Dr Tawfique–e–Elahi Chowdhury, BB, Energy Advisor to Prime Minister of Bangladesh, in a recent Energy and Power Summit in Dhaka identified investment as the major challenges of Government Energy Sector Vision. The vision includes power to all by 2021, achieving 24,000 MW power generation capacity by 2021 and 60,000 MW generation capacity by 2041. Achievement of this vision is essential for Bangladesh attaining mid income country status by 2021 and achieving the national goal of developing country status by 2041. No one having knowledge of Bangladesh Energy and Power would disagree with the opinion of energy advisor. But few would argue how much this government has achieved in attracting investment in power and energy sector over almost two complete terms of 10 years of the government.
Sector related experts and analysts observe that apart from huge investment required other challenges which have made attaining sustaining energy security are hesitancy in exploring and exploiting own primary fuel resources creating crisis in primary fuel supply, poor governance and inefficient management, inadequate competent human capital required for projects development, operation and maintenance, lack of transparency and accountability, prolonged delays in mega projects implementation (infrastructure for fuel import and imported fuel based large base load power plants) and corruption. Besides, lack of regulatory reforms and regulatory control cannot encourage major local and foreign sector investment.
This write up will attempt to briefly discuss the challenges. We hope political parties now preparing the election pledges for the ensuing general election would objectively assess and analyze the issues and challenges of achieving sustainable energy security.
Bangladesh has a population of 160 million plus population living in a small country. The riverine delta has critical issues of adverse climate change effected from global GHG emission. Energy and Power sector challenges in Bangladesh is unique those cannot be compared with other developing countries. Fortunately, the country has natural gas and coal to fuel its energy needs. But the proven reserve of natural gas resource is fast depleting from exponential growth of demand and not much exploration done for new resources for over a decade and a half. Hesitancy of the government for mining own discovered coal reserve has compelled Bangladesh adopting fuel (LNG, Coal and Liquid Fuel) import strategy. But there again absence of deep sea port and shallow draft of coastal area create huge challenge for setting up enabling infrastructure for Coal, LNG and LPG import. Bangladesh also does not have a comprehensive fuel and power utilization policy. Moreover, well below economically priced gas and power has created challenges for introducing expensive imported fuel. Bangladeshi industries especially the export-oriented industries may not remain competitive at cost price of fuel after introduction of imported LNG.
Investment Challenges
A big delegation of Bangladesh in late 2009 and early 2010 conducted road shows in Singapore, London and New York basically to present to global investors the opportunities in Bangladesh Energy and Power and incentives offered for this. If we remember correctly it was assessed at that time that $20 billion was thought to be required for setting up imported fuel infrastructure and another US$ 20 billion dollars for large power plants. We are not very sure that there has been very encouraging response to Bangladesh offer. Otherwise towards the end of the second tenure Energy Advisor would not have still identified investment as major challenge of achieving energy sector vision.
Government adopted Power Sector Master Plan (PSMP) 2010 which had diversification of fuel mix was a very important element. Coal was identified as major fuel for power generation. It was targeted to contribute 50% of the targeted 40,000 MW power by 2030. Local coal was to contribute 29%. But failure to even initiate actions for local coal mining led PSMP 2010 fall flat. Government started planning for revision of PSMP formulating new fuel mix for targeted 60,000 MW power by 2041 – 35% Coal (34% imported), 35% Gas (Own and LNG) and remaining 30% Nuclear, Imported Power, Fuel Oil and Renewables. Even this could not be approved.
Government has launched several mega projects for power generation and fuel import. Many large imported coal-based power plants projects are at different stages of implementation. But all these are running at least three to four years behind schedule. Apart from technology and human resources challenges here also the main challenge is investment. Let us discuss some of these projects.
Why Not Desired Investment Coming?
Bangladesh needs foreign investment in mining and petroleum resources exploration and development. But neither in mining nor in Petroleum exploration government has transparent investment friendly policies. For over a decade now Phulbari coal mining Scheme of Development (SOD) is hanging in a balance. Government has miserably failed to adopt right policy and strategy for mining own coal. The updated draft PSC designed for engaging IOCs for deep water exploration is not considered investment friendly. It is irony that IOCs do not hesitate to participate in PSC bidding in Thailand, Vietnam and Afghanistan but whenever Bangladesh goes for bidding there is lukewarm response. EMRD and Petrobangla failed engaging contractor for multi-client survey in over three years. Government awarded contracts on the basis of unsolicited offers under coverage of Special Speedy Power Generation & Energy Supply Act. This non-transparent process created doubts among genuine investors. This kind of acts can be a contingency action but cannot continue for so many years.
Government has also failed to nurse BAPEX in making it really competent E&P company. Its 108 wells drilling program has failed to take off with real intensity. Another reason for poor response to major investment is weak regulatory mechanism and weak partially functional BERC.
Government has imposed upon some less utility gas pipeline transmission infrastructure development on GTCL. Consequently, Bibiyana–Dhanua Pipeline and GTCL compressor stations constructed simultaneously has created huge financial impacts on GTCL. Now huge investments are being made for evacuation of RLNG without guaranteed development of so many FSRU and Land based LNG terminals. All these programs are making BAPEX and GTCL weak and sick.
Imported Coal Based Power Projects
Matarbari-Maheshkhali
Bangladesh coastal area does not necessarily have required draft for anchorage of usual deep draft requiring coal carriers, LNG and LPG vessels. The only area which is suitable is South Matarbari. JICA funded coal port development for its two units of 1200 MW each project surviving many challenges is advancing. From physical visit and in discussion with project personnel it appeared that the coal port may not be ready for operation before 2022 and as such power plant in Matarbari can start operation in 2023 at the earliest. Government has plan to covert this port into Coal Transfer Terminal (CTT) with a capacity of importing 40 million tonnes (annual). This would meet the requirement of about 10 other large coal fired power plants planned in Maheshkhali, Pekua and adjacent areas. This CTT would require huge investment. Till now there has not been any encouraging response. If this CTT does not come up on time all the coal fired power plants planned in the area will be in serious problem for coal supply.
Rampal Power Project
This project near Sundarbans survived significant challenges of environmental activists, UNESCO. Investment from Indian Exim Bank had some issues. Now the project has taken off. It also faces huge challenges for coal transportation. Coal for this 1320 MW needs to imported by large coal carriers (PANAMAX or SUPRAMAX) anchored at deep sea and transshipped by smaller vessels to plat site. Bangladesh deep sea remains turbulent over 4-5 months. Transshipment may not be possible for more than 7 months. It is not also possible for setting up storage capacity for 5-6 months in the plant area. On the other hand, transshipment in smaller vessels through shallow draft canals in Sundarbans will have issues as well. This project addressing all such issues may not be completed before end 2022.
Coal Plants at Payra
Possibly this power plant construction is at the most advanced stage. But this also faces the same issue of coal transportation and transshipment. Hope Payra Port Development Authority would include a coal port in its implementation plan.
Bangladesh would think of plan B here. In view of Railway Communication being established all the way up to Payra using Padma Multipurpose Bridge and also to Bagerhat and Matarbari not mine own coal in technically feasible and commercially viable manner and transport coal by rail? The only additional investment here is for Railway facilities expansion include coal transportation. Many private sector we are sure would agree to invest.
LNG Import Initiatives
It has taken almost 8 years for reaching the present state of first FSRU based LNG import. Still there is no guarantee when 500 MMCFD RLNG evacuation would be possible. The infrastructure for another 500 MMCFD RLNG would not be ready till middle to end 2019. It cannot be guaranteed how many other FSRU and whether even one Land based LNG plant construction would be possible. On the backdrop of the above GTCL is making huge Investment in Gas transmission infrastructure. Petrobangla would need huge investment in importing 3500-4000 MMCFD LNG import. On the other hand, delay in importing LNG would let chronic gas crisis continuing and probable investors in downstream power and other energy industry investors staying away.
Human Capacity Development
Bangladesh needs about 3000 qualified trained technical and human resources for managing programmed coal fired power plants and related infrastructure development management, operation and management. Another 100 trained personnel are required for LNG infrastructure and offshore exploration program management. Many persons are being sent abroad for exposure cum training. But right persons are not sent for right jobs. Consequently, most of the visits and training are not bringing expected dividends. EMRD senior officials, Planning Commission officials are going for compressor stations operation training, Pre-paid meter operations. Many training programs are turning into pleasure trips. PMO must investigate how training facilities of Petrobangla and EMRD have been poorly managed over the last 2-3 years.
Conclusion
Government took many great initiatives for mega projects in power and energy sector. But excepting over 3000-3500 MW liquid fuel-based power generation capacity addition achievement in all other areas is marginal. Government must carry out post mortem of energy and power sector performance over the past 10 years. Great achievements in power generation capacity enhancement has been largely over shadowed for failures in power transmission and distribution system capacity enhancement, failures of EMRD and Pterobangla in increasing local fuel supply base and importing LNG. Over all government has miserably failed to attract required investment in the power and energy sector.
Khondkar A Saleque;
NRB, Energy Professional
