utopias, as they do not live in darkness or in poverty as the people around the coal fields do. Environmental concerns and a likely repeat of an East India Company syndrome run wild in their minds. They hold no faith in laws of the country, if reformed, to punish corporate frauds or in modern technology to clean industrial pollution.

Politicians, in fear of this eco and nationalist lobby, have revealed a magic number of 50 years of reserve gas, or coal, before any export considerations. The Bangladesh economy, if steered by private entrepreneurships, will naturally seek, as the world does, alternate sources of energy including nuclear but if export of gas, or oil, at all takes place, prices will climb to an abnormal peak whenever reserves hit low. The high prices would deter exports, therefore, keeping reserves intact and untouched. Such is pure economic logic if unaltered by government bureaucrats and by the vested ruling class. Contrarily, the government enters into long-term fixed price contracts that do not reflect true gas reserves. The government built few power and fertiliser plants that does not work full time due to gas supply issues. No private enterprise, if operating without the burden of government control, would build a plant without ensuring uninterrupted gas supply.

It is time to test the private sector, foreign or local, under an environment of firm law and order, to invest in Bangladesh’s energy sector to fulfil market demand for power. Undeniably, private enterprise would be more competent with their expertise and resources to supply non-stop gas, or coal, for our power. The government has failed and should no longer be in it. Gas reserves could be higher and its utilisation more efficient if private producers were discovering, conserving, or even importing gas for our kitchen, factories, fertiliser, and power plants.

Under a setting of a free market in energy, prospective private investors in Bangladesh would be free to negotiate with people on whose land they would choose to drill or excavate. For a successful outcome, as in any businesses in free environments, there will be negotiations with people for corporate shares, jobs, or a premium price for the use or purchase of their lands. Presently, government owned or authorised private operators simply evict people and often coercively. The ruling class benefits itself at the expense of the vast poor who stay dependent on the government to meet their humble needs. The inhabitants in the area do not benefit from wealth underneath their lands, which is unjust, exploitative, and a denial of their natural economic rights.

A government plan should only formulate rules that relate to health, safety, forgery, and, indeed, the environment. It will provide the conditions of economic development as property rights, personal security, minimum taxes, and freedom to trade or invest. Governments should meddle least in the affairs of private enterprise. There will be hordes of energy watchdogs as the media, green activists, local people, lawyers, courts, politicians, and non-government organisations (NGOs) to keep an eye on private enterprise in Bangladesh’s energy.

The opposition to energy in the free sector from green environmentalist on grounds of pollution, or any other, is in reality to prevent the advance of capitalism in Bangladesh. Green environmentalists in the West, in connivance with governments bent on market control and interventions, promote ‘sustainable growth’ by ditching today’s use of resources for the distant future. However, by this doctrine, resources will remain unutilised forever, as our future will reserve it for their future. Many, however, reason that a coterie in the industrial West do not want world’s natural resources depleted but kept reserved for their industries only.

To meet energy needs of 150 million people, the private entrepreneurs, who are the unfailing engine of development, must wrestle for their right to produce power without government.

The writer, based in London, is Director, Liberal Bangla, UK


Date: 28 April 2009, Bangladesh


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Solving the energy crisis

Posted by phulbarinews on April 28, 2009


The nation is now trapped in a cruel energy crisis undermining the quality of daily life, disturbing factory production, making examination studies more difficult, reducing the volume of water available in Dhaka and threatening economic development. These are serious consequences. It is not our intention here to blame anyone for actions taken or not taken. What has happened has happened. However, it is clear to everyone that a strong, action oriented programme is needed to overcome the crisis. We have set forth here just such a programme. Many experts have discussed the ideas in this article in various forums. What we offer here is to bring all the threads together into a coherent package. The programme outlined can readily be executed with dramatic improvement in the availability of electricity. 

It is essential to keep focused on the key actions. There is too much wandering around looking for magic solutions. There are none. Programmes that come to fruition in ten year or more are of little help in the immediate crisis that has enveloped the nation, a crisis that could last for a decade if determined actions are not taken. We have become very sceptical about what can be expected, as there is a long history of false claims and broken promises from the government organisations responsible for providing gas and electricity to the nation. 

Our approach is very simple. For the next four years the only fuel available for generating electricity is gas. Diesel can be imported for critical generating requirements or for standby; power and solar power can provide some power for some buildings but it is only natural gas that will provide the large amount of additional electricity. To provide this natural gas a series of actions are necessary. 

Six Critical Steps – Complete in three months
1. Close down all the government owned urea plants and divert the gas released to power and industrial use.   This must be done promptly, but systematically, simultaneously increasing urea imports. The government has under consideration closure of the Chittagong urea plant on a temporary basis. We are arguing for shutting down all urea plants for several years to provide gas to fuel a major increase in power. KAFCO will probably have to remain open but the financing of the plant may be reviewed and refinancing at lower interest rates and for a longer time period sought. If it is impossible to close KAFCO at least one should try to get the best possible price for the urea, linking the selling price to the costs of production, not the international price. Closing the urea plants is the only immediate source of additional gas. Without this extra gas additional electricity cannot be produced.

2. Sign long term agreements to import urea. Urea prices are now approximately $300/mt or Taka 20/kg; not including transport and distribution cost.  Prices are as low as they are likely to reach with the world oil price stabilising, with the possibility of increasing. Long term purchase contracts can probably be negotiated. Now is the time to do so as international price of urea is low. The government can of course sell the urea domestically for whatever price it determines as appropriate.  This provides an excellent opportunity to adjust the price of urea relative to other nutrients to work towards a better mix of inputs, raising rice yields and improving the long term prospects for the soil. This is an intricate undertaking but it can certainly be accomplished. The availability of urea must be assured but the price should be appropriate; a subsidy is possible but undesirable. At least the subsidy should be linked to the price of rice. But the magnitude of the subsidy is secondary to the primary task of insuring the imports of urea.

3. The improvement of the gas pipelines and installation of compressors to increase pipeline pressure should be implemented immediately without concern for whether the ADB portion of the project finances enough of the total cost. Raising the pressure in the gas pipelines is essential. The Prime Minister noted the urgency of this when the project was approved but the completion of the contract is still being worked on. The government should be prepared to finance itself the additional amounts required.  Many industries require gas for heating purposes and with the current low line pressures, plants face much more difficulty, reducing production and increasing unit costs.

4. The government should contract for several large barge mounted power plants as was done in the previous AL government; however, these should be short term contracts for only a few years. These barge units will use much of the gas released from the urea plants. These barge mounted plants should be able to supply 600 MWs additional capacity by the end of the year. We believe that aggressive management of the power generation will enable the government to have an additional 1000 MWs producing electricity by the end of the year using existing generating capacity and rented barge mounted plants. This will ease the power crisis and provide breathing room for a few years while other fuel sources are developed and the required power plants constructed.

5. Instruct Bangladesh Bank to begin to buy additional foreign exchange at the rate of $25 million per week to finance the import of fertiliser. We expect that the total bill for urea might come to one billion dollars per year.

6. Water in Dhaka: The supply of water in Dhaka is significantly reduced as a consequence of power outages and the failure of WASA to provide back-up diesel driven generators. Low water changes, corruption, falling water table, neglect of maintenance for the distribution system have combined to make the water supply system very vulnerable to disruption.  There are grand projects to fix these infrastructure problems but action is needed at once to ease the shortages. The Financial Express quotes a WASA official that about Taka 600 million is needed for stand by diesel generators. This is less than US $10 million; the government should procure these at once and if necessary airfreight them. In the interim WASA should rent or borrow generators from anyone that will spare them.

Four Contractual Actions
There are four complex contractual actions to be achieved. These are all rather urgent and should be completed in six months. This is a very demanding task but completion of these tasks is essential to insure the expansion of gas, electricity and urea after the next four years.

7. Contract for one or two large (about 500MW each) gas fired plants. Once these plants come on line the barges rented on a temporary basis would be sent away. Diverting the gas from the urea factories and improving the capacity of the pipelines will enable gas to be delivered in amounts that will support the private sector and enable the national grid to deliver much more electricity.

8. Contract for new urea plants that are more efficient users of gas. As coal fired power plants come on line in five years the gas can be sold to the urea factories enabling imports of urea to be curtailed. By that time inefficient gas fired power plants can be decommissioned, and there will be sufficient gas for renewed urea production.

9. Contract for open pit mines at Barapukaria and Phulbari and associated coal fired power plants. These contracts would target the production of 12 and 15 million metric tons of coal per year displacing coal imports (currently about five million mt) and providing ultimately 18 million mt to the power plants [enough for 6000 MWs] and exporting high value coking coal. Contract for three coal fired power plants each for 1000 MWs planned to come on line in about four to five years. When these plants are available gas is switched to new efficient urea plants and peaking plants for the power sector and for direct industrial use.

10. Accelerate the exploration for gas. This requires additional and revised Production Sharing Contracts with more demanding exploration programmes required. We do not go into the details here but a more business friendly approach is needed.

Seven programmes to improve the energy availability
These programmes are complex and require major efforts; these are important complements to the major actions covered in points one to 10.

11. Conserve electricity and natural gas by raising the price of both to households and by installing meters on gas connection as rapidly as possible. Price hike of electricity and natural gas may seem to be an unpopular move in the short term but in the long run these steps will prove to be good for the country. In addition, existing industrial meters should be checked and monitored to reduce corruption. Further, the government should promote LPG as a residential cooking fuel by raising the price of natural gas and insuring the build up of the availability of LPG. There have been numerous proposals to improve energy conservation including use of energy saving bulbs; these should be implemented.  Conservation will pay off but all of this takes time, and will not ease the crisis but by starting now in a major way after three or four years we should see a significant impact lower as demand.

12. The price of electricity and gas must be raised to insure that production costs including a reasonable return to capital are fully covered. This is essential to encourage conservation. Most actions taken recently encourage use, not promote conservation.  But it is also essential that the taxation of the sector should not be excessive. 

13. Improve the electricity distribution systems in Dhaka. More than 10 per cent of the electricity generated is lost in the transmission and distribution system. Fixing this is a major undertaking but much can be done in the next two years to reduce heat loss in sub-stations. A systematic programme is needed to clean up the network of cables, wires, transformers, and illegal connections. Much progress has been made; it must be accelerated.

14. The progress made during the Caretaker government to reduce system losses in gas and electricity must be continued by aggressive administrative and police action. We have learned how much corruption existed in the government’s energy enterprises. Efforts to stop this corruption and improve the performance of the distribution companies must be implemented.

15. Government policy should focus on regulation and sound policies. The history of the Republic has demonstrated that the government’s operational involvement in the sector is wasteful, inefficient and corrupt.   While privatisation may be premature, a policy of no new public power plants is urgently needed. It is hard to understand why an approach to the power sector that has failed should continue to be supported and encouraged. A major manpower development is urgently needed for the sector.

16. Renewable energy: Renewable energy investments will ease demand for electricity.  Efforts to use solar power on tall buildings and factories should be promoted with low cost loans while insuring duties and taxes on solar equipment are kept at zero. These efforts should include retrofitting buildings if owners find this economic.

17. Nuclear power for electricity: Exploration of nuclear energy should go forward. This is long complex process but it is essential to begin. It will not impact the next decade but thereafter this could become an important source of energy. There are also available nuclear batteries – self contained generating units that provide 25 to 50 MWs.  These are expensive but could be used in some instances to provide power to key government operations.
This programme would transform the energy sector in Bangladesh. It would provide the basis for massive increases in manufacturing and job creation; it would provide the electrical power needed for most households and small businesses through the power grid. The essential points of our programme are:
· Solve the short run problem – power during the next four years – by directing gas to high priority uses and import urea during this transition period.  Use large barge gas fuelled power plants for production of electricity right now.
· Carry out a major multi billion dollar investment programme: Start open pit coal mining. Expand the power system to use coal for the base load and gas for peaking power. Rebuild the urea factories to achieve efficient plants.  Build the transmission, distribution systems for gas and electricity that will be needed to complement the production of energy. Accelerate the exploration for gas. Mount a major programme to develop the manpower needed for this massive energy development programme.
· Implement the pricing, conservation, and ownership policies that the energy sector so badly needs.
Bangladesh stands before a tremendous economic and social hazard. Without bold, decisive action the nation will face years and years of power shortages.  The wear and tear on the generation and distribution system may lead to a slow steady reduction in the availability of electricity. Just staying even will prove difficult. Without our programme these shortages will cumulate making things worse: equipment will burn out, power plants will be over stressed and collapse from inadequate maintenance; we will have to become used to power outages of eight hours per day; and there will be little growth of the manufacturing sector.   Never have so many persons been trapped like this. The ideas we have set out here have been thought about by many persons. There is no other solution that will produce prompt results with a high probability of success. Continuation on the present path will lead to national disaster.

(Salman F Rahman is Vice Chairman of Beximco Group and former President FBCCI and SAARC Chamber of Commerce. Forrest Cookson is an economist and financial analyst.)


Date: 26 April 2009, Bangladesh

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‘It cant be done in three years’

Posted by phulbarinews on April 28, 2009

Mullah Amzad Hossain, editor, Energy & Power, a Dhaka-based fortnightly magazine explains to Robab Rosan why we wont get much relief from load shedding in the next few years

inside06We have been virtually living under a state of power shortage for almost decades now, especially during summer season. While subsequent governments have promised to deal with the issue and blame each other, the situation seems to deteriorate by the day. What has really happened through these years?

 I think people are aware of the present situation in the power sector. I have monitored the flow of electricity from twelve hours from 10:00am to 10:00pm on April 15 and I have seen that electricity is not coming back after one hour, as per the schedule of load shedding. It is taking more time to return but staying on for less time. The situation is gradually getting worse.

   I think the demand for electricity in the country in peak hours is no less than 7000 MW and the government is saying that electricity is being produced from three thousand to thirty seven hundred MW. And there is also a fifteen percent system loss as well. If we take into account uninterrupted supply of electricity for privileged people and areas, we see that the share of electricity amongst the common people is minimal.

   Corruption has become the most popular victim in the country. For me, inefficiency is more dangerous than corruption.

   We saw infrastructural development during the rule of HM Ershad, however, many irregularities and corruption were reported during that time. Later the BNP government continued the projects and took only a single project of establishing an electricity production centre in Siddirganj.

   Next, the Awami League government finalised the Independent Power Producer policy (IPP), drafted by the previous BNP government.

   The AL government successfully increased production of electricity from seventeen hundred to eighteen hundred MW to nearly four thousand MG according to the policy. We got 1300 hundred MW of electricity from the IPP.

   Unfortunately, the next BNP government did not continue the projects taken by their predecessor. The government said that IPP was a curse for the nation and the then finance minister Saifur Rahman said they would not take even suppliers’ credit in the power sector. They later realised that they should start the IPP facility and suppliers’ credit again. But this time they wasted two years.

   The BNP government started a centre of one hundred MW capacity at Tongi during their last tenure. They also began the process for a 240 MW production centre in Siddirganj and a centre in Sylhet, that started production during the last caretaker government.

   Right now, we have five and a half thousand MW installed capacity. But many of the machineries are old and some of them remain closed for repair. On the other hand, the centres do not get uninterrupted gas supply. For these reasons, the production centres cannot produce according to their capacity.

   The governments blame each other. I say that there was virtually no development not only in the power sector but also in the energy sector in the last seven years.

   During the tenure of the previous government we saw violent crises regarding the shortage of power in Kansat and Demra. And yet, we now hear that not a single megawatt of power was increased in the last five years. Is this true and how is it possible?

   The crisis of electricity will never be solved because in our country, gas is the main source of producing electricity. Eighty seven percent of electricity in our country is being produced by gas. We do not have enough reserve of gas. The government has yet to decide on whether to extract coal. They are delaying more and more. If we extracted coal, it could be used in generating electricity. There is no plan, I think, to generate electricity by purchased oil.

   The government has planned to produce five thousand MW of electricity by five years. I agree with the government that it might be possible in five years but not in three years. The government has to involve local and foreign companies to explore gas immediately and urgently and they should also extract coal. Otherwise it might not be possible.

   The finance minister has said that we cannot do anything about load shedding in the next three years. Is there really no way out?

   Yes, the finance minister has said it correctly – we cannot do anything about load shedding in the next three years because it is a lengthy process. I have said earlier that the government can increase production in five years if they take effective initiatives right now. If they do not take initiatives they will not be able to produce even in five years.

   The government can provide social tariffs for at least sixty percent of people, who are in the marginal line of poverty. They can give twenty percent subsidy to the lower middle class people. But those who are capable of paying must pay the original price. The government can also establish a special grid for uninterrupted electricity at the higher price.

   In a recent report, we have heard that the government is thinking of purchasing electricity from India. What are your views on that?

   I think, this region (SAARC) is the only region where we have no real cooperation in the energy sector. Due to lack of faith among the two countries, Bangladesh and India, and a lack of far sight in our politicians, we could not establish a multinational cooperation in this region. We can import electricity from India in the short run or mid run. We can also import electricity from Nepal but the decision should be taken immediately.

   We currently, apparently have the capacity to produce 600MW of extra power and yet we don’t have the gas to do it. Meanwhile, our gas resources lay as it was because we have not been able to resolve our issues regarding the extraction of gas. How can we increase our gas supply?

   If the question of gas supply comes we will see many irregularities in this sector. We are unfortunate because our governments do not solve the problem. They allow the problem to grow into a crisis and then they go for the remedy. But by this time we waste a lot of time and money. We are gradually losing our reserve but not exploring new gas fields. We are neither allowing foreign companies nor the local ones to work in this sector.

   We have to extract coal for generating electricity because about fifty percent of electricity is produced across the world from coal. Denmark, which has a contribution of 42 percent in renewable energy, produces 48 percent of its electricity from coal. Our neighbouring country India produces about sixty percent of its electricity from coal and China produces around seventy percent of its electricity from the same resource. The government must ensure better rehabilitation of people and minimise environmental hazard for extraction of coal.

   Using the policy of Production Sharing Contract (PCS), the government should immediately take initiatives to explore gas in the Bay of Bengal, otherwise we will not be able to increase our production.

   There is inefficiency in the government sector. At the other end we have increasing demand, sometimes artificially created by MP’s and their electoral promises. How do we get out of all this?

   Forty percent of total budget in the power sector should be kept for generation, forty percent for transmission and the rest twenty percent for distribution. This was not done properly.

   To earn cheap popularity, the government says that they will set up production houses at their own cost. We virtually need nearly five million USD to set up a 450 MW power plant. This is not possible for the Bangladesh government to do single-handedly. Our share market is also not booming that the government will collect money from the market.

   If the question about the extension of electricity in rural areas comes I will ask the government whether they want to keep our rural people in darkness. The rural people have the right to get electricity. The government knows that ten percent demand will increase every year.

   To extend electricity is not a fault. It is a fault not to produce electricity. People can demand electricity from their representatives. The government is developing roads but not giving electricity. You cannot expect development without electricity.

   What are your views on alternate sources of power for households and how can we effectively increase awareness among people to stop wasting power?

   The government is going to take an appreciating initiative to replace all the incandescent bulbs with Compact Florescent Bulbs (CFBs) by two years. The World Bank will provide the bulbs free and the German organisation GTZ will provide technical support. The government has planned to replace one and half crore bulbs by February next and one crore more by the end of the year. It will save eighty percent of bills and save eight hundred MW electricity.

   The government should also ensure that the generators, refrigerators and ACs and other appliances are energy efficient. The government can also encourage the factories, particularly the steel mills, to run at night. On the other hand, the government can close markets by five o’clock five days in a week and can keep them open till 11:00 at night on the remaining two days. Shoppers will get habituated to this system in time.


Date: 24 April 2009, Bangladesh

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Parable of a student

Posted by phulbarinews on April 28, 2009


When I was a student I faced a week when several term papers were due, two difficult laboratory reports had to be finished, and there were two examinations. It was too much to manage. I convinced myself that I was tired and that somehow things would work out. The first half of the week I worked on letters about summer internships, sent letters off to graduate schools and potential employers. My future life would be bright with scholarships or high paying jobs. My advisers had told me my potential was fantastic. Each day I looked at myself in the mirror as I shaved and combed my hair, the future is mine.

I spent some time thinking about what automobile I would buy, the furniture to put into my first home, and even which of the three girls I knew I might marry. My plans for the future become more elaborate as I planned a trip to Europe after I graduated. I looked up hotels in London and Paris, what sights to visit, and how to travel around.

The end of the week came. My term papers were late and poorly done; the lab reports for were not accepted as they were late. I was unprepared for the examinations. My GPA dropped sharply. I did not get into graduate school; I did not receive any decent job offers; I did not have enough money to buy a car. It took me more than five years to get my life back on track.

This parable should be studied by Bangladesh’s energy planners. Renewable energy and nuclear power plants are like my new car or my trip to London, vital for the future but a distraction from the present. These new energy sources are fantasies of the future. The current reality is to develop gas and coal fired electricity plants or accept a resurgence of poverty.

Renewable energy remains expensive and it can make some contribution if Bangladeshis are prepared to pay two or three times the current charges for electricity or if the rich countries are prepared to subsidise such resource misallocation. The developed countries are happy to lend money and subsidise the renewable energy as part of their efforts to find ways to make such sources economic. Of course the government can continue to subsidise electricity but this has been and will be a misguided disastrous policy as it has to date. Renewable energy can provide electricity for minor projects but cannot power the industrial and agricultural sectors requirements at an acceptable cost. Significant contributions to the national power requirements cannot be met by renewable energy over the next decade.

As for nuclear energy one must go very carefully. First, the cost of the plant and the electricity it generates must be understood. The capital cost of a nuclear power plant is very expensive per kilowatt hour of electricity produced. The fuel is very cheap, although the cost of storage of the waste is not very clear. There are difficult and complex environmental issues dealing with waste storage, insuring radioactivity does not enter Bangladesh’s ground water. It is much better to send the waste abroad but then who will take it and what is the cost? Nuclear power plants require massive cooling so that one can expect the plant will be on a major river.  The plant will raise the water temperature with uncertain implication for fish and mangrove forests.

There are substantial environmental, waste management, and economic studies and investigations to be carried out. To do this properly is time consuming. My sense is that one is looking at a minimum 10 to 12 years before power is delivered to the grid and more likely 15 o 17 years. We will hear promises of rapid delivery, but these are claims that have a lot of conditions attached.  It is vital for Bangladesh to begin to use nuclear energy; but one should not expect any contribution to the power supply for the next ten years.

Truth for the energy sector is simple: the power planner has two paths available to fire the generating plants: Gas and Coal. It is not hard to calculate what can be provided by possible increases in the gas supply; perhaps 1500 MWs unless gas is diverted from other uses. Existing facilities use of gas requires 12 Tcf over the next 15 years. An additional 1500 MW will require a commitment of threeTcf. That is all the gas available. Actually it is optimistic.

How much electricity is needed?
The demand for generating capacity for five years and for 10 years under a slow growth of GDP (five  per cent) or a rapid growth (6.5 per cent).

If the economy grows fast (6.5 per cent) then an additional 3000 MW are needed for the grid in five years and 7600 MWs in ten years.  Of course if one aims for eight per cent growth requirements are even larger, but let us be content with more modest aspirations. This increase includes filling half of current unfilled demand in five years and all in 10 years. It allows some growth in captive power.

How to fuel 3000 MWs of new capacity? 
We need 1700 MWs of additional coal fired in five years and about 1500 MWs of additional gas fired. In ten years we need an additional (over 2009) 5500 MWs of coal and 2000 MWs of gas fired. This can be achieved since there is a great deal of coal and enough gas will be found from existing fields.
These are tremendous undertakings.

The requirements for coal are 5.8 million MT/annum in 5 years and 17.1 million MT/annum in 10 years. Without the coal the available generating capacity will be only 5065 MWs in 5 years and 6150 MWs in 10 years. There will not be enough gas to do more. Exploration will certainly result in much more gas but not within the next decade.

In a nutshell the energy planner’s must focus on obtaining maximum gas over the next 10 to 15 years and a full scale expansion of coal mines and coal fired plants. If only gas is used, then the manufacturing sector will stagnate and the economy plunge into greater poverty.

If brief the key problems for the energy planner are:
1. Five years: Putting in place additional gas fired power generated electricity over the next five years say 1500 MWs.  Getting 2000 MWs of coal fired plants running.
2. 10 years: Putting as much additional gas as possible (probably 1000 MWs more) and getting enough coal for 6000 MWs by the end of ten years.

Unless these key objectives are tackled there will be only modest growth in the electrical energy available (less than four per cent per annum).  This will limit GDP growth to not more than three per cent per annum!  This is a catastrophe for Bangladesh.

Government must concentrate on the key tasks of coal and gas fired generating plants. There is no magic bullet that will solve the energy problem except making hard choices and determined implementation. Day dreaming of nuclear and renewable energy avoids the key issues of today.  Bangladesh is in the midst of an energy crisis that grows day by day. This is no time for day dreaming.


Date: 21 April 2009, Bangladesh

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The Search forAlternatives

Posted by phulbarinews on April 28, 2009

Just seven years ago American oil company Unocal was so pessimistic about Bangladesh’s gas market that it went to great lengths to lobby for gas export from its Bibiyana gas field to India. Unocal and other oil companies claimed that Bangladesh was practically “floating on gas”. This campaign gained further credibility when local “experts”, including some Buet professors, actively participated in it.

Sharier Khan


It was not long before the bleak truth reared its ugly head. Petrobangla opposed it and a national committee on gas utilisation in 2002 predicted a bleak future for Bangladesh from 2011. Now, even with the Bibiyana field pumping 500 million cubic feet per day (mmcfd) gas to the domestic market– the country is not only reeling in a severe gas crisis, it does not see any end to the gas crisis in the future. Ever.

Natural gas lies at the centre of the country’s energy usage. Once thought to be abundant, 90 per cent of the country’s power plants were built using gas as the energy source for generating power. This gas also happens to be used for manufacturing fertiliser. A large number of domestic, commercial and industrial users also rely on gas. And with the introduction of the CNG system five years ago, the country’s road transportation sector has become so dependent on using gas that it is saving the country more than 800 million dollars worth of imported oil.


The country’s power demand amounts to only 5500 megawatt unofficially, and 4600 mw officially. But the power plants under the Power Development Board (PDB) can generate only around 3600 mw. Now with the gas crisis, the PDB cannot generate around 500 to 800 mw power. Earlier this month, the PDB had all the gas supply it needed, and it could generate a record 4200 mw power–just for one day.

The crises in the power and gas sector are largely attributed to the past BNP led alliance government’s inaction, mismanagement and flawed policy in the energy sector. Apart from virtually no gas exploration activity even the bleak forecast of the national committee on gas utilisation did not induce the government to look for viable alternatives to this fast depleting resource. Now it seems that apart from a miraculous discovery of massive new gas resources, there is no way the country’s energy needs can continue to be met mainly by the gas sector.

cover3According to the grimmest of three future projections of Petrobangla, the country will face 142 million cubic feet per day (mmcfd) gas shortfall in 2011, 341 mmcfd in 2014, 838 mmcfd in 2016 and 1714 mmcfd in 2019-20. This projection however did not take into cognisance that gas shortfall is already 200 mmcfd this year.

The best of these three projects included a potential gas discovery in the Bay of Bengal. But even that scenario leaves the country with a 166 mmcfd deficit in 2017 and a 814 mmcfd in 2019-20. To make matters worse, at the present trend of consumption growth, the gas demand will spiral up to 4567 mmcfd by 2019-20. This is enough reason to push the panic button and look for new energy strategies.

Petrobangla has already declined confirmation of gas supplies to a number of upcoming power projects. This means, the government cannot go ahead with its planned power projects without reconfiguring how these will run. Petrobangla has already advocated for allocating future gas only to industries (such as fertiliser factories) and domestic consumption for which there are no importable substitutes. The local energy giant has also suggested that future power projects should be coal-fired or imported fuel based.

cover4According to the PDB, till 2025 if Bangladesh’s GDP remains as low as 5.5 percent, the country needs to add 19000 megawatts of additional power and if the GDP is as high as 8 percent, it needs 41000 mw power. It is unanimously agreed by the government that by 2020, the country would need to generate 20,000 mw power to serve all of its population. Such a target would be impossible to achieve if the national focus sticks to gas based energy.

So what are the costs of alternative sources of energy?
While power plants will need billions of dollars of investment, the government would also have to consider different types of costs of generic average power production of such alternatives. Presently the world consumes 5000 gigawatts a day. Most of it is being generated from coal, followed by natural gas, oil and nuclear technology. A very insignificant part of the world’s power generation comes from renewable solutions like wind and solar.

On an average, coal fired power costs US 5 to 6 cents per kilowatt hour, nuclear power also costs the same, gas 6 to 7 cents, wind 8 cents and solar 30 to 35 cents globally. Although solar power is the costliest solution, energy experts in recent years, have lauded it as the best solution to the energy crisis as it is renewable, environment friendly and very flexible to install. Power giants such as General Electric are investing heavily in developing solar power to make it cheaper in the future. GE predicts a surge in global consumption of 10000 gigawatts a day before 2030 and there is no way any country could rely on a single source for generating such enormous power.

Research and trials have shown that Bangladesh is not suitable for wind power. Importing power or gas from neighbouring countries like Myanmar, India and Bhutan requires mutual understanding and willingness to cooperate. The government cannot just rely on such concepts unless the neighbours are willing to export energy to Bangladesh.

Fortunately new strategies are being thought of. Energy adviser to the prime minister Dr. Towfiq-e-Elahi Chowdhury has so far come up with two new ideas to deal with the current scenario. The first is to make all upcoming power projects “duel-fuel” instead of making them gas-fired only. Duel fuel implies that the plant will be both gas-fired and oil-fired. This idea will keep the future plants working when the gas crisis becomes more severe. The second idea is to import Liquefied Natural Gas (LNG) along with the floating terminal that carries it, have the terminal docked at the Sangu offshore platform and use the Sangu gas pipeline to transport the LNG to the national grid. This idea will keep the existing gas consuming industry running.

Nuclear Power
Going nuclear has also been a much talked about alternative. Earlier this month the government had discussions with Russia for two 1000-megawatt nuclear power projects. The memorandum of understanding for these plants will be signed by the end of this month. Nuclear power is also very capital-intensive, while fuel costs are relatively much more significant for systems based on fossil fuels. Development of nuclear power could provide work for local industries, which build the plant and also minimise long-term commitments to buying fuels abroad. Overseas purchases over the lifetime of a new coal-fired plant in Japan, for example, may be subject to price rises which could be a more serious drain on foreign currency reserves than less costly uranium.

The site is set at Ruppur. Such a project would also require heavy investment in power transmission as well. The maintenance cost, moreover, which includes taking safety measures addressing environmental concerns–is also very high. The government will have to carefully deal with the issue of dumping nuclear waste as it is still a problem for even the most advanced nations.

A nuclear power plant cannot be built overnight and it is also a very costly investment. The project’s financing has also not been found. If the government can ensure finance and strike a deal for these two plants within a few months, these would come into operation from 2017-18. Therefore, it would not solve the on-going problem.


Solar Power
Solar power is still globally the most costly solution but definitely a practical one because of the relatively simple installation of the power system in rural Bangladesh. It should work in the same way mobile phones became widely popular in the villages. Presently over 300,000 households are using solar energy equivalent to 15 megawatts. But solar power did change lifestyle in coastal to hilly regions. With the view to developing renewable energy resources to meet five percent of the total power demand by 2015 and 10 percent by 2020, the government has already lifted duties on solar power panels to popularise solar power in remote communities. This has cut down solar panel prices by 15 percent.

But in terms of megawatts, it offers nothing bigthough it will provide an easy solution in the rural settings.

Rental power
The concept of rental power projects is new in Bangladesh, and few people really understand the difference between rental power and independent power projects (IPP).

While IPPs are permanent set ups, along with long-term contracts and require 10 months to 18 months to install, the rental plants can be installed within 3 months for a short term and are temporary in nature. An IPP contractor procures plant equipment after getting the contract and the rental power contractors must already have equipment before getting the contract.

Unfortunately, the past BNP led alliance government turned the rental power system into a farce when it started awarding 40 plus deals to various ministers and party men much in the same manner as they would dole out relief materials.

During the caretaker regime, several rental power contracts totalling 300 mw capacity were signed. There was distinct favouritism for a local company Energy Prima– owned by the Hosaf Group, though it was not a rental company. As a result, these deals did not produce the desired result.

But don’t let the bad deals dishearten you. Rental powers, if implemented by genuine contractors, are quick and short-term solutions for the on-going power crisis. These plants can be petroleum based and they can be installed to cover a good part of load shedding for the period while large duel-fuel IPPs are installed.

Bangladesh’s other natural resource is coal–which remains nearly untapped. The first coal in Bangladesh was discovered in 1958 in Jamalganj–1000 metres below the ground. Ever since, four more discoveries were made in Khalashpir, Barapukuria, Phulbari and Dighipara. It is primarily estimated that these deposits have 2700 million tonnes of coal–equivalent to 37 trillion cubic feet (TCF) gas.

Presently the country has 7.7 TCF proven gas and 12.90 TCF probable gas reserve.

Of these five discoveries, the Barapukuria coal deposit is being tapped through an underground mine. However though Barapukuria has 391 million tonnes of coal, the mine will produce only 30 million tonnes in 30 years. The high quality coal from this mine is being used for a 250 mw power plant and the present mine can at best produce additional coal for another 125 mw. But if Barapukuria was an open pit mine, more than 90 percent of that 391 million tonnes reserve could have been extracted.

cover6The debate on new coal mining arose over British company Asia Energy’s proposal to develop an open pit coal mine in Phulbari. A pressure group that is campaigning against the proposal on grounds of environmental damage and human resettlement is now seen as a political problem by the government in taking decisions on open pit mines, which has become inevitable.

According to the PDB, if the country’s power sector switched to coal based power plants, it would need till 2025, 136 million tons (mt) of coal in a low GDP scenario and 450 mt coal in the high GDP scenario. To have such quantity of coal, the country has no option but to go for open pit mining wherever it is possible.

In addition, the country may consider “coal gasification” in Jamalganj, where the deposit rests at a depth that poses problems even for underground mining. In coal gasification technology, pipes are drilled down to the coal seams and methane gas is drawn out to generate power. Two years back, Pakistan signed a deal with a British company to generate 400 mw power on gasification technology.

The government needs to take its decision on coal as soon as possible by adopting a coal policy. New coal power plants will take at least four-five years to come into operation even if a decision is taken today. But it will be cost effective and provide the country with a long-term solution.

Other new technologies
One of the emerging new technologies in the power market is the ‘nuclear battery’. A Japanese company through modifying technologies of nuclear system of a submarine has developed the nuclear battery. The technology is only a couple of years new and it has only been applied in installations of the US navy.

The Japanese company has however opened the window for wholesale utilisation. It has signed a deal few months back with the Peruvian government to install two 50 mw plants. Such batteries are installed under the ground and a plant can be set up within 10 months period. Industry insiders say the company is preparing a proposal for Bangladesh.

Besides increasing power generation, new technologies have been introduced to increase efficiency of power consumption. One such technology is the light-emitting diodes (LED), which is now revolutionising lighting technology and saving tonnes of megawatts in consumption, according to a report in the Economist. An LED is made from two layers of semiconductor.

The conventional light bulbs may be cheap to buy but they use only 5 percent of the electricity to generate light and waste the remaining 95 percent electricity. They also last up to 1000 hours of use. But LEDs promise saving 80 percent electricity with a working life of 45000 hours. However LEDs are very costly to buy presently, though in the long run they are cheaper than the conventional bulb.

About 20 per cent of the world’s electricity is used for lighting. America’s Department of Energy thinks that, with LEDs, this could be cut in half by 2025, saving more than 130 new power stations in America alone.

Low-cost LEDs would also bring light to new areas. Philips, for instance, is planning to launch a small solar-powered LED reading light for Africa, where an estimated 500m people live without electricity. The simplest version, which it hopes to sell for less than $15, is designed to allow children to do their homework in the evenings without a candle or smoky kerosene lamp. Bringing down the cost of LEDs this way will really let in the light.

A catastrophe as potentially devastating as the energy crisis calls for sensible not to mention clever strategising which includes short term and long term planning. The most intelligent approach at this point would be to consider a combination or package of energy alternatives to ensure adequate and consistent supply of energy in the future. It is time to break away from the over dependence on one source – gas, which is already showing signs of running out.

Sharier Khan is Deputy Editor (Reporting) of The Daily Star


Date: 17 April 2009, Bangladesh

Posted in coal, Phulbari-news, Power & Energy | Tagged: , , | Leave a Comment »

Energy Crisis A Legacy of Inaction & Corruption of Alliance Govt.

Posted by phulbarinews on April 22, 2009

Mollah Amzad Hossain

12399662311interview-211While Awami League with its alliance got a thumping majority in the last national election and the electorates, young and old, endorsed the manifesto: “The Charter for Change”, conspirators are stalking in the shadows to undo the beginning of a new era for Bangladesh. Yet the new government, in the face of the worst energy crisis–a legacy of the inaction and corruption of the four-party alliance, left no time to get down to business. With Vision 2021, it started work on short, medium and long-term planning and implementation programs for energy security and supply. If past can be taken as a guide, AL in its 1996-2001 term did overcome such a crisis and its not going to fail this time. Together, We Shall Overcome.


Editor Energy & Power Mollah Amzad Hossain recently interviewed Dr Tawfiq-e-Elahi Chowhury, BB, Advisor on Energy to the Prime Minister of Bangladesh. The full text of his extensive interview follows:


EP: Energy Sector of Bangladesh is now in serious crisis. What are your plans to confront it? How long you it will take to get out of it?


TEC: It is only three months this government has come to power. Hon’ble Prime Minister has kept this portfolio given the fact that this sector requires the attention of the highest level. We have to start with what we inherited from previous regime. On stock taking, what we observed that over the last 7 years nothing of note has been done for the development of energy sector. The present situation is the consequence of the inaction over the years. Our government has definite programs to address the energy sector issues in the greater interest of the people. The first priority is what we can achieve by 2011.Then comes what we have in our vision 2021. We are endeavoring to plan actions for short, medium and long term to achieve these goals


Planning and implementation of short-term actions will proceed simultaneously. We have initiated a two-pronged strategy. We have to bring the under-implementation small plants into operation as soon as possible and simultaneously, do everything to ensure steady and uninterrupted operation of existing plants. We are also acting for ensuring smooth fuel supply – gas, for these plants. In our current assessment gas supply constraints have been identified as the single most important impediment. There are limitations in gas production and also restrictions in gas transmission. On a priority basis, we have already arranged to evacuate about 50-60MMCFD stranded gas from Jalalabad Gas field through constructing a spur line. This can facilitate generation of additional 200 MW of electricity.


GTCL has been advised to simulate its Gas Transmission Grid to devise ways of optimizing gas supply. This may facilitate to improve gas supply to Shambhuganj Plant at Mymensingh and Siddhirganj. But everyone should realize there is no instant cure for such long ailment.


The 4-party government in 5 years did only plan and implement the lone 80MW Tongi plant. Other power plants which commenced generation during that time were initiated during previous term of Awami League Government. Some other rental plants and small power plants which were initiated during alliance government and caretaker government are at various stage of installation. These are not enough to confront the crisis. If the alliance government had taken appropriate and timely decisions to set up some large power plants the present crisis could have been averted.


Moreover, the 4-party government cancelled the initiative to set up a 450 MW power plant at Sirajganj at the final stage. WB agreed to finance the project. The promised fund was withdrawn following government’s decision to scrap the project. Responsible persons of the 4-party government should be made accountable for such detrimental action.


We have initiated power factor improvement to improve quality of power supply. This will make 10% improvement of supply using the same amount of power and ensure savings of around 300 MW power everyday. You are aware that many of our power plants have already outlived their effective economic life. These have turned into fuel inefficient plants. Actions have been taken to upgrade such old plants. We need to either rehabilitate or replace these with efficient plants. With these remedial measures we will get more power from existing plants. But it will take quite time. We are planning to do these in phases during winter when the demand for power is relatively low.


EP: Power generation and supply is well below demand. People are in great sufferings. Even gas supply for power generation is well below demand. Why alternate fuel could not be made available? What led to this situation you think?


TEC: Indecision of previous governments especially of the 4-party government created this situation. No initiative was taken for about 7 years to explore new gas resource. No new major gas field was discovered after the large Bibiyana Gas field during previous term of Awami League Government. Neither IOCs nor could BAPEX has been steered to explore new gas resource. There is no other alternative to expand or increase gas reserve without new discovery. Alliance government also failed to proceed with the PSCs signed in second round bidding during Awami League government.


If we think of coal – major alternative of gas, underground coal mining on supplier’s credit was taken during the BNP rule. It had two flaws of which one impacted on the other. Local population was not consulted for taking them into confidence for a project like coal mining. Consequently, people were not made aware of the inevitable mine subsidence and the impacts although the operators of the mine were well aware of it.


Another development you must have observed in Phulbari coal mining initiative. Local people were involved in violent protests against the mining initiative leading to loss of lives. It appears contradictory since local people should welcome such a project provided it is designed appropriately taking into consideration their concerns and expectations For such projects to be successful, local people should be convinced that their life and livelihood would be significantly improved while contributing to national development. No major project can be implemented anywhere ignoring the local people.


This is a major failure of the government. The 4-party government as well as the Care Taker Government played hide and seek with local population regarding Barapukuria and Phulbari projects. We must remember taking local people into confidence is the responsibility of the government. In fact, a stalemate situation has been created in the formulation of coal policy and exploration of coal due to lack of faith and confidence of the people in the past governments.


EP: We are lagging way behind PSMP. According to it power demand for 2009 was projected as 7200 MW and generation capacity should be 10% more than that. But during this period power generation never goes beyond 4200 MW. Will it be at all possible to come out of it?


TEC: I have indicated earlier that power generation can be increased  to some extent if gas for power can be enhanced. But there is no magic solution which will overcome the present crisis. But demand side management, energy efficiency and conservation can help ameliorate the adverse impacts of power scarcity. We are taking some urgent actions in these regard.


The Prime Minister instructed us to do the needful so that the farmers have the first right to electricity during the Boro season. Under her guidance, we managed the load in such a way as to ensure uninterrupted power supply for agriculture for irrigation. This might have resulted in some extra burden on the urban population, but together we have managed the challenge.


Promoting energy efficiency is another measure. For example, a recent survey has evidenced that about 300 MW power can be saved if traditional bulbs can be replaced with power efficient CFL bulbs in 10 major towns of Bangladesh. That’s as good as setting up power plants of 300 MW!


CFL is use in many countries now. 4.5 million traditional bulbs were replaced with CFL bulbs in one day in Britain. We have taken up a project with the assistance of World Bank and GTZ which will culminate in replacement of 15million (I crore and 50 lakhs) traditional bulbs with CFL throughout selected urban centers and rural areas in Bangladesh early next year. Besides planning logistics and standardization of CFL, we shall seek public support for the initiative including the local government organizations. I am sure media would not be in wanting to lend its mite.


Emphasizing energy efficiency is another strategy to deal with such power crisis. You may be aware that many of our industries have small gas fired boilers. We have gas shortage and these inefficient boilers are wasting our valuable resources. We are considering converting these to liquid fuel and reviewing the possibility of formulating a policy to covert these within a time frame. Energy audit is also under consideration. This will ensure efficient use of energy at all stages. All boilers, chillers and all appliances will be standardized under legal framework with a view to ensuring energy efficiency Capacity of BSTI will be enhanced to deal effectively with these emerging issues.


EP: Awami League Election manifesto includes addition of generation of 1500 MW power by 2011 and 3500 MW by 2013. But existing power plants are not getting the required gas supply now. Considering this situation how the 5000 MW capacity power plants in the pipeline will get fuel supply? Do you have plans to import coal or LNG?


TEC: You are aware that the Prime minister herself is in charge of this Ministry. Awami League election manifesto has some specific milestones. PM came to ministry immediately after the assumption of office and gave specific guidelines for implementing the election manfesto. Among others, the exploration and development of gas resources came up for discussion. A two-pronged strategy will be implemented: accelerating the programs undertaken by BAPEX and involving IOCs through a competitive process that serves the best interest of Bangladesh. You are aware that ECNEC under the chairmanship of the Prime Minister has approved over TK 100 crore for BAPEX to purchase a modern drilling rig and other drilling equipments. Alongside, specific actions would be put in pace the enhance and strengthen the capacity of BAPEX. Another exploration program at Mobarakpur has been recently approved. BAPEX will focus  in areas which have lesser risks but higher prospects while IOCs will be encouraged to invest in areas which have greater exploration risks


You yourself commented that single-fuel dependent energy generation is not sensible. In the same vein we have stressed upon fuel diversification. From that perspective coal is our second most important energy source. We are trying to design an appropriate model taking into consideration the experiences, the mistakes or lack of attention on important mining issues in case of Barapukuria. This will ensure coal exploration that meshes the aspiration of local community and in particular, those that are adversely affected, with the national goal of energy production and security. The Prime Minister has instructed all concerned to mitigate the problems of the affected community of Barapukuria coal mine while ensuring its uninterrupted operation. While the previous governments had put the problems of local community under the carpet, particularly the land subsidence, the Prime Minister not only instructed her Ministry and its implementing agencies to address the emerging issues but also took out time from her busy schedule to listen to the representatives of Barapukria and gave instant directives. We are acting accordingly. EMRD has formed a committee to investigate all relevant issues and suggest recommendations. We are endeavoring to reach a consensus with the local communities and carry forward the mining that best serves all competing interests.

The mining model evolving from lessons learnt from Barapukuria will be the basis for further customization, fitting specific conditions of different coal mines. In this process we shall consult mining, environmental and energy experts including the non-resident Bangladeshis. We expect that in the next 5-7 years, coal would emerge as one of the major primary fuels for power generation in Bangladesh.


We are planning to go for dual fuel option for the power plants now under planning. If gas is not available these will run with liquid fuel. Please bear in mind the government will not limit its power generation vision on gas & coal only. We are actively considering nuclear power generation although it is unlikely to come on stream within the 5 year-term of the present government.


The PM is very keen on exploiting opportunities for renewable energy, Alongside other measures, we are actively considering the applications from renewable source of energy. We are exploring the possibility of solar power generation in commercial way apart from limited use as solar home system. Especially, the possibility of running irrigation pumps with solar power is being actively explored. If we succeed this will drastically lower power requirement for irrigation.


It was a common belief that Bangladesh is not ideal for wind power generation. Now technology has significantly advanced. Modern wind turbines do not need strong wind flow. We will work to explore the possibility of introducing this technology. Beyond this we are thinking about supporting bio gas plants and also exploring possibility of energy from waste. The challenges for harnessing these diverse sources of energy on a large scale are daunting but we shall keep pursuing and I am hopeful of some success at the end.


Few large IPPs are on the drawing board and donor agencies are prepared to stand by us in the competitive bidding process. But the recent international financial melt down has made their prospects for financing uncertain. While we shall go for the bidding, alternative modalities for implementation would also be developed, should we face limited response. 


EP: Our Gas production capacity is 1850 MMCFD against present demand of 2100 MMCFD. Another 60 MMCFD additional production is expected from the end of March. Apart from this is there any possibility of increasing gas production by 2011 and if so from where? What will be the gas scenario in 2013? If we fail to discover new gas reserve we will have no alternative but to rely on coal. Otherwise we will have to import liquid fuel or LNG. How do you view this situation?


TEC: Petrobangla is working on a gas production augmentation program. The goal is to maximize production from existing fields without jeopardizing the structures. This appraisal-cum-development program should yield some positive results. The exploration programs of BAPEX would also put on a fast track. We shall also nudge the IOCs to bring forward some of their exploration programs. All these would lead to increase in gas supply although it is difficult to speculate the number. You are right in suggesting that coal would also have to be developed simultaneously which I have elaborated before. As a contingency measure, we should not exclude the possibility of LNG import in the intervening period.


EP: Cairn will not further explore at Magnama and Hatiya if Petrobangla do not agree for higher price than agreed in PSC or allow them to sell to third parties directly in local market. In this scenario it has been recommended to approve it. There are complaints that it is a major departure of PSC provision. What is your opinion?


TEC: We are examining the proposal both in the context of the terms of the PSC, incentives for the contractor and the greater interests of Bangladesh. While exploration for new resources are critical now given the shortage we are in, we have to be equally aware of the longer term energy supply and security of the country. A balance has to be struck.


EP: French Company Total has relinquished block 16 & 17. It is told  that their decision  is influenced by the gas structures they found are not economically viable to explore. Cairn has also relinquished block 5 &10. Only Chevron has expressed intention to carry on exploration efforts in block 7. So in the next 5 years we can not expect major discovery by IOCs. Do you think it will be possible for BAPEX alone to meet our demand?


TEC: There is no last word in exploration. So do not make conclusive judgment if blocks are relinquished by contractors. We are looking into different options in this regard. BAPEX would be put into fast forward mode to which I have already referred to already. Alongside, we shall examine joint venture with BAPEX and also involvement of IOCs in the future. New policy guidelines would be put in place if conditions so require. 


EP: Are you going to approve the Petrobangla proposals to award some PSC s to IOCs to start exploration in offshore? Or you will go for fresh bidding?


TEC: The last Caretaker government took the initiative for awarding exploration contracts to some IOCs for offshore blocks. We are examining the papers and after due diligence, firm up our position. Our government is only 3-month old and you should allow some time for arriving at decisions on such important national issues.


EP: Demarcation of Maritime Boundary in offshore exploration is a sensitive issue. This can create dispute with neighbors. How you are approaching this?


TEC: An expert committee is working on it. We will finalize maritime boundary in the shortest possible time. Ministry of Foreign Affairs is actually handling this matter.


EP: Other than Barapukuria another proposal for coal mining at Phulbari is waiting government approval. Asia Energy is waiting for 3 years after submitting proposal. It has been told since last Alliance Government that decision will be taken in accordance with coal policy. Care Taker Govern echoed the same. But coal policy is not yet approved. Which route you are following on this? Will you also work on coal policy or will start coal mining?


TEC: You should have asked the past governments why even after years they could not finalize a coal policy. Ours is a democratically elected government and we have mentioned our overall stance in the election manifesto. The government has already started evaluating the legacy of past regimes. We shall finalize the policy framework in consultation of all stakeholders. There are of course detractors. But a people’s government as ours is, we shall decide in the best interest of the country. While earlier governments dealt with the Barapukuria mine without taking the local communities into confidence, the Prime Minister took time out to talk directly with them. This amply demonstrates the overall strategy of the government.  


EP: Will you to take fresh initiative to implement Tri –Nation Gas Pipeline from Myanmar? Is there any plan to import power from Nepal and Bhutan? If so, when?


TEC: The Prime Minster has on occasions emphasized the benefits of regional cooperation, particularly in the energy sector. Such initiatives can be bilateral or multilateral. We shall initiate discussions with our neighbors soon. Again, in the election manifesto this has been stated clearly.


EP: Some estimates evidence that about 20billion dollar investment is required in the next 5 years for Bangladesh Energy sector. Where from this will come? What are Government plans? How much of this will come from donors, how much from FDI and how much Government will invest?


TEC: Large investments are required, I agree. But I cannot put an exact number yet. One cannot deny that a significant part would have to come as FDI and from multilateral sources. World Bank and ADB have not only agreed to take part in financing these investment programs but also help raise funds from domestic and international sources. Although the current melt down in the international financial markets had cast some doubt about such prospects, the resolve in the recent G20 meeting and in particular, the decision to fund trade and investment, would soon release export financing from the developed countries to facilitate FDI flows in Bangladesh.


You may recall that during the last term of Prime Minster Sheikh Hasina, Bangladesh was able to attract large FDI in the energy sector along with some IPPs with one of the lowest power tariffs. Under her leadership, this time around, we shall do even better.



Date: 16 April 2009, Bangladesh

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Govt’s 3-yr power target may not be achieved-Muhith tells editors

Posted by phulbarinews on April 22, 2009

Staff Correspondent

Finance Minister AMA Muhith yesterday said it is unlikely that Awami League would be able to fulfill its election pledge to raise electricty generation by 1,000 megawatts (MW) in the country by the next three years.

“The target of raising the generation of power in three years may or may not be achieved,” Muhith said in response to questions raised by the editors of leading dailies and news agencies about the nagging power crisis at a pre-budget meeting at finance ministry. He expressed doubt that power generation could be increased to 5,000 MW within the next three years as promised by Awami League before the election.

AL, in its election manifesto, pledged to increase the power generation from the present 4000 MW to 7,000 MW during the government’s five-year tenure. Muhith said power is very important for all development activities. He said Siddhirganj Power Plant would be commissioned soon and a substantial supply of power would be available from it.

Regarding Phulbari coal mine, he said a decision in this regard would taken soon after consultations with the people of the area to improve its energy situation.  Muhith also praised some good initiatives taken by the caretaker government to increase power generation. Some electricity has been added to the national grid from rental power plants.

The finance minister also said, “The next budget would be big as we will have to give incentives to different sectors to tackle the world economic recession.”  Budgetary allocation in social safety nets, power and the agriculture sector would increase, he said. During the discussion on the budget, editors urged the finance minister to lay emphasis on the power sector and employment generation sectors. Stressing on proper implementation of the budget, the editors said care is taken in collecting revenue but not on it’s spending.

Editor of the Financial Express Moazzem Hossain, The Independent editor Mahbubul Alam, News Today editor Reazuddin Ahmed, The Daily Star editor Mahfuz Anam, Channel i Managing editor Faridur Reza Sagar, editor Toufique Imrose Khalidi, Sangbad editor Altamash Kabir and Manabjamin editor Motiur Rahman Chowdhury took part in the discussion.

Prime Minister’s finance and planning advisor Dr Mashiur Rahman, Prothom Alo editor Matiur Rahman, Jugantor editor Salma Islam, The Bangladesh Today editor Mahmudur Rahman Chowdhury, Finance Secretary Mohammad Tareque, NBR chairman Nasiruddin Ahmed and Economic Relations Division Secretary Mosharraf Hossain were also present.

Date: 10 April 2009, Bangladesh

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Open pit mining can solve power crisis, check desertification-Says Khandker Mosharraf

Posted by phulbarinews on April 22, 2009

Staff Correspondent

Labour and Expatriates’ Welfare Minister Khandker Mosharraf Hossain yesterday said open pit mining in the North Bengal’s coal mines would help solve not only power problems, but also check desertification in that region.


“In underground mining method, you can get only 10 to 12 percent coal, but in open mining you get 70 to 80 percent,” he said, expressing annoyance over too much debates among the intellectuals over the methods of mining when the country goes power hungry for years. The minister was addressing a discussion on local industries and employments organised by Bangladesh Chamber of Industries at its office in the city. He, however, said it was his personal opinion, not of the government.


Intellectuals are concerned over environment and agriculture in the case of open pit method, but it has good aspects too, because the open space created after coal extraction can retain a lot of water that can help recharge underground water in the northern areas which run the risk of desertification now, he noted. Besides, tourists can go there, he said, adding that fish production there could also help solve nutrition problem in the country. “If we leave the coal unused and yell, saying shortage and shortage, it will not do. If we cannot generate power, no development of industry nor of agriculture is possible,” the minister said. “Our future energy is coal. It has no alternatives,” he added.

Date: 09 April 2009, Bangladesh

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No alternative to open pit mining: Mosharraf

Posted by phulbarinews on April 22, 2009

ET Report

Labour and Employment Minister Khandaker Mosharraf Hossain Wednesday said there is no alternative to open pit mining to face the growing energy crisis in the country.

“We will not be able to extract more than 10 to 12 per cent coal through underground mining. On the other hand, the open pit mining can provide us up to 80 per cent yield,” he said while addressing a reception at Bangladesh Chamber of Industries (BCI) at its board room in the city. BCI organised the reception in honour of the minister and two other members of the present parliament – Zahid Maleque, MP, and Golam Dastagir Gazi (Bir Bikram), MP.

Mr Mosharraf is the former president of BCI, while Mr Maleque and Mr Dastagir are present and former directors respectively. Speaking as chief guest, Mosharraf said, as the energy crisis was alarming, the government was trying hard to solve it. He said the governments in the last seven years had failed to increase power production. Instead, the power generation had decreased substantially. “We have to change the current power scenario through coal-based or gas-based systems.” “Without improving power situation, the development of agriculture sector cannot be ensured, let alone the industrial sector.”

The employment minister said the government was also mulling to set up small power plants which could produce as little as 2 megawatt of electricity. “The government is pondering to set up power plants in the coastal belts, which will be run by wind power.” The licence fee for setting up of captive power plant would be reduced, the minister added.


Date: 08 April 2009, Bangladesh

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Coal mining city to comprise 4 thanas of Dinajpur

Posted by phulbarinews on April 21, 2009

Shamim Jahangir

 The process for establishing a coal-mining city comprising four thanas in Dinajpur will start this month. Initially the government will establish the coal-mining city with 10,000 people of Birampur, Fulbari, Parbatipur and Nababganj thanas on an experimental basis, Prime Minister Adviser for Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury Birbikram told the New Nation yesterday. Afterward, we will extend the area of the city in phases, he added.

He said they will sit with the planners and experts from LGED, BUET and BRAC soon and seek their opinion on the establishment of the mining city. He said that the ministry has already prepared a draft map to establish the city. “The government will ensure all the modern facilities in the coal mining city. For this, coal mining university, college, school, community hospital and different industrial units will be established at the city,” according to him. State Minister for Environment and Forests Advocate Mostafizur Rahman, who was elected MP from Dinajpur coalmine area, told the New Nation that Prime Minister Sheikh Hasina dreamt of establishing a coal mining city when she visited Dinajpur in 1998.


After formation new government in 2009, she again directed us to find out the possibility of establishing it in Dinajpur. It was also the demand of the people of Fulbari and Parbatipur thanas, he informed. He held out the assurance that the government will give due compensation to the families to be affected for building the coalmining city. Meanwhile, the government constituted a 8-memeber committee to determine compensation for the resettlement of 406 affected families of Barapukuria in Dinajpur coalmine project.

The committee has already identified five worst affected families of Kalupara and Moupukur villages and called for removing them to safer places as they are living in the coal mining area with great risk to their lives and properties. But the members of these five families have vehemently opposed their rehabilitation at other places unless they were given due compensation. “We have already visited the coal mining areas several times and prepared our report on the basis of our talks with the affected families,” a member of the committee said on the condition of anonymity. He further said that they would recommend rehabilitation of more than 200 families of Kalupara and Moupukur villages first and then rest of the families of five other villages in coal mining area in phases.

In reply to a question, he said that the committee is yet to assess the size of compensation for the affected families. The committee will recommend acquiring around 33.5 square kilometres of land at seven affected villages falling in coal mining area by resettling the affected people, he added. An inter-ministerial meeting on March 3 constituted the eight-member committee to prepare a complete package programme for compensating people affected by land subsidence at the coal mine area and for future course of action including acquiring of land. The meeting also asked the committee to review the land acquiring procedures like Jamuna Bridge. The committee is headed by joint-secretary Ahmed Ullah of the Energy and Mineral Resources Ministry.

The government will acquire the land as early as possible for starting open pit mining in future, sources said. ffected people at Barapukuria have become restive in recent times as huge land subsidence affected 300 acres of land and subsequently many houses at seven villages have developed cracks. Following the agitation of Jhigagari villagers the coal production of Barapukuria remained suspended from February 25 to March 2. More land subsidence might occur because of the underground mining. If people continue to live in the mining areas they might be at great risk because of subsidence, sources said. The committee is likely to recommend a guideline for the government to appoint experts or surveyors to determine what amount of compensation of the people in the area need,

‘Before assessing the compensation package, finding the actual number of people living in the area, determination of agricultural and residential land, number of houses, trees and the cost of crops are crucial. Besides, peoples’ views should be taken on where they want to go and what they want to do after relocation,’ sources noted. The government has already constructed and renovated several building to resettle the affected families at West Camp in Dinajpur. The Barapukuria coal field has a reserve of around 389 million tonnes and the authorities will extract 10 to 20 per cent coal from the underground mine in 30 years.



Date: 07 April 2009, Bangladesh

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