Amid debate over moving out of coal and going for LNG-based power generation, experts at a recent discussion suggested taking a policy to ensure a balanced mix of primary fuel to ensure the country’s energy security. They viewed that narrowing down the fuel basket could emerge as a misstep towards making the energy security vulnerable and thus making uncertain the country’s vision of becoming a developed one.
Experts, industry specialists and researchers observed that moving out of the planned coal power program might prove to be suicidal as the primary energy is still considered the fuel of choice for base load power generation for at least 100 more years. Though their observation runs counter to the present global sentiment against using the dirtiest fuel, they argued that coal is still dominating the fuel mix of developed countries. Bangladesh should also continue with coal having at least 30% stake in its power generation fuel mix. However, they warned of making sure that advanced technologies are used to address the environmental issues.
The views and suggestions emerged at the virtual EP Talks titled “Future Challenges of Fuel Mix for Power Generation and Way Forward” held on 28 November 2020. The Energy & Power magazine organized the meeting as part of a series of discussion on the country’s emerging energy issues.
Presently, there is a discussion among the policymakers as well as the policy movers to consider whether the planned coal-based large power plants should be replaced with LNG-based ones for the sake of protecting the environment and the planet.
The experts advised to exploit own coal resources and set up mine-mouth power plants besides importing coal for power generation in the coastal areas. One mining expert suggested developing Barapukuria and Phulbari mines in tandem through technically appropriate open pit method as these are a single structure. There are off-the-shelf proven technologies for managing mine water and environment. These are not the issues though. Taking a political decision for mining is the lone issue now.
They also observed that Bangladesh is steadily becoming dependent on imported primary fuel despite having challenges in setting up the import infrastructure due to shallow draft in the coastal belts. They stressed on the need for well-thought and appropriately-planned actions in developing the coal and LNG import infrastructures.
Taking part in the discussion, Engr. Khaled Mahmood, former Chairman of Bangladesh Power Development Board (BPDB), said that the PSMP 2016 provides for 54% reserve margin of power generation by 2030. If the mega coal power projects now under discussion are scrapped, around 7,000MW of generation capacity would be shelved. The reserve margin would then reduce to 30%, which should be enough. He said that up to 2,000MW of power could be imported through cross-border trading if necessary while the rest should come from the own gas and imported LNG-fired generation. The upcoming review of the PSMP 2016 would clarify the situation.
However, another former Chairman of BPDB Engr. A.S.M. Alamgir Kabir thought that the reserve margin is too high and said it should not be more than 25% in countries like Bangladesh.
Engr. Khaled Mahmood informed that review of the PSMP would start in 2-3 months with Japan International Cooperation Agency (JICA) as the consultant. He also informed that a committee was formed for conducting a feasibility study for the second nuclear power plant proposed to be set up at Patuakhali.
The wind mapping has suggested nine sites as the potential locations for wind energy. Bangladesh Rural Electrification Board (BREB) is working on solar irrigation. He thought that growing big in solar will be difficult until battery storage technologies advance further and get cheaper. Only two grid-connected solar plants – 50MW at Patuakhali and 20MW at Teknaf in Cox’s Bazar – are in sight as of now. Two more solar plants each having 7MW capacity are also in the plan. He recognized that the future fuel mix should be planned with coal, nuclear and gas. If the second 1,320MW unit is not built, he said, the tariff would go up. The infrastructure needed for two units of 1,320MW plants has been built there. The BPDB continued to pursue for the two units. The government would take the final decision in this regard. The 13 coal-based plants being considered to be shelved are mostly at the planning stage. Orion Group has two plants - 565MW at Gazaria and 522MW at Mawa. The government should think deeply before terminating these contracts due to having financial liabilities.
Engr. A. S. M. Alamgir Kabir, former Chairman of BPDB, mentioned that Bangladesh has no option but to rely on imported primary fuel. The natural gas and coal are not enough to provide necessary fuel for power generation. Coal remains and would remain as the preferred option for base load power generation. But use of coal should be capped at 15,000MW. Regarding extraction of coal mine, water management is a critical challenge, according to him. He said the priorities change from time to time. The price becomes the driving force for fuel priority changes in the planning. He agreed that for long-term planning, there is no way but staying with coal as major fuel.
We have to include renewable energy option in the fuel mix. But for using power at night, solar is still not a significant contributor due to limited battery storage capacity. Bangladesh’s power demand peaks in the evening and it continues till the midnight. He said the contribution of renewable energy would not be more than 10 percent at any stage. Imported coal-based power plants should be built along the coastal regions. Challenges with coal import is much less than LNG. Coal price in global market is much more stable than that of the LNG. Coal projects that are now under planning stage must not be shelved. We must also go for a second nuclear power plant. The first one is relatively expensive, but the cost of the second one is expected to be 30-40% lower.
About the much talked about adverse impacts of coal power plants, Engr. Kabir said the present modern technologies have effectively addressed all the concerns. The realities are far different now. China is talking about zero emissions. Bangladesh is also using Ultra Super Critical Technology. Reguations are extremely tight now. Bangladesh has windows to lower the emission levels. There must not be concerns anymore with coal power plants. Coal power is the best solution for Bangladesh. But too much reliance on imported primary fuel will create an energy security issue. Transshipment of coal is an accepted phenomenon. Considering all these, Engr. Kabir thought that abandoning coal projects will be suicidal for Bangladesh at this stage.
Muqtadir Ali, former Chairman of Petrobangla and BPC, said that none could ever suggest a perfect fuel mix for Bangladesh. In 1970s, furnace oil was the main fuel. Own natural gas became the fuel of choice and almost exclusively dominated the fuel mix till 2000. There was a notion that Bangladesh was floating on gas. When proven gas reserve started depleting, coal became the priority. Forgetting about local coal reserve, Bangladesh leaned towards imported coal. But none possibly thought about challenges of coal transportation. We also forget about affordability. We did not consider whether or not consumers can afford the high price of power and energy.
We are now thinking about abandoning a number of coal power projects and replacing these with LNG. What is the guarantee that the price of LNG would remain at the present level? Can we afford to absorb price shock of LNG when it would shoot up? Scenario would change any time. We supplied gas to industries for captive power generation on the excuse of power generation. Did the nation derive benefit out of it or the industrialists only? He said time has come to review the gas supply to end users which can be replaced with alternative fuel.
He also raised questioned about the pipeline infrastructure for evacuating re-gasifed LNG (RLNG). The capacity of the present pipelines of GTCL would not be enough for the volume of LNG that is being considered to be imported. Another 50 inch-400Km long gas transmission pipeline that the GTCL s thinking about must see the light and make it ready by 2030.
He said that there are criticisms about open pit mining at Phulbari. But, the affected communities would accept land acquisition if an attractive compensation package can be offered. In case of Barapukuria, we observed that the local people gladly accepted the compensation. We must not again become mono-fuel dependent. The fuel mix must be realistic and affordable for all.
Engr. Syed Abdul Mayeed, former Chairman of BPDB, mentioned that the PSMP is a dynamic document and gets updated at regular intervals of every five-year depending on the emerging situation and circumstances. But these must be formulated with extensive homework. We always talked about power exchange when we started negotiation with India for power trading. Our thought at that time was India would import power from us for Tripura and adjacent region. We started importing from them and let them transport machinery and plants through our territory for power plant at Palatana, Tripura. Now India is in a position to export from Tripura as well.
We have initiated many mega projects. But we must invest in our own coal extraction. India generates 55% power from coal. If India right across the border at West Bengal, Bihar and Jharkhand can extract own coal, why we cannot do that? He also suggested that Bangladesh must keep all options open in fuel mix for power generation and must not move away from coal.
Nurul Alam, Additional Secretary of Power Division, informed that energy auditing would start soon. Power from Adani power plant under construction in India is expected to come in 2022. There may be some delays if the power evacuation infrastructure is not ready on time. He said that the Covid-19 has delayed all the projects by 3-6 months.
He said financing is a major issue for large coal power projects. Not only ADB and the World Bank, even the OECD is not agreeing to finance. They would not even finance for infrastructure for evacuating coal power. Each large coal project needs an investment of at least US$2 billion. We know that Japan is developing more fuel-efficient technology that would require less coal and hence less emission will take place. If they become successful, it will be a great news for coal power.
None can say now when the LNG price will gain momentum again. “I agree that coal supply would not be a problem for at least 100 more years. The price would also remain stable. Transportation of coal is the main challenge for Bangladesh.”
Some 55 coal ships have so far been handled at the Payra plant jetty. But the draft of the channel often remains only 5-6 meters. For this, half-filled Handy Max Carriers are being used. We thought that the Payra Port Authority would set up self-supporting Payra port including the coal port. They were also supposed to dredge the 90Km port channel. But they are also right that until the Padma Bridge opens for traffic, ships would not come to the Payra port. However, the Port Authority has already signed a contract for capital dredging of the channel. We would dredge and maintain 500 meters on either side of the port jetty.
We are contemplating development of a Coal Transfer Terminal (CTT) at Matarbari Port. BIFCP for Rampal Power Plant and Barisal Power Company for its power plant at Patuakhali have agreed to use this. When the CTT will complete, the power plants at Matarbari-Moheshkhali Power Hub, Rampal and Patukhali “would not have to face any problem. We will be able to import coal at affordable price.”
Responding to a question about replacing the planned coal power plants with LNG-based plant, he said: “This is still under discussion. What I can say is that we are discussing about it.”
Sharing his opinion about energy mix, Prof. Firoz Alam from RMIT University, Australia said a country must not rely on single fuel (e.g., natural gas or liquid fuel) for power generation. At least one-third of the total power generation should be coal-based unless other fossil fuels (oil & gas) and hydro resources are abundant within the national boundary of a country. The price, demand and availability of coal will remain stable in the foreseeable future. He also said that a developing country must not rely on imported natural gas or oil for power generation as the price of these of fuels is highly volatile and politically sensitive to sourcing regions. According to him, today’s coal-fired power plant uses modern technology enabling to achieve high thermal efficiency and low carbon pollution.
Prof. Alam emphasized ardently on the use of high heating value coal (> 6,700 kcal/kg or 28,000 kJ/kg) instead of low heating value coal (4,000 kcal/kg or 16,736 kJ/kg). He provided an example for the case of Payra power plant. Using 6,700 kcal/kg heating value coal with its 42% thermal efficiency and 65% plant factor, Payra Power Plant for its 2 units can save nearly 1.5 million tonnes coal annually from its current need of 3.9 million tonnes coal with heating value around 4,000 kcal/kg. This is extremely important when coal unloading is a serious issue due to low draft at Payra river channel.
He also mentioned that our plant designers, engineers and policymakers must have a 40-50 years long plan for coal-fired power plant especially based on imported coal along with selection of long-term sourcing countries and designing boiler characteristics based on those countries’ coal specifications long before the start of physical construction of the power plant.
However, Engr. Alamgir Kabir pointed out that sourcing high heating value coal is extremely difficult as major suppliers do not want to enter into long-term contracts. That is why Bangladesh is importing a lower heating value coal. He said that financing challenges of coal power projects could be addressed if the government provides 50% of the project cost as loan. He said that China has lowered the emission limits of coal power plants as low as that of gas power plants. Bangladesh should also lower the limit he observed. He said that if any fuel use is required to be abandoned, that should be dirty liquid fuel.
In his keynote presentation, Engr. Khondkar A Saleque, Consulting Editor of Energy and Power Magazine, said that Bangladesh has considerable surplus generation capacity now and already brought 98% of the population under coverage of the grid power. But a lot remains to be done for reliable, sustainable, quality supply of power to all at affordable cost. He pointed out that sustainable supply of primary fuel, affordable fuel mix, modern reliable power transmission grid and distribution network and required number of qualified, trained human resources are major challenges.
He said proper attention was not given to challenges of coal import infrastructure development and coal transportation. Now after planning for so many projects and spending 5 years, thoughts for replacing coal projects with LNG has emerged. Two challenges are highlighted now – financing and coal transportation. It is true bilateral donors and development partners are not interested in financing coal projects now. But Bangladesh cannot suddenly switch from coal to LNG.
Engr. Saleque predicted that coal will remain the fuel of choice for base load power generation for another 100 years. He said gas based plants even if it is combined cycle has 25-30 years of life cycle. Whereas a modern coal power though a bit expensive can be operated efficiently for 50 years or more. He recommended not to scrap coal projects – especially the ones near the coastal areas.
Starting from 2010 Bangladesh could manage importing 1000 MMCFD LNG in 10 years. A flawed plan was made for too many FSRUs without considering the turbulent nature of Bangladesh offshore waters. Enough time was wasted on improbable small scale LNG at CUFL and KAFCO. Logically, not more than another 2,000 MMCFD of LNG import would be possible by setting up land-based LNG terminal at Matarbari.
Bangladesh must keep all widows (coal, gas, nuclear, power import, renewable, open in the fuel mix because mono-fuel dependency would make the energy security vulnerable. According to him, extraction of local coal should get priority.
Moderating the discussion, Mollah Amzad Hossain, Editor of Energy & Power magazine, said the country’s primary and secondary energy would become 90% dependent on imports by 2030. So, the energy mix should not be based on mono-fuel like gas under any circumstance. He argued that Bangladesh was almost entirely (98%) dependent on natural gas for its power generation. As soon as the gas supply started declining, the country had to fall in a sudden fuel crisis and go for expensive liquid fuel-based generation to meet the growing demand. By then, the government started developing coal-based base load power plants. In the half-way of its coal plan, the government again contemplating to go for gas-based generation, mainly due to starting import of LNG comparatively at lower cost thanks to the Covid-induced price debacle in the global market. But the price of the imported fuel of any kind could shoot up anytime. In this context, coal is the only fuel the price and supply of which remain stable for around last 100 years and is predicted to remain stable for 100 years more. So, the policymakers should not consider going back to mono-fuel again.
Dr. Mushfiqur Rahman, eminent mining engineer and environment expert thought that it would be wise to keep all options open for an affordable fuel mix. Leaning to a particular one will, of course, create vulnerability. For us, feasible renewable options are solar and wind power. We have only 1.9MW of wind power now while efforts are being made for a 50MW windmill at Payra.
According to IDCOL, 2,000MW of solar power is possible by 2025. In my opinion, he said, it is highly optimistic. We cannot expect this unless the technology advances significantly. We should not expect large grid-connected solar coming soon. Among the traditional fuel-based new generation capacities, we have seen power at little higher cost at Tk 6.00 per unit could be generated from Payra Unit one. But there are challenges of dredging the channel and coal transportation.
The plan for setting up as much as 21 coal power plants was way too much right from the outset. Challenges similar to the imported coal projects are also there for the large-scale LNG imports. The LNG price could hit sky-high anytime. I do not think required considerations were taken into account while talking about the LNG-based power generation.
Engr. Quamruzzaman, former Director (Operation) of Petrobangla, however, welcomed the government’s plan to replace planned coal projects with LNG-based plants. But he stressed the need for proper coordination with Petrobangla and EMRD in this regard.
An affordable fuel mix is necessary. Planned capacity must be higher. It gives flexibility to change based on circumstances. The land-based terminal planned to be set up at Matarabari can be extended to 30 million tonnes of storage capacity.
In conclusion, the energy sector experts have cautioned the policymakers of the dangers of going for mono-fuel in generating power to meet the fast-growing demand for electricity. They also warned of the risks of complete dependence on imported energy and suggested enlarging the fuel basket that would have the strong contribution of the local resources – be it coal or other fossil fuel, which are yet to be explored.
