Generating power without government

Nizam Ahmad

The government of Bangladesh has failed to ensure supplies in order to meet the energy demand of the populace. The country needs a radical energy policy. The best would be for the government to stand back and allow the market's competitive forces to generate power.
While the government would probably take until 2021 to consider that option, they should begin importing gas from the surplus world market to operate the state-owned power plants starved of fuel. Many people as exporters or shopkeepers would be too willing to pay more but many may not. Nonetheless, a sweeping shift in power generation from an undependable 'public-private partnership' to a wholly private can overcome the present energy crisis both in the short- and the long-run.
The leaking gas fields of Bangladesh and constant disruptions to supply prove that contractors chosen by the government were either incapable, or had cheated it, or politics and nepotism decided all energy businesses. Bangladesh gas fields are not only ill-managed but also do not benefit from advanced technologies.
Mainstream economists, environmentalists, policy experts, and politicians always insist that government should play the leading role in energy, and in all matters. Such policy practices have created a vested ruling class and a mass dependent on government. Government, as they perceive, is almost a deity that fulfils all demands of the people, when qualified technocrats advise it and dedicated elected officials run it. Destined are people to submit to this authority for collective deliverance.
The planners advise mobilisation of resources to develop energy. This means high taxes, which is a severe burden on the people. They also instruct the government to borrow capital from foreign governments and non-market institutions. This method has not only failed to develop our energy, or the economy, but also brought in an ugly culture of corruption and inefficiency. It is only rational that a cut in government's economic authority will minimise corruption but elite experts and elected leaders of the people oppose it.
Our coalfields could be a good source for power but remains bogged down with faulty contracts, and blockades from environmentalists who prefer darkness and poverty to foreign investors utilising our natural resources. Our 'eco warriors' and those wary of big neighbours can afford to dwell in Utopias, as they do not live in darkness or in poverty as the people around the coal fields do. Environmental concerns and a likely repeat of an East India Company syndrome run wild in their minds. They hold no faith in laws of the country, if reformed, to punish corporate frauds or in modern technology to clean industrial pollution.
Politicians, in fear of this eco and nationalist lobby, have revealed a magic number of 50 years of reserve gas, or coal, before any export considerations. The Bangladesh economy, if steered by private entrepreneurships, will naturally seek, as the world does, alternate sources of energy including nuclear but if export of gas, or oil, at all takes place, prices will climb to an abnormal peak whenever reserves hit low. The high prices would deter exports, therefore, keeping reserves intact and untouched. Such is pure economic logic if unaltered by government bureaucrats and by the vested ruling class. Contrarily, the government enters into long-term fixed price contracts that do not reflect true gas reserves. The government built few power and fertiliser plants that does not work full time due to gas supply issues. No private enterprise, if operating without the burden of government control, would build a plant without ensuring uninterrupted gas supply.
It is time to test the private sector, foreign or local, under an environment of firm law and order, to invest in Bangladesh's energy sector to fulfil market demand for power. Undeniably, private enterprise would be more competent with their expertise and resources to supply non-stop gas, or coal, for our power. The government has failed and should no longer be in it. Gas reserves could be higher and its utilisation more efficient if private producers were discovering, conserving, or even importing gas for our kitchen, factories, fertiliser, and power plants.
Under a setting of a free market in energy, prospective private investors in Bangladesh would be free to negotiate with people on whose land they would choose to drill or excavate. For a successful outcome, as in any businesses in free environments, there will be negotiations with people for corporate shares, jobs, or a premium price for the use or purchase of their lands. Presently, government owned or authorised private operators simply evict people and often coercively. The ruling class benefits itself at the expense of the vast poor who stay dependent on the government to meet their humble needs. The inhabitants in the area do not benefit from wealth underneath their lands, which is unjust, exploitative, and a denial of their natural economic rights.
A government plan should only formulate rules that relate to health, safety, forgery, and, indeed, the environment. It will provide the conditions of economic development as property rights, personal security, minimum taxes, and freedom to trade or invest. Governments should meddle least in the affairs of private enterprise. There will be hordes of energy watchdogs as the media, green activists, local people, lawyers, courts, politicians, and non-government organisations (NGOs) to keep an eye on private enterprise in Bangladesh's energy.
The opposition to energy in the free sector from green environmentalist on grounds of pollution, or any other, is in reality to prevent the advance of capitalism in Bangladesh. Green environmentalists in the West, in connivance with governments bent on market control and interventions, promote 'sustainable growth' by ditching today's use of resources for the distant future. However, by this doctrine, resources will remain unutilised forever, as our future will reserve it for their future. Many, however, reason that a coterie in the industrial West do not want world's natural resources depleted but kept reserved for their industries only.
To meet energy needs of 150 million people, the private entrepreneurs, who are the unfailing engine of development, must wrestle for their right to produce power without government.

The writer, based in London, is Director, Liberal Bangla, UK

Source : The Financial Express, Bangladesh

Link : http://www.thefinancialexpress-bd.com/2009/04/28/65002.html

Date : 28 April 2009

It cant be done in three years’

Mullah Amzad Hossain, editor, Energy & Power, a Dhaka-based fortnightly magazine explains to Robab Rosan why we wont get much relief from load shedding in the next few years

We have been virtually living under a state of power shortage for almost decades now, especially during summer season. While subsequent governments have promised to deal with the issue and blame each other, the situation seems to deteriorate by the day. What has really happened through these years?
I think people are aware of the present situation in the power sector. I have monitored the flow of electricity from twelve hours from 10:00am to 10:00pm on April 15 and I have seen that electricity is not coming back after one hour, as per the schedule of load shedding. It is taking more time to return but staying on for less time. The situation is gradually getting worse.
I think the demand for electricity in the country in peak hours is no less than 7000 MW and the government is saying that electricity is being produced from three thousand to thirty seven hundred MW. And there is also a fifteen percent system loss as well. If we take into account uninterrupted supply of electricity for privileged people and areas, we see that the share of electricity amongst the common people is minimal.
Corruption has become the most popular victim in the country. For me, inefficiency is more dangerous than corruption.
We saw infrastructural development during the rule of HM Ershad, however, many irregularities and corruption were reported during that time. Later the BNP government continued the projects and took only a single project of establishing an electricity production centre in Siddirganj.
Next, the Awami League government finalised the Independent Power Producer policy (IPP), drafted by the previous BNP government.
The AL government successfully increased production of electricity from seventeen hundred to eighteen hundred MW to nearly four thousand MG according to the policy. We got 1300 hundred MW of electricity from the IPP.
Unfortunately, the next BNP government did not continue the projects taken by their predecessor. The government said that IPP was a curse for the nation and the then finance minister Saifur Rahman said they would not take even suppliers’ credit in the power sector. They later realised that they should start the IPP facility and suppliers’ credit again. But this time they wasted two years.
The BNP government started a centre of one hundred MW capacity at Tongi during their last tenure. They also began the process for a 240 MW production centre in Siddirganj and a centre in Sylhet, that started production during the last caretaker government.
Right now, we have five and a half thousand MW installed capacity. But many of the machineries are old and some of them remain closed for repair. On the other hand, the centres do not get uninterrupted gas supply. For these reasons, the production centres cannot produce according to their capacity.
The governments blame each other. I say that there was virtually no development not only in the power sector but also in the energy sector in the last seven years.
During the tenure of the previous government we saw violent crises regarding the shortage of power in Kansat and Demra. And yet, we now hear that not a single megawatt of power was increased in the last five years. Is this true and how is it possible?
The crisis of electricity will never be solved because in our country, gas is the main source of producing electricity. Eighty seven percent of electricity in our country is being produced by gas. We do not have enough reserve of gas. The government has yet to decide on whether to extract coal. They are delaying more and more. If we extracted coal, it could be used in generating electricity. There is no plan, I think, to generate electricity by purchased oil.
The government has planned to produce five thousand MW of electricity by five years. I agree with the government that it might be possible in five years but not in three years. The government has to involve local and foreign companies to explore gas immediately and urgently and they should also extract coal. Otherwise it might not be possible.
The finance minister has said that we cannot do anything about load shedding in the next three years. Is there really no way out?
Yes, the finance minister has said it correctly - we cannot do anything about load shedding in the next three years because it is a lengthy process. I have said earlier that the government can increase production in five years if they take effective initiatives right now. If they do not take initiatives they will not be able to produce even in five years.
The government can provide social tariffs for at least sixty percent of people, who are in the marginal line of poverty. They can give twenty percent subsidy to the lower middle class people. But those who are capable of paying must pay the original price. The government can also establish a special grid for uninterrupted electricity at the higher price.
In a recent report, we have heard that the government is thinking of purchasing electricity from India. What are your views on that?
I think, this region (SAARC) is the only region where we have no real cooperation in the energy sector. Due to lack of faith among the two countries, Bangladesh and India, and a lack of far sight in our politicians, we could not establish a multinational cooperation in this region. We can import electricity from India in the short run or mid run. We can also import electricity from Nepal but the decision should be taken immediately.
We currently, apparently have the capacity to produce 600MW of extra power and yet we don’t have the gas to do it. Meanwhile, our gas resources lay as it was because we have not been able to resolve our issues regarding the extraction of gas. How can we increase our gas supply?
If the question of gas supply comes we will see many irregularities in this sector. We are unfortunate because our governments do not solve the problem. They allow the problem to grow into a crisis and then they go for the remedy. But by this time we waste a lot of time and money. We are gradually losing our reserve but not exploring new gas fields. We are neither allowing foreign companies nor the local ones to work in this sector.
We have to extract coal for generating electricity because about fifty percent of electricity is produced across the world from coal. Denmark, which has a contribution of 42 percent in renewable energy, produces 48 percent of its electricity from coal. Our neighbouring country India produces about sixty percent of its electricity from coal and China produces around seventy percent of its electricity from the same resource. The government must ensure better rehabilitation of people and minimise environmental hazard for extraction of coal.
Using the policy of Production Sharing Contract (PCS), the government should immediately take initiatives to explore gas in the Bay of Bengal, otherwise we will not be able to increase our production.
There is inefficiency in the government sector. At the other end we have increasing demand, sometimes artificially created by MP’s and their electoral promises. How do we get out of all this?
Forty percent of total budget in the power sector should be kept for generation, forty percent for transmission and the rest twenty percent for distribution. This was not done properly.
To earn cheap popularity, the government says that they will set up production houses at their own cost. We virtually need nearly five million USD to set up a 450 MW power plant. This is not possible for the Bangladesh government to do single-handedly. Our share market is also not booming that the government will collect money from the market.
If the question about the extension of electricity in rural areas comes I will ask the government whether they want to keep our rural people in darkness. The rural people have the right to get electricity. The government knows that ten percent demand will increase every year.
To extend electricity is not a fault. It is a fault not to produce electricity. People can demand electricity from their representatives. The government is developing roads but not giving electricity. You cannot expect development without electricity.
What are your views on alternate sources of power for households and how can we effectively increase awareness among people to stop wasting power?
The government is going to take an appreciating initiative to replace all the incandescent bulbs with Compact Florescent Bulbs (CFBs) by two years. The World Bank will provide the bulbs free and the German organisation GTZ will provide technical support. The government has planned to replace one and half crore bulbs by February next and one crore more by the end of the year. It will save eighty percent of bills and save eight hundred MW electricity.
The government should also ensure that the generators, refrigerators and ACs and other appliances are energy efficient. The government can also encourage the factories, particularly the steel mills, to run at night. On the other hand, the government can close markets by five o’clock five days in a week and can keep them open till 11:00 at night on the remaining two days. Shoppers will get habituated to this system in time.

Source : New Age (X tra) , Bangladesh
Link: http://www.newagebd.com/2009/apr/24/apr24/xtra_inner6.html
Date : 24- 30 April, 2009

Coal policy, now a necessity-Minister says

Star Business Report

The government will finalise the much-awaited coal policy, to mitigate the acute power crisis, said the state minister for energy and mineral resources yesterday.
“There is no alternative to finalising the coal policy, as to prove to be a lower cost option for power generation,” said Shamsul Haque Tuku at a meeting with the Forum for Energy Reporters Bangladesh.
He however did not reveal the present status of the policy, which has been under deliberation within the government for the last few years. But the policy, which is required to develop the coal sector, is still in red tape.
The last caretaker government finalised the draft coal policy. But that government did not impose it, as it thought a political government should take such a decision.
The state minister said new gas and coalmines must be excavated.
He urged all stakeholders of the mineral resources sector to suggest the government how national resources should be used.
The state minister claimed the present government increased day-to-day electricity generation from 3200 MW in January to 3850 MW till yesterday. However, the last caretaker government increased electricity generation to 3900 MW in December 2008.
In response to a query, the minister said the present government is trying to add more than 741 MW electricity by July this year, based on the last caretaker government’s load management policy.
He said the present government is not responsible for the current power crisis. But the current government will not consider what happened in the past, he added.
“We will have to develop the power sector. Otherwise, the government will be blamed for the power shortage. That is what the past government faced,” Tuku said.

Source: The Daily Star, Bangladesh
Link: http://www.thedailystar.net/newDesign/news-details.php?nid=82375
Date: 02 April 2009

Coal policy must to ease energy crisis

Staff Reporter

State Minister for Power and Energy Shamsul Hoq Tuku yesterday said that there is no other alternative but to approve the coal policy for electricity production. “We are working to present a concrete coal policy to nation for extracting coal uninterruptedly,” he said in a press conference, organised by Forum for Energy Reporters of Bangladesh (FERB) at the National Press Club. The FERB Chairman Mollah Amzad addressed the press conference, among others.
“If we are able to extract coal from Barapukuria, then we will extract coal from five other coal fields,” Tuku said, adding, ” The Government will use the coal for producing additional electricity.” He expressed his frustration on controversy over coal extraction and said that the coal and gas protection committee don’t want to extract coal. For additional electricity production, it is also urgent by needed to explore gas, the Minister said.
About offshore bidding, the State Minister said, “We are trying to come into a solution with the neighbouring country for offshore bidding.” The Government is also trying to strengthen BAPEX for gas exploration, he further said. He informed that the power ministry works for adding 714mw electricity in the national grid as a part of short-term strategy of the government within July next. But he cannot explain how it will be possible.
About installation of mega power plant, the Minister said that the government was negotiating with the Russia and some other countries to set up 1000mw nuclear power plant. “The process to set up 450mw Sirajgonj power plant will also continue,” he again said.

Source: The New Nation, Bangladesh
Link: http://nation.ittefaq.com/issues/2009/04/02/news0663.htm
Date: 02 April 2009

PM for decision on coal policy on priority basis

Staff Correspondent

The Awami League-led alliance government has decided to hold an open discussion on the draft coal policy with different stakeholders for finalising the policy on a priority basis. ‘The prime minister, Sheikh Hasina, has directed us to finalise the coal policy as we need alternative energy sources to produce electricity. We will soon hold an open discussion with different stakeholders to finalise it on an urgent basis,’ the prime minister’s adviser Tawfiq-e-Elahi Chowdhury told reporters after Hasina held a meeting with power and energy officials on Thursday.
The previous BNP-led government that first prepared a draft of the coal policy and then the interim government held half a dozen open meetings with stakeholders but could not finalise the draft because of controversy surrounding the mining method and fixation of royalty. When asked why another meeting was needed with stakeholders when controversy was raging over the coal policy for the last three years, Tawfiq said, ‘Every government has its own policy and philosophy. Of course, we will consider the investment issues, local people’s concern and electricity generation while finalising the coal policy.’
Hasina, who is also in charge of the power and energy ministry, held her second meeting, which lasted three hours and a half, at the ministry to discuss about the current power situation and what steps could be taken to improve it. The prime minister stressed the need for increasing gas and coal production for overcoming the power crisis. Sources present at the meeting said that Hasina had asked power officials why there were power outages 10-12 times a day. Power officials said that power outages more frequent in some areas because of technical faults. She dismissed power officials’ claims that there was only 15 per cent system loss in the power sector. Power officials said that the electricity supply situation in the capital would worsen after May because of rise in the demand and sought the prime minister’s directive in shutting down steel and re-rolling mills which consumed huge amount of electricity during evening peak hours.
Hasina asked the authorities to go ahead with the plan. She also asked them to launch a campaign for reducing use of air-coolers during peak hours. She asked officials to take steps so that the power projects that were in the pipeline – under construction, under tender process or planning – could be implemented as soon as possible. Tawfiq said that the capacity of the power plants in the pipeline would be around 3,000MW. ‘The prime minister has directed the authorities to go for dual-fuel option in installing the new power plants like the 450MW Sirajganj independent power plant,’ he said. Hasina also asked the authorities to start negotiations with the countries that had installed power plants like Ghorashal, Ashuganj and Khulna, to replace these old and inefficient plants with new plants. She asked the power officials to explore whether smaller hydropower plants could be installed in rivers and haors across the country and in water streams in Sylhet and Chittagong.
The prime minister also directed the authorities to expand solar energy projects in urban areas and to explore whether irrigation pumps could be run by electricity generated from solar panels. She also directed officials to explore whether electricity could be imported from India, Nepal, Bhutan and Myanmar under regional cooperation. For exploring new gas, Hasina asked the gas authorities to engage a contractor to conduct 2D and 3D survey at the onshore gas fields of Bangladesh Petroleum Exploration and Production Company as Bapex would remain busy in the next three years with gas exploration.
Hasina also directed energy officials to discuss with the attorney general the issue of taking legal steps to have a High Court injunction on signing production sharing contract for onshore gas fields withdrawn. Tawfiq said that they would take to the cabinet meeting a proposal for introduction of daylight saving system by advancing the clock by one hour to save power and gas during evening hours.

Source: New Age, Bangladesh
Link: http://www.newagebd.com/2009/apr/03/front.html#10
Date: 03 April 2009

Gas Crisis to Worsen Further From 2011-Fast decision a must to produce coal, N-power

Sharier Khan

The country is walking the path of a perennial gas crisis where even the best possible situation of striking gas in the off-shore blocks will not give it a respite till 2020. This means unless the government takes major policy decisions like emphasising coal or nuclear power production within a short time, the already unbearable power load shedding that is hitting the economy and lifestyle very hard will go beyond any solution. Most of the country’s power plants run on gas.
The gas situation is so bleak that Petrobangla has been declining confirmation of gas supply to a number of upcoming large power projects. In a paper submitted to the prime minister, Petrobangla even recommended discouraging use of gas for power generation as it can be generated using alternative resources like coal. Power Development Board (PDB) sources say while Petrobangla okayed gas supply to Bibiyana 450 megawatt power project, it cannot confirm gas supply to the much older 450 MW Sirajganj power project till 2012.
For now it can only confirm gas supply to 150 MW Sylhet, 150 MW Bhola and two 150 MW Siddhirganj power projects. Petrobangla flatly refused to supply gas to Phase- 3 Meghnaghat 450 MW project, 150 MW Sikalbaha, 240 MW Dhaka North and 150 MW Khulna power projects. And it can conditionally supply gas to the dual-fuel 450 MW Bheramara project, 360 MW Haripur, dual-fuel 210 MW Khulna, 150 MW Chandpur and 150 MW Sirajganj projets. The condition is that gas may be available tor these schemes after 2012.
Lack of gas supply to the power plants is already forcing the PDB to refrain from generation of around 600-700 MW power. This is adding to power load shedding because of inadequate power plants in the country. Planning of power project has been revolving round availability of gas since the sixties. Till now the focus remains confined to gas-based power projects which generate around 90 percent of the country’s power.
PETROBANGLA’S PROJECTIONSAs per Petrobangla’s projection number-1, with the current activities involving gas exploration and production, gas shortfall will hit 142 million cubic feet a day (mmcfd) in 2011, 341 mmcfd in 2014, 838 mmcfd in 2016 and 1,714 mmcfd in 2019-20.
The demand for gas is 2,018 mmcfd at present and it will rise to 4,567 mmcfd in 2019-20 at the present trend of consumption growth, Petrobangla sources said. But the country is already experiencing more than 200 mmcfd gas supply shortfall, and the Petrobangla projection did not include this. It means the actual situation would be even worse.
Gas production in 2008-09 has been shown to be 2,042 mmcfd against the demand for 2,014 mmcfd. But in reality, the country is producing around 1,800 mmcfd gas from 17 gas fields–half of it by the international oil companies. Of this gas, power sector–including industrial captive power generators– is consuming 900 mmcfd, fertiliser factories 290 mmcfd and 580 to 600 mmcfd are being consumed by industrial, commercial and domestic and CNG users, and tea estates. In addition, the gas fields are producing 6,700 barrels of condensate.
In scenario-2, where international oil companies would discover new gas fields under production sharing contracts (PSCs) signed through the 1998 second round block bidding, the situation would be slightly better in 2011 as it offers 58 mmcfd gas supply surplus. But by 2014-15, this surplus turns into a deficit of 112 mmcfd gas. The deficit rises to 666 mmcfd in 2017 and 1,314 mmcfd in 2019-20. In scenario-3, where oil companies having off-shore block bidding contracts may strike gas, the situation is even better. But even then, the supply crunch starts in 2017 with 166 mmcfd deficit, rapidly rising to 814 mmcfd in 2019-20.
PETROBANGLA’S RECOMMENDATIONSIn a brief to Prime Minister Sheikh Hasina, Petrobangla pinpointed various issues of the country’s oil and gas sector, and said as per the Gas Sector Master Plan 2006, gas demand may be met till 2019 using the existing gas reserves and probable and possible reserves.
“But if we fail to find the probable and possible gas reserves, the crisis would emerge much before that time limit. In such a situation, it has become very urgent to expedite onshore and offshore oil and gas exploration,” said the brief. Petrobangla emphasised fixing the maritime boundary. Priority should be given to supplying gas to fertiliser factories, cottage industries and foreign currency-earning industries than supplying to consumers who can use alternative energy resources, it said. As this sector is capital dependent, Petrobangla urged the prime minister fix gas prices commercially. Coal exploration and development activities should be geared up for growth of power sector, it stressed.
RESISTANCE & INSTITUTIONAL SHORTCOMINGS While fund crisis and institutional shortcomings coupled with inaction of the past four-party alliance government had almost halted development of the energy sector, different groups had been resisting new energy exploration and development activities by foreign companies.
Following the Magurchhara blowout of 1997, Jamaat-e-Islami-leaning retired secretary Shah Abdul Hannan turned to the court in late nineties and during the four-party rule, the High Court imposed a stay order on bidding in on-shore blocks. Till now the government did not contest the court order while the stay order contributed to the existing problem, Petrobangla sources said.
Towards the fag end of the alliance rule, when Petrobangla tried to float an on-shore and off-shore block bidding by challenging the court order, the then legal adviser to Petrobangla, belonging to pro-Jamaat camp of lawyers, suggested limiting the bid to off-shore blocks. Accordingly, Petrobangla prepared for the off-shore bid that was floated in early 2008.
Again, following the Tengratila blowout in 2005, environment group Bangladesh Environment Lawyers Association (Bela) filed a lawsuit against the gas field’s operator Canadian company Niko, which led to suspension of payment to Niko and its Bangladeshi partner Bapex. The case is now in its final stage of disposal.
On the other hand, the national committee for protecting oil, gas and coal resources launched a campaign against the proposed open-pit mining in Phulbari by British company Asia Energy, which led to death of several protesters in police firing in 2006. The campaign gained ground as the-then government left the matter of resettlement and compensation to Asia Energy which is perceived as an “inexperienced” and “insensitive” company. Following the “success” in Phulbari, the committee has continued campaigning against any open-pit coal mining.
The campaign has also gained popularity among people around Barapukuria underground mine, who recently attempted to get the lone coal mine’s new production suspended. Due to the “nationalistic” peer pressure caused by such campaigns, the government has been unable to take any decision in the last two years concerning vital issues including the country’s first coal policy.
Meanwhile, the lone Barapukuria coal mine is producing nearly 9,00,000 tonnes of coal a year, and a few other coal zones now await government decision. The country is officially and unofficially importing more than 3 million tonnes of low quality and environmentally hazardous coal from India worth around Tk 2,500 crore a year.

Source:The Daily Star, Bangladesh
Link: http://www.thedailystar.net/story.php?nid=82652
Date: 04 April 2009

Govt moves for JV policy on gas, coal fields

ET Report

The power and energy ministry has taken a move to formulate a policy for the public-private joint venture to develop gas and coal fields on a ‘fast track’ basis. ‘The main aim of the policy will be to allow Petrobangla to form joint ventures with local private sector or foreign companies to develop gas and coal fields. The gas and coal fields cannot be developed quickly at present because of the existing procurement rules,’ sources said. Petrobangla prepared and placed a draft joint venture policy on Thursday as per the ministry’s directive at an inter-ministerial meeting, headed by the adviser to the prime minister Tawfiq-e-Elahi Chowdhury.

Source: Weekly Economic Times, Bangladesh
Link: http://weeklyeconomictimes.com/news-details.php?recordID=3581
Date: 05 April 2009

Coal mining city to comprise 4 thanas of Dinajpur

Shamim Jahangir

The process for establishing a coal-mining city comprising four thanas in Dinajpur will start this month. Initially the government will establish the coal-mining city with 10,000 people of Birampur, Fulbari, Parbatipur and Nababganj thanas on an experimental basis, Prime Minister Adviser for Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury Birbikram told the New Nation yesterday. Afterward, we will extend the area of the city in phases, he added.
He said they will sit with the planners and experts from LGED, BUET and BRAC soon and seek their opinion on the establishment of the mining city. He said that the ministry has already prepared a draft map to establish the city. “The government will ensure all the modern facilities in the coal mining city. For this, coal mining university, college, school, community hospital and different industrial units will be established at the city,” according to him. State Minister for Environment and Forests Advocate Mostafizur Rahman, who was elected MP from Dinajpur coalmine area, told the New Nation that Prime Minister Sheikh Hasina dreamt of establishing a coal mining city when she visited Dinajpur in 1998.

After formation new government in 2009, she again directed us to find out the possibility of establishing it in Dinajpur. It was also the demand of the people of Fulbari and Parbatipur thanas, he informed. He held out the assurance that the government will give due compensation to the families to be affected for building the coalmining city. Meanwhile, the government constituted a 8-memeber committee to determine compensation for the resettlement of 406 affected families of Barapukuria in Dinajpur coalmine project.
The committee has already identified five worst affected families of Kalupara and Moupukur villages and called for removing them to safer places as they are living in the coal mining area with great risk to their lives and properties. But the members of these five families have vehemently opposed their rehabilitation at other places unless they were given due compensation. “We have already visited the coal mining areas several times and prepared our report on the basis of our talks with the affected families,” a member of the committee said on the condition of anonymity. He further said that they would recommend rehabilitation of more than 200 families of Kalupara and Moupukur villages first and then rest of the families of five other villages in coal mining area in phases.
In reply to a question, he said that the committee is yet to assess the size of compensation for the affected families. The committee will recommend acquiring around 33.5 square kilometres of land at seven affected villages falling in coal mining area by resettling the affected people, he added. An inter-ministerial meeting on March 3 constituted the eight-member committee to prepare a complete package programme for compensating people affected by land subsidence at the coal mine area and for future course of action including acquiring of land. The meeting also asked the committee to review the land acquiring procedures like Jamuna Bridge. The committee is headed by joint-secretary Ahmed Ullah of the Energy and Mineral Resources Ministry.
The government will acquire the land as early as possible for starting open pit mining in future, sources said. ffected people at Barapukuria have become restive in recent times as huge land subsidence affected 300 acres of land and subsequently many houses at seven villages have developed cracks. Following the agitation of Jhigagari villagers the coal production of Barapukuria remained suspended from February 25 to March 2. More land subsidence might occur because of the underground mining. If people continue to live in the mining areas they might be at great risk because of subsidence, sources said. The committee is likely to recommend a guideline for the government to appoint experts or surveyors to determine what amount of compensation of the people in the area need,
‘Before assessing the compensation package, finding the actual number of people living in the area, determination of agricultural and residential land, number of houses, trees and the cost of crops are crucial. Besides, peoples’ views should be taken on where they want to go and what they want to do after relocation,’ sources noted. The government has already constructed and renovated several building to resettle the affected families at West Camp in Dinajpur. The Barapukuria coal field has a reserve of around 389 million tonnes and the authorities will extract 10 to 20 per cent coal from the underground mine in 30 years.

Source: The New Nation, Bangladesh
Link: http://nation.ittefaq.com/issues/2009/04/07/news0119.htm
Date: 07 April 2009

No alternative to open pit mining: Mosharraf

ET Report

Labour and Employment Minister Khandaker Mosharraf Hossain Wednesday said there is no alternative to open pit mining to face the growing energy crisis in the country.
“We will not be able to extract more than 10 to 12 per cent coal through underground mining. On the other hand, the open pit mining can provide us up to 80 per cent yield,” he said while addressing a reception at Bangladesh Chamber of Industries (BCI) at its board room in the city. BCI organised the reception in honour of the minister and two other members of the present parliament - Zahid Maleque, MP, and Golam Dastagir Gazi (Bir Bikram), MP.
Mr Mosharraf is the former president of BCI, while Mr Maleque and Mr Dastagir are present and former directors respectively. Speaking as chief guest, Mosharraf said, as the energy crisis was alarming, the government was trying hard to solve it. He said the governments in the last seven years had failed to increase power production. Instead, the power generation had decreased substantially. “We have to change the current power scenario through coal-based or gas-based systems.” “Without improving power situation, the development of agriculture sector cannot be ensured, let alone the industrial sector.”
The employment minister said the government was also mulling to set up small power plants which could produce as little as 2 megawatt of electricity. “The government is pondering to set up power plants in the coastal belts, which will be run by wind power.” The licence fee for setting up of captive power plant would be reduced, the minister added.

Source: The Financial Express, Bangladesh
Link: http://www.thefinancialexpress-bd.com/print_view.php?news_id=63530
Date: 08 April 2009

Open pit mining can solve power crisis, check desertification-Says Khandker Mosharraf

Staff Correspondent

Labour and Expatriates’ Welfare Minister Khandker Mosharraf Hossain yesterday said open pit mining in the North Bengal’s coal mines would help solve not only power problems, but also check desertification in that region.

“In underground mining method, you can get only 10 to 12 percent coal, but in open mining you get 70 to 80 percent,” he said, expressing annoyance over too much debates among the intellectuals over the methods of mining when the country goes power hungry for years. The minister was addressing a discussion on local industries and employments organised by Bangladesh Chamber of Industries at its office in the city. He, however, said it was his personal opinion, not of the government.

Intellectuals are concerned over environment and agriculture in the case of open pit method, but it has good aspects too, because the open space created after coal extraction can retain a lot of water that can help recharge underground water in the northern areas which run the risk of desertification now, he noted. Besides, tourists can go there, he said, adding that fish production there could also help solve nutrition problem in the country. “If we leave the coal unused and yell, saying shortage and shortage, it will not do. If we cannot generate power, no development of industry nor of agriculture is possible,” the minister said. “Our future energy is coal. It has no alternatives,” he added.

Source: The Daily Star, Bangladesh
Link: http://www.thedailystar.net/story.php?nid=83447
Date: 09 April 2009

Govt’s 3-yr power target may not be achieved-Muhith tells editors

Staff Correspondent

Finance Minister AMA Muhith yesterday said it is unlikely that Awami League would be able to fulfill its election pledge to raise electricty generation by 1,000 megawatts (MW) in the country by the next three years.
“The target of raising the generation of power in three years may or may not be achieved,” Muhith said in response to questions raised by the editors of leading dailies and news agencies about the nagging power crisis at a pre-budget meeting at finance ministry. He expressed doubt that power generation could be increased to 5,000 MW within the next three years as promised by Awami League before the election.
AL, in its election manifesto, pledged to increase the power generation from the present 4000 MW to 7,000 MW during the government’s five-year tenure. Muhith said power is very important for all development activities. He said Siddhirganj Power Plant would be commissioned soon and a substantial supply of power would be available from it.
Regarding Phulbari coal mine, he said a decision in this regard would taken soon after consultations with the people of the area to improve its energy situation. Muhith also praised some good initiatives taken by the caretaker government to increase power generation. Some electricity has been added to the national grid from rental power plants.
The finance minister also said, “The next budget would be big as we will have to give incentives to different sectors to tackle the world economic recession.” Budgetary allocation in social safety nets, power and the agriculture sector would increase, he said. During the discussion on the budget, editors urged the finance minister to lay emphasis on the power sector and employment generation sectors. Stressing on proper implementation of the budget, the editors said care is taken in collecting revenue but not on it’s spending.
Editor of the Financial Express Moazzem Hossain, The Independent editor Mahbubul Alam, News Today editor Reazuddin Ahmed, The Daily Star editor Mahfuz Anam, Channel i Managing editor Faridur Reza Sagar, bdnews24.com editor Toufique Imrose Khalidi, Sangbad editor Altamash Kabir and Manabjamin editor Motiur Rahman Chowdhury took part in the discussion.
Prime Minister’s finance and planning advisor Dr Mashiur Rahman, Prothom Alo editor Matiur Rahman, Jugantor editor Salma Islam, The Bangladesh Today editor Mahmudur Rahman Chowdhury, Finance Secretary Mohammad Tareque, NBR chairman Nasiruddin Ahmed and Economic Relations Division Secretary Mosharraf Hossain were also present.


Source: The Daily Star, Bangladesh
Link : http://www.thedailystar.net/story.php?nid=83561
Date: 10 April 2009

Energy Crisis A Legacy of Inaction & Corruption of Alliance Govt.

Mollah Amzad Hossain


While Awami League with its alliance got a thumping majority in the last national election and the electorates, young and old, endorsed the manifesto: “The Charter for Change”, conspirators are stalking in the shadows to undo the beginning of a new era for Bangladesh. Yet the new government, in the face of the worst energy crisis–a legacy of the inaction and corruption of the four-party alliance, left no time to get down to business. With Vision 2021, it started work on short, medium and long-term planning and implementation programs for energy security and supply. If past can be taken as a guide, AL in its 1996-2001 term did overcome such a crisis and its not going to fail this time. Together, We Shall Overcome.
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Editor Energy & Power Mollah Amzad Hossain recently interviewed Dr Tawfiq-e-Elahi Chowhury, BB, Advisor on Energy to the Prime Minister of Bangladesh. The full text of his extensive interview follows:

EP: Energy Sector of Bangladesh is now in serious crisis. What are your plans to confront it? How long you it will take to get out of it?

TEC: It is only three months this government has come to power. Hon’ble Prime Minister has kept this portfolio given the fact that this sector requires the attention of the highest level. We have to start with what we inherited from previous regime. On stock taking, what we observed that over the last 7 years nothing of note has been done for the development of energy sector. The present situation is the consequence of the inaction over the years. Our government has definite programs to address the energy sector issues in the greater interest of the people. The first priority is what we can achieve by 2011.Then comes what we have in our vision 2021. We are endeavoring to plan actions for short, medium and long term to achieve these goals

Planning and implementation of short-term actions will proceed simultaneously. We have initiated a two-pronged strategy. We have to bring the under-implementation small plants into operation as soon as possible and simultaneously, do everything to ensure steady and uninterrupted operation of existing plants. We are also acting for ensuring smooth fuel supply – gas, for these plants. In our current assessment gas supply constraints have been identified as the single most important impediment. There are limitations in gas production and also restrictions in gas transmission. On a priority basis, we have already arranged to evacuate about 50-60MMCFD stranded gas from Jalalabad Gas field through constructing a spur line. This can facilitate generation of additional 200 MW of electricity.

GTCL has been advised to simulate its Gas Transmission Grid to devise ways of optimizing gas supply. This may facilitate to improve gas supply to Shambhuganj Plant at Mymensingh and Siddhirganj. But everyone should realize there is no instant cure for such long ailment.

The 4-party government in 5 years did only plan and implement the lone 80MW Tongi plant. Other power plants which commenced generation during that time were initiated during previous term of Awami League Government. Some other rental plants and small power plants which were initiated during alliance government and caretaker government are at various stage of installation. These are not enough to confront the crisis. If the alliance government had taken appropriate and timely decisions to set up some large power plants the present crisis could have been averted.

Moreover, the 4-party government cancelled the initiative to set up a 450 MW power plant at Sirajganj at the final stage. WB agreed to finance the project. The promised fund was withdrawn following government’s decision to scrap the project. Responsible persons of the 4-party government should be made accountable for such detrimental action.

We have initiated power factor improvement to improve quality of power supply. This will make 10% improvement of supply using the same amount of power and ensure savings of around 300 MW power everyday. You are aware that many of our power plants have already outlived their effective economic life. These have turned into fuel inefficient plants. Actions have been taken to upgrade such old plants. We need to either rehabilitate or replace these with efficient plants. With these remedial measures we will get more power from existing plants. But it will take quite time. We are planning to do these in phases during winter when the demand for power is relatively low.

EP: Power generation and supply is well below demand. People are in great sufferings. Even gas supply for power generation is well below demand. Why alternate fuel could not be made available? What led to this situation you think?

TEC: Indecision of previous governments especially of the 4-party government created this situation. No initiative was taken for about 7 years to explore new gas resource. No new major gas field was discovered after the large Bibiyana Gas field during previous term of Awami League Government. Neither IOCs nor could BAPEX has been steered to explore new gas resource. There is no other alternative to expand or increase gas reserve without new discovery. Alliance government also failed to proceed with the PSCs signed in second round bidding during Awami League government.

If we think of coal - major alternative of gas, underground coal mining on supplier’s credit was taken during the BNP rule. It had two flaws of which one impacted on the other. Local population was not consulted for taking them into confidence for a project like coal mining. Consequently, people were not made aware of the inevitable mine subsidence and the impacts although the operators of the mine were well aware of it.

Another development you must have observed in Phulbari coal mining initiative. Local people were involved in violent protests against the mining initiative leading to loss of lives. It appears contradictory since local people should welcome such a project provided it is designed appropriately taking into consideration their concerns and expectations For such projects to be successful, local people should be convinced that their life and livelihood would be significantly improved while contributing to national development. No major project can be implemented anywhere ignoring the local people.

This is a major failure of the government. The 4-party government as well as the Care Taker Government played hide and seek with local population regarding Barapukuria and Phulbari projects. We must remember taking local people into confidence is the responsibility of the government. In fact, a stalemate situation has been created in the formulation of coal policy and exploration of coal due to lack of faith and confidence of the people in the past governments.

EP: We are lagging way behind PSMP. According to it power demand for 2009 was projected as 7200 MW and generation capacity should be 10% more than that. But during this period power generation never goes beyond 4200 MW. Will it be at all possible to come out of it?

TEC: I have indicated earlier that power generation can be increased to some extent if gas for power can be enhanced. But there is no magic solution which will overcome the present crisis. But demand side management, energy efficiency and conservation can help ameliorate the adverse impacts of power scarcity. We are taking some urgent actions in these regard.

The Prime Minister instructed us to do the needful so that the farmers have the first right to electricity during the Boro season. Under her guidance, we managed the load in such a way as to ensure uninterrupted power supply for agriculture for irrigation. This might have resulted in some extra burden on the urban population, but together we have managed the challenge.

Promoting energy efficiency is another measure. For example, a recent survey has evidenced that about 300 MW power can be saved if traditional bulbs can be replaced with power efficient CFL bulbs in 10 major towns of Bangladesh. That’s as good as setting up power plants of 300 MW!

CFL is use in many countries now. 4.5 million traditional bulbs were replaced with CFL bulbs in one day in Britain. We have taken up a project with the assistance of World Bank and GTZ which will culminate in replacement of 15million (I crore and 50 lakhs) traditional bulbs with CFL throughout selected urban centers and rural areas in Bangladesh early next year. Besides planning logistics and standardization of CFL, we shall seek public support for the initiative including the local government organizations. I am sure media would not be in wanting to lend its mite.

Emphasizing energy efficiency is another strategy to deal with such power crisis. You may be aware that many of our industries have small gas fired boilers. We have gas shortage and these inefficient boilers are wasting our valuable resources. We are considering converting these to liquid fuel and reviewing the possibility of formulating a policy to covert these within a time frame. Energy audit is also under consideration. This will ensure efficient use of energy at all stages. All boilers, chillers and all appliances will be standardized under legal framework with a view to ensuring energy efficiency Capacity of BSTI will be enhanced to deal effectively with these emerging issues.

EP: Awami League Election manifesto includes addition of generation of 1500 MW power by 2011 and 3500 MW by 2013. But existing power plants are not getting the required gas supply now. Considering this situation how the 5000 MW capacity power plants in the pipeline will get fuel supply? Do you have plans to import coal or LNG?

TEC: You are aware that the Prime minister herself is in charge of this Ministry. Awami League election manifesto has some specific milestones. PM came to ministry immediately after the assumption of office and gave specific guidelines for implementing the election manfesto. Among others, the exploration and development of gas resources came up for discussion. A two-pronged strategy will be implemented: accelerating the programs undertaken by BAPEX and involving IOCs through a competitive process that serves the best interest of Bangladesh. You are aware that ECNEC under the chairmanship of the Prime Minister has approved over TK 100 crore for BAPEX to purchase a modern drilling rig and other drilling equipments. Alongside, specific actions would be put in pace the enhance and strengthen the capacity of BAPEX. Another exploration program at Mobarakpur has been recently approved. BAPEX will focus in areas which have lesser risks but higher prospects while IOCs will be encouraged to invest in areas which have greater exploration risks

You yourself commented that single-fuel dependent energy generation is not sensible. In the same vein we have stressed upon fuel diversification. From that perspective coal is our second most important energy source. We are trying to design an appropriate model taking into consideration the experiences, the mistakes or lack of attention on important mining issues in case of Barapukuria. This will ensure coal exploration that meshes the aspiration of local community and in particular, those that are adversely affected, with the national goal of energy production and security. The Prime Minister has instructed all concerned to mitigate the problems of the affected community of Barapukuria coal mine while ensuring its uninterrupted operation. While the previous governments had put the problems of local community under the carpet, particularly the land subsidence, the Prime Minister not only instructed her Ministry and its implementing agencies to address the emerging issues but also took out time from her busy schedule to listen to the representatives of Barapukria and gave instant directives. We are acting accordingly. EMRD has formed a committee to investigate all relevant issues and suggest recommendations. We are endeavoring to reach a consensus with the local communities and carry forward the mining that best serves all competing interests.
The mining model evolving from lessons learnt from Barapukuria will be the basis for further customization, fitting specific conditions of different coal mines. In this process we shall consult mining, environmental and energy experts including the non-resident Bangladeshis. We expect that in the next 5-7 years, coal would emerge as one of the major primary fuels for power generation in Bangladesh.

We are planning to go for dual fuel option for the power plants now under planning. If gas is not available these will run with liquid fuel. Please bear in mind the government will not limit its power generation vision on gas & coal only. We are actively considering nuclear power generation although it is unlikely to come on stream within the 5 year-term of the present government.

The PM is very keen on exploiting opportunities for renewable energy, Alongside other measures, we are actively considering the applications from renewable source of energy. We are exploring the possibility of solar power generation in commercial way apart from limited use as solar home system. Especially, the possibility of running irrigation pumps with solar power is being actively explored. If we succeed this will drastically lower power requirement for irrigation.

It was a common belief that Bangladesh is not ideal for wind power generation. Now technology has significantly advanced. Modern wind turbines do not need strong wind flow. We will work to explore the possibility of introducing this technology. Beyond this we are thinking about supporting bio gas plants and also exploring possibility of energy from waste. The challenges for harnessing these diverse sources of energy on a large scale are daunting but we shall keep pursuing and I am hopeful of some success at the end.

Few large IPPs are on the drawing board and donor agencies are prepared to stand by us in the competitive bidding process. But the recent international financial melt down has made their prospects for financing uncertain. While we shall go for the bidding, alternative modalities for implementation would also be developed, should we face limited response.

EP: Our Gas production capacity is 1850 MMCFD against present demand of 2100 MMCFD. Another 60 MMCFD additional production is expected from the end of March. Apart from this is there any possibility of increasing gas production by 2011 and if so from where? What will be the gas scenario in 2013? If we fail to discover new gas reserve we will have no alternative but to rely on coal. Otherwise we will have to import liquid fuel or LNG. How do you view this situation?

TEC: Petrobangla is working on a gas production augmentation program. The goal is to maximize production from existing fields without jeopardizing the structures. This appraisal-cum-development program should yield some positive results. The exploration programs of BAPEX would also put on a fast track. We shall also nudge the IOCs to bring forward some of their exploration programs. All these would lead to increase in gas supply although it is difficult to speculate the number. You are right in suggesting that coal would also have to be developed simultaneously which I have elaborated before. As a contingency measure, we should not exclude the possibility of LNG import in the intervening period.

EP: Cairn will not further explore at Magnama and Hatiya if Petrobangla do not agree for higher price than agreed in PSC or allow them to sell to third parties directly in local market. In this scenario it has been recommended to approve it. There are complaints that it is a major departure of PSC provision. What is your opinion?

TEC: We are examining the proposal both in the context of the terms of the PSC, incentives for the contractor and the greater interests of Bangladesh. While exploration for new resources are critical now given the shortage we are in, we have to be equally aware of the longer term energy supply and security of the country. A balance has to be struck.

EP: French Company Total has relinquished block 16 & 17. It is told that their decision is influenced by the gas structures they found are not economically viable to explore. Cairn has also relinquished block 5 &10. Only Chevron has expressed intention to carry on exploration efforts in block 7. So in the next 5 years we can not expect major discovery by IOCs. Do you think it will be possible for BAPEX alone to meet our demand?

TEC: There is no last word in exploration. So do not make conclusive judgment if blocks are relinquished by contractors. We are looking into different options in this regard. BAPEX would be put into fast forward mode to which I have already referred to already. Alongside, we shall examine joint venture with BAPEX and also involvement of IOCs in the future. New policy guidelines would be put in place if conditions so require.

EP: Are you going to approve the Petrobangla proposals to award some PSC s to IOCs to start exploration in offshore? Or you will go for fresh bidding?

TEC: The last Caretaker government took the initiative for awarding exploration contracts to some IOCs for offshore blocks. We are examining the papers and after due diligence, firm up our position. Our government is only 3-month old and you should allow some time for arriving at decisions on such important national issues.

EP: Demarcation of Maritime Boundary in offshore exploration is a sensitive issue. This can create dispute with neighbors. How you are approaching this?

TEC: An expert committee is working on it. We will finalize maritime boundary in the shortest possible time. Ministry of Foreign Affairs is actually handling this matter.

EP: Other than Barapukuria another proposal for coal mining at Phulbari is waiting government approval. Asia Energy is waiting for 3 years after submitting proposal. It has been told since last Alliance Government that decision will be taken in accordance with coal policy. Care Taker Govern echoed the same. But coal policy is not yet approved. Which route you are following on this? Will you also work on coal policy or will start coal mining?

TEC: You should have asked the past governments why even after years they could not finalize a coal policy. Ours is a democratically elected government and we have mentioned our overall stance in the election manifesto. The government has already started evaluating the legacy of past regimes. We shall finalize the policy framework in consultation of all stakeholders. There are of course detractors. But a people’s government as ours is, we shall decide in the best interest of the country. While earlier governments dealt with the Barapukuria mine without taking the local communities into confidence, the Prime Minister took time out to talk directly with them. This amply demonstrates the overall strategy of the government.

EP: Will you to take fresh initiative to implement Tri –Nation Gas Pipeline from Myanmar? Is there any plan to import power from Nepal and Bhutan? If so, when?

TEC: The Prime Minster has on occasions emphasized the benefits of regional cooperation, particularly in the energy sector. Such initiatives can be bilateral or multilateral. We shall initiate discussions with our neighbors soon. Again, in the election manifesto this has been stated clearly.

EP: Some estimates evidence that about 20billion dollar investment is required in the next 5 years for Bangladesh Energy sector. Where from this will come? What are Government plans? How much of this will come from donors, how much from FDI and how much Government will invest?

TEC: Large investments are required, I agree. But I cannot put an exact number yet. One cannot deny that a significant part would have to come as FDI and from multilateral sources. World Bank and ADB have not only agreed to take part in financing these investment programs but also help raise funds from domestic and international sources. Although the current melt down in the international financial markets had cast some doubt about such prospects, the resolve in the recent G20 meeting and in particular, the decision to fund trade and investment, would soon release export financing from the developed countries to facilitate FDI flows in Bangladesh.

You may recall that during the last term of Prime Minster Sheikh Hasina, Bangladesh was able to attract large FDI in the energy sector along with some IPPs with one of the lowest power tariffs. Under her leadership, this time around, we shall do even better.

Source: Energy & Power, Bangladesh
Link : http://www.ep-bd.com/news.php?cat_id=5&archive=24&namee=INTERVIEW
Date: 16 April 2009