Bangladesh needs achieving sustainable energy security (seamless supply of quality power and energy on uninterruptible basis at affordable cost for all citizen) for achieving the national vision of developing and developed economy status. SDG7 is affordable , reliable , sustainable and clean energy supply to all citizen. Government information states of 20,854 MW installed capacity of power generation including 2800 MW off grid captive power generation and 1160 MW import from India. For various reasons ranging from fuel supply deficit to power transmission & distribution constraints more than 11628 MW power generation could not be achieved yet. Government information also states of 92% of the population having access to power. There are claims that by the end of 2019 the entire population of Bangladesh would have access to power. However, the surplus generation capacity could not ensure uninterrupted supply of quality power to all users. Load shedding is experienced in isolated areas, still industrial consumers are concerned about poor quality of power. The energy supply is not yet affordable for all, still to compensate for the cost arising out of expensive LNG import price increase of power and energy is in the offing. The supply is yet to become reliable as the quality is still poor. The supply is also not sustainable. We are not sure that Bangladesh can have more than marginal contributions from renewable energy (clean fuel) in the foreseeable future.
Generation is only one segment of power value chain. If transmission, distribution and supply to users do not evenly match, significant generation capacity remains unutilized. Every developed country has about 25-30% spinning reserve for meeting contingencies. But a developing country like Bangladesh cannot afford to have over 40% spinning reserve. Bangladesh has to pay the price of achieving installed capacity. Bangladesh needs fuel for achieving up to the maximum possible capacity, evacuation facility and market to absorb.
Choosing appropriate fuel mix is a major challenge for Bangladesh. Until 2009 own natural gas exclusively dominated fuel mix contributing above 90% for power generation. Natural gas is also raw material for Urea fertilizer. In gas franchise area gas also is used as fuel for industrial, commercial and domestic use. Bangladesh was not very careful about perspective planning in natural gas sector development and economic utilization of the precious resource. From 2000 demand of natural gas increased in geometric progression. Every 1% GDP growth created 1.5% power demand growth. So for 6.5% -7% power demand alone grew by 10%. But keeping pace with that gas exploration and development could not be done for poor over all energy sector management. From 2000-2018 only about 2Tcf new gas reserve could be added to national reserve mainly through efforts of capacity constrained BAPEX. But over this period almost 9 Tcf from the proven reserve was consumed.
Bangladesh unfortunately juggled with formulation of coal policy for exploiting its 3565 million tones of superior quality discovered coal reserve lying at mineable depth. These led to obvious power crisis, fuel supply crisis in 2008. Government in 2009 required contingency measure for setting up several imported liquid fuel based 3-5 years duration rental power plants. Government also adopted PSMP 2010 prescribed for 50% of the projected 40,000 MW power by 2030 from coal. Of this 29% was to come from local coal and 21% from imported coal. Every single year of the term of Bangladesh Awami League led Government of 2009-2014 finance minister in his budget speech mentioned about mining own coal. But some how or other coal mining remained in suspended animation. Government also failed to develop coal port or set up any imported coal based power plant in the entire duration of two successive terms.
Neither it could explore and develop a significantly large gas field. These necessitated extending terms of contingency liquid fuel based power plants and set up more and more such plants.
Government in 2014-2018 decided not to explore own coal and revised PSMP 2010 through PSMP 2016. The outstanding feature of PSMP 2016 is revised fuel mix. For achieving 60,000 MW envisioned power generation target fuel mix prescribed is 35% coal (34% imported) , 35% own gas and Imported LNG and 30% from power import , Nuclear , Renewables and others . If government chose to ignore own coal exploitation and cannot expedite exploration for oil and gas by 2030 it may become over 90% reliant on imported fuel. Bangladesh does not have required draft along coastal area for setting up coal port and LNG terminals. As such it will require huge investment and long time for setting up these facilities. Volatile global market will create huge price impacts in case of imported fuel. There are chances of supply chain getting disrupted from regional and global geo politics. Bangladesh must review affordable fuel mix.
Present Situation Of Gas and Suggestions: For lack of exploration and exponential growth of gas demand the recoverable proved reserve of natural gas is fast depleting creating concerns for possible gas crisis in foreseeable future. The following table is would depict the picture
|Discovered gas Fields||27|
|Gas Fields Under Production||19|
|Production Capacity||2750 MMCFD|
|Highest Production||2785.8 MMCFD ( 06/05/2015)|
|Proved (P1) + Probable ( P2) Reserve||27.77 Tcf|
|Cumulative Production Till December 2018||15.22 Tcf|
|Remaining Reserve||12.55 Tcf|
|Coincident Peak Demand||3996 MMCFD|
Government has started supplying 500 MMCFD equivalent RLNG. By end 2019 it may increase to 1000 MMCFD. But by that time production of own gas may deplete further. Many gas users in gas franchise suffered from chronic gas supply for almost a decade. The situation improved marginally following import of RLNG through setting up first FSRU at Maheshkhali. It has already been evidenced that FSRUs are not reliable solution for sustainable supply. Government has expressed willingness of moving out from FSRU initiative after the second FSRU of Summit Group due to start operation by mid 2019. Land based LNG terminal may take 5 -7 years. Bangladesh must expedite exploration for oil and gas in offshore and onshore for mid to long term gas supply security.
Gas Use ( June 2018) :
It may be seen that gas used by captive power plant and domestic users is about 33%. Quality power supply on sustainable basis will not require industrial consumers using gas for captive power generation. Government can gradually withdraw gas supply to domestic consumers replacing it with better supply chain of LPG. Government must also review gas supply to power plants and fertilizers using outdated technology of fuel inefficiency. These must be gradually replaced with efficient plants of retired.
Bangladesh must go for extensive gas and oil exploration in onshore frontier areas and offshore announcing PSC bidding round . BAPEX assigned blocks and areas can be ring fenced . In onshore there can three different type of PSC bidding
Coal Reserve /Resource:
|Coal Deposit||In situ Reserve (Million Tones)||Considering 50% Recovery ( Million Tones)||Considering 35% Recovery ( Million Tones)|
The discovered coal fields are in the greater Dinajpur and Rangpur area. The mining is being done at Barapukuria by a Chinese company. They started with Box and Pillar method and now changed to Long Wall Top caving method. Bangladesh coal fields do not have rocky overburden suitable for underground coal mining. The water saturated soft silts caused water ingression / flooding, roof caving, subsidence . There were incidents of gas formation as well. Geological , geo physical , rock mechanics , depth of cover, type and thickness of coal seam, nature of over burden make at least two mines ideal candidate of open pit mining. Still very inappropriate underground mining method caused all type of impacts possible in an underground mine. The mining of coal from Barapukuria absorbing all costs of impacts management has made it costlier than imported coal. The present method of mining cannot even support the operation of 545 MW capacity three units of mine mouth power plants. Decision must be taken soon on findings of the study done for mining from North and South flanks by open pit method.
Asia Energy Corporation, A GCM company in 2005 submitted Scheme of Development (SOD) suggesting open pit mining from Phulbari Mine. The mine was originally discovered by BHP Minerals Corportaion, the leading mining company of the world in 1994. The extensive feasibility study having detail methods of Mine Water Management, Recovery and Rehabilitation of Farming Land, Resettlement of Mining Community and Environment Impacts Impacts management were not reviewed at all. Some untoward incidents created by a vested quarter keeps mining from Phulbari in suspended animation. For the greater national interest it is strongly suggested that AEC Scheme Of Development (SOD) be thoroughly examined by accredited mining consultant and decision for mining taken at the earliest.
Study reports for mining coal from Dighipara and Kahlaspeer are also available. Due consideration must be given for that also. Mining from the deepest mine Jamalganj need further study.
Fuel Import Initiatives.
In desperate situation in 2009 government had no alternative but going for imported liquid fuel based rental and quick rental power plants as quick fix. Most of these were for 3-5 years duration . But failures for completing construction of even any large coal fired power plants in 10 years forced extending contracts of most of the rental plants and add more . While most of these were to be retired and replaced by now. Furnace oil and diesel based power plants now account for almost 35% of power generation capacity. Given the volatility of crude oil price in global market this may create huge price impacts soon.
Government initiated plan for importing LNG in the wake of gas crisis in 2010. But for poor perception and project management in 8 years it could set up only one FSRU leveraging 500 MMCFD RLNG import. Another FSRU may start operation by the middle of 2019. But FSRU for its nature may not be in operation for 365 days which Bangladesh learnt lessons after burning its fingers in fire . Land based terminals are expensive and in Bangladesh considerations would take 5-7 years. The only area where it can be set up is Kutubdia and Matrabri. None of such plants may be in operation by 2023. Hence Bangladesh plan for 4000 MMCFD RLNG import by 2025 appears impossible now.
Government entrusted BAPEX with an over ambitious project for drilling 108 wells including 53 exploration wells by 2021. The progress so far is bare minimum. Conspicuously after conceiving this project and BAPEX starting taking preparation Government started negotiation with Russian Energy Giant GAZPROM for this project . Very little success has been achieved. Capacity constrained BAPEX nevertheless discovered few marginal gas fields . But most of these have been already depleted.
Petrobangla failed to conclude deal with a possible partner of BAPEX for further exploration of four identified structures in greater Chittagong Region . BAPEX does not have capacity for exploration in this tight structures .
Off Shore Exploration:
Bangladesh acquired huge area in the Offshore through settlement of maritime boundary disputes with India and Myanmar . But in over four years Petrobangla and EMRD could not even engage contractors for Multi Client Surveys in deep water . Neither it could go for offshore bidding for exploring deep water prospects . ONGC , Posco Daewoo , Kris Energy Santos works in Bay of Bengal is progressing at snails pace.
Two projects ie 2X1320 MW Payera Power plant and 2X1320 MW Rampal power plants are at advanced stages. Payera power plant may come into operation by end 2019 and Rampal by 2021 . But there are issues of coal transportation . For Payera coal may be transported in smaller Panamax vessels from Indonesia . For Rampal coal may be transshipped in smaller vessels from Mother Vessels anchored in Andaman sea . These would add cost . Power generation cost would not remain under affordable limit.
The coal port at Matrbari may not be operational before 2022 and Matarbari power plant may not come into operation before 2023 . The coal supply to all planned power plants at Matarbari , Maheshkhali , Pekua and Bashkhlai would depend on construction of Coal Transfer Terminal at Matarbari. Till now no commitment is there for investment.
In the above situation the mining of own coal and railway transportation to Payera, Rampal appears logical conclusion.
Suggestions and Recommendations:
Bangladesh cannot sustain exclusive reliance on imported fuel. It has enormous possibility of exploring and exploiting own fuel. It cannot afford price shock of imported fuel. Neither it can construct highly expensive fuel import infrastructures –coal port and Land Based LNG terminals. So for ensuring sustainable energy security it must review fuel mix. Most logical fuel mix would be Domestic : Imported = 50: 50 . This would require immediate decision of mining own coal and going aggressive for exploration of own petroleum resources on shore and offshore. At the same time power transmission and distribution networks require modernization and energy efficiency needs priority attention.