20th July 2022

Saleque Sufi

 

Bangladesh government has finally decided to launch austerity in Power and Energy use. But success will largely depend on integration of all stakeholders and strict monitoring. Realities in global energy market turbulent for overarching impacts of War in Ukraine (proxy war of Russia with Western Allies) left no other choice for extensive demand side management. The actions announced for implementation are 1-2 hours planned loadshedding all over Bangladesh with prior arrangement.  Dropping down of shutters of shopping malls and d business after 8PM. Suspending power generation from diesel temporarily. Rationing power use in mosques, pagodas, churches, and temples with specific reference to use of air conditioners.

 

In addition to above, policy makers are contemplating for limiting office hours from 9 AM to 5 PM and if necessary reintroducing working from home. Thoughts are there for keeping petrol pumps closed for a day.

 

According to government source power demand needs adjusting by 1500MW. In the present situation there is no other option than avoiding austerity.

 

Whether all the above actions can be actually implemented needs to be seen. Bangladesh definitely needs to keep the wheels of industries going. Whatever fuel supply and electricity supply are available must be directed to industries. Policy makers are also heard saying the crisis may continue till September stating that commissioning of few coal based power plants and tiding over high summer time. We are not sure whether importing expensive coal from global market and adding the transportation cost will make coal based power cheaper.

 

For years Bangladesh paid no heed to suggestions, recommendations of experts for explorations and exploitation of own primary fuel resources. Bangladesh despite of introducing indemnity act in the shape of Speedy Supply of Power act failed to confirm sustainable supply of primary energy. Government did nothing with exploitation of own coal resource in 14 years. The addition of new gas is like trickle in the big sea. Mostly for expedited development of Chevron operated Jalalabad gas field and Bibiyana total local gas production at one stage reached 2750 MMCFD. But over the past three years production depleted to 2300 MMCFD and threatening to deplete further. Delayed implementation of LNG import could create capacity for importing 1000 MMCFD LNG utilizing two FSRUs anchored at shallow waters off the coast of Maheshkhali, Cox’sbazar. Through two contracts under long term supply with Qatar and Oman Bangladesh imports upto 500 MMCFD LNG. It also use to import 350-400 MMCFD LNG from spot market. Recent spot market LNG price climbing sky high forced Bangladesh suspending purchase of LNG from spot market. Bangladesh relied about 28-30% on liquid fuel (Furnace oil and Diesel) for power generation. World market exorbitant price of liquid fuel also created issues for import. Gas and Liquid fuel import issues created crisis in power generation. Much of these could be avoided if government could take political decision for mining own coal on time and successfully implement exploration campaign of petroleum exploration at onshore and offshore.

 

Let us discuss the situation a little deeper. Bangladesh for unique geographical location is not much suitable for setting up infrastructure for import of Coal, LNG and LPG. Bangladesh policy makers without realizing the reality jumped into imported fuel strategy ignoring exploration of own fuel. Bangladesh after spending years realized that Payra is not ideal for coal port and Land Based LNG terminal. The only location that is suitable for import infrastructure is Matarbari. The works for a coal port and 1200MW power plant has advanced. But with Japanese government announcement for withdrawal from the second 1200MW unit and uncertainties of implementation of planned Coal Transfer Terminal (CTT) the future of Matarbari growing as a power hub has become uncertain. Plan for 7 coal based power plants at Maheshkhali and Matarbari is now uncertain. The program of Land Based LNG (LBT) and LPG terminal on time has also become uncertain. Hence it is now uncertain whether Bangladesh can achieve power vision 2030 as fuel supply will continue remain uncertain.

 

Cutting the long story short let me forecast that present situation of power and energy supply crisis is bound to create public commotion. Own production of gas may deplete below 2000 MMCFD by 2025 with not much possibility of major new addition by 2025 through works of BAPEX. Even if Ukrain war is stopped soon the impacts of war on global energy supply will stay for two years at least. LNG will be in high demand in Europe and rest of the world. Bangladesh may not be able to import Coal, Gas and Liquid fuel at such high price. Hope government realizing the situation will take pragmatic actions for exploring and exploiting own fuel resources.


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