Coal mines up north, power plants down south

All five coal mines of the country are in the northern region. But almost all of the 20,000 MW coal-fired power plants are in the south. As a result, there is hardly any possibility to run these power plants with local coal. The plants, instead, will run on imported coal

Energy experts think that the interests of some local and foreign business groups are behind setting up the power plants at antipodes to the local coal sources. They said the Bay of Bengal in the south is important for geo-strategic reasons.

The energy experts also said a ‘deep seaport’ for unloading coal is being built at Matarbari in Cox's Bazar and one coal-fired power plant after another is being constructed in the southern region including Cox's Bazar because of this.

These coal-fired power plants are part of the master plan of the power sector in Bangladesh. Tokyo Electric Power Company (TEPCO), a Japanese company, formulated this master plan in 2010 with the funding of Japanese aid agency JICA. In 2010, the master plan was first drafted for a 30-year period to generate 60,000 MW of electricity, of which 35 per cent was coal-based. After 6 years, it was amended to reduce the amount of coal-based electricity to 25 per cent.

Shortly after the master plan in 2010, JICA proposed to build a seaport for unloading coal at Matarbari in Cox's Bazar. At the same time, they offered a loan for the construction of a 4,000 MW coal-fired power plant there. The government later agreed to both of the proposals.

Meanwhile, the coal port is being built at Matarbari with JICA funding. Next to it, Sumitomo Corporation of Japan, Toshiba Corporation and IHI Corporation are jointly working to construct a 2,000 MW coal-fired power plant.

Energy experts said JICA is simultaneously a consulting firm, which is building ports to do business and is also investing in power plants. This is a conflict of interest.

About the matter, Badrul Imam, a professor and energy expert in the geology department of the Dhaka University, told Prothom Alo that all coal-fired power plants are in the country’s south. But all the coal mines of the country are in the northern region.

He also said if a power plant could be set up at the source of the coal, electricity could be obtained at an affordable price. This has been done to protect the interests of those who want to do coal business in the country. If coal is extracted under government management, the local and foreign vested interest quarters will not get a cut of the profits.

Badrul Imam wonders that even if JICA wanted to invest in coal ports and coal power plants, why they were allowed to formulate the master plan? In fact, JICA made the plan in a way that they could do their business.

Under this master plan, one agreement was signed after another to build the coal-fired power plants. Almost all of these plants are in the southern part of the country. Subsequently, the government decided to run these power plants by importing coal from abroad using ports under-construction by JICA. The sites for construction of 16 power plants have already been selected. Land has been acquired for almost all the plants. Construction of several power plants has already started. As much as 15,752 MW of electricity will come from the 16 power plants.

Out of 16 power plants, the power department has planned to build four in Cox's Bazar, four in Patuakhali, two each in Bagerhat, Chittagong and in Meghnaghat near Dhaka while one each in Munshiganj and Dinajpur’s Dighipara. Apart from Dighipara, 15 power plants are far away from coal mines.

As a result, these power plants will run on imported coal. Meanwhile, the 1,320 MW power plant in Patuakhali’s Payra has commenced generation. It runs on coal brought from Indonesia. The much talked about Rampal Power Plant in Bagerhat is scheduled to start in February next year. It will also run on imported coal. The coal of these power plants will be unloaded at the Matarbari coal port built with the funding of JICA. The Japanese media is calling it a deep seaport.

Two senior officials of the government's power department told Prothom Alo that after 10 years, the government realised that Japan's JICA had formulated the master plan for the power sector in a way so that they can do business. That is why the government will amend the master plan.

Meanwhile, 50 civic organisations and climate movement platforms from different countries including Bangladesh and Japan have demanded that the Japanese company TEPCO no longer be considered as a consultant in the process of revising the master plan of Bangladesh's power sector.

A letter to this effect was sent to the planning minister, finance minister, state minister for power and energy and the chairman of the parliamentary standing committee on environment, forests and climate on 20 August. The letter was also sent to the foreign minister of Japan, the president of JICA and the president of TEPCO.

The organisations argue that TEPCO has serious conflicts of interest with Bangladesh's energy and power sectors. That is why it cannot be involved in revising the master plan.

Among the organisations signing the statement are Bangladesh Poribesh Andolon (BAPA), Bangladesh Environmental Lawyers Association (BELA), Campaign for Good Governance (SUPRO), Nagorik Sanghati, Campaign for Sustainable Rural Livelihoods (CSRL) and some others. In addition, foreign organisations such as Japan Center for a Sustainable Environment and Society (JACES), Japan’s Friends of Earth, Germany’s Urgewald, Oil Change International of the United States, Growthwatch of India, NGO Forum on ADB and some other others signed the letter.

Hasan Mehedi, member secretary of the Bangladesh Working Group on External Debt, said TEPCO is simultaneously involved in the formulation of policy in the power sector and the implementation of projects. It is a serious conflict of interest.

Policy formulation and implementation can never be done by the same person or organisation, he added.

According to the preliminary statistics of the Bangladesh Geological Survey Department, the total coal reserves in the five coal mines of the country are about 3 billion tonnes. The feasibility study of three of these mines has been completed. Barapukuria in Dinajpur, one of which, has already started extracting coal. Two other are in Dighipara and Phulbari of Dinajpur. The cost of power generation will be much lower if power plants can be set up near the mines.

The moisture content of coal found in Dighipara of Nawabganj in Dinajpur is low. It is also low in sulfur, which is considered as high quality coal. This coal exists in an area of about 30 square kilometres. At a depth of 320 to 506 metres from the surface, coal reserves are 706 million tonnes. Of this, 90 million tonnes of coal can be extracted in 30 years if coal is extracted by underground tunnel system. It is possible to generate one thousand megawatts of electricity with this coal in the mine.

Barapukuria Coal Mining Company Limited (BCMCL), a state-owned company, signed an agreement with a consortium of two German and one Australian company in May 2017 to fix the storage and extraction of Dighipara coal.

State minister for power, energy and mineral resources Nasrul Hamid told Prothom Alo over mobile phone that the foreign consortium has submitted a detailed feasibility study report of 1,700 pages. It has been learnt that coal in Dighipara is of high quality. That is why the level of environmental damage will be very low.

He also said the government will not do anything that destroys the environment. If it is possible to mine by protecting the environment, then coal will be extracted from Dighipara.

The quality of coal found in Phulbari is as good as Dighipara’s coal. The government had a plan to export the coal extracted by foreign companies. There was also anger among the local people about the excavation method. Due to the movement and the government's indifference, the Phulbari coal mine project is no longer going ahead.

The three demands of the National Committee for Protection of Oil-Gas-Mineral Resources and Power-Port regarding Phulbari coal mine are, coal cannot be extracted through open mining system, coal cannot be exported abroad and coal cannot be extracted by foreign owned companies.

There was a movement in favour of the three demands. At one stage of the movement on 26 August 2006, three villagers were killed and more than two hundred were injured in the firing of the then BDR (now BGB). The movement was supported by the then leader of the opposition and president of the Awami League Sheikh Hasina. She then joined the rally at Phulbari and announced that if she came to power, she would not extract coal in open mining.

The other two mines are at Jamalganj in Joypurhat and Khalaspir in Rangpur. The feasibility study of these mines has not been done yet. So, the government has no idea how much coal is there and what kind of challenges will have to be faced in extracting it.

According to the master plan of the power sector, Bangladesh will have capacity to generate 24,000 megawatts of electricity in 2021, 40,000 megawatts in 2030 and 60,000 megawatts by 2040. Meanwhile, power plants have doubled that of the demand. For this reason, the government has to keep half of the power plants inoperative. The government's losses are increasing.

According to the Bangladesh Energy Regulatory Commission (BERC), from the 2013-14 fiscal to the last financial year, the government paid Tk 614.62 billion as rent or capacity payment to private owned power plants. This is how the government paying for the inactive plants.

More than one energy expert believes that a large number of power plants should have not been built without expanding the country's industries. There is no possibility of the demand for power in the country to suddenly go up in the next few years. Given the circumstances, this huge power generation with imported fuel will rather increase the foreign debt of the country.

Former caretaker government's chief adviser and energy specialist M Tamim told Prothom Alo that if the electricity is generated with domestic coal, the power cost will be in affordable range, cutting down import cost of billions of taka.

The government’s current policy is not to extract coal. If this policy has not been changed, there will be no benefit in having such a good quality coal in Dighipara coal mine.

*This report appeared in the print and online editions of Prothom Alo and has been rewritten for the English edition by Toriqul Islam