Energy security is still beyond horizon



Finance Minister Mr. Abul Mal Abdul Muhith in his speech to Bangladesh parliament proposing the 4th annual budget of the current term of the present government has recognized once more that power is the main driving force of socio-economic development and poverty reduction. He also stated that his government understood the importance of this sector and accordingly attached highest priority to power and energy in their election manifesto. He talked of laying emphasis on a comprehensive action plan. He talked about formulation of Power Sector Master Plan [PSMP] 2010 .He went on telling about kicking –off the implementation agenda by installing new power plants, upgrading transmission and distribution system, diversifying renewable energy sources and identifying ways to ensure economic use of power.

But having said these entire he also acknowledged that, due to chronic load shedding people of Dhaka and elsewhere has been suffering immense miseries. He said humbly that some development activities have lagged effect and their impacts become visible after a certain period. He assured with confidence that the results of the government’s endeavors will become visible to the nation by end 2013.

It is the fourth year of the five year term of a democratic government which came to power in January 2009 after landslide popular mandate. People voted them

abul mal abdul muhit
FM surprisingly mentioned, "I am pleased to inform you – BAPEX has already discovered oil reserve at Haripur and Kailashtila. The drilling of wells of newly discovered gas field ‘Sunetro’ has begun. In order to explore oil and gas fields onshore at several points, 2-D and 3-D seismic surveys have been conducted."

massively being attracted by their pledges of change from poor governance, unbridled corruption and freestyle terrorist activities of state sponsored mafia syndicates. People expected government of change with visionary planning and strong management with confront among others the prevailing and emerging power and energy crisis of 2009. People appreciated that given the depth and diversity of the crisis it will need at least two years to turn around. People took serious pains in 2009 and 2010 expecting improvement of situation in 2011 and afterwards. People witnessed government strategy of enacting indemnity bill to protect government officials from legal actions for dealing with unsolicited offers from Power and Energy Sector investors’ .People witnessed how ruling party blessed novice persons were given state sponsorship for setting up high priced quick rental power plants. There were hardly any adverse street agitations in 2010 or 2011. Responsible government policy makers talked of load shedding free Bangladesh by end 2011. Some talked about importing 500 MMCFD equivalents LNG by 2011. But all blew with the wind. In June 2012 people are suffering from diabolic power load shedding and gas supply crunches. Power load shedding has impacted water supply crisis. There is no indication that in the remaining 18 months there can be major improvement to justify the confidence of Finance Minister that people will witness positive changes by end 2013.

Stating about power demand supply situation FM mentioned that at the time of the formation of government in 2009 the effective generation capacity was 3525 MW against the co incident peak demand of 5600 MW. He claimed that his government achieved a generation of 6066 MW against a demand of 7518 MW. We are not aware where from he got the information about demand and generation. When he made this statement in budget speech it should have been double checked. Power Generation never rose above 5200 MW and demand now in high summer may not be less than 8000MW. This huge deficit has created unbearable situation all over the country as prolonged draught like situation and high humidity has created great suffering for the people. Frequent power load shedding and gas shortage have added to untold miseries. Power crisis has also triggered water supply crisis.

FM has stated about having 79 power plants some of these are quick rental plants implemented by present government .He found excuse of accelerated demand growth which cannot be supported with evidences. No major energy consuming new industries were set up in recent times. Power connection to new consumers remained suspended for a long time. In this situation FM’s excuse for present situation arising from accelerated demand growth is unacceptable. Perspective planning of Power Sector should have accounted for these.

FM said that 53% of the population has now direct access to electricity which was 47% when the government took office. Without improving quality of supply this increase is meaningless. All connected consumers suffer from at least 6-8 hours load shedding. Very shamelessly FM sated that power supply situation is better now than any time before. Media everyday is now carrying report of unbearable load shedding. The situation is the worst ever by neutral analysts.

FM stated that “In my budget speech for FY2009-10, I had mentioned that we will produce additional 5,000 MW of electricity by 2013. By this time, the demand for electricity has gone up substantially. The per capita electricity consumption rate has increased from 220 kwh to 265 kwh. We have, therefore, planned to produce 8,294 MW of electricity by 2013 in addition to our previous target. Agreements have been signed to install 52 power plants both under public and private sectors to achieve this goal. We are expecting that these plants will go into commercial production by FY2013-14. Moreover, installation of 30 power plants having capacity to produce 5,600 MW of electricity is in progress. These new power plants will come into operation by 2015-16.”

End 2013 the deadline of the present term of the government is only 18 months away. Generating 8294 MW by 2013 means there has to another effective addition of about 3000MW.Many of the existing generation plants may need to be retired by then and according to contracts all rental plants have to be shut down.So actual addition in 18 months have to be over 5000MW. We cannot see any such indications.

Old plants are mostly in dilapidated state from repeated cannibalization. These are consuming higher volume of gas. It could be far more useful if most of these plants could be replaced by fuel efficient new plants. Using the present volume of gas about 8500 MMCFD it could be very much possible to generate over 6000MW if new Combined Cycle Plants could be installed. But Government and PDB are reluctant for doing that.

Power trading with Myanmar, Nepal and Bhutan are far cry. Government could not firm up power import deal with India yet. Imported Coal based plant under joint venture initiative may fall flat soon for several issues and challenges. Nuclear power generation imitative is still on drawing board. Government could do better in aggressively pursuing Solar option through providing better incentives and operationalizing SEDA.

Regarding Alternative Sources FM mentioned the following: “We have a plan to produce 500 MW of electricity from renewable energy sources by 2020. We hope that by adopting various energy savings measures we will be able to save 350 MW of electricity by 2013. Alongside, power distribution agencies have installed 56,415 prepaid meters to ensure receipt of cent percent revenue. Another 35,000 prepaid meters will be installed in near future.”

All possible options for renewable must be aggressively explored. Prepaid meter is good imitative. But other options like energy saving valves, solar lights for city streets and municipalities, solar friendly building construction could be better patronized. More attentions could be given from energy from municipal wastes, bio mass etc.

FM placed second update of the report on ‘‘Road Map towards Development of Power and Energy Sector’ before the House. That report is said to have provided a complete picture of our achievements in power and energy sector, existing problems and the action plans to address them.

One of main reason of present critical situation of our pre dominantly mono fuel natural gas dependent energy sector is the failure to arrange required fuel required for power , fertilizer , industries and CNG. There has been bare minimum development in the gas sector .Consequently in the middle of 2012 natural gas deficit has widened to about 50 MMCFD. BAPEX as national flag carrier has done wonderfully well with its limited capacity and resources. It has brought Semutang field to production and drilled development wells at Salda and Fenchuganj. Its major success is in acquiring 3D Seismic capability. It has mapped addional resources at Rashidpoor, Haripoor; Koilashtailla.  But one must bear in mind BAPEX has to develop its technical skills and financial resources yet more to be compared at par with other National Oil Companies like CNPC, ONGC, PETRONAS etc. We must not be swept away by youthful exuberance.

Among IOCs only Chevron could increase production from its Bibiyana Gas Field. But may feels it is producing way too much exposing the Bibiyana field to early depletion. Chevron failed to add new resource at Moulavibazar despite mapping some resources in 3D Seismic survey. Santos made courageous exploration campaign at Shallow Water Sangu Gas Field. But its efforts met with limited success. It should have explored further at Magnama.

FM in his budget speech talked about adding 405 new gas to national grid. Some of these are work over and rehabilitation of old wells. BAPEX marginal Semutang field in operation and increased production from Fenchuganj and Salda. About 300MMCFD addional gas came from Bibiyana for which present government cannot take much credit. Efforts to deliver more than capacity gas to capacity constrained North-South Segment of National Gas Grid has created low pressure situation of national Gas Grid. Protracted delay for indecisive Petrobangla and EMRD over Gas Pipeline Compressor Stations project of GTCL has created serious bottlenecks in transmission system management. Failure of GTCL in cleaning major transmission lines of accumulated condensate and sludges has caused additional transmission issues.

FM has mentioned that during the tenure of the present government the extractable gas reserve has increased from 20.6 tcf to 26.8 tcf . We cannot understand where from he arrived at this figure. Bapex conducted some 3D seismic surveys. But no seismic survey can discover resources. It can only map presence of resources. Actual extent of GAS In Place or recoverable reserve can only be established after required exploratory drilling and testing. The figure that FM quoted may put him in great shame.

Petrobangla failed miserably to drive its fast track gas production enhancement to success. PM Hasina herself had to request Russian Energy giant GAZPROM to Bangladesh and drill some production wells .GAZPROM obliged. But even that initiative was unfortunately opposed by planted agents of western companies in Energy sector. A little more positive thinking by Petrobangla and EMRD could have fielded GAZPROM by January 2012 and at least 200MMCFD gas could be made available by June 2012. We fail to understand what magic will make Petrobangla another 1285 MMCFD new gas by 2013.

The major failure of the present government is in exploration and exploitation of own coal resources. Misguided government is still hibernating with unnecessary coal policy. It could be so much useful for the nation to start mining of coal at Barapukuria and Phulabri by modern open pit method and start setting up mine mouth large coal plant by middle of 2009. About 1000 MW own coal fired power plant could be at advanced stage of generation by now.

Policy makers are unnecessarily concerned about presence of aquifer. Modern mine water management can very well address this concern. Mine water after required treatment can meet sweet water requirement of the adjacent communities. Part of the water could meet the irrigation needs of the area. Still some water left could be pumped back to replenish aquifer. The affected mining community could be adequately compensated, relocated and rehabilitated. It is only though open pit mining most of the mining area can be rehabilitated to original and better state. All other forms of mining whether it is underground mining, Underground Coal Gasification or Coal Bed Methane cause subsidence and aquifer contamination.

Bangladesh has no possibility in importing lNG or set up imported coal based power plants over short term. Technical and commercial reasons will force government to abandon the initiative soon.

One of the successes of the present government is in resolving maritime boundary disputes with Myanmar .We now have extensive area in Myanmar Adjacent shallow and deep water to explore and exploit. We must update our Model PSC making it more investment friendly. People having limited idea and experience must not be allowed to misguide policy makers. There must be authentic investigations into reasons why major IOCs stayed away from last bidding round? Why the activities of Conoco Philips are still not satisfactory? Bangladesh must not impose unnecessary conditions in model PSc to discourage major IOCs. It is useless to remain penny wise pound foolish.

FM surprisingly mentioned, “I am pleased to inform you – BAPEX has already discovered oil reserve at Haripur and Kailashtila. The drilling of wells of newly discovered gas field ‘Sunetro’ has begun. In order to explore oil and gas fields onshore at several points, 2-D and 3-D seismic surveys have been conducted.”

Oil was discovered at Haripoor in 1987 and there was oil show in Kaillashtilla in 1988 .There is no use in reinventing the wheel. Only through drilling and testing of exploratory well at Suntero one can say whether it will be a commercial discovery. Till such time any over enthusiastic statement can put anyone to shame.

Coal mining does not essentially need a separate coal policy. We have Mines & Minerals Act and Policy. In the excuse of coal policy an identified coal mafia syndicate is making merry through importing dirty polluting coal from across the border .The same mafia syndicate is misleading policy makers for setting up imported coal based power plants .It must be considered a crime to leave the nation in energy crisis leaving significant coal resources buried below surface .

The budget allocations of 9554 crores for the Power & Energy sector for 2012-2013 may not be enough to accomplish all works envisioned unless significant investment comes through Foreign Direct Investment and PPPs. The Gas development Fund recently created must be judiciously utilized for supporting exploration and development efforts of BAPEX.

Power and Energy Sectors are the driving forces of the economic development and poverty alleviation. But Bangladesh is still as a distance in achieving energy Security .Bangladesh still have substantial energy resources and very potent  young and dynamic work force .Only visionary patriotic leadership is missing. We are in crisis. Energy and Power must be considered a strategic sector where national consensus and meeting of minds of all stakeholders is essential for exploring and exploiting own resources and enter into regional energy trading. Uninterrupted power availability may shoot our GDP growth to double digit and may elevate our economy to mid income country by 2021.

217 Responses to “Energy security is still beyond horizon”

  1. Author Image

    Sheikh Zia

    ” Only visionary patriotic leadership is missing. We are in crisis.” – Agree. ছাগল দিয়ে হালচাষ করা যায় না ।

  2. Author Image

    I Porter

    The comment about underground coal gasification and and coalbed methane ’cause subsidence and aquifer contamination’ is misleading. UCG and CBM CAN cause such effects but only if the project is not implemented correctly. If safe management practices are adopted (as with water management refered to in the previous sentence), UCG and CBM is perfectly safe and would be free from subsidence and aquifer contamination need not occur.

  3. Author Image

    Khondkar Abdus Saleque

    Please note that I had opportunity to visit Chinchilla -The Australian UGC project in Queenland .I saw the impact of underground aquifer contamination. I had long discussion about UCG with Dr LenWalker ,CEO Cougular Energy [ Ex CEO Link Energy].He is one of the few leading experts in UCG . My opinion on UCG is based on my discussion with experts , reading extensive literature and watching UCG in practise .UCG is not a proven technology below 500Meter Depth as well. UCG or CBM will obviouslu create void undeground leading to subsidence .Moreover after Methane extraction from coal bed you have to extract left over coal .

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