A public debate is going on in the country over power generation capacity.Critics say the power system is maintaining substantially an overcapacity,putting additional burden on the consumers and the government exchequer.They argue that this overcapacity or higher spinning reserve has increased thegeneration cost, forcing the utilities to get subsidy from the government andraise the retail tariff. Imported fuel is also responsible for increased cost ofpower. There is also a strong argument that the surplus capacity is beingmaintained to benefit the private sector investors on political ground. On theother hand, the high government officials in the sector claimed that the actualgeneration capacity is not much considering the difficulties on ground. The gassupply shortage alone limits the generation capacity by 2,500 MW out of thetotal gas-based capacity of 11,000 MW. Of the present total installed capacity ofaround 20,300 MW, only around 14,000 MW can be produced now aftermanaging various difficulties.

The situation would not have created if the power system got adequate supplyof own fuel like gas. The government should explore and exploit own energyresources to overcome the difficulties in future.

Cover Photo: Night View of Payra 1320MW Thermal Power Plant

Fortnightly Magazine, Vol 18, Issue 5, August 16-31

Bangladesh Power DevelopmentBoard (BPDB) is incurring lossescontinuously due to selling elec-tricity at a tariff determined byBangladesh Energy RegulatoryCommission (BERC). To offset thecumulative losses, the govern-ment has provided Tk 55,000crore to Tk 60,000 crore as sub-sidy. The government in itsbooks of account has shown thisas loan. There is, however, nopressure on BPDB to repay thisas yet.

The spinning reserve of powergeneration in the country isclaimed to be not much in realityconsidering the difficulties beingfaced by the generation system,including short supply of fuel likegas and de-rated capacity ofmany old-aged plants.

Chairman of Bangladesh PowerDevelopment Board (BPDB) Engr.Belayet Hossain claimed this at arecent webinar on “Debate OverPower Generation Capacity”.

The power sector continued to face criti-cism. Electricity is indispensable for devel-opment, but the excess generation capacityappears to have become a liability, espe-cially in the eyes of the consumers’ rightsactivists. Notwithstanding, the necessity ofintroducing the private sector in powergeneration and the growth of generationcapacity has been unplanned. Conse-quently, the cost of generation is increasingdue to payments of rents and capacitycharges for keeping the generation capacityunutilized. The consumers are bearing the..

43 23 9

EditorMollah M Amzad Hossain

Advisory EditorAnwarul Islam TarekMortuza Ahmad FaruqueSaiful Amin

International EditorDr. Nafis Ahmed

Contributing EditorsSaleque Sufi

Online EditorGSM Shamsuzzoha (Nasim)

Managing EditorAfroza Hossain

Deputy EditorSyed Mansur Hashim

Magazine AdministratorAKM Shamsul HoqueReportersArunima HossainJannatul Ferdushy Sova

Assistant Online EditorAditya HossainDesign & GraphicsMd. Monirul Islam PhotographyBulbul Ahmed

ProductionMufazzal Hossain JoyComputer GraphicsMd. Uzzal Hossain

Circulation AssistantKhokan Chandra DasEditorial, News & CommercialRoom 509, Eastern Trade Center56 Inner Circular Road (VIP Road)Naya Paltan. GPO Box : 677Dhaka-1000, BangladeshTel & Fax : 88-02-58314532Email: ep@dhaka.netenergypower@gmail.comWebsite: www.ep-bd.comPriceBangladesh: Tk 50, SAARC: US$ 6,Asia: US$ 8, Europe: US$ 10, NorthAmerica, Africa & Australia: US$ 14

Encouraged by the readers and patrons, the EP would continue bringingout Green Pages to contribute to the country’s efforts in its journeytowards environment-friendly energy.

5 WORLD WATCH

Latest Development in

World

6,8 SNAPSHOT

Latest Development

9 COVER

Own Fuel To Boost

Demand for Power

COVER ARTICLE

15 Overcapacity Syndrome in

Power Sector

COVER PLUS

19 Spinning Reserve: A Blessing

or Curse?

SPECIAL REPORT

23 Actual Spinning Reserve of

Power Generation Not Much

REPORT

27 ‘Socio­Economic Conditions

Should Get Priority in Energy

Policy’

28 Dhaka Gets First Tranche of

$1b Japanese Loan

29 RNPP: Further Progress in

Equipment Manufacturing

30 Indian Oil Resumes Supplying

Petroleum Products to BD

31 Reliance's 15­Year­Plan to

Build into New Energy

Company

ANALYSIS

37 We are Still in Power Crisis

Management Mode

CLIMATE

39 PM's Leadership on Climate

Front Globally Recognized:

FM

39 Climate Vulnerable Forum’s

Next Confce to be Held

Marking Mujib Borsho

40 Climate Change Protesters

Burst British GP ‘Bubble’’

40 Young Leaders Tapped to

Invigorate UN’s Climate Action

Plans

41 Revolutionary Solid­State

Batteries to Create a $6b

Market in 2030

41 Japan Wind Power Group

Aims for 10GW Offshore Wind

by 2030

INTERVIEW

43 Engineer Md Belayet Hossain;

Chairman, Bangladesh Power

Development Board (BPDB)

33 Little Progress in

Renewable Energy

35 Energy Efficiency Projects

to Cut 22 Industries’

Consumption by 43 Pc

35 Technaf Solartech Provides

Safety Gears for PDB

36 Experts for Financing Local

RE Initiatives Through

Commonwealth

5

Worldwatch

August 16, 2020

BP has un-veiled itsnew strat-egy as it

moves from an international oil company to an integrated en-ergy company.

Within a decade, the company aims to increase its annual lowcarbon investment tenfold to around $5 billion a year, with aportfolio of low carbon technologies, including renewables, hy-drogen, and CCUS.

By 2030, its target is around 50 GW of net renewable generatingcapacity — 20 times more than in 2019.

Over the same period, the company expects to cut its oil andgas production by at least 1 MMboe/d to around 1.5 MMboe/d,40% lower than 2019 levels, with its remaining hydrocarbonportfolio more carbon-resilient.

Emissions from its operations and those associated with the car-bon in BP’s upstream oil and gas production should come downrespectively by 30-35% and 35-40%.

With hydrocarbons, thecompany said it wouldremain focused on safetyand operational reliabil-ity, at the same time striv-ing to drive capital andcost productivity up andemissions down.

BP Targeting 40% Lower Oil,Gas Production by 2030

Santos Ltd.has agreedf a r m - i nterms with

Bengal Energy Ltd. for a portion of Bengal’s southwestQueensland permit ATP 934 in Cooper-Eromanga basin.

Santos will pay 100% of the costs of a one-well work programestimated at $2.7 million (Aus.) for the right to earn a 60% in-terest in 420 sq km in the southern portion of the permit. Thisarea offsets recent successful Santos-operated explorationwells.

Santos will be operator of the farmin sector and drilling is ex-pected to begin during second-half 2021, subject to accessand rig availability.

The remainder of ATP 934 is not part of the deal and remains100% Bengal-owned.

Bengal has mapped four prospects in the permit and the com-pany hopes success with Santos will derisk future exploration

outside thefarmin area.Bengal alsoplans to reen-ter and recom-plete fourhistoric wellsas part of itsdevelopmentplan.

Santos holds100% interestin five produc-tion licensessur roundingATP 934.

Santos Farms into BengalEnergy Cooper Basin Permit

M a r t i nO e t j e nhas beenappointedto the Ex-

ecutive Board of MAN Energy Solu-tions on August 1, and will beresponsible for the Supply Chain andProduction division.

His scope of responsibility will there-fore combine the previously separateProduction and Purchasing divisions.The 52-year-old qualified engineerhas already been responsible for theSupply Chain role since January2020, as chief representative of thecompany.

"Supply chain management is an important subject that we haveaccordingly given a seat at the executive table by way of this ap-pointment," explains Dr. Uwe Lauber, Chief Executive Officer ofMAN Energy Solutions. "I am pleased to be able to welcome Mar-tin Oetjen, a long-time colleague and experienced Productionteam member, to the executive team."

Oetjen has already occupied various managerial positions in thecompany since 2012, and has been in charge of the Engine &Marine Systems strategic business unit since 2015. He began hisprofessional career in 1995 at MAN Truck & Bus, and worked invarious managerial roles for the Munich-based heavy goods ve-hicle manufacturer for a total of 17 years.

Martin Oetjen New Memberof MAN Executive Board

India's topgas importerP e t r o n e tLNG is set tocancel itsoffer to buy

an annual 1 million tonnes of liquefied natural gas (LNG) for 10years, two sources said, as signing long-term contracts are notattractive in the current scenario.

India is scouting for cheap gas for price-sensitive consumers asPrime Minister Narendra Modi wants to raise the share of natu-ral gas in the national energy mix to 15per cent by 2030 fromthe current 6.2per cent to reduce pollution.

Earlier this year, Petronet invited bids to buy LNG with pricinglinked to Henry Hub natural gas futures in the United States andDutch TTF gas futures and shipped on a delivered ex-ship basis.

"This month in an internal committee it was decided to cancelthe tender. Soon the proposal will be placed for approval by theboard," said one of two sources familiar with the matter whoboth confirmed the plan to end the tender.

India's Petronet Plans toCancel 10-Year LNG ImportTender

Martin Oetjen

6

Snapshot

August 16, 2020

All over-head ca-bles onGulshan

Avenue (from Pakistan Embassy to Gulshan Shooting Club)will be put underground by October 1, Dhaka North City Cor-poration(DNCC) Mayor Atiqul Islam said recently.

No price will be increased at the consumer level for these, hesaid.

The decision was taken at a meeting of DNCC at Nagar Bha-ban in the capital's Gulshan.

The project will be implemented by Summit CommunicationsLtd, Fiber at Home, Bahan Ltd, Cable Operators Associationof Bangladesh (COAB), and Internet Service Providers Asso-ciation of Bangladesh (ISPAB).

At the meeting, the mayor said the existing overhead cablesin all areas of DNCC need to be moved underground forplanned urbanization.

Overhead Cables on GulshanAve to Go Underground: Atiq

S t a t e -ownedPower GridCompany ofB a n g l a d e s h

(PGCB) has leased out its 2,422km optical fiber cable for aone-year period to the private telecom operator Robi.

PGCB and Robi signed an agreement at the PGCB head officerecently.

PGCB Company Secretary Md. Jahangir Azad and Robi ChiefCommercial Officer Shihab Ahmed signed the deal on behalfof their respective sides.

During the new deal signing ceremony, PGCB also renewedthe earlier deal of leasing out 190 km fiber optic cable to Robi.

Under the new deal, PGCB will get Tk 210 million per yearfrom Robi while it will get Tk 18 million from the reneweddeal.

The lease agreement for 2,422 km of fiber optics is initiallyfor one year, which is renewable.

Earlier, PGCB received Tk 15.1 million from Robi for leasing190 km long fiber optic cable from Chittagong to Cox's Bazarevery year which was leased to Robi in July 2010.

PGCB Rents Out 2,422kmOptical Fiber to Robi

The securitiesregulator hasapproved theproposal ofdeterminingcut-off price

of the shares of Energypac Power Generation Limited (EPGL) aspart of the process of offloading shares under book buildingmethod.

The regulatory approval came at a meeting at the office of theBangladesh Securities and Exchange Commission (BSEC) re-cently.

As per the BSEC approval, the EPGL will raise fund worth Tk 1.5billion from the capital market under the book building method.

As per the public issue rules, the cut-off price of the shares ofcompany will be determined through electronic bidding.

Eligible Investors (EIs) will get shares at cut-off price, while gen-eral investors will get shares through IPO (initial public offering)at 10 per cent discount on cut-off price.

The EPGL will utilise the fund to repay bank loans, and to ex-pand LPG project along with bearing the IPO expense.

As per the consolidated financial statement for the year endedon June 30, 2019, the company's net asset value per share is Tk45.15 (with revaluation reserve), while the value stands at Tk30.20 (without revaluation reserve).

For the same period, the company's earnings per share (EPS) isTk 3.13.

LankaBangla Investments is the issue manager of the EPGL.

Proposal for DeterminingCut-Off Price of EnergypacPower Approved

BangladeshRural Electri-f i c a t i o nB o a r d

(BREB) has announced that it has completed cent percent elec-tricity coverage in 461 upazilas under 80 Palli Bidyut Sami-ties.

It successfully ended the expansion work in August in line witha target it set earlier making birth centenary of BangabandhuSheikh Mujibur Rahman, a BREB release said recently.

Households still without electricity under the 481 upazilashave been asked to visit nearest Palli Bidyut office to get elec-tricity connection by August 20, it said.

With a view to making the country a ‘Sonar Bangla’ dreamt bythe Father of the Nation under, ‘Ghore Ghore Bidyut’ programwas adopted to expand rural electrification.

Despite many constraints, it has become possible with the di-rections and constant support from the Prime Minister SheikhHasina, BREB said.

BREB invited education institutions, district-upazila level pub-lic and private offices, and village residents to apply for elec-tricity.

To get the connection, consumers are requested to contactPalli Bidyut directly and pay the fixed fees.

BREB Completes ElectricityCoverage in 461 Upazilas

8

Snapshot

August 16, 2020

A Memorandum of Un-derstanding (MoU) be-tween Petrobangla andRupali Bank Limited for

making payment of LNG import invoices or compensation ofservices was signed recently at Petrobangla's Board Room atKawran Bazar in the city.

Chairman of Petrobangla ABM Abdul Fattah presided over theceremony while Managing Director & CEO of Rupali BankLimited Md. Obayed Ullah Al Masud was present as chiefguest.

It was also attended by Deputy Managing Director along withhigh officials of Rupali Bank Limited and Directors along withhigh officials of Petrobangla.

Secretary of Petrobangla Syed Ashfaquzzaman and GeneralManager of Local Office, Rupali Bank Limited Mr. KhanIqubal Hossain signed the MoU on behalf of their respectiveorganizations.

Petrobangla, RupaliBank sign MoU

Shankar Mazumdar hasrecently joined as Man-aging Director (MD) ofBakhrabad Gas Distri-

bution Company Limited, saida press release.

He started his career fromPetrobangla.

Mr Shankar obtained his Ac-counting (Hons) and M.Comdegrees from Chittagong Uni-versity.

The newly-appointed MD ofthe company, Mr Shankar hasreceived various trainingcourses from local and abroad,the release added.

Bakhrabad Gas GetsNew MD

BM Energy (BD)Limited, arenowned LPGoperator in

Bangladesh, has recently been certified with ISO 9001:2015,ISO 14001:2015 and ISO 45001:2018, according to a pressrelease.

The company was certified after satisfying all the ISO require-ments in quality management system, environmental man-agement system and occupational health and safetymanagement system respectively for their Cylinder Manufac-turing Plant at Boalkhali, Chattogram and LPG Bottling Plantat Barabkunda, Chattogram.

The certificates were issued by Stan Wright, director of DasCertification, UK on July 22, 2020.

Das Certification, UK is a global provider of ISO certificationservices for various management system standards.

BM Energy (BD)Ltd started mar-keting LPGCylinder Prod-uct inB a n g l a d e s hunder the brandname "BM LPGAS" from2015.

The companyhas been oper-ating throughtwo motherplants, one inChattogram andother in Chalnaand a satelliteplant in Dhaka.

BM Energy (BD) Ltd GetsISO Certification

As part of itsCOVID-19 sup-port for under-p r i v i l e g e dcommuni t i e s ,C h e v r o n ’ s

Bangladesh companies recently handed over 300 packs offood & hygiene supplies for the students of nine Kushum Kolischools of Dhaka - a network of charity schools run by theSocial Welfare Committee of the Dhaka Ladies Club.

Ismail Chowdhury, Chevron’s Bangladesh Corporate AffairsDirector, handed over the supplies at an event held at the Clubpremises.

Fyzunnessa Muna, Social Welfare Secretary of Dhaka LadiesClub, and other key school officials were present.

Chevron ProvidesCOVID-19 Relief Supportto Nine Dhaka Schools

Shankar Mazumdar

9

Cover

August 16, 2020

The power sector continued to facecriticism. Electricity is indispensablefor development, but the excess

generation capacity appears to have be-come a liability, especially in the eyes ofthe consumers’ rights activists. Notwith-standing, the necessity of introducing theprivate sector in power generation and thegrowth of generation capacity has beenunplanned. Consequently, the cost of gen-eration is increasing due to payments ofrents and capacity charges for keeping thegeneration capacity unutilized. The con-sumers are bearing the burnt of this. Onthe other hand, the energy sector re-searchers and academics observed that

the present situation has been createddue to planning the generation growthbased on projected economic growth.The demand grew in domestic andcommercial sectors, but remained vir-tually static in the industrial sector overthe last four years. The unutilized ca-pacity progressively increased. Thereis another school of thought that the al-ready operational industries could notbe brought under the grid power cov-erage for not very reliable supply andcomparatively higher tariff than that ofthe cost of captive power. However,Bangladesh Power DevelopmentBoard (BPDB) analysis evidenced thatthe generation capacity increased by444% over the past 19 years, but thedemand growth in industrial sector is245% only. The demand growth incommercial and domestic sector is853% and 620% respectively. USA-based research organization, InstituteFor Energy Economics Financial Analy-sis (IEEFA) claimed that if the PSMP2016 is pursued, 58% of the genera-tion capacity would remain unutilizedin 2030. BPDB, however, contestedthese observations as unrealistic andclaimed that these were not based onobjective information.

During the COVID-19 pandemic, halfof the generation capacity remainsidle. The Power Divi-sion thought that thedemand during thissummer could grow to14,000-15,000 MWhad there been no pan-demic. In that case, itcould be extremely dif-ficult to manage thatdemand with the pres-ent effective generationcapacity. The pan-demic, that caused aneconomic stagnation ofBangladesh alongsideglobal recession, hasforced the authoritiesto review the powergeneration plan. Someacademics and civil so-

ciety representatives have advised thegovernment for slowing down the im-plementation of the under-constructionmega power generation projects. Ad-vice is also there to suspend other proj-ects in the pipeline. Sources close toBPDB told the EP that there is no scopefor paying heed to such advises beforereviewing the PSMP 2016. Moreover,slowing down execution of the ongo-ing projects would push up the cost.

At present, the installed capacity of thegrid-connected power is 20,383 MW.The off-grid capacitive generation ca-pacity is 2,800 MW. Some 56% of thetotal natural gas supplied byPetrobangla is used for power genera-tion (40% for grid power and 16% forcaptive generation). Of the grid con-nected power plants, gas-based 53.86% (10,979 MW), furnace oil27.17% (5540MW), diesel 6.33%(1,290MW), import from India 5.69%(1,160MW), coal 5.62% (1,146 MW),hydro 1.13% (230MW) and renewable0.19% (38MW). The capacity of liquidfuel-based meaning furnace oil anddiesel-based generation capacity is33.50% (6,830MW). The governmenthas a plan to bring down liquid fuel-based generation to 5% by 2041.

In 2018-19, the total generation was70,553 giga watt hour. Of this, gas-

based generation was 68.5%, furnaceoil 16.20%, import 9.60%, diesel2.90%, coal 1.70%, water 1%, renew-able 0.1%. In 2019-20, according toprovisional estimates, the total genera-tion marginally increased to 71,417giga watt hour. Of this, gas-based71.91%, furnace oil 13.19%, import9.30%, coal 4.18%, hydro 1.15%,diesel 0.19% and renewable 0.19%.During the pandemic, the use of gashas increased and liquid fuel dimin-ished. Consequently, the cost of gener-ation should be reduced.

Bangladesh had to enter into a crisisphase as the development partners hadwithdrawn their financial assistancefrom the power sector. Consequently,the deficit in power system progres-sively increased as generation growthfailed to keep pace with the demandgrowth. Against this backdrop, the gov-ernment of Sheikh Hasina after assum-ing office in 1996 started attractingforeign direct investment in generationthrough formulating and introducingIndependent Power Policy (IPP). Fol-lowing that trend, the local companieslike Summit, United, Orion, Energypacand Confidence have successfully in-vested in power generation. Alongsidethe private companies, some publicsector companies of BPDB under ECAfinancing and forming joint venture

with foreign companiesare working in expand-ing the generation ca-pacity. In addition,under a contingencyaction plan, liquid fuel-based rental and quickrental plants have beenset up. Due to failure inincreasing gas supply,some liquid fuel-basedIPPs have also been setup. For all these, theaverage cost of genera-tion also increased. In2009, the unit cost ofpower generation wasTk 2.53, which is in-creased to Tk 6.03 in2014. However, itcame down to Tk 5.67

11August 16, 2020

per unit in 2019due to increasedgas supply. Thegeneration cost isexpected to reducefurther this year dueto increased gassupply and substan-tial fall in fuel oilprice in the interna-tional market.However, the bulkpower tariff did notincrease propor-tionately. The lossof BPDB startedgoing up as a resultwhile the retailprice continues torise.

Though the suc-cesses and achieve-ments have beenobserved, yet no such success was vis-ible in transmission and distributionsegments. Dr Ijaz Hossian, Dean ofChemical Engineering faculty of BUET,said the success in generation segmentcould not be achieved if it remains inthe exclusive domain of public sectorlike the transmission and distributionsegments. The private sector has be-come interested to invest in powergeneration due to guarantee of returnon investment. And, to do that the in-vestors have been provided with rentand capacity charges. According to theBangladesh Energy Regulatory Com-mission (BERC), the government has topay rental fees and capacity charges ofTk 61,460 crore during a period of sixyears from 2013-14 to 2018-19. Overthis period, BPDB had to account forTk 293,294 crore for purchasingpower from the IPPs.

The energy sector analysts and acade-micians considered the private sectorinvestment rational. But representa-tives of the consumers’ rights organiza-tion and left-leaning politicians termedthis as a flawed planning. Theyclaimed that these were done on polit-ical ground to serve few companies.According to them, this is why the gen-

eration capacity kept sky-high than theactual demand.

Special assistant to the Chief Advisorof former caretaker government Prof MTamim observed that the present situ-ation has emanated from planning thegeneration on the basis of the govern-ment’s projection on the GDP growth.That strategy is proved to be wrong.Hence, the generation growth must bereadjusted through revisiting the PSMPnow. Taking the situation where itstands, it can be forecasted with rea-sonable assurance that the demandwould not grow to 32,000 MW or37,000 MW by 2030.

Dr Ijaz thought that the demand is notgrowing as investment in industries isnot increasing. In this situation, he sug-gested not to go for any new importedcoal-based generation plant. Coalplant can be constructed at mine-mouth through exploring own coal. Healso stressed on giving priority to LNGimport.

Giving a detail technical analysis, Engr.Belayet Hossain, Chairman of BPDB,explained that BPDB cannot utilize its11,000 MW gas-based generation ca-pacity for gas supply deficit. About2,500 MW gas-based generation ca-

pacity remainsidle. BPDB has noother alternative touse liquid fuel-based generation.Taking into ac-count the fuel sup-ply constraints,auxiliary use, plantload factor andtechnical losses,there is not muchspinning reserve.Hence, we have tokept pursuing ourgeneration plan.Otherwise, wewould not be in aposition to meetthe requirements of100 new SpecialEconomic Zones(SEZs) now under

the process of implementation. But thepace of development of SEZs is not en-couraging as such.

Former Chairman of BPDB Engr.Khaled Mahmood did not see any rea-son for reviewing the generation planas yet. By 2030, about 7,000 MW ca-pacity plants would go into retirement.Consequently, we have to continueadding new baseload power plantsprogressively. He expressed concernover the permissions now being givenfor new captive power generation inthe SEZs. These will create huge risksfor grid power utilization in the future.Hence, for effective utilization of thegrid power, there must not be any newcaptive power generation in the SEZs.He also strongly suggested bringing outpresent industries from exclusive re-liance on captive power. Otherwise,the grid power development planningwould fall flat. Another pre-conditionof demand increase is enhancing thecapacity of power transmission anddistribution, and ensuring efficiency.Though late, emphasis on these seg-ments would make it more reliable inabout 3 years.

Director General of Power Cell Mo-hammad Hossain did not think that the

12August 16, 2020

present generation capacity is way toomuch. The situation has not yetreached a level for supplying fuel asper demand to all generators, espe-cially gas. Hence, there is no alterna-tive but to have surplus generationcapacity. Some 25% spinning reserveis a universally accepted standard forefficient power system operation. Thecountries where renewable energy is amajor contributor have 100% reservemargin. He said the PSMP is a dynamicdocument. In usual practice, it is re-viewed every 5 years. On special cir-cumstances, it can be reviewedquicker as well. Hence, there is scopefor reviewing the generation plan, fuelmix and other associated aspects.

State Minister for Power, Energy andMineral Resources Nasrul Hamid toldthe EP that the effective generation ca-pacity is not above 16,500 MW. Wewould have struggled meeting thepower demand in the summer hadthere been no depletion of demanddue to the COVID-19. However, thegovernment will plan new powerplants upon reviewing the demandgrowth in “New Normal” Bangladeshin the post-COVID period. But wemust bear in mind that the liquid fuel-based plants and many ageing plantsare being progressively retired.

Environment activists and consumerrights organizations allege that thepower tariff is being continuously in-creased as more and more privatepower generation units coming intooperation. But the energy sector ana-lysts and professionals stressed that thesuccess of power generation owes agreat deal for introduction of the pri-vate sector. They insisted that not theIPPs, the fuel supply constraint is themain reason for the present uncomfort-able situation. The gas supply con-straints cause going for increased useof liquid fuel-based power. This has in-creased the cost of generation. Thecost of power generation doubled nowsince 2009. But in the last year, thecontribution of gas increased com-pared to the year before. Consequen-tially, the cost of generation would godown. The losses of BPDB is com-pounding as the bulk power tariff is re-maining lower than the generationcost. For managing the impact, thegovernment requires subsidizing BPDBevery year. Around Tk 60,000 crorehas been given as subsidy to the BPDBover the past 10 years. The govern-ment is showing this as loan to BPDB.If BPDB has to repay this, it would be-come bankrupt.

The debate over surplus capacity ofpower generation is not an isolated

issue. Sustainable economic develop-ment and smooth, assured supply ofpower and energy in any country goeshand in hand. Specially, energy andpower are two inseparable inputs.Without their coordinated and simul-taneous development, safe, sustain-able and affordable power supplysecurity cannot be ensured. Withoutexploiting own fuel resources andusing this economically and effec-tively, secured and affordable powersupply cannot also be guaranteed. Re-liance on imported coal and LNG ex-clusively would create uncertainty asthere can be supply chain disruptionor price shock in the global marketdue to regional and global geo poli-tics. This would become an issue forlack of utilization of the actual gener-ation capacity. Power evacuation andsupplying efficiently would also be im-peded if transmission grid and distri-bution networks are not updated andmodernized. In fact, it is very muchunlikely that the industrial demand forgrid power could be increased withoutincreasing the contribution of own fuelresources in the fuel basket for powergeneration. Failure in doing so wouldkeep the power sector open for debatein the future too.

13August 16, 2020

EP

Of late, it is now being saidloudly that the overcapacity isa growing concern for the

power sector on the plea that it is cre-ating fiscal and financial burdens forthe country. The amount of overcapac-ity on June 16 of FY18, FY19 and FY20was 9,437 megawatts, 8,806 MW, and10,216 MW respectively. During thesame period, the rates of overcapacitywas 59 percent, 46 percent and 49.8per cent respectively. The capacity pay-ment has significantly increased overthe years: from Tk 1,790 crore in FY10to Tk 8,929 crore in FY19. Argumentsare being forwarded for reprioritizationof budget allocation for the power divi-sion, particularly towards promotingclean energy by discouraging new in-vestment in coal or fuel-based powerplants as well as retiring private sectorquick rental power plants on a prioritybasis. According to the lobbyists for re-ducing generation capacity, Covid-19has provided an opportunity to revisitthe existing approaches, operations,management, cost and return of the on-going power generation, distribution,transmission and related activities.

The actual position in the power sectoris however different from the picturebeing colored by the proponent ofovercapacity slogan. When asked inthe parliament, the Energy Ministry re-futed the charge of overcapacity andexplained that of the 23,500 MW in-stalled power generation capacity,4,000 MW is produced by industriesthrough captive generation. There is 10percent of de-rated capacity. There areold plants with combined capacity of1,500 MW that are not used but havebeen put on standby and these plantswould retire soon. As per the presentposition, the generation capacity as ofnow comes to 16,000 MW, but the de-mand rose to 12,000 MW even duringthe Covid-period. There would havebeen big trouble if there had been noCovid-19. As such, the question ofovercapacity is baseless.

According to the Energy Ministry thereis only 19 percent in excess capacitynow in Bangladesh whereas it is 100per cent in India and in the USA. Of thepower plants, 35 percent are based on

liquid fuel and the government wantsto get rid of them bringing in base-loadand more efficient power plants. TheEnergy Ministry believes thatBangladesh would require an invest-ment worth US$30 billion if it wants tohave a stable electricity in the next fiveyears.

Lest we forget that power shortageswere rampant during 1995-2010 pe-riod. During this time, the people suf-fered for absence of adequate powerand the economy suffered an untoldmisery as the industries could not oper-ate in full capacity, commercial and so-cial activities came to a grinding haltand sufferings of the people at largewere untold. During 2001-2006, theauthority responded by adding one 80MW gas-fired power plant. Captivepower generation and private sectorpower in small scale were also initiatedin 2006-09. In 2009, as a remedialmeasure to have early power, RentalPower Plants (RPPs) and Quick RentalPower Plants (QRPPs) were started andthese diesel or furnace oil-fired plantswith a few gas-based power plantswere quickly installed and connected

to the grid. Notwithstanding thehigh generation cost, peopleheaved a sigh of relief at seeingan end to the rampant load-shed-ding. The contract life of theseRPPs/QRPPs was set at 3-5 years,after which they were to be re-tired when more economic,larger power plants would re-place them. However, these RPPsand QRPPs were granted extralife from 5-15 years reportedlywith the original clauses of agree-ment when the power crisisgripped the country that if theunits are idle, the governmentwill pay the private owners of theplants for keeping their unitsidle–resulting in huge drainagefrom the public exchequer. It is

15

Cover Article

August 16, 2020

Overcapacity Syndrome in Power Sector Mohammad Mosharraf Hossain

Bheramara Combined Cycle Power Plant

time to retire thesmall, old andinefficient unitsfor a leaner andhealthier grid. Itis high time togive a decentphased burial tothe RPPs andQRPPs. Thepresent lean pe-riod of electric-ity demand canbe used to ad-just these non-performing stopgap power sta-tions. But cer-tainly, thealternative baseload power stations must be availablebefore such scrapping.

According to the Energy Ministry, as ofnow there is no overcapacity in thepower sector. Due to amalgamating thevery old power stations which shouldnever in the accounts book of thepower sector are still being dragged on.These are not only outdated but veryinefficient and fuel guzzling and needto be written off. Similarly, the oldrental power plants and so-called quickrental power plants need to be shakenoff from the liability of the authority andthe contract with those sponsors of thepower plants need to be cancelled ear-liest. Once these rental plants are offfrom the liability, the Energy Ministrymay design a plan to buy power fromthe efficient power plants in private sec-tor as and when needed at a competi-tive price for short duration.

Taking plea of the overcapacity, it isbeing suggested that the power stationsincluding the coal-fired ones that are inpipeline to be scrapped. Such a movewill be detrimental to the national in-terest. Because, not only that the coun-try does not have any overcapacity inpower generation, the proposed powerstations are very much essential for thepost-Covid period as the existing powerstations will be dead by that time. Andunless we can ensure big base loadpower stations based on affordable fuel

like coal and or local gas, our economywill be strangulated in the post-Covidrecovery period.

The crux of the problem is not in thepower generation capacity, but it is thesource of fuel for power generation.Setting up any power plant is less com-plicated and difficult compared to thearrangement of fuel for the same powerplants. It must be admitted that as therewas easy supply of natural gas at a lowprice, it was possible to augment thepower generation capacity at a shortnotice; but with the rapid depletion oflocal natural gas, the situation in powerplants operation will turn worse verysoon. It must be deeply consideredwherefrom the fuel for the upcomingpower stations will come and at whatprice. What is going to happen whenthe gas fields will stop supply of gasfrom the existing wells. The new powerstations are coal based and LNG based;but these are being imported fuel — thecost of power generation will be muchhigher than what we are experiencingnow. It will have a negative impact onthe national economy.

The proposed shift from conventionalfuels to renewables overnight is impos-sible. If the plan of paradigm shift fromthe fossil fuel to renewables is taken upfor implementation right now, thecountry will be in a big trouble in theenergy sector as there will not be ade-

quate powerfor the social,industrial andeconomic ac-tivities in thecountry due tosudden switchover from con-ventional fuelsto renewables.Setting up ofLNG or im-ported coal-based powerstation in addi-tion to the al-r e a d yc o m m i t t e dones would notbe advisable as

the future price trend of NGL or im-ported coal would be any body`s guess.The past experiences of price hike offuels after any global catastrophe willnot encourage to advocate for goingfurther import based fuel instead bestcourse would be to go for locally avail-able fuels like gas and coal. For theseaccelerated exploration programme foroil and gas and development of theproved coal deposits in the country arethe way out. Unless import of fuels likeLNG and imported coal for power sta-tions are dovetailed with local produc-tion of natural gas and coal, the fuelcost of power generation in futurewould be exorbitant and resultant elec-tricity would hardly be of any benefit tothe people of Bangladesh.

Let us not close our eyes to the activi-ties on coal in China and India wherecoal is still a major source of energy.

INDIAOn June 18, 2020 Prime MinisterNarendra Modi launched the auctionprocess of 41 Coal Blocks for commer-cial mining. Speaking on the occasion,he said that India will overcome theCOVID-19 pandemic and the nationwill turn this crisis into an opportunity.He said that this crisis has taught Indiathe lesson of becoming AatmaNirbhar,i.e. Self-Reliant. He said an AatmaNirb-har Bharat means reducing depend-ency on imports and saving foreign

16August 16, 2020

Prime Minister Narendra Modi launches the auction process of 41 coal blocks for commercial mining through

video conference in New Delhi on June 18, 2020

currency on imports. It entails that Indiadevelop resources domestically so thatthe country does not have to rely onimports. He said a major step takentoday will make India self-reliant in theenergy sector. He said that this eventmarks not only the implementation ofreforms concerning one coal miningsector but also marks the beginning oflakhs of employment opportunities forthe youth. He said that today we arenot only launching the auction of com-mercial coal mining but also freeing thecoal sector from decades of lockdown.

He stressed the irony that India, withthe world’s fourth largest coal reserveand being the second largest producer,is also the second largest coal importer.He said the situation has lasted fordecades now and the coal sector waskept entangled in the mesh of Captiveand Non-Captive mines. He added thatthe sector was excluded from competi-tion and transparency was a big prob-lem. Owing to this, he said, the coalsector lacked investment and its effi-ciency was also questionable.

The Prime Minister said that in 2014,coal linkage was introduced to provideimpetus to the coal sector. He said thatIndia has taken a major decision to fullyopen the coal and mining sector for in-creased competition, capital, participa-tion, and technology. He stressed thatself-reliance is not possible without astrong mining and mineral sector as thetwo are important pillars of our econ-omy.

The Prime Minister said that after thesereforms, coal production and the entirecoal sector will become self-reliant.Now the market has been opened forcoal, so, any sector can buy coal as pertheir requirements. PM said, these re-forms will not only benefit the coal sec-tor but other sectors such as Steel,Aluminum, Fertilizers and Cement aswell. It will also help increase thepower generation.

While implementing coal reforms, PMsaid that it has been ensured that India’scommitment to protect the environ-ment does not get weakened. He

added, “Latest technology can be intro-duced to make gas from coal and theenvironment will be protected withsteps like coal gasification. Coal gaswill be used in transport and cookingwhile Urea and steel will promote man-ufacturing industries.” The Prime Min-ister said that the government has set atarget to gasify around 100-million-tonne coal by the year 2030 and fourprojects have been identified for thispurpose and around 20,000 crore ru-pees will be invested.

On the other hand, Mukesh Ambani,Chairman and Managing Director ofReliance Industries Limited (RIL), hassaid that instead of treating carbondioxide (CO2) as a liability, one can useit as a raw material. Needless to men-tion that CO2 is considered the maindeterrent in using coal and for that mat-ter any fossil fuel. Ambani stressed oncompleting the carbon cycle. "I thinkthat, where we are, if we take a cleansheet of paper and adopt technologieswhereby, we can complete the energycycle, we can adopt new technologies,particularly biochemical photosynthe-sis. Instead of treating carbon dioxideas a liability, we can make that a rawmaterial." There are new progresses inchemical roots, in the catalytic roots,whereby we can still complete the car-bon cycle," he added, “I think in thecoming decades, we have no choicebut to meet these challenges to com-plete the carbon cycle and serve theenergy needs of all its customers ratherthan thinking in terms of fossil and re-newable and wind and so forth.”

Reliance showcased how its syntheticbiology programme, recently devel-oped an "algae to oil" technology thattakes carbon dioxide waste from the re-finery, and combines it with algae andsunlight to produce bio-crude oil thatcould one day fuel the carbon-neutralair travel.

CHINAIf we look at China, Coal based powerstations are still playing a dominant rolein that country. Though in the interna-tional media it is flashed that China isreducing the coal power generation,

yet the fact remains that china will con-tinue to move along with coal for sometime to come.

China has lowered the risk ratings forcoal-power overcapacity in many partsof the country for the third year in arow. The move opens the door for moreregions to build coal power in 2021-23and has been interpreted by experts asa signal that coal will be a key part ofthe 14th Five Year Plan, which will startnext year. Restrictions are being relaxedand new projects are getting underway.Figures from Global Energy Monitorshow that in just the first 18 days ofMarch, China approved the construc-tion of 7.96 gigawatts of coal power —more than the 6.31 gigawatts approvedduring the 2019.

Coal is a controllable and reliablesource of power that makes stabilizingthe power grid easier. Also, large coalpower construction projects are bettersuited for a quick economic boost thanmuch smaller renewable projects. Thesudden spurt of power plant approvalsin March in China shows that local gov-ernments were keen to soften the eco-nomic impact of the epidemic bystabilizing investment and spurring theeconomy.

ConclusionUnder the above circumstances,Bangladesh should not deviate from theJICA recommended and the govern-ment approved energy mix for thepower plants wherein coal has beengiven a reasonable share on practicalpurposes. Coal will be cheapest sourceof fuel for the base load power stationsin Bangladesh. The best options are ac-celerated exploration programme foroil and gas discovery and developmentof the coal deposits at Fulbari, Bara-pukuria, Dighipara and Khalashpir aswell as implementation of the projecton coal gasification in Jamalganj coalfields in Bangladesh for survival in theenergy world.

Mohammad Mosharraf Hossain;Former Chairman, Petrobangla.

17August 16, 2020

EP

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From a huge deficit in power gen-eration capacity in 2009,Bangladesh has grown into a sub-

stantial surplus in 2020. The installedgeneration capacity of the grid-con-nected power in Bangladesh now is20,383 MW. There also exists 2,800MW off-grid captive power and 365MW off-grid solar power capacity. Thehighest generation recorded so far ofgrid-connected generation was 12,893MW on May 29, 2019.The COVID-19 pan-demic affecting busi-ness operations hasrestricted highest gener-ation to about 12,000MW. Consequently,about 8,000 MW ofsurplus grid-connectedgeneration capacitynow remains unuti-lized. BangladeshPower DevelopmentBoard (BPDB) has topay capacity charges tosome generators mostlybelonging to the privatesector. This situationwas unavoidable assuch provisions were tobe included in the con-tracts at a time during2010 to encourage pri-vate sector investments.Bangladesh was suffer-ing from chronic powershortage creating 8-10hours of loadsheddingevery day and frequentblackouts. Bangladeshrequired quick genera-tion coming on streamto alleviate stagnant sit-uation of the economyand comforting livesand living.

The generation seg-ment of power value

chain of any country has surplus ca-pacity, which is known as spinning re-serve. What should be the extent hasno firm or fixed limit. It depends on thecountry-specific situation, efficiency ofgenerators, fuel mix, availability of fuel,reliability of power transmission, extentof automation, grid configuration, dis-tribution system and other related mat-ters. A section of the civil society keepsarguing against the capacity charge that

the average generation cost is going up.Their argument also relates to the fre-quent power tariff revisions on excuseof increased generation cost.Bangladesh Power System Master Plan(PSMP) 2016 envisions achieving24,000 MW of generation capacity by2021, 40,000 MW by 2030 and60,000 MW by 2041. Some mega proj-ects (imported coal based 1,320 MWPayra power plant, 1,320 MW Rampal

Power Plant, 1,200MW Matarbari PowerPlant and 2,400 MWRooppur NuclearPower Plant) are now atdifferent stages of im-plementation and fewother projects are in thepipeline. Some friendlycountries are imple-menting these projectsunder joint venture andsome developmentpartners / countrieshave provided soft termloans for these. Thegovernment has alsoinvested its fortune fordeveloping a coal portat Matarbari — whenready, it will be theprime location for facil-itating import of coaland LNG. Coal im-ported at Matarbari,once coal port and coaltransfer terminal con-structed there, cancater for the coal de-mand of all plannedpower plants in Matar-bari and Maheskhalipower hub. The largeland-based LNG termi-nal can also be set upat Matarbari.

Some observers aresuggesting to suspend

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August 16, 2020

Spinning Reserve: A Blessing or Curse?Saleque Sufi

all the mega powerprojects in thepipeline, possibly notrealizing that the pres-ent surplus capacity ofpower would be ablessing forBangladesh in attract-ing huge FDI in the in-dustrial sector. Manylarge industries fromJapan, Germany andother countries areplanning to relocateplants from COVID-af-fected China soon to other countries.Some Special Economic Zones (SEZ)under implementation in Bangladeshwould also push up the power demandin not too distant future. Bangladesh isin far better position to woo these in-vestors with the surplus generation ca-pacity. Now it requires to expediteupgrading and modernizing the powertransmission grid and distribution net-works for evacuating most of the powerand making power supply chain reli-able and dependable.

Another circumstance requires atten-tion that most of the liquid fuel (dieseland furnace oil) based power plants(present capacity is about 6,830 MW)would be gradually retired as soon asthe large coal-based power plants andthe nuclear power plant at Rooppurstart commercial operation. Some old-aged fuel-inefficient power plants inthe public sector under the process ofretiring and some others are being re-placed with fuel-efficient modernplants. Till the power transmission sys-tem and distribution networks are up-dated and modernized, any decision toshelve the planned projects would cre-ate huge risks of going back to the situ-ation of 2010.

There is another school of thought forgoing huge to LNG-based generation,abandoning as far as possible the coal-based power plants. Bangladesh has al-ready invested fortune in setting coalimport infrastructure development andplanning for modern technology forcoal-fired power generation. Those

who are suggesting for this are not per-haps realizing that the present oil crashin global market causing depletion ofLNG will be reversed in two to threeyears. The LNG-based power genera-tion cannot compete with coal over themedium and long term. Yes, whatBangladesh must do is to immediatelyreview its own coal exploitation strat-egy which remained in suspended an-imation for several years. Nothing canbe more cost effective than setting upmine-mouth coal plants and using ourown coal. Our coal can be transportedby improving our railway system toPayra and Rampal, where transporta-tion difficulties tend to make genera-tion cost higher. The LNG import isessential to replace our depleting owngas reserve, but LNG import is alsoconstrained for limited possibility ofland-based LNG terminal. Apart fromMatarbari, no other location appearsfeasible for land-based LNG terminal.The FSRU has already proved not toosuitable option for Bangladesh. Theproven reserve of own gas is fast de-pleting. As such, the existing gas-basedpower plants would soon suffer fromfuel shortage.

The above discussion would justify asto why none of the mega power proj-ects under implementation or in theplanning process should be aban-doned. Rather, some mine-mouth coal-based power plants in greater Dinajpurand Rangpur areas may be plannedand decision of mining own coal mustbe taken as soon as possible. Own coalcan also be transported by rail to Payraand Rampal as the transportation of

coal to these plants ap-pears costly at thisstage. All large powerplants whether coal-based or nuclear arebaseload plants. By2025, when these allwill come into commer-cial operation andtransmission grid attainsthe capacity for evacu-ating all power, thepresent technical bottle-necks would not remainat all. Reliable grid

power can serve all industries whichare now relying on own captive gener-ation. Bangladesh Power DevelopmentBoard (BPDB) thought that the powerdemand in this summer could reach16,000 MW if there was no outbreak ofcoronavirus. In that situation, the pres-ent capacity of 20,383 MW would nothave sounded that much high.

The government should not let anymore contracts for captive power gen-eration. Sustainable supply of qualitypower to all industrial and other usersmust be ensured as soon as possible.

Let us diagnose the power value chainof Bangladesh a little deeper. The suc-cess of achieving a comfortable powergeneration capacity owes a lot to adop-tion of private sector power generationin the forms of IPPs and SIPPPs withprovision of attracting private sector in-vestment. Even some local companiesare now successfully operatingmedium to large power plants. In 2009Bangladesh had no option but to adoptliquid fuel-based rental and quickrental power plants. Many of thesehave been retired and others are in theprocess of retiring. The present contri-bution of liquid fuel-based powerplants would be about 28%. By 2030,it will be brought down to only 5%.The under-implementation megapower projects would progressively re-place these capacity and cater for theincreasing demand.

We all are aware that the proven re-serve of own natural gas is fast deplet-ing. Unfortunately, over the last 20

20August 16, 2020

years against cumulative use of 13 Tcf,the addition of new gas is a little morethan 2.0 Tcf. Petrobangla has failed toadd gas for the flawed BAPEX-only pol-icy in exploration in the onshore. A vir-tually under-performing Petrobanglacould not initiate required initiative toengage IOCs through PSCs in deepwater exploration. Under the presentcircumstances, it is highly unlikely thatBangladesh would get encouraging re-sponse from leading IOCs soon for risk-ing investment in offshore exploration.Hence, there are remote possibilities ofdiscovering large new gas reserve soon.In such situation, the contribution ofown gas to power generation wouldprogressively diminish. Construction ofthe multibillion dollar land-based LNGterminal may not so easily get invest-ment. This situation requires expeditingpetroleum exploration in onshore areasand immediately taking decision forcoal reserve exploitation.

Bangladesh is gradually moving out ofliquid fuel-based power generation.The under-construction baseloadpower plants would facilitate reducingthis dependency. The depletion of owngas reserve delays in exploring new gasresources, challenges of LNG infra-structure developments necessitatescontinuing with large coal-basedpower plant and expansion of renew-able power generation.

Reliable Distribution System Bangladesh with its huge spinning re-serve still suffers from occasionalpower disruptions. The quality of

power supply is poor in many placesfor transmission constraints. In a mod-ern power system operation, SAIDI andSAIFI indices are the guiding indices forreliable distribution networks. Peoplenow consume more electricity thesedays. They want uninterrupted supplyat right quality. The Institute of Electri-cal and Electronic Engineers (IEEE) useSAIDI and SAIFI international standardsfor determining reliability of power dis-tribution. DESA, DESCO and otherpower distribution utilities also followthese.

SAIDI (System Average InterruptionDuration Index): It is a system index ofaverage duration of interruption in thepower supply indicated in minutes percustomer. SAIDI means total durationof interruptions for a group of cus-tomers/number of all customers.

SAIFI (System Average Interruption Fre-quency Index): It is a system index ofaverage frequency of interruptions inpower supply. SAIFI means total num-ber of interruptions for a group of cus-tomers/number of all customers.

The indices serve as valuable tools forcomparing electrical utilities perform-ance reliability. Nordic countries (Nor-way, Denmark and Finland) haveadapted SAIDI/SAIFI criteria to monitorelectricity distribution in their markets.Some countries, including Finland,have taken in use regulations that de-mand distribution network operators topay reimbursement for customers forlong interruptions in electricity distribu-

tion. In addition, the aging network in-frastructure and increasing use of re-newable energy sources force utilitycompanies to increase network's visi-bility. If any analyst uses the above in-dices on the power distribution utilitiesoperation, the existing generation ca-pacity will not be considered at all acurse.

Optimum Spinning ReserveFinally, one cannot agree that the pres-ent comfortable surplus generation ca-pacity any way is a curse forBangladesh. If we take out most of theover 5,000 MW liquid fuel-basedpower generation, replace 2,800 MWcaptive generation with grid power,will you be left with remaining capac-ity to deal with that situation? Thechallenge is ensuring assured supply ofquality power on uninterrupted andsustainable manner. Supplying powerto all at affordable price requires sus-tainable supply of fuel, affordable fuelmix, modern updated reliable powervalue chain, harmony in generation,transmission and distribution.Bangladesh must not abandon any ofits major power project under-imple-mentation or in the pipeline. It must ex-plore and exploit its own primary fuelresources without being unnecessarilyfussy about myths and propagandaabout coal mining.

Saleque Sufi;Contributing Editor, EP

21August 16, 2020

EP

The spinning reserve of power gen-eration in the country is claimedto be not much in reality consid-

ering the difficulties being faced by thegeneration system, including short sup-ply of fuel like gas and de-rated capacityof many old-aged plants.

Chairman of Bangladesh Power Devel-opment Board (BPDB) Engr. BelayetHossain claimed this at a recent webi-nar on “Debate Over Power GenerationCapacity”.

He explained the difficulties in thepower system value chain, especiallythe composition of installed capacity, ef-fective capacity, plant factor, auxiliarypower use, constraint of power evacua-tion for transmission system inadequacy,fuel specially gas supply constraints.

The Energy & Power (EP) magazine or-ganized the webinar amid widespreaddebate over overcapacity in power gen-eration in the country.

“Even the consumers might have to facesome load shedding with surprise hadthere been no Covid-induced sup-pressed demand,”the BPDB Chair-man said, in re-sponse to thedebate, and ap-parently depictingthe actual genera-tion situation. Heinformed that thecountry’s capacityfor meeting de-mand of end usersis now only14,500 MW out ofthe installed ca-pacity of 20,300MW against theforecast for systemdemand of 14,000MW. “Then therewas no surplus at

all.”

EP Editor Mollah Amzad Hossain pro-vided the context of the discussion,highlighting the installed capacity, pres-ent and planned fuel mix for achievingPSMP 2016 generation targets, and percapita energy use.

Sector leaders, private power producers,energy think tank, representative of con-sumers and academic researchers tookpart in the virtual seminar.

Taking part in the discussion, DirectorGeneral of Power Cell Engr. Moham-mad Hossain said: “We must not dealonly with the installed capacity ofpower generation which is merely theplate capacity. There are many techni-cal elements like plant factor, plant effi-ciency loss over time, fuel supply andtransmission distribution constraints.”

Considering all these, he said, the pres-ent effective generation capacity is notmore than 17,000 MW. In a power sys-tem, which already experienced a high-est actual generation, this effectivecapacity is not too much to worry

about.

If the COVID-19 pandemic did not stallthe economic activities, the demand in2020 peak summer could have ex-ceeded 15,000. In that situation, evenwith 17,000 MW effective generationcapacity, the power system could havestruggled to contain power systembrown outs, said the senior official ofthe government.

He found nothing wrong in the genera-tion planning at all. He mentioned thateven in Germany, there exist 100% re-serve margin, and the same in India isabout 70%. Both the countries utilizesolar power during the day.

Engr. Hossain said the total installed ca-pacity in Bangladesh including grid ca-pacity and off-grid (captive and import)is 23,800 MW. There is no denial of oc-casional power disruptions due to tech-nical faults and requirements for routinemaintenance, he said.

He added that these are done throughadvance notifications, but sometimessomewhere it cannot be done. He said

that there is a di-lapidated state ofpower distributionnetworks in theremote areas.

BPDB ChairmanEngr. Belayet Hos-sain explainedthat the installedcapacity now is20,300 MW. Con-sidering 5% auxil-iary consumption,meaning own use,it comes down to19,500 MW. Ac-cording to inter-national standard,the plant factor is80%. Takeaway20% capacity for

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August 16, 2020

Actual Spinning Reserve of Power Generation Not MuchSpeakers tell in a webinar EP Report

Engr. Mohammad Hossain Engr. Belayet Hossain

the plant factor and then, it gets downto 15,500 MW. Actually that is the ef-fective capacity that can be evacuatedto the grid now. It is a standard practiceto have comfortable spinning reserve inany system for managing contingencies.Then again, he further explained, con-sidering 10% technical loss, our capac-ity for meeting the demand of end usersis now 14,500 MW.

The BPDB Chairman also said that theyhave to observe some formalities forusing fuel. The gas based generation ca-pacity is 11,000 MW. But Petrobanglacan supply only 1,200 MMCFD againstour requirement of 14,000 MMCFD.That is barely enough to generate 8,250MW. Consequently, about 30% capac-ity of gas-based generation remainsidle. He further informed that the liquidfuel based generation capacity is nowabout 7,000 MW, of which 3,200 MWis now being used and 3,800 MW re-mains idle. If the gas supply deficitcould be addressed, the surplus now isonly 800 MW. He questioned whether,in a significantly large power system,this surplus should be termed excessiveat all?

He said that the situation could be verydifferent if required gas supply could beavailable. We have retained 3,200 MWsurplus liquid fuel generation in consid-eration of gas deficit and challenges of

power import.

The BPDB Chairman said the demandhas gone down a bit due to the COVID-19 pandemic. We can relax a bit. Oth-erwise, the system’s real time demandcould exceed 14,000 MW. When youtry to run too fast without pacing yourrace smartly, we stumble at times. SomeIPPs and some public sector plantswould retire in 2-3 years. Hence 7,000MW new generation would not createmuch surplus even in 2024, 2025.

Engr. Khondkar Saleque Sufi, Interna-tional Energy Consultant, taking part inthe discussion from Melbourne, saidthat the hype about 20,000 MW in-stalled capacity through organizing fire-works, ceremonies has createdmisunderstanding. The common peopleare not expected to know the differencebetween the plate capacity, auxiliaryuse, plant factor and other constraints.He appreciated the commendable suc-cess of the power sector in significantlyincreasing the generation capacity. Hebitterly criticized the failure of energysector in general and Petrobangla inparticular. Failure of Petrobangla inkeeping pace with the growth of powersector has mainly contributed to thepresent uncomfortable situation. IfPetrobangla could meet the demand ofpower sector through increasing gasproduction and exploiting coal reserve,

the system could be much more com-fortable. He said that the power sectorin 100-meter sprint has left the energysector 50 meters behind. He stronglysuggested mining own coal and expe-diting petroleum exploration.

Reputed energy and environment ex-pert Dr. Mushfiqur Rahman said that theactual generation capacity was notstated possibly to highlight the govern-ment’s achievements in power sector.Perhaps it has been done intentionally.Therefore, the excessive power capac-ity and huge unutilized capacity issuesemerged. People could ignore the issueif the increase of power tariff at a regu-lar interval and large subsidy for powerand energy sector have not been madeissues of concern. The primary energyscarcity has a major impact on powertariff and govt. subsidy rise. Increaseddependency for import primary energyhas its impact on cost increase forpower and its growth. It has been obvi-ous that the energy sector policy makershave been inclined to import energy,both LNG and coal. He expressed frus-tration that the challenges for importingprimary energy were considered man-ageable. On the contrary, for domesticprimary energy development, speciallyfor domestic gas exploration and min-ing coal, several real and unreal

24August 16, 2020

Engr. Khondkar Saleque Sufi Engr. Khaled Mahmood Dr. Ijaz Hossain

impediments have been brought for-ward. Not ignoring the necessity for im-port energy he stressed upon the needfor securing domestic primary energydevelopment for reducing import de-pendency. He suggested for taking ra-tional decision on exploring gas andexploiting own coal for ensuring bal-ance mix of primary energy for attainingthe vision for affordable power for all.

President of Bangladesh IndependentPower Producers Association (BIPPA)Emran Karim expressed the concernthat this summer could have witnessed1,000-1,500 MW of power load shed-ding if there was no COVID pandemic.He said that the necessity requires ex-tension of the contracts of liquid fuelbased power plants. We also do notwant to see BPDB under stress. Wewould welcome any decision of thegovernment about liquid fuel basedplants. But we suggest that some fuel-inefficient public sector power plantsshould be retired alongside private sec-tor ones.

Chairman of Ashuganj Power CompanyLimited (APCL) and Former Chairmanof BPDB Engr. Khaled Mahmood in-formed about a decision taken earlierthat subject to non-availability of gassupply, the contract of liquid fuel basedpower plants would be extended onlyon “no power, no payment basis”. But

the realty is that there exists gas crisis.Only up to 1100-1150 MMCFD gassupply is possible now against the de-mand of 1400-1450 MMCFD.

Dr. Ijaz Hossain, Dean of Chemical En-gineering Faculty of BUET and energyanalyst, observed that one must notmake COVID as an excuse for the pres-ent dismal demand growth situation.The demand scenario was not very dif-ferent before the COVID outbreak.There is no visible demand growth inthe industry sector over the past fewyears. In fact, there was no growth ofdemand over the past three years. After2020, all will witness how much will bethe excess capacity. One foreign com-pany conducted an analysis that showsin 2030, Bangladesh will experience58% over capacity. The power PowerDivision cannot account for reducedeconomic growth. He suggested cool-headed demand projection for the nextyears. The reason for the present in-creased power tariff is irrational plan-ning. He thought that such trend wouldcontinue. He continued to say that thereis no need of additional imported coalbased power plants beyond the threenow under implementation. Industrial-ization is essential. But there exist manyimpediments. There is no reason to be-lieve that merely the power supply stim-

ulates economic growth, setting up theEPZs creates industrialization. Yes, theseare among many other elements whichall must happen at the same time.

Dr. Shamsul Alam, Dean of DaffodilUniversity, thought that the entire powersystem is crisis prone. The generationcapacity did not increase as per PSMP2010. The liquid fuel based power gen-eration was discouraged at that time. In2018, the Power Division sent a letter tothe BPDB, advising to go for another3,100 MW new liquid fuel based powergeneration. What was the basis of thatletter? That decision created a Tsunamiin the power sector.

Energypac CEO and President of Interna-tional Business Forum, Bangladesh(IBFB) Engr. Humayun Rashid thoughtthat reasonable surplus power and en-ergy supply capacity would encouragefree flow of FDI in Bangladesh. Genera-tion must be continued to increase formeeting the future demand growth. Spe-cial Economic Zones (SEZs) are being de-veloped. So, the demand of power andenergy would shoot up, and about 3 mil-lion new job opportunity would be cre-ated. The government can provide jobopportunities for 1.5 million. Power isthe most essential element for facilitatingthe job market growth. The modern ma-chines are all software driven. Reliablequality power supply is essential.

25August 16, 2020

Dr. Shamsul Alam Engr. Humayun Rashid Dr. Mushfiqur Rahman

EP

The prospect of dis-covering more gasfields onshore is

high in the country, butthe government cannotwait only for those fieldsto come into productionas there must be severalparallel plans to ensureenergy security.

As part of this strategy, thegovernment has importedliquefied natural gas(LNG) and coal.

Tawfiq-e-Elahi Chowdhury, energy ad-viser to the prime minister, said this re-cently while speaking as the chief guestat a webinar organized to mark the Na-tional Energy Security Day.

He also stressed that the socio-eco-nomic conditions should get priority inthe energy policy of a country.

The aftermath of the mining has to betaken into consideration as socio-eco-nomic conditions of the general peopleare a big issue, he argued.

Regarding the gradual energy importtendency, Tawfiq-e-Elahi said, "Flexibil-ity is very important for keeping pacewith the world as we cannot go alone."

Defending the imports of energy, hesaid, "Even if gas is found in the seaarea, it could take at least 10 years to getthe supply. How would we meet the in-dustrial gas demand till then?"

Every year, August 9 is observed as theNational Energy Security Day to com-memorate a decision of Bangabandhuto buy five gas fields (Titas, Bakhrabad,Habiganj, Rashidpur and Kailashtila)from foreign companies at a nominalprice of $4.5 million. The energy sectorof Bangladesh now stands on that pur-chase.

State Minister for Power, Energy and

Mineral Resources Nasrul Hamid ad-dressed the event as a special guest.

Asked whether the government is fol-lowing the path shown by Banga-bandhu to attain the energy security,Nasrul said, "We are in a resource plan-ning. We have taken some short-termand long-term plans. In some areas, wealso have taken long-term plans be-cause we think putting everything inone basket is risky for a country likeours."

He said his government started to im-

port LNG to ensure affordable energyfor the people.

Another special guest, ShahiduzzamanSarkar, chairman of the ParliamentaryStanding Committee on the Ministry ofPower, Energy and Mineral Resources,emphasized on own sources.

Energy expert andBangladesh University ofEngineering and Technol-ogy Professor M Tamimsaid the energy poverty isstill a challenge for thecountry.

"We have attained remark-able achievements in elec-trification and otherenergy indicators, butquality and reliability haveto be ensured in the com-ing days," he observed.

Among others, Petrobangla ChairmanABM Abdul Fattah, Bangladesh Petro-leum Corporation Chairman ShamsurRahman, Chairman of Forum for EnergyReporters Bangladesh Arun Karmakar,Energy and Power Editor Mollah AmjadHossain spoke as panel discussants.

Former managing director of Rupan-tarita Prakritik Gas Company LimitedEngineer Md Qamruzzaman presentedthe keynote paper at the program.

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August 16, 2020

‘Socio-Economic Conditions ShouldGet Priority in Energy Policy’

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The government will adjust the tariffof heavy fuel oil (HFO) and Jet A-1

fuel products based on internationalmarket rates, said a senior official.

Bangladesh’s annual demand for Jet A-1 fuel, mostly used by airlines, is around400,000 tonnes.

The government has decided to adjustthe tariff of Jet A-1 fuel as per interna-tional common tariff as the internationalairliners have been demanding to adjustthe price for a long time.

The tariffs of the other petroleum fuels

will be determined bythe government’s execu-tive power.

The board ofBangladesh Petroleum

Corporation (BPC) will fix the tariffs ofthe two fuel products based on interna-tional market prices.

“The import tariff of HFO is compara-tively lower than the HFO fuel importedby the private sector to produce electric-ity,” the official said.

With the newly-imposed tax by the Na-tional Board of Revenue (NBR), the im-port tariff of HFO would be increasedremarkably, according to officials.

Govt to Cut Jet Fuel, HFOTariffs as per Int’l Rates

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August 16, 2020

Bangladesh recently gotthe first tranche of the $1

billion loan pledged by Japanto bounce back from eco-nomic whiplash brought onby the global coronaviruspandemic.

Japan joins the likes of devel-opmen tpartnerssuch ast h eW o r l dBank, theA s i a nDevelop-m e n tBank, theAsian Infrastructure Invest-ment Bank InternationalMonetary Fund and the Is-lamic Development Bank inrallying behind Bangladesh.

The five multilateral develop-ment lenders have altogetherprovided about $2 billion inBangladesh's efforts for eco-nomic recovery.

Japan normally provides

project aid to Bangladeshand now would call theplanned support as budgetaid, which came after Dhakasought help following theoutbreak of coronavirus inthe country in March that ne-cessitated a two-and-a-halfmonth-long general shut-

down.

W h i l ethe virusc o u l dnot bes n u f f e dout, thes h u t -d o w n

caused great damages to theeconomy.

The pandemic stands to wipeoff the gains made in povertyreduction in the past decade,according to the World Bank;and as per estimates, morethan 1.5 million of the poorand the vulnerable have losttheir livelihoods for the shut-down.

Dhaka Gets First Tranche of $1bJapanese Loan

Bangladesh has receivedconfirmation of another

US$ 970 million loan fromChina to be used for strength-ening its electricity grid.

This loan will be provided tothe state-run Power GridCompany of Bangladesh Ltdor PGCB for its 'Power gridnetwork strengthening proj-ect’, officials said.

The total project cost is esti-mated at $1.4 billion and it isscheduled to end by 2024.

During the visit of Prime Min-ister Sheikh Hasina to Chinain July, 2019, a primary dealwas inked between the two

countries under which theChinese government agreedto back the PGCB project.

Out of the total amount loanamount, $690 million will beprovided under preferentialbuyers' credit and $280 mil-lion under the governmentconcessional loan.

A consortium of the Chinesecompanies, including CCCEngineering Ltd, JiangsuETERN Co Ltd and FujianElectric Power Company arethe contractors of the project,said the loan agreement, acopy of which has been ob-tained by the FE.

BD Gets $1.0b China Loan toImprove Power Grid

Bangladesh's liquefied nat-ural gas (LNG) import in-

creased significantly by64.61 per cent in last fiscalyear (FY), 2019-20, to 4.164million tonnes to meet themounting domestic gas de-mand.

The state-run Petrobangla im-ported 2.53 million tonnes ofLNG in the previous FY,2018-19, through its sub-sidiary Rupantarita PrakritikGas Company Ltd (RPGCL), asenior official said.

The increased volume ofLNG was consumed by the

country'sgas-guz-zling in-d u s t r i e s

and factories, especially thegas-fired power plants.

Several dual-fuel powerplants, having the total elec-tricity generation capacity ofaround 650 megawatts(MW), which were runningon gasoil, have been con-verted to gas-fired ones, re-sulting in the rise of LNGimport, he also said.

The country's LNG import isset to increase further, as ithas already cleared the bot-tlenecks for full utilization ofits two floating, storage, re-gasification units (FSRUs)

with thecomple-tion ofrequiredn a t u r a lgas trans-mi s s ionpipelinein March.

LNG Imports Up 64.61pcin FY ’20

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The persistent spread ofcoronavirus in India is lin-

gering the suspension of lique-fied petroleum gas (LPG)export from Bangladesh to theneighboring country.

Export of LPG to India hasbeen halted for around fivemonths since March 26 due tothe coronavirus pandemic,market insiders said.

Restricted movement of al-most all types of transports, in-cluding air, rail, public andprivate vehicles, between thetwo countries has barred re-sumption of LPG export, they

also said.

Bangladeshinitiated ex-porting LPG

commercially to India fromthe first week of January withan initial consignment ofaround 1,000 tonnes permonth.

Two privately-ownedBangladeshi firms - Omera Pe-troleum and Beximco LPG -initiated exporting the fuel byroad to Tripura, the land-locked north-eastern state ofIndia.

Both the firms were exportingaround 500 tonnes of LPG permonth each, which they wereplanning to increase to 2,500tonnes per month.

LPG Export to India HaltedSince March

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August 16, 2020

GE (NYSE: GE) has an-nounced that it will pro-

vide its advanced gas turbinetechnology upgrade Ad-vanced Gas Path (AGP) forthe upcoming RelianceBangladesh LNG & PowerLimited's 718-megawatt(MW) combined cycle powerplant at Meghnaghat inBangladesh.

Reliance Bangladesh LNG &Power Ltd. is a joint venturebetween India's ReliancePower and Japan's JERA.

The power plant will begingenerating power in 2022. Itwill provide the equivalentelectricity needed to supply850,000 homes inBangladesh.

Built by Engineering, Pro-

curement & Construction(EPC) group Samsung C&T,Meghnaghat power plant willbe powered by two GE 9Fgas turbines, one GE D11steam turbine and three H53generators.

The power plant will utilizere-gasified liquified naturalgas (LNG) fuel to generatethe equivalent electricityneeded to supply more than850,000 homes inBangladesh, said a media re-lease.

GE's contract with SamsungC&T includes GE's AGP up-grade for two GE 9F.03 gasturbines, steam turbine refur-bishment along with controlupgrades and parts supply.

GE to Provide Advanced GasTurbine Tech for 718MW Power

Plant in BD

Consumption of furnace oilhas increased after the

easing of the nationwide lock-down as electricity generation

is on the rise to meet themounting domestic demand.

The country expects to importaround 280,000 tonnes of fur-

nace oil in August,up by 12 per centthan in July, due tostrong demandfrom its power sec-tor, industry sourcessaid recently.

They said electric-ity demand has

Furnace Oil Consumption Riseson Strong Power Demand

Assembly and welding ofspherical casings of reac-

tor coolant pumps (RCP), andlocal heat treatment of bot-tom weld of one of the steamgenerators for Unit-1 ofRooppur Nuclear PowerPlant have been completedin Russia.

Assembly and welding ofspherical casings of reactor

coolant pumps (RCP) weredone at “AEM-technology”“Petrozavodskmash”. Weldjoints successfully passed allnecessary tests.

The RCP casings are nowsubject to heat treatment at atemperature of up to 640 de-grees Centigrade, in a fur-nace for 7-8 hours. Rooppur

NPP Unit-1 will have fourRCP spherical casings.

On the other hand, at ‘AEM-technology’ ‘Atommash’ bot-tom part was welded to thesteam generator vessel beforethe local heat treatment ofweld joint, which is amandatory operation to re-lieve stress in the weldedjoint.

The volume heat treatment inthe furnace is not possibledue to the thin-walled stain-less SG tubes installed insidethe vessel. Local heat treat-ment includes not only grad-ual heating of the weld, butalso gradual cooling of thejoint. The entire process takesone and a half to two days.

RNPP: Further Progress inEquipment Manufacturing

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been increasing in the countrywith the easing of lockdownrestrictions.

It has almost doubled its fur-nace oil import since June toaround 220,000 tonnes permonth, compared with100,000 tonnes per month inApril and May, as businessesresumed operations, albeitlimited in scale following thethree-month long lockdowndue to the coronavirus pan-demic.

The country's import of fur-nace oil is expected to in-crease steadily intoSeptember, he added.

Bangladesh imported around3.2 million tonnes of furnaceoil in the fiscal year, or FY,2019-20, of which 2.90 mil-lion tonnes were imported bythe private sector to run theirpower plants while the remain-ing 300,000 tonnes by state-run Bangladesh PetroleumCorporation, or BPC.

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August 16, 2020

Chevron Corp. reported aloss of $8.3 billion for

second-quarter 2020, com-pared with earnings of $4.3billion in second-quarter2019.

Included in the current quar-ter were impairments andother net charges of $1.8 bil-lion primarily associated withdownward revisions to thecompany's commodity priceoutlook, severance accrualsof $780 million, and a gain of$310 million on the sale ofAzerbaijan assets.

The company also fully im-paired its $2.6 billion invest-ment in Venezuela due touncertainty associated withthe current operating envi-ronment and overall outlook.

Foreign currency effects de-creased earnings by $437million.

Excluding the special items,the adjusted loss of $3.0 bil-lion in the second quartercompares to adjusted earn-ings of $3.4 billion in sec-ond-quarter 2019.

Sales and other operatingrevenues in the quarter were$16 billion, compared to $36billion in the year-ago period.Second quarter organic capi-tal expenditures were $3.0billion, 40% below the quar-terly budget, and year to dateorganic capital expendituresare on track with the com-pany’s revised full year guid-ance of $14 billion.

Chevron Reports Q2 Loss of $8.3b

India's state-owned Indian OilCorporation, commonly

known as Indian Oil, has initi-ated supplying refined petro-leum products to Bangladeshas a major supplier.

Indian Oil has already deliv-ered 30,000 tonnes of dieselthrough a cargo and anothercargo having similar capacityis expected to reach Chat-togram by this month, a seniorBPC official said.

This is the first oil supply of In-dian Oil to state-runBangladesh Petroleum Corpo-

ration, or BPC after 15 years.

Earlier, BPC imported around400,000 tonnes of diesel fromthe IOCL during 2005-06.

Under the current deal, IndianOil will supply 430,000tonnes of diesel, 50,000tonnes of jet fuel and 30,000tonnes of octane during theJuly-December period of 2020as it has been awarded a ten-der to supply fuel as the bestbidder.

The Indian firm has enteredthe Bangladesh market with

supplying cleanerdiesel having 50 ppm,or parts per million,sulphur.

The BPC imported500 ppm sulfur dieseluntil June. Specimensof other petroleumproducts, however, re-main the same.

Indian Oil Resumes SupplyingPetroleum Products to BD

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With more than 45 proj-ects in the pipeline,

LNG-to-power projects willdrive demand for FSRU tech-nology in Africa, Asia andSouth America, according toPoten & Partners.

Less expensive, faster to de-ploy and more flexible thanland-based terminals, float-ing storage and regasificationunits (FSRUs) have openedup new markets for LNG.

Demand for the vessels isbeing spurred by countrieslooking to replace coal andmore carbon-intensive fossilfuels with cleaner burningnatural gas.

This was highlighted during awebinar, ’Global LNG FSRUProject Update: Is New De-mand Development Stalling?’presented by Poten & Part-ners in July.

Webinar panelist Poten &Partners LNG finance advi-sor, business intelligenceMelanie Lovatt said the FSRUand floating storage unit(FSU) fleet has risen steadilysince the first one enteredservice in 2005, with 38today.

Additionally, there are sixnewbuild FSRUs, four ofwhich have secured commit-ments.

“We could see a lot more ofthese FSRUs being used forLNG-to-power projects,”said Ms Lovatt, adding,“there are good prospectsfor further growth.”

Global LNG-to-Power Projects toUnderpin FSRU Growth

Energy prices are set to fallfor millions of British

households from Octoberafter the energy regulator saidit would lower its cap on themost widely used tariffs byabout 7.5%.

A cap on electricity and gasbills came into effect in Janu-ary 2019 and was aimed atending what former BritishPrime Minister Theresa Maycalled "rip-off" prices by en-ergy firms.

The reduction, to the lowestlevel since the cap began,was due to a fall in wholesalegas prices since February aslockdowns on business andhomes hit demand, Ofgem

said.

"The COVID-19 crisis has de-pressed energy demand al-though wholesale gas priceshave started to recover sincehitting 20-year lows in thespring," the regulator said ina statement.

The cap for average annualconsumption on the mostcommon tariffs, used byaround 11 million house-holds, will fall by 84 pounds($110) to 1,042 pounds,while for some 4 millionhomes on pre-payment en-ergy meters it will fall by 95pounds to 1,070 pounds ayear, Ofgem added recently.

Energy Costs to Fall for Millions ofBritons from Oct

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August 16, 2020

India's fuel demand in Junecontinued its recovery from

a 13-year low hit in April asmore commuters preferredprivate vehicles over publictransport for fear of contract-ing COVID-19 and eco-nomic activity graduallypicked up on easing of lock-down restrictions.

Petroleum product con-sumption rose 11 per cent to16.28 million tonnes in Juneover demand witnessed inthe previous month, accord-ing to data from the Petro-leum Planning and AnalysisCell (PPAC) of the Ministry ofPetroleum and Natural Gas.

The demand was, however,7.8 per cent lower than17.67 million tonnes con-sumption in June 2019.

Fuel demand had plunged to9.93 million tonnes in April,its lowest level since 2007after stringent coronaviruslockdown halted economicactivity and took most vehi-

cles off-road.

Overall, fuel demand hadreached over 92 per cent ofpre-COVID levels.

Demand for diesel, the mostconsumed fuel in the coun-try, reached 84.5 per cent ofnormal levels, while petrolconsumption was at 86.4 percent of normal levels.

Diesel consumption stood at6.3 million tonnes in June,14.5 per cent higher thanMay, but 15.4 per cent lowerthan the demand witnessedin June 2019.

Demand for diesel in Junewas almost double of 3.25million tonnes consumptionin April.

Petrol sales at 2.28 milliontonnes were almost 29 percent higher than May, but13.5 per cent lower thanJune 2019. It more than dou-bled from 9,73,000 tonnesin April, the data showed.

India's Fuel Demand Continuesto Recover in June

Billionaire Mukesh Am-bani's Reliance Indus-

tries Ltd has a 15-year visionto build itself as a new en-ergy company that aims torecycle CO2, create valuefrom plastic waste and hasan optimal mix of clean andaffordable energy, analystssaid.

While the oil-to-chemicalconglomerate has in recenttimes seen focus on con-sumer business, RIL's coreoil-to-chemical (O2C) busi-ness is well placed to gener-ate sustained free cash flow,BofA Securities said in a re-port.

"Until demand normalizes,RIL is looking to maximizethroughput, focus on cost byleveraging deep petrochemi-cal integration and continueto focus on domestic fuelmarketing," it said.

"RIL has a 15-year vision tobuild itself as one of theworld's leading new energyand new material compa-

nies. It also intends to be anet carbon zero company by2035. To achieve this, thecompany is open to workwith global financial in-vestors, reputed technologypartners and start-ups work-ing on futuristic solutions," itsaid.

This new energy businessbased on the principle of car-bon recycling and circulareconomy is a multi-trillionopportunity for India and theworld.

Reliance's 15-Year-Plan to Buildinto New Energy Company

India’s much heralded Kr-ishna Godavari basin deep-

water gas projects will drivedomestic gas productiongrowth over the next fewyears. Combined, the proj-ects will add over 1 bcfd ofnew supply by 2023.

But only a small proportionof this supply has been con-tracted to date. With India’sgas market shaken by Covid-19, and low spot LNG pricesexpected to persist at leastuntil 2022, the full commer-cialization of these deepwa-

ter vol-umes is atrisk.

Deepwa-ter is critical to both the fu-ture of India’s upstreamsector and to the develop-ment of domestic gas mar-kets.

Reliance’s KG-D6 andONGC’s KG-DWN-98/2projects, off the east coast ofIndia, are behind this growth.KG-DWN-98/2 came onlinein April while the secondphase of the KG-D6 projectwill start output in late 2020.We project combined incre-mental output of 400 mmcfdin 2021.

LNG is Challenging India’sDeepwater Future

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COVID-19 has negativelyimpacted companies

across all industries. How-ever, power utilities havebeen quick to adapt to the sit-uation and ensure businesscontinuity.

Currently, customer relationmanagement and brand percep-tion are expected to be of utmostimportant for the utilities to holdon to their customer base.

In a similar effort, the SaudiElectric Company (SEC) haslaid down a plan to safeguardthe private, commercial andindustrial sector consumers’

interest, says GlobalData, aleading data and analyticscompany.

The Saudi Electric Companyhas postponed the cancella-tions and disconnections ofelectrical services due to thenon-payment of bills duringthe COVID-19 outbreak.

The utility would providemerchants and factory own-ers the option to pay 50% ofthe April, May and June 2020bills. The remaining can bepaid in installments over thesix months starting from Jan-uary 2021.

Saudi Electric Offers Support toConsumers, says GlobalData

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33August 16, 2020

The government's goal to significantlyincrease renewable power genera-

tion within this year has gone miserablyoff track as only four out of 42 renew-able power projects have been imple-mented in the last six years.

To ensure national energy securitywhere power would be supplied frommultiple sources, the government adecade ago planned to have at least 10percent of total electricity from renew-able sources within 2020. Today, thereal number is less than 3 percent.

In 2014, to attain this goal, the govern-ment took up 42 renewable power proj-ects totaling 2,500 megawatts (MW)capacity–connected to the nationalgrid.

If these were implemented by today,they would have represented more thanone-tenth of the country's electricity thatare mainly produced by using naturalgas, oil, liquefied natural gas, coal andsome hydro power plants.

These 42 plants required around $1.5billion investment and they wereawarded to different agencies and pri-

vate companies. But most of the projectsremained stuck with zero progress whilesome companies have given up theirprojects.

Instead of 2,500 MW, the governmenttoday got only 38 MW from renewableplants–half of which came through theprivate sector.

Experts attributed this stunning under-achievement to several obstacles that in-clude land crisis, power factor and abureaucracy that works at a snail's pace.

Unlike fossil fuel projects, the renew-able energy projects did not get any spe-cial attention and incentives either, theynoted.

This is happening when the world ismoving towards renewable energy andgradually discarding power generatedusing fossil fuel.

Presently, at least 30 nations have morethan 20% renewable energy supply.Countries like Iceland and Norway userenewable energy exclusively. Indiameets 35% and China meets 38% oftheir energy needs from renewablesources.

Little Progress in Renewable Energy

Siemens, BECIS to accelerate rollout ofdistributed energy in Asia Pacific

Combining its financial expertise withintelligent energy solutions and services,Siemens has entered investment andframework agreements with BerkeleyEnergy Commercial Industrial Solutions(BECIS).

Together, they will provide customersaccess to distributed energy solutionsvia a flexible ‘Energy as a Service’ (EaaS)model, allowing customers in the AsiaPacific market to pay for energy serviceswithout the need for any capital invest-ment. This will address customers’ en-ergy cost and sustainability challenges.

Under the agreements, Siemens’ financ-ing arm — Siemens Financial Services(SFS) — becomes a major shareholder inBECIS.

At the same time, Siemens Smart Infra-structure (SI) will contribute technicalexpertise from its existing footprint inenergy and performance services (EPS)projects to BECIS, complementing thelatter’s experience in distributed energygeneration solutions.

BECIS will act as the investor, developerand operating partner, holding the assetson the balance sheet, while SI will bethe technology provider.

Siemens, BECIS toAccelerate Rolloutof DistributedEnergy

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35August 16, 2020

The government of Bangladesh has is-sued guidelines for the net metering

and grid integration of solar-poweredpumps but there are concerns the newrules could disincentivize adoption forfarmers who may need to draw downgrid power as well using the solar energygenerated by the systems.

Under the new system, the owners ofsolar pumps which do not need to drawdown grid electricity — apart from a per-mitted 1 kWh per month to keep certainsystems functional — can remain classedas independent power producers undertheir existing grid integration approval.

However, a Sustainable and RenewableEnergy Development Authority (SREDA)official has told pv magazine irrigationsystem owners who expect to need todraw on grid power to boost the solarenergy generated will now be requiredto surrender grid integration status andinstead apply for net metering.

Under the new rules issued by SREDAlast week, net metering will enable solarpump owners to have the energy theyexport back to the grid offset against theelectricity they consume at the samerate. However, net metered customerswill be classed as electricity consumersand will face payment of a demandcharge and line rent, adding an addi-tional financial burden.

Bangladesh NetMetering RequirementMay Deter Solar PumpOwners

As part of its national goal to bringdown the overall energy consump-

tion by 20 percent by 2030, an energyefficiency project is underway in 22 in-dustries which is expected to reducetheir overall power consumption by 43percent.

According to official sources, Sustain-able and Renewable Energy Develop-ment Authority (Sreda) has beenimplementing the maiden project of itskind through encouraging consumers touse energy efficient equipment and ap-pliances.

The 22 industries include 3 cement fac-tories, 9 garments industries, 7 spinningmills, one weaving factory, one papermill, and one electronics industry.

Once implemented, the project will alsosave Tk 110 crore annually as their bills.

Sreda has arranged a soft loan of aboutTk 1147 crore from two government-owned specialized financial institutionsfor the industries to implement project.

Officials said these industries are in-stalling energy efficient equipment andreplaced their conventional lighting sys-

tem with LED bulb-basedsystem.

“We hope, the industries’ av-erage electricity consump-tion will come down byabout 43 percent once theproject is implemented”,said Mohammad Alauddin,Chairman of Sreda and addi-tional secretary at the PowerDivision.

Energy Efficiency Projects to Cut 22Industries’ Consumption by 43 Pc

Technaf Solartech Energy Limited(TSEL) has distributed health safety

materials to Bangladesh Power Devel-opment Board (BPDB).

State Minister for Power and Energy andMineral Resources Nasrul Hamid at-tended the ceremony as the chief guestthrough a video conference, says pressrelease.

On the occasion,Nuher Latif Khan,Managing Director ofTSEL handed over1,650 units of per-

sonal protective equipment (PPE) toPDB Chairman Belayet Hossain.

He said that private power companieshave been helping the government aswell as the power sector with safety ma-terials from the beginning of the Covid-19 crisis.

He also stressed that separate hospitalsare necessary for the powersector.

Thanking all the privatecompanies for safety mate-rials, Belayet Hossain said,“Private power generationcompanies are also playinga vital role in ensuring un-interrupted power.”

Other than TSEL, private

Technaf Solartech ProvidesSafety Gears for PDB

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power companies have so far donated1,150 units of PPE, 4,600 hand gloves,more than 62,000 surgical masks toPDB.

Among others, BPDB’s member (admin)Zahurul Haque, member (company af-fairs) Nurun Nahar Begum and othersenior officials were also present at theceremony.

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36August 16, 2020

The ERCOT grid operator that servesmost of Texas has completed full in-

terconnection studies for 58 solar proj-ects totaling 11.9 GW of capacity so farthis year. The completed studies willallow project developers to proceed to-ward commercial operation.

In the first seven months of this year,ERCOT has already completed nearlytwice as many solar interconnectionstudies, for nearly twice as much solarcapacity, as it did in all of 2019.

These data reflect an analysis ofERCOT’s Generator Interconnection Sta-tus reports for December 2019 and July2020.

Contributing to this dramatic increase inproductivity, said an ERCOT spokesper-son, is a resource integration group thatERCOT formed, with staff from the op-erations, planning and grid coordinationfunctions, to help streamline the inter-connection process. ERCOT also cre-ated new tools to aid its staff and marketparticipants in processing interconnec-tion requests, she said.

The spokesperson credited transmissionservice providers for doing “most of thework” on full integration studies, whileERCOT staff “is responsible for review-ing and approving FIS studies.”

Texas Approves12GW of Solar Projectsin Seven Months

Commonwealth governments havecommitted to lowering CO2 emis-

sions considerably to fight climatechange.

And to facilitate a smooth and afford-able transition to renewable energy inboth developed and emergingeconomies, the Common Wealth Enter-prise and Investment Council recentlyhosted the webinar "CommonwealthClean Energy Conversation."

The speakers at the webinar discussedthe challenges in investment opportuni-ties and how the Commonwealth canact as a platform to coordinate and

share knowledge and to advance thetransition to green economies.

They also discussed how local renew-able energy initiatives can be financedthrough the Commonwealth platform.

The existing challenges of the energysector and the road forward came to thefore as early as the 1960s, but "financingmultilateral initiatives for the transitionto happen is where we can work more,"Federation of Bangladesh Chambers ofCommerce and Industries (FBCCI) Pres-ident Sheikh Fahim said at the webinar.

"The modalities and business models ofrenewable energy are not very com-

mon; local governments andbanks are not enough. Butthrough global platforms andresources such as that of Com-monwealth, these issues can beaddressed."

BMW Group is "setting thecourse for the future of mobility"in Germany and "continues toexpand charging infrastructurefor electrified vehicles."

Experts for Financing Local RE InitiativesThrough Commonwealth

Power Division has finally asked all thepower distribution entities to directly

purchase electricity from solar mini-gridoperators to save their investment.

According to sources at the Power Divi-sion, the distribution entities will nowpurchase electricity from mini-grids at atariff to be settled through a tripartite ne-gotiation on a case-to-case basis assess-ment.

“The private sponsors of mini-grids, thedistribution entities concerned and the fi-nancing agency will set the tariff for themini-grid projects through their joint as-sessment,” Mohammad Alauddin, Chair-man of Sreda and Additional Secretary atthe Power Division, told media.

Power Division officials said a letter was

recently sentto all thepower distri-bution entitiesto implement

the government decision.

They said once the distribution entitiesstart purchasing power from mini-grids,the consumers of their areas will get elec-tricity at the same rate applicable in thegrid areas.

“That means the consumers of thesemini-grids will not require to pay higherbills for electricity while the mini-grid op-erators will get rid of their problem,” saida Power Division official.

According to the sources, 26 solar mini-grids, with their total generation capacityof 5 MW, were set up at different off-gridareas of the country as part of an initia-tive, “Remote Area Power Supply System(RAPSS)”, to ensure access of people liv-ing in remote areas to electricity.

Power Division Comes Up to SaveSolar Mini-Gird Investors

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When Awami League took power in2009, the energy sector was in cri-sis. There is no point in revisiting

that scenario with facts and figures, but it issafe to say that the then government’s deci-sion to prioritize power generation, over thatof exploration of primary energy, was a pru-dent move. Where we went wrong unfortu-nately, was to turn our short term plan ofrunning power plants based on liquid-fuel(furnace oil and diesel) and turning that pol-icy in to our long term plan. This decisionwas taken in contravention and violation ofsuccessive Power System Master Plans(PSMPs) and its amendments. Policymakerskeep referring to the PSMP as a ‘living docu-ment’, indicating that it is merely a guideline.The government can bypass it with changedrealities whenever it wishes. There is somelogic in that. However, the reason why gov-ernments all over the world make suchplans, expending months and years andholding detailed discussions with variousstakeholder groups, is to come up with aplan that is based on historical data andprobable future scenarios. If then, the plan isnot followed or followed partially andchanges are then incorporated throughamendments, what was the point of goingthrough that painful process in the first place?Why waste time and money?

This was our first policy misstep and thecountry has been paying the price for it eversince. The whole idea of having liquid fuel-based rental and quick rental power plantswas the right move in 2009 to mitigate thechronic power outages of the time. It wasnever meant to become the mainstay forpower generation, but as history will testify,that is precisely what happened. Anotherthing that is often overlooked is the fact thatsince the preferred fuel for these plants wasfurnace oil (which is many more times moreexpensive than natural gas), it was impossi-ble to keep power tariff hike within tolerablelimits, either for bulk or retail consumers.

To make matters worse, the decision to go forrental power was further complicated sinceits energy source could not be limited to fur-nace oil, but a significant part of diesel plantswere also added in the stream. Now comesthe interesting point. Once the power crisiswas substantially mitigated, political compla-

cency emerged. We found ourselves in anera, where, unnecessary extension of rentalpower plants were given and delays crept inthe implementation of mid-term plants be-came the reality. Consequently, a situationhad been purposely created so thatBangladesh Power Development Board(BPDB) could not free itself from the costlyyet less-efficient liquid-fuel based rentalpower plants till date. A short term plan un-dertaken originally for a few years from 2011remains an entrenched part of our energyplanning in 2020.

Our modus operandi in energy sector plan-ning turned into ad-hoc decision making,where vested interest groups joined hands toperpetuate this situation, over and above thenational interest. We went on awarding con-tract after contract for power plants (not justfurnace oil, but others, albeit to a muchlesser degree — the gas fired plants). Becausethe mantra was to generate power. While allthat was going on, we forgot a crucial part ofenergy planning, i.e. about transmission anddistribution networks that should have beenbuilt in synchronization with the powerplants — but wasn’t. So today, we have thegeneration plants and the power productioncapacity, but limited transmission and distri-bution capacity. The result? Idling powerplants (translating into costly capacitycharges for the IPPs and rental portion ofpower plants).

As we recount all this, it is necessary to lookback at the first PSMP. We wasted (for polit-ical indecision and inefficient primary en-ergy sector managers) a few years to decidewhich way to go for primary energy supply.Once it was decided that coal would be amajor component, we found ourselves in asituation where “import lobby” was far toopowerful and managed to deviate the coalsupply chain building (especially domesticcoal development, was ignored). Our deci-sion for not extracting over 3.0 billion tonnesof proven, sweet coal and base everythingon an import of coal was made without com-ing to any decision on what basis that coalwill be imported.

Then we wasted another few years decidingon coal supply. Having finally decided onimported coal, nothing much happened onsecuring supplies (short term vs. long term

coal supply contracts). So, as pointed out inmy last article, we will have coal plants builtbut no/ uncertain supply of coal. AGAIN, noSYNCHRONIZATION in planning. We arevery good at awarding contract for plants butleave everything else - including supply ofprimary energy source as an afterthought.

To put things in perspective, let us take thecase of Payra coal-fired power generationplant. The Payra plant is ready but due totransmission line lagging behind, power can-not be evacuated now. Also, 660 MW more(2nd unit) at Payra coal-fired power plantmay join next year (could have joined endof 2020 had it not been for Covid 19). Wemay see the same fate repeated for the Ram-pal 1,320 MW, Matarbari 1,200 MW andRooppur 2,400MW power plants if they failto get respective transmission lines con-nected timely. The result? We are potentiallylooking at these power plants sitting idlewhile the national exchequer counts thecostly idling time (as per contract).

The crisis brought on by transmission anddistribution is already stated. If things weren’tbad enough, we continue to keep faith withan import-based primary energy fuel supply.Barapukuria 525 MW (already commis-sioned) + Payra 1,320 MW (660 commis-sioned) + Rampal 1,320 MW and Matarbari1,200 MW coal fired power plants alreadyin the pipeline and should start power supplywithin 2-3 years. If no coal, (approximately14 million tonnes needed for these plants )or, uninterrupted supply is not ensured, thenthese costly plants will idle, and we pay ex-orbitant sums for the idle time.

We are very good at making excuses for notdoing what should have been done in termsof concrete and effective planning. Last butnot the least, are we headed towards a Pak-istan (or Sri Lanka) type scenario? A few yearsago, the then Pakistani government nearlywent bankrupt with $5 billion in unpaidbills. All seemed to be lost. Saudi Arabia, astrategic partner of Pakistan, bailed the latterout. Who will bail us out when our creditorscome calling? With so many live examplesof other countries having taken the wrongroad to planning, must we follow in theirfootsteps to disaster? There is still time to takecorrective action, because as pointed out byso many in the past, Bangladesh is standingat the crossroads and the decisions we taketoday will decide if we will have a viableand sustainable energy sector in the future.

Syed Mansur Hashim;Deputy Editor

37

Analysis

August 16, 2020

We are Still in Power CrisisManagement Mode

Syed Mansur Hashim

EP

39

Climate

August 16, 2020

The next conference of theClimate Vulnerable

Forum (CVF) will be held in2021 commemorating the"Mujib Borsho".

"CVF President and ex-UNsecretary-general Ban Ki-moon informed this recentlywhen he phoned Prime Min-ister Sheikh Hasina," PM'sPress Secretary Ihsanul Karimsaid.

The press secretary said BanKi-moon called the PM andtalked with her for nearly 12minutes on different issues,including the CVF confer-ence and the Global Centreon Adaptation conference.

Ihsanul said the Global Cen-tre on Adaptation conferencewill be held in the secondweek of September next and

the Bangladesh PM will inau-gurate the event. Ban Ki-moon will join the programvirtually.

The press secretary said theformer UN secretary-generalhighly appreciated the PM'sleadership in combating thenovel coronavirus situationand Cyclone Amphan withcourage.

Ban Ki-moon congratulatedHasina for being elected asthe CVF chair for the secondtime.

He also congratulated SaimaWazed Hossain, chairpersonof the National AdvisoryCommittee on Neurodevel-opmental Disorders andAutism, as she has beenmade a "Thematic Ambassa-dor" by the CVF.

Climate Vulnerable Forum’s NextConfce to be Held Marking

Mujib Borsho

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The government is going toform a special fund titled

'Bangladesh Delta Fund', forimplementing its long-termintegrated master plan, 'DeltaPlan 2100', to harness thehuge potentials ofBangladesh through water re-source management, ensur-ing food and water securityand tackling disasters.

According to an official doc-ument, it would require im-plementation of a good

number of new projects apartfrom development and main-tenance of the existing infra-structure for accomplishingthe Delta Plan 2100.

"To make that happen, a spe-cial fund named 'BangladeshDelta Fund', will be consti-tuted," the document says.

To implement the Delta Plan,2.5 per cent of the Gross Na-tional Income (GNI) will berequired till 2030. Currently,

Govt to Form 'Delta Fund' toFinance Climate Projects

the expenditure in this sectoris only 0.80-1.0 per cent,shows the document.

Under the plan, 80 projectshave been proposed for im-plementation within 2030.Of the projects, 65 are re-lated to physical infrastruc-ture while 15 to institutionalcapability, skill developmentand research, involving Tk2,978 billion (around USD37 billion).

The implementation of theseprojects, the document men-tions, will start in differentyears.

The National EconomicCouncil approved the'Bangladesh Delta Plan2100' in September 2018, tobe implemented over thenext 100 years, aiming toraise the GDP growth to 9per cent by 2030.

EP

Foreign Minister Dr AKAbdul Momen recently

said Prime Minister SheikhHasina's leadership in facingthe challenges posed by cli-mate change is recognizedglobally.

He made the remarks after in-augurating the Ministry ofForeign Affairs' component ofa national tree plantationprogram.

On the occasion of the cele-bration of Mujib Borshomarking the birth centenaryof Father of the NationBangabandhu Sheikh Mu-jibur Rahman, Prime MinisterSheikh Hasina announced aprogram planting one crore

trees across the country.

She inaugurated the entireprogram recently in theGanobhaban garden. TheForeign Minister planted 100saplings on the premises ofthe state guest house "Ja-muna".

On the occasion, Dr Momenplanted a NageshwarChampa tree and State Min-ister for Foreign Affairs Md.Shahriar Alam planted asapling of a jarul tree.

Besides, Foreign SecretaryMasud Bin Momen planted agolden tree and the Chief ofProtocol planted a Kadamtree.

PM's Leadership on Climate FrontGlobally Recognized: FM

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The United Nations Secre-tary-General Anto nio

Guterres announced thenames of seven young cli-mate leaders — between theages of 18 and 28 years old —who will advise him regularlyon accelerating global actionand ambition to tackle theworsening climate crisis.

The announcement marks anew effort by the United Na-tions to bring more youngleaders into decision-makingand planning processes, asthe UN works to mobilize cli-mate action as part of theCOVID-19 recovery efforts.

“We are in a climate emer-gency. We do not have theluxury of time,” the Secre-

tary-General said in a videoannouncing the establish-ment of the Youth AdvisoryGroup on Climate Change.“We need urgent action now— to recover better fromCOVID-19, to confront injus-tice and inequality and ad-dress climate disruption.”

“We have seen young peopleon the front lines of climateaction, showing us what boldleadership looks like,” headded. “That is why I amlaunching my Youth AdvisoryGroup on climate changetoday — to provide perspec-tives, ideas and solutions thatwill help us scale up climateaction.”

Young Leaders Tapped to InvigorateUN’s Climate Action Plans

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Climate

August 16, 2020

The four, members of theExtinction Rebellion envi-

ronmental protest group,were understood to haveevaded security by wearingorange race marshal uni-forms.

They unfurled their banner atClub Corner as the cars set offon the formation lap in a racewon by world championLewis Hamilton.

Silverstone officials andNorthamptonshire Policesaid the four protestors werein police custody.

“During the race, Northamp-tonshire Police were madeaware of four people whohad been detained by Silver-stone security inside thevenue perimeter,” said astatement.

“Officers are working closelywith Silverstone Circuit andconducting a full investiga-tion.”

Formula 1 has been in a secu-rity ‘bubble’ of strict anti-coro-navirus protocols since thedelayed season got underwayin Austria last month.

Climate Change Protesters BurstBritish GP ‘Bubble’

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The unprecedented fall ingreenhouse gas emissions

from lockdowns during thepandemic will do "nothing"to slow climate change with-out a lasting switch from fos-sil fuels, an internationalteam of researchers said re-cently.

Global emissions from theburning of coal, oil and gascould fall up to eight percentin 2020 after governmentsmoved to confine billions ofpeople to their homes in abid to slow the spread ofCovid-19.

But absent a systemic change

in how the world powers andfeeds itself, experts warned inthe study that the emissionssaved during lockdownwould be essentially mean-ingless.

Using open source data, theteam calculated how levelsof 10 different greenhousegases and air pollutantschanged in more than 120countries between Februaryand June this year.

They found that pollutionsuch as carbon dioxide andnitrogen oxides fell in the pe-riod by between 10 and 30percent.

Lockdown Emissions Fall Will Have‘No Effect’ on Climate

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At least 212 environmentalcampaigners worldwide

were murdered in 2019, mak-ing last year the deadliest onrecord for frontline activistsbattling the destruction of Na-ture, watchdog group GlobalWitness reported yesterday.Colombia and the Philippinescombined accounted for justover half of the confirmeddeaths -- 64 and 43, respec-tively -- followed by Brazil,Mexico, Honduras andGuatemala.

About 40 percent of victimswere indigenous people, andover two-thirds died in LatinAmerica. One in ten werewomen. Of the 141 murderslast year that could be linkeda specific economic sectors,more than a third involvedcampaigners protesting min-ing operations, some legalmost not.

Thirty-four killings related toagribusiness were overwhelm-ingly in Asia, especially thePhilippines.

Record 212 Environmental ActivistsMurdered in 2019

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41

Climate

August 16, 2020

Solid-state batteries keep onattracting tremendous at-

tention and investment withthe maturing technologiesand closeness to mass pro-duction.

Even with the influence ofCOVID-19, the potential mar-ket size is expected to grow toover $6 billion by 2030, ac-cording to IDTechEx’s report“Solid-State and Polymer Bat-

teries 2020-2030: Technol-ogy, Patents, Forecasts, Play-ers”.

With the potential of excellentsafety, simplified battery packdesign, and higher energydensities, solid-state batteriesbecame extremely populararound 2015.

In 2015, Volkswagen got a5% stake in QuantumScape,

Dyson ac-quired Sakti3,Bosch ac-quired SEEOand JohnsonBattery Tech-nologies soldits solid-statebatteries toBP.

Revolutionary Solid-State Batteriesto Create a $6b Market in 2030

The Japan Wind Power As-sociation said recently it

aims to expand the country’soffshore wind power installedcapacity to 10 gigawatts(GW)in 2030 and 30-45 GW in2040.

Offshore wind power currentlyprovides only a tiny fraction ofJapan’s electricity supply but isset to grow after a law, the Off-shore Wind Promotion Act,came into force last year tospur development.

“Japan has huge potential forbuilding large-scale offshore

wind farms, 128 GW potentialfor fixed-bottom and 424 GWfor floating,” Jin Kato, presidentof the JWPA, told a news con-ference.

“Nuclear power plants havebeen struggling to restart whileJapan has decided to fade outageing coal-fired power plants,renewable energy is the onlysolution to cover a shortfallfrom these power sources,”Kato said.

Kato said the Japanese govern-ment should map out ambi-tious long-term goals foroffshore wind power genera-tion, which can help to attractinvestments, including foreignmanufacturers of wind turbinesand blades to build local sup-ply chains.

Japan Wind Power Group Aims for10GW Offshore Wind by 2030

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Bangladesh Power DevelopmentBoard (BPDB) is incurring lossescontinuously due to selling elec-

tricity at a tariff determined byBangladesh Energy Regulatory Commis-sion (BERC). To offset the cumulativelosses, the government has provided Tk55,000 crore to Tk 60,000 crore as sub-sidy. The government in its books of ac-count has shown this as loan. There is,however, no pressure on BPDB to repaythis as yet. But, there is no doubt that theBPDB would become bankrupt if it hasto repay this loan.

BPDB Chairman Engr. Belayet Hossainsaid this in an exclusive interview withEnergy & Power Editor Mollah AmzadHossain.

How do you evaluate the present per-formance of BPDB? There are severalpublic sector power companies in gen-eration, transmission and distribution.But BPDB on behalf of the governmentis the owner of all these. How BPDB ismanaging this gigantic task?

There is no scope to devalue theachievement. But we must keep in mindthat the significant success in powergeneration could be achieved for majorrestructuring and reforms done in theentire power value chain. BPDB alonecould not have done that. Again com-panies have greater opportunities thanBPDB for implementing the projects ex-peditiously. But selection of wrong per-sons can create corruptionopportunities. The scope of intensivemonitoring of the power division andBPDB has been created. Consequently,there exists regular monitoring at everylevel. Again, the role of private sector inincreasing generation capacity is alsoadmirable.

The special power act has played a veryimportant role in expeditiously imple-menting the projects of the power and

energy sectors. But in my personal opin-ion, there is no further requirement nowfor continuing with this act.

But you should bear in mind that theachievements in increasing power gen-eration in the first phase has been pos-sible for creating different companiesand working together in close cohesion.Now works are in progress for enhanc-ing capacity of power distribution. But,I do not think, PGCB in unison can en-hance efficiency in power transmission.Necessity is there for creation of fewcompanies in power transmission.

Many reforms have taken place in thepower sector over the last five decadesof operation of BPDB. Besides powertransmission and distribution works,BPDB started power generation in thepublic sector. Private sector companiesare also there in power generation. ButBPDB is the single buyer. Consequently,the financial stress on BPDB is gettingintensified. Every year in the nationalbudget, the allocations for BPDB isshown as subsidy, but in the accountingsystem these are shown as loans. So,there is a popular belief that BPDB issurviving as a company under severe fi-nancial stress. What are your views?

The governing ministry in the past usedto determine the bulk and retail powertariff. Now it is the domain of BERC.Consequently, the bulk selling tariff ofBPDB is lower than average purchaseprice (average cost of own power andpurchased from the IPPs). BPDB, as a re-sult, has to count losses continuously.This is managed with subsidy given bythe government. During introduction ofthe IPPs in power generation, the BPDBviewed that the government will have toprovide subsidy to mitigate the financialstress of selling power at lower tariffthan the purchase price of the IPPs’power. The government so far has pro-

vided Tk 55,000-60,000 crore as sub-sidy. But in the government account, itis shown as loan. But there is no pres-sure on the BPDB for repayment. Thereis no alternative to BPDB getting bank-rupt if the subsidy is considered as loanand the BPDB has to repay it.

There are some allegations that BPDB isunder continued stress with increasedgeneration as the capacity of powertransmission and distribution have notbeen increased in coordinating with in-creased of generation. Consequently,cost of generation is being continuously

Engineer Md. Belayet Hossain

We have requested the PowerDivision for not giving any

permission for setting up captivepower plants in the SEZs and new

industrial areas. But permissions forsome such plants have already beenissued. If such trends continue, we

will be left with no option but revisingour generation plan.

‘BPDB Will Become BankruptIf It Has to Repay Subsidy’

43

Interview

August 16, 2020

increased. The burden is being trans-ferred to the consumers. What wouldyou say?

The rapid increase of generation capac-ity is indeed an achievement. It is alsotrue that transmission and distributionsegments could not keep pace with thegeneration. The generation capacity isnot remaining unutilized although thereare some issues. Relying on the distribu-tion utilities, initiatives have beenlaunched for expanding the capacity.But for existence of a single company,PGCB, it is getting increasingly difficultfor evacuating power from all privateand public sector companies. Policy di-rectives are essential from the govern-ment for getting out of this situation. Theoptions are the creation of two to fourcompanies of at least two separate unitsunder single company. If that is done,the transmission segment can alsoachieve success similar to that of thegeneration.

The PSMP provisions are not being fol-lowed since 2010 for increasing gener-ation though PSMP used to be the basisof power system development since1990s. Consequently, effective genera-tion capacity did not increase that muchthough installed capacity increased sig-nificantly. What do you think?

Please note that every PSMP is beingmeticulously followed. But you mustalso bear in mind that no plan can everbe completely implemented to thepoint. It requires revising and updating.For example, the target for achievinggeneration capacity by 2030 is now46,000 MW. But there may be some is-sues in achieving it. Achieving 80% ofany planned target is also a great suc-cess. But it is not true that coordinatedpower system development did not hap-pen for not following the PSMP provi-sions.

For example, the rate of demand growthis slow now. There may be requirementsfor reviewing the PSMP afresh due topost-COVID period. That is a usual phe-nomenon.

Do you think that continuation of rental,quick rental plants and liquid fuel basedIPP development program from 2010 till

now is correct? Do you think that suchwindows have been kept open for pro-viding undue advantages to politicallyaligned local entrepreneurs?

Please note that in 2010, the hugedeficit of gas necessitated going for liq-uid fuel based rental and quick rentalplants for managing diabolic power cri-sis. Managing that stage well,Bangladesh has now entered into aphase of comfort. One after another, theplants are being retired after completionof the terms. Other than the fuel-effi-cient gas based IPPs, no contract will befurther extended. These would be doneunder “no power, no payment basis”.Contracts of no liquid fuel based rental,quick rental or IPPs would be further ex-tended. By 2030, almost all would beretired. I think criticism without appre-ciating the realities is not right.

Getting sustainable supply of primaryfuel is now a major challenge. But sup-plying gas, coal and liquid fuel is not theresponsibility of power division andBPDB. The organizations of energy sec-tor cannot perform their responsibilitiesas required. That is impeding the execu-tion of plans of power generation andconsequently the cost of generation isincreasing. Do you have any alternateplan?

Please note that BPDB has no scope formaking any alternative plan. Organiza-tions of energy division have to ensurefuel supply. Specially gas and LNG sup-ply. We even do not have any plan forimporting LNG. But imported coalbased power generation companies areimporting coal under own arrange-ments. Oil based IPPs are also importingthe liquid fuel under own arrangements.But during this coronavirus period, BPChas sold their imported liquid fuel to theIPPs.

I believe that smooth and safe powergeneration cannot be ensured until en-ergy division can ensure sustainablesupply of pledged primary fuel as re-quired.

1972-2020 is a long time. Starting from445 MW to 21,000 MW capacity is ahuge transformation of BPDB. Do youthink BPDB could develop its human re-

source competence keeping pace withthe capacity enhancement of the sector?If not, what needs to be done?

Human resource crisis grew alongsidethe capacity enhancement. But like be-fore, the power plants are no longermanually operated. Hence number ofskilled manpower is considerably less.Human resources are being trainedunder contracts with project implemen-tation contractors. But we lack efficientmanpower for operating modern coalbased power plants. That is why jointventures with experienced reputedcompanies have been made to train anddevelop our own human resources. Weare approaching in a planned manner.As the plans are being implemented ina systematic manner, no crisis is antici-pated as far as competent manpoweravailability is concerned.

PSMP 2016 provided for achieving40,000 MW generation capacities by2030 and 60,000 MW by 2041. Fuelmix as prescribed shows 35% each fromcoal and gas/LNG. Do you think de-mand is increasing as projected? Doyou think it is necessary to makechanges in the plan for generation ca-pacity?

Yes, there is no denial that there hasbeen no noticeable increase in demandin the industrial sector over the past fewyears. Demand has further diminishedsince the Covid-19 outbreak. The gen-eration plan has been made taking intoconsideration the GDP growth projec-tion by the government. The demand ofpower would not grow if the plannedindustries in the Special EconomicZones (SEZ) do not come into commer-cial operation on time. Hence, we haveto closely monitor the rate of growth ofindustrialization. But it is a matter of de-light that we would come out of liquidfuel based generation by 2030. Powergeneration will then be based on coal,gas, LNG, imported power and nuclear.We may have to revise generation planif the industrial development does notproceed at an expected pace.

A foreign company in its analysis hasmentioned that as per current develop-ment plan up to 2030, there would be

44August 16, 2020

58% surplus power generation capacity.What is your response?

Look the basis of this analysis is not ac-curate. It mentioned that the capacity in2030 would be 52,500 MW. But as perour plan now, it is 46,000 MW. If wetake into account, the planned imple-mentation of past capacity of 42,000MW against a demand of 37,000 MWmust not be considered too much. Re-serve margin will also be logical. Theidea of huge power going idle is not cor-rect.

The requirements for supplying powerto under construction new SEZs havealso taken into consideration in yourplan for generation capacity increase.But at the same time, we find permis-sions are also being given for setting upcaptive power generation plants in theSEZs. Why you are not raising objec-tion?

We have requested the Power Divisionfor not giving any permission for settingup captive power plants in the SEZs andnew industrial areas. But permissions forsome such plants have already been is-sued. If such trends continue, we will beleft with no option but revising our gen-eration plan.

If the last 19 years is viewed in retro-spect, the growth of generation capacityis 444%. The demand growth in indus-trial sector over the same period is245%, in residential sector is 620% andcommercial sector is 853%. Conse-quently, the overall power demandwould not grow unless the industrialsector can be relieved from the depend-ence on captive power. What is yourplan?

We are aware that the industrial sectoris now using up to 2,800 MW captivepower. The cost of generation is still lessthan the grid power and at the sametime, distribution utilities cannot ensurereliable quality power supply on unin-terruptible basis to the industries. Webelieve that the gas supply to the cap-tive generators outliving its design lifemust not continue. Gas supply must bephased out. The gas saved must be di-verted to the grid power generation.That will reduce generation cost of

power. The distribution utilities will alsodevelop capacity for supplying reliableand quality power supply to industriesin a couple of years. There has beenconsiderable improvement achieved al-ready.

The world is leaning towards renewableenergy. Bangladesh also has a plan forthis. Where is BPDB standing?

Please note that the sources of renew-able energy in Bangladesh is limited.We found the possibilities of windpower are minimum in our studies. Thegeneration of wind power will also beexpensive. Possibility of solar power isbright. But without storage, supply isonly possible during the daytime. Butduring that we have to leave our plantsidle for reduced day demand. The grid-connected solar plants need huge landsurface. We have great limitation thereas well. Hence, we are not really hope-ful about getting much from renewableenergy.

Associations of Consumers allege thatthe inefficiencies of BPDB and its gen-eration companies are reason for in-crease of generation cost. They alsoblame that fuel inefficiency of the plantsis also the reason for increased cost ofgeneration. What is your reaction to

such allegations?

I cannot claim that power sector is ab-solutely free of inefficiency and irregu-larities. But we are leaving nothingunturned now for enhancing efficiency.But the deficit of fuel supply (gas supply)for power generation is among the rea-sons for the increased cost of genera-tion. Proven recoverable reserve of owngas is on the wane. LNG and coal arebeing imported now for power genera-tion. So the reasons behind increase ofgeneration cost are not inefficiency andcorruption.

Efficient use of fuel at generation levelis neglected till now. How long shall wehave to wait for getting fuel-efficientpower sector?

Look, now we are developing High Ef-ficiency Low Emission (HELE) Type coal-fired power plants and in other cases,combined cycle plants. Gradually, weare retiring old fuel-inefficient plants.Every year progressively fuel efficiencywould increase. We must rememberthat we are constructing new coal basedpower plants. These are around 40% ef-ficient. But by 2030, the fuel efficiencywould grow to about 50%.

45August 16, 2020

Report

In April 2020, amid the COVID-19,the Ministry of Power (MoP) proposed

amendments to the Electricity Act of2003 as a Draft Electricity (Amend-ment) Bill 2020.

The bill incorporates the National Re-newable Energy Policy (NREP), whichis likely to push the generation of elec-tricity from renewable sources of en-ergy and prescribe a minimumpercentage of the purchase of electric-ity from renewable and hydro sourcesof energy.

With more renewable energy incorpo-rated in the generation mix, the elec-

tricity sector would undergo a greentransformation, says GlobalData, aleading data and analytics company.

The inclusion of energy storage in thescope of the NREP would be beneficialas the aspect of energy storage in thesector would be crucial in the long run.

The NREP promotes the renewablesector while addressing the shortcom-ings of the existing policies, lack of in-vestments within the sector, the slowpace of technological adoption, andcompliance-related issues, keeping theindividual interests of the states inpurview.

Electricity (Amendment) Bill to TransformIndian Electricity System, says GlobalData

EP

EP