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Energy Crisis in Bangladesh

Short and Long Term Solutions

April 30, 2009

Compiled by Shawkat Haider



Electricity Generation Worldwide

Current production costs :1.76 cents per kWh for nuclear,2.47 cents for coal,6.78 cents for natural gas and10.26 cents for petroleum.

Coal accounts for 39% of global energy

World Nuclear AssociationIAEA.



Electricity Generation in Bangladesh

Peak demand is catered by:

Natural gas 85%Liquid fuel 6.76%Coal 5.41%Hydropower 2.45%

Demand from:

DESA, DESCO 1800MWREB 2200MWPDB itself 1500MW

1 TCF Coal (37MT) can produce 14000-94000 MW1 TCF Gas can produce 22000 MW

3.5 barrels of oil = 17000 cubic feet gas = 1780 pound coal(in terms of energy production)

Coal Mining Challenges in Bangladesh Khondkar Abdus Saleque, energybangla, April 2009

Solution lies in gas supply, Sharier Khan, The Daily StarDr. Khalequzzaman, The Daily StarWorld Nuclear Association



Energy Sector Snapshots

TOTAL INSTALLED CAPACITY 5453 MW (105 Unit) December - 2008

BPDB 3812 MW (59 Unit) December - 2008

IPP 1330 MW (39 Unit) December - 2008

SIPP & Rental 311 MW (7 Unit) December - 2008

Present generation capacity 4931 MW December - 2008

Current demand 5500 MW April- 2009

Average generation 3700-3800 MW April- 2009

Maximum generation in history 4146.9 MW April-2009

Load shedding 1000-1500 MW April-2009

Access to electricity 45% FY- 2008

Per capita generation 149 kWh FY- 2008

Distribution lines (33 KV & below) 47,479 Route KM FY-2007

Bangladesh power development board, BPDB; Power Cell, Energybangla



Power Sector Structure in Bangladesh



Gas Sector Scenario in Bangladesh

Total recoverable gas : 21 TCF(proven and probable)Reserve remaining : 13 TCF

National demand of natural gas : 2200 MMCFD

Production capacity : 1880 MMCFD

Power sector requirement : 921 MMCFDPower sector gets : 800 MMCFD

PetroBangla

Coal Mining Challenges in Bangladesh , Khondkar Abdus Saleque, Energybangla



GAS PRODUCTON CAPACITY 2009

Capacity

Field (mmscfd)

TITAS 14 405

BAKHRABAD 4 34

HABIGANJ 9 240

NARSHINGDI 2 35

MEGHNA 1 0

Sub Total 30 714

SYLHET 1 2

KAILASHTILA 6 97

RASHIDPUR 5 53

BEANIBAZAR 2 18

Sub Total 14 170

SALDANADI 2 11

FENCHUGANJ 2 32

Sub Total 4 43

SUBTOTAL (1+2+3) 48 927

CAIRN SANGU 6 35

JALALABAD 4 230

MOULOVIBAZAR 4 75

CHEVRON BIBIYANA 12 500

NIKO FENI 3 3

TULLOW BANGURA 2 100

Sub Total 31 943

TOTAL 79 1870

3.BAPEX

2.SGFL

1.BGFCL

Producing WellsCompany

Category Wise GasConsumption (2007)

Power 44%Fertilizer 13%Captive Power 13%

Industrial 16%Domestic 11%Others 3%

Titas Gas, Petrobangla

PetroBangla



Coal Sector Scenario in Bangladesh

The total coal reserves in 5 coal fields=

2.9 billion metric tons=

energy equivalent to 67 TCF of gas

Only Baropukuria Coal Mine is operational from where 1.73 mill MT of coal hasbeen extracted up to December 2008 for 250MW power plant

Place/ Field (Discovery) Depth (Meter) Proven Reserve (Mill Ton)

Barapukuria, Dinajpur (1985) 119-506 390

Khalashpeer, Rangpur (1995) 257-483 143 (GSB), 685 (Hosaf)

Phulbari, Dinajpur (1997) 150-240 572

Jamalganj, Jaipurhat (1965) 900-1000 1050

Dighirpar, Dinajpur (1995) 327 200 (partly evaluated)

Petrobangla

Coal Mining Challenges in Bangladesh, Khondkar Abdus Saleque, April 26, 2009, Energybangla.com



Power Plant Status in Bangladesh

Years in operation No. of powerplants

Capacity (MW)

40 + 7 140

31 - 40 6 318

21 – 30 26 1399

11 - 20 10 1113

01 - 10 50 2483

5453

Power Crisis: Issues and Challenges Md. Mizanur Rahman, March 26, 2009, Energybangla



Causes of Power Crisis

• The demand for around 5,500MW of electricity is notmet by an avg supply of only 3,800MW.

• High gas dependence. Many power plants are idle

due to shortage of gas supply and poormaintenance.

• An inefficient transmission and distribution systemoperated by state owned companies are the mainfactor behind huge system loss (15-20%).

• Unprecedented delay in finalizing a coal policy. Wehave a probable coal reserve of 3.3 billion tones,which is around 5 times higher than our currentproven gas reserve in terms of its heating value.

• A lack of transparency in power generationprocurement and tendering in the past. Highlyinefficient decision making process

Maximizing Growth for Bangladesh: A Private Sector Vision , Ifty Islam, Asian Tiger Capital Partners



Short Term Solutions

• Shutting down of all the government owned urea plants. This the only immediate source ofadditional gas to be used for power generation. Most of these fertilizer factories use old fuelinefficient process which already have outlived their effective economic life.

• Going for long term agreements to import urea right now as international price of urea is low.

The availability of urea must be assured but the price should be appropriate; a subsidy ispossible but undesirable. At least the subsidy should be linked to the price of rice.

• More Rental Power Plants need to be installed to overcome the short term power crisis.

• Reducing system loss in the power sector should be a priority as a reduction of 1% systemloss can save around 45 MW of power. The government should implement the merchantpower policy immediately

• The government can set up some small coal fired power plants and can import coal fromIndia on a temporary basis before developing our own coal mines

• Several large barge mounted power plants can be contracted on short term basis which cansupply additional 600 MW by the end of the year. This will ease the power crisis for a fewyears while other fuel sources are developed and the required power plants constructed

Solving the energy crisis Salman F Rahman and Forrest CooksonMaximizing Growth for Bangladesh : A Private Sector Vision, Ifty Islam, Asian Tiger Capital PartnersPower Crisis: Issues and Challenges Md. Mizanur Rahman, Energybangla.comBangladesh Power System Master Plan Review , Engr Khondkar Abdus Saleque, Feb 2009, Enerybangla.com



Short Term Solutions

• Captive power generation by the private sector is around 1800-2000 MW; 20-25% of thiscapacity remains unutilized which can be added to the national gridline. Provide incentiveto the standby captive generators to run their machine without taking power from grid.

The improvement of the gas pipelines and installation of compressors to increase pipeline

pressure - should be implemented immediately.

• Daylight energy saving. Changing the office timetable to 8 am - 2 pm can save moreelectricity for using in the evening peak hours. 350 MW at Dhaka and Chittagong can besaved daily

• Using energy efficient appliances and immediate removal of taxes on them

• Importing Liquefied Natural Gas (LNG) from gas exporting countries like Indonesia, Qatarto meet urgent need

• Nation-wide power conservation awareness program

Solving the energy crisis Salman F Rahman and Forrest Cookson

Maximizing Growth for Bangladesh : A Private Sector Vision, Ifty Islam, Asian Tiger Capital PartnersPower Crisis: Issues and Challenges Md. Mizanur Rahman, Energybangla.comBangladesh Power System Master Plan Review , Engr Khondkar Abdus Saleque, Feb 2009, Enerybangla.com



Mid to Long Term Solution

• Accelerate the exploration for gas. The recoverable proven remaining reserve of gas iswill start depleting after 2012. The maritime boundary dispute with India and Myanmar is amajor barrier to offshore gas exploration, and should be resolved as soon as possible.

• Petrobangla and EMRD must do everything possible to support Bapex to make it a self

reliant exploration company.

• Install new urea plants that are more gas efficient. As coal fired power plants come online in five years the gas can be sold to the urea factories enabling imports of urea to becurtailed.

• Fast-track the development of Phulbari and other coal deposits and simultaneously buildlarge-scale coal-fired power stations. Gradually remove coal imports (currently about 5mill MT) and supply ultimately 18 MMT to the power plants [enough for 6000 MWs].Contract for 3 coal fired power plants each for 1000 MWs in about 4-5 years. When theseplants are available gas is switched to new efficient urea plants and peaking plants for thepower sector and for direct industrial use.

• Public private partnership should be highly encouraged. If needed, energy bond or leviesshould be charged to raise funds.

Solving the energy crisis Salman F Rahman and Forrest CooksonMaximizing Growth for Bangladesh : A Private Sector Vision, Ifty Islam, Asian Tiger Capital Partners

Power Crisis: Issues and Challenges Md. Mizanur Rahman, Energybangla.comBangladesh Power System Master Plan Review , Engr Khondkar Abdus Saleque, Feb 2009, Enerybangla.com



Mid to Long Term Solution

• Government must encourage expansion of Solar, wind and bio fuel energygeneration. Efforts to use solar power on tall buildings, factories, rural areasshould be promoted with low cost loans while removing taxes on solarequipment. Full potential of mini micro hydro generation must also be explored.

Energy from solid municipal waste in major cities can be possibility also.

• Nuclear energy is a long term solution with huge cost involvement of billiondollar per 1000 MW plant, but essentially this would become a vital source withhighest durability and low unit cost of production.

• Many power plants set up in Ashuganj, Ghorashal, Shajibazar have outlivedtheir effective economic life. Further investment in those will be waste of moneyand efforts. There has been considerable drainage of national resources inmaintenance of some plants. These can be replaced with fuel efficient modernplants.

• A more efficient and faster procurement and tendering process should beadopted for quicker implementation of any project.

Solving the energy crisis Salman F Rahman and Forrest CooksonMaximizing Growth for Bangladesh : A Private Sector Vision, Ifty Islam, Asian Tiger Capital Partners

Power Crisis: Issues and Challenges Md. Mizanur Rahman, Energybangla.comBangladesh Power System Master Plan Review , Engr Khondkar Abdus Saleque, Feb 2009, Enerybangla.com

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