Coal News of Phulbari – Bangladesh

News on coal resources & coal basins of Bangladesh

Archive for June, 2009

Coal mining issues spark fresh debate

Posted by phulbarinews on June 23, 2009

NRB expert’s comment irk colleagues; NRB panel advocates mining method on cost-benefit basis

Staff Correspondent

The local and non-resident Bangladeshi (NRB) participants of the four-day brain storming session on coal policy were irked by public comments of two experts against certain aspects of mining in Bangladesh. They said that their comments at a press conference organised by Bangladesh Paribesh Andolon (Bapa) and Bangladesh Environment Network Friday were aimed at discrediting the four-day session in which the two themselves had participated and contributed to the recommendations on the coal policy.

Only within a day after participating in the session, NRB coal expert and a member of the Environment Network Dr Khalequzzaman Friday at a press conference on the four-day session said that open pit mining was not ecologically friendly for Bangladesh. Another NRB environmentalist Dr Sarwat Chowdhury said coal could be exported if there is no way for it to be stored or preserved. This statement however reflects the outcome of the four-day session.

Other NRB and local experts who attended the four-day session said that Khalequzzaman misrepresented the discussions that took place at the Jamuna Resource on coal policy, land subsidence, resettlement and environment issues arising out of coal mining. “He gave an impression to the public that this four-day session was designed to legitimise open pit mining and coal export and they sat with the same group of people which is terming that session a grand conspiracy,” said a Petrobangla official who attended the Jamuna sessions.

“While the session was highly academic and focused, we had a lot of discussions with Dr Khalequzzaman and we had converged that the policy will not be bent on any particular style of mining. Instead, we recommended that the method of mining will be determined by cost-benefit ratio. In certain areas, underground mining method would be more beneficial for the nation, while in some other areas, open pit would be more beneficial,” he added.

NRB Saleque Sufi who is working on mines and minerals with Queens Monarch University said, “It was unofficially agreed among the NRBs that we would not make any isolated statement to the press.” “But contrary to the spirit of the group, Khalequzzaman Mohammad and Sarwat Chowdhury appeared at a press conference of a group which is agitating against mining in Bangladesh within less than 24 hours of the formal conclusion of the programme.” He noted that a leader of the National Committee to Protect Oil, Gas and Mineral Resources–that has been campaigning against any coal sector development–was present at the conference.

“As invited guests of Petrobangla and part of the group, normal courtesy demands that they should have consulted with Petrobangla chairman or at least the group co-ordinator before joining the conference,” he added. “NRBs in the brain storming session did not recommend any particular mining method but discussed in-depth all forms mining methods and associated impacts. It was agreed that mining methods would only be adopted after extensive feasibility study and on detailed cost benefit analysis. Yet within less than 24 hours of agreed position these two professionals from USA disowned the agreed position,” he pointed out.

Another participant noted, “This was not a discussion to give Asia Energy’s Phulbari project a go-ahead. But unfortunately some people are giving that impression.” “Some asked why did we meet at Jamuna resort. I ask how do you get people fully devoted to discussion and debates for four days if you don’t take them out from Dhaka?” he added.

Date: 21 June 2009, Bangladesh

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Keep export option, build green city-Expat experts suggest at discussion on coal

Posted by phulbarinews on June 23, 2009

Refayet Ullah Mirdha, back from Tangail

A panel of non-resident Bangladeshi experts yesterday suggested that the government formulate a coal policy with an option to export the surplus fossil fuel. It talked about merits and demerits of open-cut and underground methods of coal extraction, but did not recommend any.

At a post-workshop press conference at Jamuna resort in Tangail, the energy experts said the government should build ‘green cities’ near the coal mines to ensure locals are safe from environmental hazards. They also stressed the need for arranging alternative means of livelihood for the people affected by coal mining. Nafis Ahmed, a panel member, said they have asked the government to develop a database through geographic information system for a 30-year land management in the mining localities.

“We have also suggested regular dialogue between the government and experts on protection of the environment from the perils of extraction,” he added. The panel observed that the country would be able to have four 500-megawatt power plants if coal mining at Barapukuria and Fulbaria runs on full throttle. It said it favours exporting the coal in excess of the domestic demand because extraction, once underway, cannot be stopped.

The experts drew up a draft coal policy during the workshop titled ‘Brainstorming with Non-Resident Bangladeshi Experts on Coal Mining in Bangladesh’. The four-day group work, which began on June 15, was organised by the energy ministry and Petrobangla, the state body mandated to oversee production, transmission and marketing of gas, oil and other mineral resources.

In the draft, the expatriates’ team suggested securing energy security for 20 years, provided the GDP growth would hover around 8 percent a year. M Khalequzzaman, one of the specialists, said that while sketching out the policy, they focussed on energy security, institutional and legal framework, resource mobilisation, environment, health and safety issues, and resettlement and rehabilitation of those who would be affected.

Alongside its own coffers, he noted, the government should count on stock markets, public-private partnerships, banks and security bonds for funds. Mohammad Mohsin, secretary of the energy ministry, said they would discuss the suggestions at the secretary-level committee to include those in the government’s draft coal policy. “The government wants a coal policy as soon as possible. However, I cannot give you an exact time by which the proposed policy would be finalised,” he told reporters.

Muktadir Ali, acting chairman of Petrobangla, said he has already recommended export of 2 lakh tonnes of surplus coal produced at the Barapukuria coal mine. Among others, Toufiq-e-Elahi Chowdhury, power and energy adviser to the prime minister, was present at the press conference.

Date: 19 June 2009, Bangladesh

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Experts to review coal issues, policy

Posted by phulbarinews on June 23, 2009

Star Report

A panel of eight expatriate Bangladeshi experts begin today an exclusive brainstorming session to give the government a fresh perspective on coalmining issues and the pending coal policy. The energy ministry and Petrobangla organised the four-day session to be held at the Jamuna Resort.

The expatriates have been asked to focus on four issues — Barapukuria coalmine’s land subsidence and how to make it efficient in future; what should be the main mining option for the Phulbari coal resources irrespective of Asia Energy’s proposal; the draft coal policy; and how the nation should handle water resources and rehabilitation while implementing a coal project.

Double PhD holder from the UK and Australia on minerals, Dr Nasir Ahmed is acting as the coordinator of the expatriate group. Ahmed is serving as a UNDP consultant and working on coalmine for the last 20 years in New Castle, Australia. All the expats are coming from either Australia or the USA. A few panel members who arrived in the city last week have already collected data and visited Barapukuria underground coalmine, which is causing land subsidence and drainage of underground water.

“The Barapukuria mine is operating amid very high risk. Its ventilation system is very poor. There is no ventilation plan. The safety and environment status is very poor compared to any mine in Australia,” said Salek Sufi quoting observation of his colleagues. Sufi is a former official of Gas Transmission Company Ltd (GTCL) now working on mines and minerals with Queens Monarch University, Australia.

He added wherever the land subsidence had occurred in Barapukuria coalmine, the untapped coal seams underneath have been completely damaged. “These coal seams cannot be extracted in any method. In the present circumstances, this mine should complete its underground mining before anyone can consider other options like open pit mining,” he noted.

Other expatriate experts are Dr Saad Analip, professor and the chair of marketing, Pennsylvania State University, USA, Dr Khalequzzaman, head of geology department of Lock Haven University, Pennsylvania, US-based environmentalist Dr Sarwat Chowdhury, mining engineer working in Queensland coal and iron mines Masud Hossain, and Melbourne-based Global Positioning System and Global Information System expert Sultana Nasrin.

Energy adviser Dr Tawfiq-e-Elahi Chowdhury, Bir Bikram, five parliamentarians from North Bengal, representatives from the parliamentary standing committee on energy and secretaries of the ministries of power and energy would be present at the event financed by Petrobangla.

The chairmen of Petrobangla and Power Development Board (PDB), members from Geological Survey of Bangladesh, Bureau of Mineral Development, Barapukuria Coal Mine Company, Dr Hossain Monsur of the geology department of Dhaka University, and representatives from the Rajshahi University and the chemical engineering department of Buet will also take part in the session.

Date: 15 June 2009, Bangladesh

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Govt plans to set up coal-fired plants in each mine mouth

Posted by phulbarinews on June 23, 2009

M Azizur Rahman

The government has planned to set up coal-fired power plants at the mine mouth of every coalmine in a major drive under its long-term plan to divert its energy sources from natural gas to coal and resolve the country’s nagging electricity crisis, officials said Sunday. These plants would be in addition to the six planned coal-fired power plants to be installed in different strategic locations near the coastal areas, a senior energy ministry official said.

He said the mine-mouth coal-fired power plants would be set up on the basis of a guideline to be provided in the national coal policy. The long-pending national coal policy is now in the final stage of approval. The country has five coalmines having reserves of around 2.90 billion tonnes but coal extraction is now limited to only one mine at Barapukuria in northern Dinajpur.

Country’s lone coal-fired power plant is located at the mine-mouth of the Barapukuria underground coalmine having electricity generation capacity of 250 mw. But the plant can produce only 65mw of electricity due to technical glitches. The state-owned – Power Development Board (PDB) – has recently placed a proposal to the power ministry for setting up six coal-fired power plants to generate a total of 2,625mw of electricity.

“Five of the plants having the generation capacity of 500mw each are expected to be built under Private Public Partnership (PPP), while the remaining 125mw capacity by the government itself,” PDB Member (generation) Tapan Kumar Chowdhury told the FE. All the five power plants under the PPP would be set up near the coast – one each near the country’s two seaports Chittagong and Mongla, two at Meghnaghat, on the Meghna river bank and the rest at Mawa, on the Padma river bank.

The country might import coal from Indonesia, India or Australia to run these plants, as the output from the Bangladesh’s lone operative Baropukuria coalmine won’t be sufficient. The government-owned 125MW coal-fired power plant would be set up onshore at Katakhali near the Barapukuria coalmine.

The government has stepped up activities to set up these coal-fired power plants as the gas crisis started taking toll on the overall power generation in the country with the state-owned energy corporation Petrobangla projecting emptying of the present gas reserve by 2019. With the gas crisis getting worse every month, the government has already decided to keep provisions for dual-fuel for all the future power plants in the country.

The country’s overall electricity generation is now hovering around 3,800mw against the peak hour demand for over 5,500mw. But the government has a commitment to augment electricity generation to 5,000mw by 2011 and 7,000mw by 2013. Currently over 80 per cent of the country’s power plants are gas-fired but gas scarcity has forced a number of them, having the generation capacity of around 600mw -700mw, to shut.

Natural gas production is now hovering around 1,900 million cubic feet per day (mmcfd) against the demand for over 2,150 mmcfd.


Date: 15 June 2009, Bangladesh

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Review of 8th draft coal policy starts tomorrow amid criticism

Posted by phulbarinews on June 23, 2009

Staff Correspondent

The government tomorrow begins the four-day brainstorming workshop at Jamuna Resort in Tangail to review the eighth draft coal policy with the participation of a number of local and expatriate Bangladeshi ‘experts’ some of whom have campaigned in favour of open-pit mining. The coal policy was first drafted in 2005 but successive governments failed to finalise it after making changes for seven times in a debate over fixing the mining method and royalty rate.

A team of around 40 people including prime minister’s adviser Tawfiq-e-Elahi Chowdhury and state minister for power and energy Shamsul Haque Tuku and 11 local and expatriate ‘experts’ will attend the workshop and visit coal fields in Dinajpur for gathering first-hand data before making any recommendations on the coal policy.

Meanwhile, the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port, the Bangladesh Economic Association and a number of eminent teachers of different public universities have criticised the government move to get the coal policy reviewed by the ‘so-called experts’. The entourage will also include state minister for forest and environment, Mustafizur Rahman, six members of parliamentary standing committee on power and energy, five parliament members from the coal field areas, energy and power secretaries, Petrobangla and Power Development Board chairmen, Department of Environment and Geological Survey of Bangladesh director generals and other officials of energy division, Petrobangla, Bureau of Mineral Development and Barapukuria Coal Mining Company Limited.

The ‘experts’ will review the latest draft of the coal policy, which was changed by the interim government amid criticism after an advisory committee, headed by the BUET’s former vice-chancellor Abdul Matin Patwari, finalised the draft. Sources in Petrobangla said three local ‘experts’ — Professor Ijaz Hossain from BUET, Professor Hossain Mansur from Dhaka University and Professor Kamruzzaman of Rajshahi University — have been invited to attend the programme.

The expatriate ‘experts’ include Dr Nasif Ahmed, Masud Hossain, Abu Salek Sufi and Sultana Nasrin from Australia and Dr Khalequzzaman, Dr Sad Andalib and Dr Sarwat Chowdhury from the USA. Sources in Petrobangla said some of the local and expatriate ‘experts’ have campaigned in favour of open-pit mining in last few years while some of them are from business studies background. 

They said a German organisation that has sponsored a number of roundtables and seminars to promote open-pit mining and the controversial Asia Energy’s Phulbari project would provide funds for the programme. Although Petrobangla initially estimated that around Tk 80 lakh would be needed, the latest estimate of the corporation showed that the expenditure of the programme would be between Tk 30 lakh and Tk 40 lakh.

The National Committee to Protect Oil, Gas, Mineral Resources, Power and Port, the Bangladesh Economic Association and a number of eminent teachers of different public universities, meanwhile, also alleged that the government was trying to legitimise the open-pit mining and allow the controversial UK-based Asia Energy to operate open-pit mining at Phulbari coal field by reviewing the draft.

They demanded that the government should approve the draft of the coal policy finalised by the Patwari committee and ban open-pit mining in the country.


Date: 14 June 2009, Bangladesh

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Govt guns for long term power goal

Posted by phulbarinews on June 23, 2009

Leans on coal, nuke, import options to solve gas, power crisis

Staff Correspondent


Touching upon energy and power issues in his budget speech, the finance minister outlined a long-term vision to solve the gas and power crisis at present and in future, and as part of it proposed an allocation of Tk 4,310 crore for the sector in the next fiscal year (FY). The allocation is 48 percent higher than that in the revised budget for the current FY.


The finance minister’s speech flashes the government’s consciousness about various issues related to energy, usually overlooked in the past. For instance, he talked about environment friendly energy technology, greater use of renewable energy like solar power, tapping coal in an environment friendly way, setting up a gas development fund for Bapex, conservation of energy and greater emphasis on partnership between private and public sectors.

AMA Muhith also tabled government plans to import gas from neighbouring countries through pipelines on the basis of mutual cooperation. He adds, “We are continuing dialogue with our neighbouring countries to import power for mitigating the power crisis on a short term basis.”

He declined to give a definitive deadline for building a nuclear power plant but said the government plans to implement a 1,000 megawatt nuclear power plant in Rooppur with self-finance. The government is seriously considering using coal along with gas for power generation, Muhith said. “We shall set up coal fired power plant using environment friendly technology for extraction of coal. If required, coal may be imported to run these power plants.”

He said the government is also considering importing environment friendly energy technology in the “context of current level of environmental degradation”. To enhance capacity of the national oil and gas exploration company Bapex, the government is considering setting up a gas development fund. Bapex’s Shahbajpur gas field in Bhola is ready to supply 45 million cubic feet per day (mmcfd) gas for a 250 MW power plant proposed to be built there.

The country’s gas reserve is depleting. The proven reserve now is 7.3 trillion cubic feet (tcf) while probable reserve is 5.5 tcf more. This situation demands that the country must find new gas fields or face diminishing gas supply from 2011. For this, it is important to take up on-shore and offshore exploration for new reserves. The government is also looking into the prospect of viable extraction of coal at deeper layers. “A time-befitting energy and coal policy is nearing finalisation,” he mentioned.

To ensure energy security, the government is working for a three-fold increase in oil refinery capacity. Muhith pointed out that when Awami League came to power, it was aware of a huge gap between demand and supply, but it was not aware that the snag is not only in the supply of gas and generation of power but also in the transmission of power. There had been ‘serious neglect’ to taking up new initiatives regarding known gas fields.

As a result, the present government has been compelled to set up “expensive dual-fuel power plants that can use diesel or furnace oil and also gas,” the finance minister said. “Only 45 percent of our entire population have access to power. Currently our per capita power consumption is only 172 kwh, which is 325 kwh in Sri Lanka, 408 kwh in Pakistan and 665 kwh in India.”

Against the average power demand of 5000 MW at present, the existing power plants can generate only3800 MW, he said. “We are determined to take appropriate steps to increase power generation assuming its demand to be 20,000 MW by 2021.” This year additional power will be generated by four projects under public sector and 440 MW by 11 projects under private sector. The bidding process for building 450 MW Bibiyana power plant is underway.

“If we go ahead as planned, we hope that by 2013, 2810 MW of power will be produced through 13 projects under public sector and another 1,350 MW through three private sector projects,” the minister said. The government is also working for efficiency enhancement of management and efficient use of power. During the boro season this year, the government through load management diverted 300 MW power for irrigation to achieve bumper boro harvest.

“We have taken up a Tk 105 crore project to produce energy saving bulbs. Once this project is implemented, there will be a saving of 350 MW electricity,” Muhith said. For transmission-distribution of power, the government has a three-year plan. An additional 837 km power grid line, 17 sub-stations and 15,000 km distribution line will be built.

The country now produces 20 MW power from renewable energy, mainly in rural areas. Now the government is taking initiatives for use of solar energy and biogas technology also in urban areas. To address gas issues, the government plans to drill in 2009-11 period five development wells, four work-over wells and four production wells to get an additional 208 mmcfd. Offshore exploration will start soon.



Date: 12 June 2009, Bangladesh

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Expatriate Bangladeshi exptriates to review coal policy

Posted by phulbarinews on June 10, 2009

R Akter

The government will have the coal policy reviewed by a group of ‘expatriate Bangladeshi experts’ at an expense of around Tk 80 lakh, most of which will be donated by an organization from a European country.

The expatriate experts will just share their experiences with government on coal mining in different countries. It is the government which will ultimately decide which recommendations it will accept.

The four-day programme, from June 15-18, will include a meeting at the Jamuna Resort in Tangail for thrashing out ideas and a visit to coal-fields in Dinajpur for gathering first-hand data before making any recommendations on the coal policy.

Apart from ‘expatriate experts’, members of the parliamentary standing committee on the power and energy ministry and officials of various government agencies, like the Geological Survey of Bangladesh and Department of Environment, might attend the discussions organized by Petrobangla.

The ‘experts’ will review the latest draft of the coal policy, which was slightly changed by the interim government after an advisory committee, headed by the BUET’s former vice-chancellor Abdul Matin Patwari, finalised the draft.

The coal policy is in the final stage. There is no scope anymore to favour any company or any mining method. If any good suggestions come up from the experts, the government will mull them over, sources said.


Date: 08 June 2009, Bangladesh

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Expat experts invited to dissect coal policy

Posted by phulbarinews on June 10, 2009

MPs, academics to join brainstorming on its draft on June 15
Star Report
Expatriate and local energy experts, parliamentarians and energy sector officials will examine the draft coal policy at a four-day exclusive brainstorming session, jointly organised by the energy ministry and Petrobangla.

The session begins on June 15 at Jamuna Resort near the Jamuna Bridge, sources said. Eight expatriate experts due to attend the session are expected to arrive in the city this week from US and Australia.

Energy adviser Dr Tawfiq-e-Elahi Chowdhury, five parliamentarians from northern Bangladesh, representatives from the parliamentary standing committee on energy and secretaries of the ministries of power and energy would be present at the event financed by Petrobangla.

The chairmen of Petrobangla and Power Development Board (PDB), officials from the Geological Survey of Bangladesh, Bureau of Mineral Development, Barapukuria Coal Mine Company, Dr Hossain Monsur of geology department of Dhaka University, and representatives from chemical engineering department of Bangladesh University of Engineering and Technology (Buet) and from Rajshahi University will also participate in the session.

Meanwhile, the plan for this brainstorming session has raised eyebrows as some newspapers reported that it is going to cost Petrobangla around Tk 80 lakh. Sources however said the event should cost around Tk 30 lakh. Petrobangla will pay for air tickets of six of the eight expatriates while two will bear the cost themselves. The other expenses include those for four-day use of facilities at Jamuna Resort and for transport.

Petrobangla initiated the process of hosting the session following a directive from the energy adviser who had been maintaining links with expatriate energy experts for long. “There is a110-member forum of expatriate energy experts. Selection of experts for the session was made through this forum,” said one source.

Dr Nasir Ahmed, Buet-educated chemical engineer and double PhD holder on minerals from UK and Australia, is acting as coordinator of the expatriate group. He is a UNDP consultant, and is working on coal mine for the last 20 years in New Castle, Australia.

The other guests include Dr Saad Analip, professor and chair of marketing department, Pennsylvania State University, US, Dr Khalequzzaman, head of geology department of Lock Haven University, Pennsylvania, US- based environmentalist Dr Sarwat Chowdhury, Buet-educated chemical engineer and former official of Gas Transmission Company Ltd (GTCL) now living in Australia and working on mines and minerals at Queens Monarch University Saleq Sufi, mining engineer working in Queensland coal and iron mines Masud Hossain, and Melbourne-based Global Positioning System and Global Information System expert Sultana Nasrin.

These experts will give their independent opinions on the draft coal policy that the government failed to approve in the last four years, mainly due to resistance from some groups, and controversy over the Asia Energy Phulbari coal mine project.

During the last caretaker government’s tenure, the energy ministry held its last meeting on the draft coal policy in October last year. The present Awami League government started working on the policy from March-April.

Many view the draft policy as anti-investment, unattractive and unrealistic. For instance, the draft makes it mandatory for a coal mining company to set up power plant. In reality, a mining company is unlikely to be a competent one for this task.

On rehabilitation, the draft policy demands that after mining the relevant land must be returned to the original owners in original state. It contradicts the land acquisition act of the country.

The policy also says that a committee would periodically fix royalty on coal production. Such a provision would create uncertainty over the investment. So, there should be a clear-cut range of royalty for both underground or open- pit mining so that project cost and return can be predicted, sources noted.

Date: 08 June 2009, Bangladesh

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Energy Source for Power Generation

Posted by phulbarinews on June 10, 2009

EP Report

Energy & Power and GTZ-SED jointly organized a roundtable on “Energy Source for Power Generation” at the CIRDAP auditorium on May 17. Ministers, MPs, former Ministers, academics, researchers, experts and representatives from development partners were present. The speakers raised concerns about the power crisis, tried to identify the reasons of the crisis, discussed about alternative energy options for power generation and suggested possible measures to solve the situation.

I have been experiencing load shedding since my school life, but now it seems like a real Sidr — this is the way a former State Minister for Power expressed his concern about the ongoing power crisis in the country at a roundtable in the capital city of Dhaka. The concern over the crisis was better reflected by the recent government decision to move clocks forward by one hour as well as to distribute CFL bulbs free of cost. The delicacy of the problem can also be understood when top entrepreneurs or researchers yelled and appealed: “We do not afford to wait a single day to get power.” A participant of the roundtable does not afford to wait even half an hour. Common people have hardly any forum to voice their concern formally, but it’s well evident everywhere.

It was suggested at the roundtable to summon even a special session of the Parliament to discuss and take decision on the power situation.

Energy & Power, a fortnightly, and GTZ-SED jointly organized the roundtable titled “Energy Source for Power Generation” at the CIRDAP auditorium on May 17. Ministers, parliament members, former Ministers, academics, researchers, experts and representatives from foreign development partners were present at the meeting. They raised concerns about the power crisis, tried to identify the reasons of the crisis, discussed about alternative energy options for power generation and suggested possible measures to solve the situation. 

The roundtable witnessed an unprecedented consensus on coal based power generation – be it through firing local coal or imported coal – and urged immediate steps in this regard. The participants were, however, divided in their opinions regarding alternative options of energy sources, from using less expensive gas, which came to its fag end, to highly expensive solar power. It was suggested to summon even a special session of the Parliament to discuss and take decision on power generation. 

The participants took part in the discussion based on a keynote paper by BUET professor Dr Ijaz Hossain, who showed that the coal-fired power generation would be the best option for Bangladesh. Out of seven alternatives he showed at the roundtable, the solar power is the worst option. 

Erich Otto Gomm

Appreciating Energy and Power for organizing the roundtable, GTZ-SED program coordinator Erich Otto Gomm highlighted German cooperation in the power sector of Bangladesh. He noted that the roundtable would not only discuss about the big issues in the energy and power sector of the country, but also shed some light on the problems being faced by the rural people. He also expected that the roundtable would provide some thoughts on issues like energy savings and energy sources.

Dr Ijaz Hossain

In his keynote paper, Professor Dr Ijaz Hossain, Chairman of Chemical Engineering Department of BUET, gave a brief history of the country’s energy and power sector and tried to identify as to why the country plunged into a severe crisis. He also shows seven alternative options to mitigate the crisis, taking local coal resources as the best option for the country followed by imported coal while choosing renewable sources as the worst one.

He identified that all the past governments have failed to tackle the energy sector problems for conditions imposed by the World Bank and IOCs as well as lack of government’s proper attention on funding for exploration and pricing of energy.

He said the World Bank stopped funding the power generation as well as oil and gas exploration in the early 90s due to availability of private financing while IOCs announced in 1999-2000 that they would stop exploration if they are not allowed to export gas. The IOCs became reluctant to explore gas and oil as the government did not allow exports. The exploration work became the responsibility of the government, as a result. But the government failed to provide funds for this purpose.

In the power sector, the World Bank imposed a restriction on IPP in mid-2000 on an excuse that the Power Development Board would not be able to afford electricity from the IPPs. PDB will be bankrupt if they continue using electricity from the IPPs. A disappointing price offer of 3.5 cents per Kwh of electricity also prevented new power plants from coming in. At the same time, important issues like replacement of old power plants, adequate maintenance budget and steps to tackle the imminent disaster have not been taken care of. 

The people used to get energy at throw away prices while the new electricity and gas price by now doubled than the present retail prices. In 1975, the price of gas was only 25 cents per mcf, which in default started the history of low energy prices. The price by now increased to US$ 2 per mcf, which would increase exponentially. It would be a challenge for the government to make a transition from the lower price to the higher price as the people are habituated with the lower price. Prof Ijaz wondered if the government would subsidize the price to attract exploration.

The power sector system loss has been identified as a major reason behind an organization’s financial health, it was questioned how an organization could survive with having a system loss of 10-15 percent – be it technical or non-technical (theft) loss. Technical system loss in the country is also too high while power stations’ own use is not being addressed. Future growth of the sector would depend on the well management of the system loss.

The keynote paper also identified management deficiency in the power and energy sector as the skilled manpower either went abroad for a better opportunity or being appointed by foreign companies working here at higher remuneration. The problem should be addressed through setting up of new organization structure with good remuneration.

It urges a truly motivated workforce to develop the energy sector while the utilities should be taken out of the national pay scale. An incentive based pay scheme should be devised for meter readers of both gas and electricity utilities. Privatization can also be explored, if possible.

The keynote paper considered cost of power generation from different options – production cost of per Kwh electricity from the high quality local coal would be Tk 3 while it would be Tk 4 from imported coal, Tk 17 from solar system. The cost from solar system would come down to Tk 10 per Kwh if interest free loan is available.

However, the cost of electricity generation from imported coal would vary depending on the price and quality– if the coal imported at US$ 100 per ton, the price of electricity would be Tk 3.9 while the price would go up to Tk 5.1 per Kwh if the high quality coal imported at US$ 150 per ton. The cost for high quality local coal would be of US$ 50 per ton and the cost of electricity would be Tk 3.5 per Kwh. Cheaper coal from India would cause increased plant cost.

Power generation from biomass has an opportunity in the country but there is a shortage of biomass. About the LNG option, it said the LNG would be too expensive compared to coal as the price of LNG is always tagged to oil prices that would keep on rising as the most recent trend shows. LNG would cost US$ 6-7 per thousand mcf while the country buys gas from IOCs at US$ 3 per mcf. LNG could be considered if the domestic retail price of electricity can be increased. However, LNG could be acceptable for other uses in the off-grid areas.

Considering the cost of power generation, the price of new electricity should be at least Tk 6 per Kwh at the consumers’ end as the power supply consists of some other cost in addition to generation cost. The additional costs involved in transmission, distribution, billing and collection expenditure, tax and VAT.

In the renewable electricity generation technology, the investment cost for solar system would be US$ 7,000 per kwh as compared to US$ 2,000 in the biomass system while the poultry litters would be free. “But it’s a kilowatt-hour solution to the megawatt-hour problem,” said Prof Ijaz, adding that the solar system would not be able to compete with other non-renewable options in next 25 years. The batteries, used in the solar system share 25 percent of the total cost, will have to be changed 4-5 times during the useful life of the project.

He, however, considered that high-rise buildings, all commercial and industrial establishments can be forced to install solar system to meet 5 percent of their electricity demands while 50 percent of all villages can be electrified using SHS, hundreds of markets and rural industries can be supplied with solar PV mini-grids and thousands of irrigation pumps can be run using solar electricity.

The country will have to offer a near zero discount rate if it wants to encourage high investment technologies like solar, nuclear or hydro electricity, but wondered whether the government would afford it. 

Prof Ijaz recommended introducing feed-in tariff system in Bangladesh that would provide incentive-based guaranteed price for electricity to be generated from renewable energy sources. “Forget about tender, you just set a price of electricity and give buyback guarantee,” he added. India has guaranteed buyback arrangements for “bagasse cogeneration electricity” at 6.7 cents (equivalent to Tk 4.6) per Kwh and bio-diesel at Rs 25 per litre. Feed-in tariffs are standard in many developing countries that have Kyoto obligations.

Prof Ijaz compared the nuclear power for Bangladesh “digging one’s own grave” as the country would not be able to manage one incident like Chernobyl nuclear disaster. He posed question as to why a country, having high quality coal reserve of 2 billion tons to generate 10,000 MW power in next 50 years, will have to go for highly expensive nuclear power.

Although the nuclear power can provide cheaper electricity and energy security, he said the World Bank, ADB and IFC would not even talk about funding the nuclear power plants while handling of fuel and waste would pose high risks.

Prof Ijaz compared the energy sector crisis with Tsunami, urging the government to give a big push for conservation of energy resources, attaining energy efficiency and using renewable sources. He welcomed the government initiative to save daylight and suggested introducing CFL bulbs, T5 tube light.

He said around 100 MW electricity can be generated from biomass (bagasee, jute cuttings, rice husk and poultry litter) while government should promote dual-fuel for gas turbines, set up 200-300 MW of liquid fuel power stations to use naptha and condensate. He expressed his surprise as the country started exporting condensate. He also suggested allowing captive generators to sell surplus electricity and, if possible, taking the electricity into grid. “They don’t run plant in full capacity. They can add 200-300 MW.”

“Gone are the days for cheap energy,” he said, adding that the government plans and programs for expansion should forget the days of cheaper electricity while the natural gas is too expensive for power generation.

He recommended that the gas and electricity utilities must be reformed in a manner similar to the state-owned banks. Coal fired plants and electricity import from India, Nepal and Bhutan are our only near and medium term options (3-8 years). Our own coal can be the first priority followed by import from Meghalaya and then Indonesia or Australia.

A.B.M. Sirajuddoula

Taking part in the discussion on the keynote paper, A.B.M. Sirajuddoula, Director, Cairn Energy, pointed out that domestic use share 10-12 percent of the total gas consumption. He suggested replacement of gas burner with LPG through reducing import duty to some extent.

He recommended strengthening BAPEX as Petrobangla cannot perform huge task alone and forming new companies like BAPEX as the individual companies can do very well. Technical people should be increased in Petrobangla.

Mainul Ahsan

Former Director of Petrobangla Mainul Ahsan said: “We have been talking about energy crisis for long but there is no development.” He expected that some solution would take place after the roundtable as the country is at the fag end of gas resources. He recommended utilizing all the alternative options simultaneously as he thought one option cannot solve such huge crisis.

Solution to the problem with coal mining will require bold political will. “We must come to a consensus on the coal project.” The disadvantages of the open pit mining are not problems. They could be solved through bold political initiative. He said the land slide due to mining can be reclaimed completely. In some places, one cannot understand that there was a mine 50 years back. The people are resisting open pit mining due to their ignorance. The best way to extract coal is open pit mining.

“You cannot scrap the agreement with Asia Energy, but the problems can be solved through negotiation. The royalty rate in the draft coal policy should be reviewed.”

Muhammad Aziz Khan

Summit Group Chairman Muhammad Aziz Khan said there has been a sea change about the estimate of gas reserve. The question needs to be answered how the 32 tcf reserve came down to 6 tcf overnight. “We should allow import of furnace oil duty-free if you have no gas and if you take time to decide on coal mining.” Allow captive generators and IPPs to import furnace oil duty-free. “I don’t think we have a single day to waste thinking about the coal policy,” he said, adding that there should be an energy mix policy to provide people with a reasonable price.

Prof Rafiqul Islam

Former State Minister for Energy, Power and Mineral Resources Prof Rafiqul Islam said the energy and power problem would not have turned in this worse state if the projects and policies undertaken until 2001 continued. “The main problem is primary source of energy.” He said the Awami League government started journey with only 1,600 MW of electricity, and the power generation could have increased to 5,000 MW if the projects continued. The government should act quickly based on the recommendations. The problem deserves quick attention of the government and it should consider both offshore gas and other available options.

Iqbal Hassan Mahmood

Former State Minister for Power Iqbal Hasan Mahmud said the people don’t pay heed to our suggestions as we lost everything of our character in last two years. Rather, the suggestion of Prof Ijaz should be conveyed to the people.

In 1990, he said the World Bank suggested that the private sector would generate power. “But, I insisted them to rectify the sources of leakages, which should pay off.” The system loss was 56 percent at that time. They (World Bank) said that DESA will do it, but the leakages found in DESA too. “I’ve been experiencing load shedding since my school life but now it seems like a real Sidr.”

He said opinion surfaced again in favor of IPP in the private sector. But, he said, the government should also take part in IPP with the private sector. “Only the private sector can be risky… they can blackmail anytime.” He said that the deal should be made in a manner that the government will hold 60 percent share and the private sector 40 percent while the government will offload its 20 percent share in the capital market after five years.

“I’ve long been insisting for public-private partnership (PPP) but the World Bank restricted the idea to make way for the private sector,” he said. Of late, he added that now the World Bank is giving money to PDB to study the feasibility of PPP.

Iqbal said there is another problem in undertaking a power project that the Planning Division cut an estimate of a power project although there is no power expert in the division. “This is the reality of the power sector. Why the World Bank will impose reform? I’ll say, I need reform, you give us money. We’ll pay back this way.”

He said the power stations should be made profit centers. “I’ve introduced prepaid meters that worked very well – people are happy and, at the same time, it stopped leakages. I would like to request my successor to follow it up.”

It has not been considered earlier that there should be alternative source of energy as we have had huge gas reserve. “We’ll have to generate electricity through importing coal or extracting our own coal. We cannot wait even half an hour. If necessary, we’ll have to convene a special session in the Parliament to discuss the energy and power crisis and take a decision in this regard.”

Iqbal agreed with Prof Ijaz on nuclear power and said he does not know how many Chernobyl incidents Bangladesh would be able to manage. He requested the government to undertake an immediate plan to generate power in Bheramara with coal.

AKM Mosharraf Hossain

Former State Minister for Energy and Mineral Resources AKM Mosharraf Hossain said coal is the most important energy. But the problem is that the OGPC is always against it.

He said an improved salary structure would not help as the expertise has not been developed. He added that there is a shortage of technical people too. He said offshore demarcation is urgent. “We should try to establish cooperation with Myanmar as India did not cooperate us in relation to offshore demarcation…We must go for coal extraction.”

Dr Anwar Hossain

Dr Anwar Hossain said that three gas-fired or 2-2.5 coal fired power plants could be procured at the same cost of a nuclear power plant. He said the country should not use gas for power generation even if we get more gas discoveries and gas should be used for other production like fertilizer. “We should immediately go for imported coal fired plant as we don’t afford to wait.” He said the country can import coal by train from India or by ship from Australia while it can be imported immediately by train from Meghalaya.

“If we want nuclearpower, why don’t we do it in Ruppur, where land ready.” It would take one year more time if we do it in Bherama due to time consuming land procurement procedure. He suggested having a 500 MW nuclear power plant at Ruppur with own resources if fund is not available from other sources. He said furnace oil price should be equivalent to gas price, solar power should be made compulsory in the residential hotels and residents having hot water facilities to save gas.

Syed Tanveer Hussain

Former secretary Tanvir Hossain said the problem is that if any secretary speaks against World Bank, he gets a transfer order. “I can say now because I have retired.” He said the authorities concerned were supposed to drill 64 wells in last five years, but could drill not even 10 wells. “If you want gas you have to drill.” He said BAPEX needs to be strengthened.

Heather Variava

USAID representative Heather Variava said the US has long been involved in the development of Bangladesh’s energy and power sector. USAID has also been working in renewable energy sector. Many US companies are interested to invest in Bangladesh’s energy and power sector, she added.

Rafidul Islam Khan

Rafidul Islam Khan said there is no confusion about extraction of coal while there is no instance of whimsical pricing system in the world.  

Younus Akon

Younus Akon said that having a nuclear power plant would require higher initial cost, but it’s the cheapest and safest. “You don’t have so much fear of incidents like Chernobyl as waste must go through international inspection.” He said 20 percent of the world’s total power generation comes from nuclear power. “If we don’t undertake this project, it will be another suicidal decision. Nuclear should be second or third option.”

Mollah Amzad Hossain

EP Editor Mollah Amzad Hossain summarized the recommendation, saying that energy must be used efficiently. “We are talking only on imaginary data without exploring new gas. We will need coal and renewable energy, but the important thing is that we’ll need it immediately.” He said there is a debate whether we’ll get power at lower price or at the market price. “There must be a decision right now because we will not get power at a time even at higher prices.”

Major Gen (Ret) Shubid Ali Bhuiyan

Chairman of the Parliamentary Standing Committee on Ministry of Power, Energy and Mineral Resources Major Gen (Retd.) Shubid Ali Bhuiyan, MP, said the country is passing through a critical condition in the energy sector. There has been plans on paper but were not implemented. There has been massive corruption while forward looking policy has not been taken. He said a detailed plan has been given in the Awami League’s election manifesto and as part of its plan an agreement on nuclear power has been signed. The government has decided to move forward the clock by one hour while the government will distribute 1.5 crore CFL bulb free of cost in February next year to save power.

He said 500-700 MW lesser power being generated due to shortage of gas. What makes this situation? The caretaker government and the previous government failed to take any decision in this regard, causing this crisis. “My recommendation is to give maximum allocation for the power sector. We should go for coal as soon as possible.” Otherwise, he added, the country will have to import coal from the neighbouring country. He said the Parliamentary Standing Committee recommended duty-free import of solar system. It would not be possible to solve the power problem without private sector, but the policymakers must remain alert so that the private sector cannot blackmail. The country must go for atomic power some day while looking into the furnace oil option. “I call upon all to see how we can solve the problem by bringing together all the knowledge.”

Advocate Shamsul Haque Tuku 

Appreciating the keynote paper and expert opinions with specific direction in solving the power crisis, State Minister for Power, Energy and Mineral Resources Shamsul Haque Tuku said the discussion helped create the base of a consensus. He hoped that the organizers will handover a work paper on the discussion. He would try to face the crisis considering the recommendation with importance.

He said Bangabandhu had stated that there will be no dearth of enemies of Bangladesh because there is much more resources underground than what we cannot see, but the foreigners know it. As a result, the country is facing barriers one after another. Every citizen of the country know, where the barrier to use resource is, he said.

“We want power, but we have barriers in gas exploration. How then we will generate electricity.” He said everybody reached a consensus at the meeting that there is no alternative to coal extraction. The government will do everything necessary to explore gas, but the country lacks skill in identifying, proving and exploring gas. You also understand how much is possible for the BAPEX alone.

He said the power crisis is not today’s problem. He mentioned that his predecessors also spoke about the problem without hiding anything. “We will also utilize their information and knowledge.” He said the present government started working with 3200 MW in hand and increased it to 4,147 MW and 4,162 MW through maintenance and management of the power plants. “We are trying to keep power supply at this level and if we can do it we will be able to give you some comfort to the people of Dhaka and across the country.”

He said tenders will be floated soon for some power plants, but sought the time to be required for commissioning of the plants. He sought suggestion on increasing power generation from all concerned – be they from this house and outside of the house. He called upon the people, who form human chain and threaten movement for power, to think about the reality of the country and help the country raise its head in the world. “I think waging movement would not be wise, rather come and join the meeting and give us the right direction how we can overcome the problem. If you come with open heart and patriotism, the power crisis will be removed.”

Above all, Tuku said the main thing for a country is that the democracy must be there. The democracy has been hampered often and again after Bangabandhu was killed. Conspiracy still persists in the country to destroy the democratic process. “I call upon all to remain alert against any conspiracy to destroy the democratic process.” He thanked organizers and sought cooperation from all to solve the power crisis.


Date: 01 June 2009, Bangladesh

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Silver Lining around Clouds of Uncertainty?

Posted by phulbarinews on June 10, 2009

Farid Hossain

Bangladesh sits on a coal reserve of 2.5 billion tones, which are equivalent to 65 TCF of natural gas, according to a recent study jointly conducted by Bangladesh government and the UNDP. The study was carried out to understand sustainable energy development and to see if coal can serve as an alternative energy resource.

Bangladesh has long been relying on natural gas and oil in generation of power. With gas in short supply and oil being expensive Bangladesh has been looking for a new source of energy for producing electricity. Policymakers and experts turn to coal as possible new source of energy that the country can use for generating power, which too is in short supply. Even the donors support the use of coal for producing electricity.

In spite of a huge coal-for-electricity lobby there has been little progress in this field. That is largely because the government’s hesitancy in the face of protests by another lobby (comprising members of civil society) that insists that Bangladesh coal is not for sale to international companies… also they are opposed to open pit mining which can ensure maximum extraction of coal reserves.

The anti-coalmining lobby strongly argues that foreign companies are up for grabbing our not-too-abundant natural resources. According to this lobby allowing foreign companies to extract the coal resources will bring only short-term benefits to a few. In the long-term Bangladesh will be the biggest loser and its citizens will be the worst victims, especially the poor villagers who will be losing their farmlands and homesteads to make way for the mining.

In recent remarks to reporters state minister for energy Shamsul Huq Tuku expressed his frustration over the resistance from the civil society-led lobby. He has a simple equation to overcome the country’s energy crisis: Coal — instead of scarce natural gas — should be used for generation of power and thus rid the country of its long-standing energy crisis.

But the problem, he said, is that there is resistance from a section of the citizens. We can’t but appreciate the minister’s frustration. At the same time we feel it our duty to remind him that there is also a grassroots resistance, especially in Phulbari, a focal point of coal controversy.

It will take years for us to forget the anti-mining riots that erupted in Phulbari with thousands of angry villagers clashing with police, forcing the security forces open fire that left some protesters dead. Asia Energy, the company that had earlier signed a contract with the government for mining the coal, had to quit the area after the protests and it has since then been lobbying hard to get back to that area. It has so far been unsuccessful.

However, one bright spot is that Asia Energy is not relenting. The company is prepared to wait. To return to Phulbari Asia Energy has two challenges to overcome: convince Prime Minister Sheikh Hasina and then win the heart of the Phulbari people. Is Hasina’s government doing anything on the coal front? At least some of the ministers are talking.

Finance Minister AMA Muhith has recently said the government will take a while to go through a coal policy drafted by the caretaker government of Dr. Fakhruddin Ahmed. That means the mining of coal — open pit or underground — in the country’s northwestern region will have to wait.

Bangladesh has been working on a coal policy since 2005. It took a definite shape only in 2008 when an interim administration mobilized experts, policymakers and officials to draft a policy, saying that the country’s interests have been kept high. Even though the finance minister has hinted at delaying an approval of the drafted policy, the coal picture is not all gloomy. He has reportedly favored establishment of coal-fired plants. Is it a silver lining around the clouds of uncertainty?


Date: 01 June 2009, Bangladesh


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