Monday, July 28, 2008

Will There Be Any Reasonable Coal Policy?

Farid Hossain

In her farewell speech as the Bangladesh country representative of ADB Hua Du told a group of journalists that she had been impressed with the performance of Bangladesh’s economy. What had stricken her most is the resilience of the Bangladeshis in the face of natural disasters: floods and cyclones. Kudos to the dynamic and resilient people of Bangladesh, a smiling Hua Du said at a recent farewell reception. However, even a super optimist like Huq Du, a Chinese national, was not happy with the way Bangladesh has dealt with power and energy. This sector _ so vital to the economic development _ got no grade points from the outgoing official. What great potentials this sector has in taking the country’s economy to a new heights! But so little has been done! Huq Du could not hide check her. Neither did she mince any words in her criticism.
As the ADB chief in Bangladesh Hua Du did what her organization had wanted her to do: to sell ADB ideas and prescriptions to the government of Bangladesh. Her performance was flawless, near perfect. Power and Energy, however, is one of the few areas where she could not make any impact. On her farewell night she spoke about the country’s coal reserve and the potentials the natural resource has in producing electricity in power-hungry Bangladesh.
Bangladesh has been buffeted with electrify crisis not for lack of resources but for lack of initiatives. That we all know. First, there was the BNP-led coalition government that did nothing to add new electrify to the national grid. No new projects and no new plants. No additional electricity. The demand had kept rising, but there had been no effort to augment the supply. That was when Khaleda Zia was the prime minister during her second term. She kept telling the nation that her government had flooded it with development even though her government inexplicably failed in creating even a single kilowatt of electrify.
Having inherited the crisis from Khaleda’s failed regime the caretaker government of Fakhruddin Ahmed has been in trouble in coping with it. It has not dared to go for any big plan to set up new power plants to meet the growing demand. Instead, it first focused on austerity and better management of electricity consumption. As part of its austerity drive the caretaker government forced the shops in capital city and elsewhere to shut down by 8 p.m. every night. The measure, the government thinks, has helped save some power. Load shedding has remained the central feature in management of consumption. Every one is suffering - domestic, commercial and industrial users. Frequent outages have hurt the economy.
Then came the government initiative to make a coal policy that will be acceptable to all. Coal has grabbed the central stage of the government’s energy policy after some experts _ supported by donors _ concluded that coal _ not the gas _ should be used for producing electricity. According to them Bangladesh should turn its attention from gas to coal to make electricity. Natural gas, once thought to be available on plenty in Bangladesh, is now in short supply. There is also no sign yet when a full scale exploration of gas will be possible. On the other hand coal is available and the current reserve is good enough to attract foreign investment. Asian Energy is there. But there are at least three other companies eyeing on our coal reserve. The four companies, I’ve been recently told, are proposing to investment at least US$5 billion.
The Asian Development Bank and other donors support exploration of coal to produce electricity. The coal policy drafted by a national committee is awaiting government’s approval. Will the policy end the controversy centering the use of coal. Or will it ignite more debate?

Energy & Power
Date: 16 July 2008, Bangladesh
Link: http://www.ep-bd.com/

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