[🇧🇩] Energy Security of Bangladesh

[Saif]

600MW power outage can be cured overnight

Bangladesh currently reels from load shedding to the tune of around 2,000-3,000 megawatts of electricity daily as the demand far outstrips production, market-insiders say, although much of it can be healed readily. Despite having the shortfall in electricity generation, state-run Bangladesh Power

thefinancialexpress.com.bd

600MW power outage can be cured overnight
Operating six idle HSFO-based power plants under 'No-Electricity, No-Payment' arrangement holds the key
M Azizur Rahman
Published :
Sep 14, 2024 23:56
Updated :
Sep 14, 2024 23:56

Bangladesh currently reels from load shedding to the tune of around 2,000-3,000 megawatts of electricity daily as the demand far outstrips production, market-insiders say, although much of it can be healed readily.

Despite having the shortfall in electricity generation, state-run Bangladesh Power Development Board (BPDB) has kept six furnace-oil-run power plants, having the generation capacity of around 600 MWs, idle as the interim government has yet to decide on continuation of their operation under 'no-electricity, no-payment (NENP)' mechanism, they have said.

Officials think if such six furnace-oil plants got approval for continuing electricity generation under NENP, they would be able to contribute to reducing at least one-third of the load shedding without any immediate investment from the government.

"Of the peak-load power plants, these are most economical because they are the only plants among the 150 new ones that do not entail capacity payments," says a senior BPDB official.

"Operating these plants poses no financial burden on the government either," he adds.

Typically, load shedding occurs for only 2-3 hours per day, equating to 30 to 40 per cent of the time when additional power is needed. At this plant-load factor, the NENP plants are 8-15-percent cheaper than other high sulfur-fuel oil (HSFO)-based plants that require capacity payments, the official explains.

Load shedding primarily occurs during peak periods, and these HSFO-based plants are particularly suited to such scenarios.

Unlike coal- or liquefied natural gas (LNG)-based plants, which require longer startup times and have slower load- adjustment capabilities, HSFO-fired plants can be activated instantly, ramped up or down quickly, and shut down when demand decreases.

Continuation of such power plants is also needed to meet the mounting power demand, he suggests.

"Over the past several years, Bangladesh got almost all sorts of power plants as part of its energy diversification, resulting in overcapacity," says research director of the Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem.

To ensure the country's future energy security at affordable costs, he opines, the government now requires to streamline the energy sources.

The policy researcher suggests that the provision of capacity payment should be withdrawn from all the rentals and quick rentals and 'no-electricity, no -payment (NENP)' clause should be applicable to all of them.

Speaking in the same vein as CPD's Dr Moazzem, president of Bangladesh Independent Power Producers' Association (BIPPA) Faisal Khan also opines for continuation of NENP mechanism to buy electricity from the HSFO-based power plants.

"The BPDB only pays for the electricity actually produced. Since the project capital costs and loans are paid off during the initial power -purchase agreement (PPA), there is no requirement for capacity payment," he told the FE in support of the NENP method.

Power producers are motivated to maintain high operational efficiency to get optimal dispatch.

"This model can promote a more dynamic and competitive energy market. It will be good for Bangladesh to run expired plants in this model as the infrastructure is already available and no further capital expense is required," says the BIPPA top brass about the merit of kick-starting the laid-off units as an immediate cure for nagging outages reported from different corners of the country.

Sources have said despite having excess electricity-generation capacity, Bangladesh has been struggling to cope with an ever-growing demand, resulting in acute load shedding across the country amid sweltering heat, the rural areas being the worst sufferers.

Improper energy-mix and inefficient infrastructure, coupled with volatile foreign currency and global energy markets, pushed the situation in dire straits, market-insiders have said. They said riding on installations of around 150 new power plants, the previous 'authoritarian' government had declared 100-percent electricity coverage in March 2022 as the first country in South Asia.

But, unfortunately, after achieving such pride, the country started suffering from electricity load shedding again due to newer sort of challenges -primary energy crisis and the piling up of overdue payments against energy purchases by state-run entities.

Load shedding meddled on the very first year of achieving the feat as state-run Petrobangla had to stop purchasing liquefied natural gas from international spot market due to skyrocketing of its price as high as a record US$70 per million British Thermal unit (MMBTu).

The Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) then relied more on privately owned high-sulfur fuel oil (HSFO)-run power plants to augment generation along with coal-fired power plants amid continuation of imports from neighbouring India, a senior BPDB official told the FE Saturday.

Again, during June 2023, when the countrywide load shedding intensified amid the shutdown of a number of coal-fired power plants, including the Payra 1,244MW coal-fired plant, due to coal scarcity caused from mounting overdue payments, the gas-fired power plants and HSFO-based power plants augmented generation to overcome the crisis, the official added.

Electricity generation from coal-fired power plants and HSFO-fired power plants and importation also ramped up over the past several months when gas-fired power plants were struggling to generate electricity due to short supply of the fuel caused from the shutting of operation of Summit LNG Terminal until September 11.

Market-insiders say continuation of such power plants is also needed to meet the mounting power demand.

According to latest official data of the BPDB, the country's annual electricity consumption soared by around 25 per cent over the past four years from around 70,534 million kilowatt-hour (MkWh) during fiscal year (FY) 2018-29 to 88,450MkWh during FY 2022-23 amid energy diversification.

Although the power-consumption figure of FY 2023-24 was not available, the BPDB official said it grew by around 8.0 to 10 per cent.

Despite increase in power consumption, contribution of natural gas in overall power generation declined to around 52 per cent during FY 2022-23 from 72 per cent during FY 2019-20. Contribution of HSFO-based power plants slumped to 21 per cent during FY 2022-23 from 27 per cent during FY 2022-23.

Use of expensive diesel-fired power plant continued to grow over the past several years as it reached 2.8 per cent of the country's overall power generation during FY 2022-23 from only 0.8 per cent during FY 2020-21.

Power import from India, including that of Adani's Jharkhand power plant, increased to 12 per cent during FY 2022-23 from 9.0 per cent during FY 2021-22.

Contribution of coal-fired power plants almost doubled to 11 per cent during FY 2022-23 from 6.0 per cent during FY 2021-22.​

 

[Saif]

Energy Adviser seeks Swiss cooperation in renewable energy, advanced technology

Adviser of the interim government for Power, Energy and Mineral Resources, Road Transport and Bridges and Railways Muhammad Fouzul Kabir Khan has sought the cooperation of the Swiss government in the fields of renewable energy and advanced technology. He also invited Swiss businessmen to participa

thefinancialexpress.com.bd

Energy Adviser seeks Swiss cooperation in renewable energy, advanced technology
UNB
Published :
Sep 15, 2024 21:43
Updated :
Sep 15, 2024 21:43

Adviser of the interim government for Power, Energy and Mineral Resources, Road Transport and Bridges and Railways Muhammad Fouzul Kabir Khan has sought the cooperation of the Swiss government in the fields of renewable energy and advanced technology.

He also invited Swiss businessmen to participate in the development of Bangladesh and invest in business.

He made the call when Ambassador of Switzerland to Bangladesh Reto Renggli met him on Sunday.

The Swiss envoy was leading a delegation in the meeting in the adviser’s room in the Ministry of Power, Energy and Mineral Resources at the Secretariat.

The Advisor discussed the activities he has undertaken in a short time after taking charge to ensure transparency and accountability in the power and energy sector. He welcomed Swiss companies to participate in various development activities of Bangladesh.

Fouzul Kabir said that he recently visited the Matabari power plant project. The project also includes deep sea ports, economic zones, railways and road projects. But it is not possible to get real benefits from just setting up power plants, until other projects are implemented.

He observed that a huge number of unplanned development projects in the power and energy sector had been taken up and implemented during the previous government’s tenure.

“In most cases projects have been implemented at a cost much higher than the reasonable one which has not been value for money”.

He said that from now on, he will give importance to implementation of big projects with small projects at low cost.

He also noted that emphasis will also be laid on renewable energy generation and use of environment-friendly energy.

Swiss envoy Reto Renggli welcomed the adviser for assuming offices of three important ministries and said it is a very challenging task. The ambassador appreciated the steps taken by the current government in a short period of time.

He expressed hope that the measures taken including the suspension of the controversial law in the power and energy sector and the cancellation of Section 34A of the BERC Act, introducing the open tender process in government procurement, removal of the secretaries from the post of chairman of the companies under their control will play a significant role in ensuring transparency and accountability.

The Ambassador assured that the offer of investment and technology assistance to Bangladesh will be seriously considered.​

 

[Saif]

S Alam takes Tk 3,287cr in power capacity charge

The coal-based 1,224MW Banshkhali power station, owned by the controversial S Alam group, realised up to more than double the amount received by its peers in capacity charge payment in the 2023–24 financial year, revealed data obtained from the Bangladesh Power Development Board...

www.newagebd.net

S Alam takes Tk 3,287cr in power capacity charge
Emran Hossain 18 September, 2024, 23:35

The coal-based 1,224MW Banshkhali power station, owned by the controversial S Alam group, realised up to more than double the amount received by its peers in capacity charge payment in the 2023–24 financial year, revealed data obtained from the Bangladesh Power Development Board.

The coal-fired power plants compared here include the 1,600MW Adani power station, 1,320MW Rampal power station, 1,320MW Payra power plant, and 370MW Barishal power station.

The capacity charge received by the Banshkhali power plant, energy experts pointed out, shines the spotlight on the typical Bangladesh power scenario— power deals coupled with mismanagement earning private investors predatory profits.

Capacity charge represents the amount of money payable under power deals by the government irrespective of electricity generated, ensuring private investors maximum return on their investment.

The Banshkhali power station generated 240.29 crore units of electricity last year and received Tk 3,287.86 crore in capacity charge, receiving Tk 13.68 while producing a unit of electricity.

The Payra and Barishal power plants, on the other hand, received Tk 5.69 and Tk 5.99 respectively for producing a unit of electricity during the same time, revealed BPDB data.

The Payra power plant received Tk 4,292 crore in capacity charge and generated 754.87 crore units of power.

The Barishal power plant was paid Tk 477.52 crore in capacity charge and produced 79.74 crore units of electricity.

The Rampal power plant received Tk 7.96 in capacity charge per unit of electricity. It was paid Tk 2,236.92 crore in capacity charge and produced 281.15 crore units of electricity.

The controversial Indian business group Adani received Tk 6.6 in capacity charge per unit of electricity produced. The power plant set up in Jharkhand received Tk 5,392.3 crore in capacity charge and produced 816.66 crore units of electricity.

The large amount of capacity charges indicates that significant parts of the power plants’ capacity remained unused last year.

The time the power plants remained out of operation, however, was not always due to the country’s inability to take power from them.

There were times when the power plants remained out of operations because of technical glitches and the failure to manage fuel.

Except for the Payra power plant, the other power stations manage their own coal. The Bangladesh government has a long-term supply deal with Indonesia for procuring coal for the Payra power plant.

‘It is apparent the power plants were paid capacity charge anyway, indicating loopholes in the power deals,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development.

Bangladesh’s power deals did not follow a pattern and varied case-to-case as they were achieved through one-to-one negotiation bypassing the standard bidding procedure.

The past Awami League government, toppled now by a student-led mass movement, carried out power projects under an indemnity law over the last one and a half decade.

The Banshkhali power plant was used less than 21 per cent of its capacity, according to the BPDB. The Adani power plant was used 60 per cent of its capacity.

‘One of the reasons behind the poor use of Banshkhali power plant was the delay in installing the transmission network needed to evacuate power from the plant,’ said a BPDB official seeking anonymity.

Delays in building transmission networks turning power plants to economic burden are nothing new. A unit of the 660MW power plant remained unused for over a year in the absence of adequate transmission network.

Last year, Banshkhali produced the costliest coal power spending Tk 20.53 for generating a unit of power, followed by Tk 16.11 spent by Rampal power station, Tk 15.14 spent by Adani, Tk 13.16 spent by Barishal power plant and Tk 11.87 spent by Payra power station.

The Banshkhali power plant, which came into operation with its both units between September and October last year, frequently grabbed headlines when the past government intervened in its favour sending police to use lethal force, killing at least 11 people.

Located in Chattogram district, the power plant faced strong opposition from the local people since the very beginning as it affected thousands of families and many villages.

The plant was set up without having a proper environmental impact assessment.

The government also waived the stamp duty of about Tk 3,170 crore on land lease agreement and financing documents for the SS Power 1 Limited under the Private Sector Power Generation Policy.

The interim government has employed a committee of experts for evaluating power deals signed under the indemnity law during the autocratic regime of Sheikh Hasina.

Bangladesh’s current installed power capacity is 27,791MW but the country struggles to constantly generate 13,000MW.

Only six coal-based power plants realised Tk 15,686.6 crore in capacity charge in the last fiscal.

In September last year, the past Awami League government revealed that Tk 1.04 lakh crore was spent in paying capacity charge in the 14 years since the government assumed power in 2009.​

 

[Saif]

Bangladesh to sign deal to import power from Nepal soon: adviser

Bangladesh is poised to sign the tripartite agreement with Nepal and India soon to import hydropower from Nepal via Indian transmission lines, according to Power, Energy and Mineral Resources Adviser Md Fouzul Kabir Khan

www.thedailystar.net

Bangladesh to sign deal to import power from Nepal soon: adviser

Bangladesh is poised to sign the tripartite agreement with Nepal and India soon to import hydropower from Nepal via Indian transmission lines, according to Power, Energy and Mineral Resources Adviser Md Fouzul Kabir Khan.

"A delegation of the interim government will visit Nepal soon to sign the agreement for import and export of power," he said while speaking as chief guest at a reception programme marking Nepal's National and Constitution Day at a city hotel last evening.

Bangladesh, Nepal and India recently agreed to sign an agreement to import 40MW of electricity from Nepal via India six years after they reached an understanding on energy cooperation, according to the official source.

At the reception, hosted by Nepal Embassy in Dhaka, the adviser expressed satisfaction over the growing engagements between the two countries.

Commending the friendship and cooperation of Nepal and Nepali people, he underscored the need to accelerate bilateral cooperation in areas of trade, energy, connectivity, and people-to-people contacts, among others.

In his welcome remarks, Ambassador Ghanshyam Bhandari highlighted that the day marked the historic promulgation of a democratic and inclusive Constitution in 2015.

"The day reminds us of the Nepali spirit of patriotism, democracy, and diversity, and is a testimony to the Nepali people's ability to resolve their political issues and differences on their own," he said.

He said as Bangladesh is passing through a transition period, Nepal is committed to stand by the interim government and its people with solidarity to provide all support and cooperation.

The envoy also mentioned that a tripartite deal on the export of 40MW electricity from Nepal to Bangladesh through the Indian transmission line is expected to be concluded sometime soon.

Shedding light on the relationship between Nepal and Bangladesh, he emphasised the need to leverage the transformative power of solidarity and cooperation to boost connectivity and propel economic development and prosperity for the mutual benefit of the peoples of both countries.

A cultural programme showcasing Nepali folk-dance performances was held in the second half of the event.

The event was attended by political leaders of Bangladesh, high-level government officials, ambassadors, heads of missions and diplomats, representatives of international organisations, business leaders, media personnel, and members of the Nepali community living in Bangladesh.​

 

[Saif]

Three dozen renewable energy projects await govt approval
Proper scrutiny of projects a must
M Azizur Rahman
Published :
Sep 23, 2024 00:28
Updated :
Sep 23, 2024 00:28

Nearly three dozen renewable-energy projects with around 3,287-megawatt generation capacity are now stalled at the final stage of inking power purchase agreements (PPAs) with a state power agency.

Sources say with initial government consent before the August changeover, the private entrepreneurs were about to enter into PPAs with state-run Bangladesh Power Development Board (BPDB). But now the process faces delays.

Bangladesh's overreliance on imports of fossil fuels will escalate further if these projects do not get approval for quick start, relevant sponsors fear.

Once implemented, these projects will help the country to ease ever-escalating capacity-payment burdens as all these renewable-power projects will be implemented under 'no electricity, no payment' mechanism with no capacity -payment provisions, they point out.

The circles concerned, however, suggested proper probe into the status of the solar power projects---whether they got approvals bypassing competition under the much talked-about indemnity law.

These projects are aimed at checking Bangladesh's growing over-dependence on the imports of 'expensive' fossil fuels like liquefied natural gas (LNG), petroleum products and coal, to ensure the country's future energy security, a senior Power Division official told the FE Saturday, preferring anonymity.

"The initial works of these renewable projects got momentum a couple of years back against the backdrop of scarcity of conventional fuels like petroleum products, natural gas, and LNG and their soaring prices on the international market after the outbreak of Russia-Ukraine war," he says.

The ongoing Russia-Ukraine war exposed a new dimension of primary-energy situation across the globe, which had prompted Bangladesh to expedite the move to increase the share of renewable energy in the overall electricity- output basket, he adds.

Bangladesh had to stop purchasing LNG from spot market and reduce imports of diesel, furnace oil and coal under an austerity measure, resulting in enforcement of load-shedding.

The country is already struggling to foot mounting energy-import bills worth around US$2.20 billion and sought budgetary support from the multilateral donor agencies, including the World Bank, to get fiscal support.

"Foreign direct investments (FDIs) worth around US$4.5 billion will be at risk and initial investments worth around US$200 million will go down the drain with further delaying of these project works," general secretary of Bangladesh Sustainable and Renewable Energy Association (BSREA) Tofael Ahmed told the FE Saturday.

He said these renewable -energy projects were initiated during the previous government and most of the project sponsors obtained letter of intent (LOI) from the Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) several months back and were waiting to ink PPAs with the BPDB and implementation agreements with the government.

But the fall of the deposed Sheikh Hasina regime on August 5 pushed these projects into 'uncertainty' as the interim government has decided to halt further negotiations over the projects that were in the process of final approval under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010.

"We are yet to get any formal letter from the government over the halting of the renewable-energy projects that are in the pipeline of implementation," said senior vice president of Bangladesh Sustainable and Renewable Energy Association (BSREA) Mostafa Al Mahmud. "But if the government decides to scrap these LOIs, it will be suicidal," he said.

The issuance of LOIs by the Power Division to these renewable power plants meant the government intended and agreed to ink final deals with the project sponsors to move forward with these projects, he said. In the process of obtaining LOIs, the private-sector entrepreneurs have invested around US$200 million from foreign lenders through banking channels, he mentioned.

For full implementation of these projects foreign direct investments (FDIs) worth around US$4.5 billion from different countries, including China, France, Malaysia, Singapore, South Korea, Germany, Japan, the USA, the UAE and Saudi Arabia, are in the pipeline, he said.

The renewable-energy sponsors also purchased and acquired necessary lands, constituted respective special purpose vehicles (SPVs), carried out feasibility studies and were at the final stage of financial closures, said Mr Mahmud.

Although these renewable -energy projects attained approval during the previous government, due diligence was followed during the process of selecting sponsors, he said.

"The interim government can scrutinize further the selection process to ensure transparency and accountability," said the BSREA leader, adding that the tariff rates of all the solar-power plants is very competitive and below 10 US cents per kilowatt-hour.

Besides, half a dozen project sponsors have already completed 100-percent purchase of required lands as they achieved the 'go ahead' from the previous government. Mr Mahmud said all sorts of renewable-energy projects are among the projects that obtained LOIs, he said, adding that 2,942 MWs are of solar plants, 320 MWs wind-based power plants and the remaining 25 MWs are of waste-to-energy projects.

Foreign investors have already invested a portion of their committed investments to carry out initial works. They will pour in further funds after the inking of the PPAs and IAs, he said.

He notes that if the interim government goes for scrapping LOIs, a negative message will go to the foreign investors.

"If new tenders are floated, the foreign investors might not come up again due to erosion of confidence and loss of their invested money," the BSREA top brass fears. And it will be time-consuming, too.

Most of the project sponsors are genuine businessmen, said Mr Mahmud.

"To avoid controversy the government can cancel some projects that were awarded on political grounds, including those of former foreign minister Hasan Mahmud, former state minister for shipping Khalid Mahmud Chowdhury and former religion minister Faridul Haque Khan Dulal," he suggests.

Sources said there could be some more projects that took recourse to dubious means to get approval and those need to be dentified.​