Power Sector Success & Future Plan

Electricity is crucial to economic growth, sustainable infrastructure development as well as poverty reduction and security of any country.Future economic growth crucially depends on the long-term availability of uninterruptedand quality electricity supply. Security, climate change, and public health are closely interrelated with electricity. Overall, at least 1.6 billion people – one-fourth of the world’s population – currently live without electricity and this figure has hardly changed in absolute terms since 1970.

Globally, electricity use is rising rapidly as new major economies develop in places such as India, Sri Lanka etc. This need for electricity drives a growing demand for electricity generation, with thousands of new power plants needed across the world over the coming decades. Every form of electricity generation has its strengths and weakness and future electricity generation will need a range of options, although there must be low carbon emission if greenhouse gas emissions are to be reduced.

In line with this aspect, the vision of the government is to enrich Bangladesh as a middle-income country by 2021. The government is planning to speed up power demand growth by setting up economic zones and industrial parks, increasing textile export etc. For this reason, a sustainable generation expansion plan has been prepared to provide the reliable power supply for boosting up the economic growth in the country.

The Impact of Electricity Use on Economic Growth

There is a clear relationship between GDP and electrical power consumption. If a lesser amount of electricity generated, the cost of electricity will go up, less would be used and GDP would go down. The argument is that more desirable: more power and reducing the cost and outcome will be a higher GDP.

What is the relationship between population growth and energy consumption? Electricity consumption versus GDP per person for 202 countries shown in Figure1.

 Figure 1: Source for all the numbers in these charts is the CIA World Fact book

It is clear from Figure1: fora well-developed economy with a high GDP, power consumption must also be high. A rough inclination could be seen: each KW hour power produces about $10 GDP per person. The average GDP/kWh for all countries is $8.31. The ten highest electrical power users per person are: Iceland, Norway, Kuwait, Canada, Finland, Sweden, United Arab Emirates, Luxembourg, United States, and Australia. Oil production in Africa and the Middle East distort some of the GDP numbers.

Present Power Sector in Bangladesh

Power sector in Bangladesh witnessed a turnaround since 2009. The total 6,665 MW new power plants and 600 MW import based power connected to the national grid since 2009. At present power generation, installed generation capacity increased to 12,399 MW from 4,942 MW.Per capita generation increased from 183 KWh to 371 KWh. The electricity coverage in grid areas increased from 47% to 75% (including renewable energy). Highest average peak generation of 8,348 MW (9 April 2016) was achieved compared to 3,268 MW in 6 January 2009. System loss (distribution) reduced from 18% to 13%.An agreement was signed with the Russian Federation for setting up 2,400 MW capacity nuclear power plant. An initiative is going on to import more power from India, Nepal, Bhutan and Myanmar. Innovative financing strategy introduced in power sector for setting up power generation projects.

Now, Bangladesh has shown enormous achievement in power sector. Even, power sector has been able to meet the government's targets and has even been able to achieve the higher level of economic growth. This economic growth has paved the way to rapid urbanization and increased industrialization. Extensive sustainable development structures have accelerated the overall economic growth.

Present Power Scenarios

Year-Wise Capacity Addition Since 2009

The total 6,665 MW new capacity power plants and 600 MW import based power has been added to the national grid since 2009. The year-wise capacity addition is shown below:

         Year wise capacity addition since 2009

   Fuel Mix Installed Generation Capacity

Electricity demand is increasing and the total installed generation capacity also increasing commensurate with demand. Present installed generation capacity in fuel mix is 12,339 MW (Upto April 2016). Of the total capacity, gas based is 61.82%, hydro 1.86%, coal 2.03%, furnace oil 21.68%, diesel 7.75% & Import power from India 4.86%. The graphical representation is shown below:

                               Fuel mix generation capacity

Fuel Mix Energy Generation

Consumption of liquid fuel mainly furnace oil increases sharply in the early stage of this plan.  Whereas gas based generation is decreasing. However, in the later part of the planning period, liquid fuel based generation capacity will come down and coal based capacity will increase.

The net energy 45,836 Million-kilowatt hour (MkWh) was generated in total from public and private sector’s power plants during fiscal year 2014-2015. Maximum generation comes from gas base power plants. Of the total energy generated in fiscal year 2014-2015 gas base generation was 69.44%, 1.24 % hydro, 2.05 % coal and 16.18 % furnace oil and 3.72% diesel based. The graphical representation is shown below:

                                   Fuel mix energy generation

Power Generation Plan up to 2021

Untilnow, gas based electricity generation is much higher comparedto other fuels like hydro, coal. Gas supply is the major constraint for gas based power generation projects. At present more than total 1000 MW gas based power plants are not generating power due to shortageof gas supply. For thisreason, government has taken strategic decision to diversify primary fuel supply for power generation projects. Asustainable power development plan up to 2021 has been prepared for mitigation of the growing demand to catch up the generation capacity 24,000MW by 2021. Underthis plan, the coal (indigenousor imported), power trade from India, thelimited gas, nuclear power will be used for the base load power plant, and LNG will be used to complement the gas shortage. Limited gas, liquid fuel and LNG will be used for the peak load power plant. The government has also taken efficiency improvement program for reduction of the growing power demand.

Implementation Status of Power Generation Expansion Plan upto 2021

Revised generation expansion plan updated in Jan 2016 targeting about 18,086 MW generation additions from 2016 to 2021 is provided in a table below:

3.1.1.2Yearwise capacity addition plan (2016 to 2021)      

3.1.1.3 Year wise fuel based new capacity addition (2016 to 2021)      

Under Construction & Tendering Process Projects

Under the plan, 31projects of capacity 9,361MW are now in under construction stage and 24 projects of capacity 5,892 MW are now in the various stages of procurement process as provided in the following table:

             Under Construction Projects

             Projects under Tendering Process

Coal Based Power Plant

Currently coal is main source of electricity generation with 41% of world power generated from it. In South Africa, 93% of the electricity is being generated from coal while in China, Australia, India and USA, the percentage is 79, 78, 68 and 49 respectively. In Bangladesh, the rate is only 2.04%.

In order to increase the coal based generation, many imported coal based power plants are planned to be installed in different areas of the country by public and private entities including BIFPCL, CPGCBL, NWPGCL, EGCB, BPDB, RPCL, Orion group, S. Alam group. Large scale imported coal based power plants will be installed in Matarbari, Payra, Pekua, Moheshkhali, etc. Under this plan, there are about 7,689 megawatts coal based power plants are expected to be commissioned by 2021. It is to be mentioned that Power System Master Plan 2010 is being updated that will be published in the year 2016. Under the draft report, the plan period will be up to 2041 and 35 % of the total power capacity will come from the coal.

Nuclear Energy and Initiative Status

One of the main necessities for sustaining human being development is an adequate source of energy. Universally,the demand for electricity is gradually growing. World wise largest sources of energy are the combustion of coal, oil and natural gas. Greenhouse gas emissions from producing electricity-using fossil fuels contribute significantly to global warming. Now it is an emergency to encourage the use of nuclear power as it is likely to remain cheaper owing to volatile in oil price in international market, declining of conventional energy resource, high cost of renewable energy and increasing global warming.

Above this perspective, Bangladesh Government is going install two nuclear power plants of capacity 2400 MW at Rooppur in northwestern Pabna district. Unit-1 of 1200 MW capacity will be commissioned by 2023 and 2^nd unit will be commissioned by 2024. The Russian government would give support for necessary infrastructure development to set up the power plants and will provide necessary nuclear fuel for the plants on long-term basis.

Renewable Energy Development Program and Implementation

Now a days, developed countries are using renewable energy resources such as wind, solar, bio- energy and geothermal to meet a significant proportion of their energy demand. Toreduce CO2 emission in the face of global warming and as well as reducing the pressure on the conventional energy,Bangladesh has taken initiative on systematic development of renewable energy projects. For this reason, a dedicated policy on renewable energy was adopted in 2008, which envisions developing 10% of power capacity from renewable sources by 2020.

Several fiscal incentives, which were facilitated, to conventional power projects have also been extended to renewable energy projects. Besides, since policy formulation, government has extended import duty exemption renewable energy products, e.g. solar panel, solar panel manufacturing equipment, solar LED light and wind power plant. Funding support has also been extended through government financial institutions like Bangladesh Bank and IDCOL as well as through private commercial banks. A dedicated central agency, called SREDA,has been established for renewable energy development.

Renewable energy based new power projects are being taken in public and private sector as a new approach for sustainable development which will be shared to mitigate the future demand. Under the approach, some projects have already been implemented in different areas of the country. It has also planned to connect grid based power generation projects with solar, wind and biomass based fuel. The present status and future program of wind, solar and biomass projects are provided below:

  Present Status of Renewable Energy Projects

New Solar and Wind Based Capacity Addition Plan Up To 2021

Under this plan, some capacity based solar power plants will be connected to the grid by 2021. The plan is shown below:                        

 Solar Based New Capacity Addition Plan

Power Trade & Regional Cooperation

a) South Asian countries have good resource potential and tremendous scope of energy cooperation. Enormous potential lies in cross-border energy trade, which can ensure reductions in required generation and transmission capacity, reduction in fuel costs and improved use of low-cost electricity sources. Some countries like Nepal, Bhutan and Northeastern part of India have enormous unexploited hydroelectric potential compared to their low peak demands. Hydropower potentialities in the region are:

b)A Memorandum of Understanding (MoU) was signed between the governments of Bangladesh and India in January 2010 for regional power exchange in SAARC countries for mutual benefits. Under this MOU, about 500 MW power is being imported from Bahrampur, India through regional grid interconnection from 2013 and 100 MW from Tripura on March 2016. Another 500 MW power will be imported from Bahrampur; India by 2018 and 400 MW from Tripura by 2021.

c) Bangladesh has planned to import hydropower from North Eastern part of India. Initiatives are also in progress to import hydropower resources from Nepal, Bhutan.

   Human Resource Development

Human resource development is the frameworks for helping employees develop their personal and organizational skills, knowledge, and abilities. This strategy is being applied for the successful implementation of the development projects and efficient operation of such projects. Power sector entities have program to train up 50 hours/year/employee and have a plan to increase it to100 hours in future. It is very important to ensure quality training to all employees otherwise all efforts will go in vain. Initiatives are in progress to set up state-of-the-art training academy at Keraniganj near Dhaka for this purpose.

   Transmission & Distribution System

Transmission of generated power from power plants to the load centers and then distribution to the end users must be ensured to achieve the real benefits out of above generation expansion program. At present, a total 9789 km (Circuit Km) transmission lines and 326,000 Km distribution lines have been connected to Bangladesh power system network. The government has initiated several extra high voltage transmission projects for power evacuation from Sylhet area and from major coal power projects in Khulna and Chittagong.

Bangladesh-India Regional Grid Interconnection project has already been established and now the power is being imported through this line. Some initiatives are underway to evacuate power from other planned power generation projects and to increase MVA capacity of existing sub stations. To strengthen distribution system, a plan is being prepared to construct new distribution lines and related substations by 2021. After the construction of the new distribution, lines, the total system estimated distribution lines would be 481 thousand kilometer.

Cost Reflective Tariff

Power Pricing Framework 2004 has illustrated plain guideline for cost reflective tariff adjustment. Cost reflective tariff is important issues for reducing the huge compensation to the power utilities. It will also encourage people to save their electricity consumption by adjusting the price charged.

Now government is providing budgetary support to BPDB for reducing the gap between bulk supply cost and bulk tariff. It needs to adjust present bulk electricity supply cost and bulk tariff and this adjustment has to be gradually increased keeping tolerable limit for the consumers.

            Amount Received from Government (Budgetary Support) FY 2006-07 to 2014-15

                                                                                                                                             Tk in Crore for BPDB

Challenges

The government has taken the sustainable generation expansion plan to provide the reliable power supply for boosting up the economic growth in the country. The plan will be implemented in phases. Sustainable fuel supply and financing are the major challenges to implement this plan. However, GOB already initiated steps to activate and facilitate mobilization of local and foreign investments in the power and primary fuel supply sector. The major challenges would be:

Primary Fuel Supply

a)   Enhanced gas exploration and production

b)   Domestic coal development

c)   Coal import (long term agreement) and deep sea port for coal handling

d)   LNG import

e)   Safe nuclear technology

Project Financing

f)    Ensuring financing for public & private sector projects 

g)   Availability of foreign currency

Transportation of Fuel & Equipment

h)   Infrastructure development by railway and R&H

i)     Dredging of river routes

j)    Capacity build up of BPC, Railway, R&H and BIWTA etc

Customer Satisfaction

k)   Quality distribution

l)   Less interruption

m)  Call centers for better customer service 

Human Resources Development

n) Development of skilled manpower: adopt and operate new Technology

Conclusion

Ensuringthe reliable and cost reflective electricity isamust to achieve the highest sustainable economic growth, employment and a living standard of the nation. For this reason, government has taken the right steps of implementing the sustainable generation expansion plan. Eventually sustained primary fuel supply, financing to capital-intensive power projects and overall efficiency improvement are the major challenges. Government is very confident to provide the reliable power supply for boosting up the economic growth through the proper implementation of generation, transmission and distribution projects. It needs support from all stakeholders to overcome these challenges.

Shamsul Hasan Mia

Chairman, Bangladesh Power Development Board (BPDB).

The content of this article has reflected only his personal view, not official.]

Power Sector Success & Future Plan