The power sector's dependency on imports was planned

M Tamim

Dr M Tamim is the dean of the Chemical and Material Engineering Faculty of the Bangladesh University of Engineering and Technology (BUET), professor of the petroleum engineering department, energy expert and former special assistant to the chief advisor of the caretaker government. In an interview with Prothom Alo's AKM Zakaria, he talks about the prevailing power and energy crisis, the energy policy, dollar crisis and the stalemate in onshore and offshore gas exploration.

Q :

Given the plans with which the government was taking the power sector ahead, could it be conceived that such a power crisis would emerge? What is your assessment?

There were apprehensions that we may fall into problems over arranging funds for the primary energy required for power generation. Given our power sector planning, according to my assessment, by the year 2023 we will be 90 per cent dependent on imported energy. That means expenditure on importing primary energy for power generation will reach USD 20 billion then. Presently we spend around USD 10 billion to 12 billion. During the planning, questions were raised from various quarters as to where the funds will come from. I raised this question too. We were told that the way that the economy is advancing, funds will not be an issue.

Q :

So why do we face this problem now?

I feel that the decision was taken without due thought or consideration to reality. The international market, the risk of availability, supply shortfall, risk of increased prices or hard economic times -- none of this was taken into consideration.

Q :

Why have we become so dependent on imports for primary energy in power generation?

Actually this important dependency was planned. We assumed that the economy would do well and thus proceeded towards import dependency. The logic was that the energy sector of countries like Japan, Taiwan and South Korea was completely import-dependent. The question is whether our economy is as strong as theirs. It wasn't taken into consideration that just as the economy can fare well, it can fare badly too. The Perspective Plan 2041 of the country's power sector calculated a 9 per cent growth over 20 years. This is both over-ambitious and unrealistic.

Q :

You said that by the year 2030, around 90 per cent of the power will be generated with imported fuel. How much is it now?

Presently we generate 15,000 MW of electricity, of which 6000 MW is gas-fired. Of this, 5000 MW is from our own gas. That means, energy is imported for 60 to 65 per cent of power production at present.

Q :

How wise is it to render power generation so import-dependent?

The fact remains that we have to import energy for power production and that is reality. It is not possible for us to be wholly self-dependent in this regard. When our gas production began to dwindle, we had to shift towards import-dependent oil-fired power plants. There was no other alternative at the time and so a special power act had to be drawn up under a special arrangement. But that was a temporary measure, for three to five years. We should have, at the same time, paid attention to increasing gas production.

In 2018 we began importing LNG. Perhaps that was necessary too. But the mistake we made was not to simultaneously pay attention to gas exploration on grounds that it would take time, and entirely turn to import-dependency. Over the past 20 years, for various reasons, Bangladesh did not turn to gas exploration.

In power production, we have three primary energy sources -- gas, coal and solar energy. Alongside the emergency measures taken to address the power deficit, if we used our own gas and coal, and also pay attention to solar power, then the situation would not have deteriorated so far.

Q :

Our Fulbari coal mining process has been more or less abandoned.

When the movement against the Fulbari coal mine started, the present prime minister was in the opposition. She had said at the time that if she went to power, she would not extract coal. She has kept her word. Actually, those who were opposed to the coal mining, did not have any plausible argument. This is not a matter of emotion. They had argued that the coalfield was on an area where two crops were grown and that mining would harm the agriculture. They also used the argument of problems with the management of water from the mine. In 1976-77 our cropland was 90 per cent, now it is 70 per cent. It has shrunk due to industrialisation and housing. The entire Fulbari coalmine area will be about 6000 hectares. I calculated that the crops grown here annually will be worth around USD 12 million. That means, if the coal mine was started up, we would be deprived of rice of that value. The financial calculations were not done properly. We were busy worrying about losing cropland.

However, the mine water management issue was important and an engineering matter. The foreign company that wanted to extract the coal, had their explanation and argument. But the matter should have been assessed by a third party. The pragmatic aspects of both sides should have been taken into consideration. We did not look into whether there was any solution to the engineering challenges of mine water management that were raised. This should have been done. We should have reached a decision regarding Fulbari only after taking all angles into consideration.

Q :

How practical is solar power for Bangladesh? The government has taken up various initiatives in this regard, but not much headway has been made.

The government from 2010-11 has been promoting  solar power. It provided the private sector with certain benefits and concessions in this regard. Till date, over 40 projects have been approved, but this has only provided 500 MW of electricity. At the rate this is progressing, this 500 MW may reach 1000 MW in the days ahead. The bottom line is, the policy taken up by the government regarding solar power, has been of no use. The government wanted to carry this out through the private sector and provided them benefits too. But it requires at least 300 acres of land to set up a 100 MW solar power plant. It is difficult for private enterprises to procure so much land. Many pointed to the chars or river islands, but the land there is not that firm. Many of the entrepreneurs wanted to carry out such initiatives jointly with foreign companies, it is hard to bring in foreign investment without any guarantee of land.

Since the matter of land is involved with solar power, it will yield no results if the responsibility is simply handed over to the private sector. The government's positive stance towards solar power is not enough. The government has an additional role to play here. It has to push the issue forward. Also, our national grid lacks the capacity to take power from solar power plants.

Q :

How can the government assist the private sector in resolving the land problem for solar power generation?

The government has a lot of fallow land and it has records of this land. The government must come forward to give the private sector land. Also, the government can hand over various abandoned or closed plants to the private entrepreneurs for solar power production.

The government can make it compulsory to have solar panels on the roofs of every school. It can have a policy so that large industrial establishments can hire out their factory rooftops to other companies for solar power generation. All these steps would make it possible to increase solar power production to 6000 MW by 2030.

Q :

It has been around 10  years since the maritime boundary was determined. Why has there be no offshore gas exploration in the deep sea?

Offshore gas exploration requires data. After the maritime boundary was determined, Bangladesh took initiative to run a survey. Tenders were invited and a reputed company was selected. The process had been transparent. But for some unknown reason, the ministry cancelled it. A fresh tender was called. The same company came first after the selection process. The tender wasn't cancelled, but left hanging. Everything has a timeline and that timeline expired. After that, a meaningless proposal was discussed on arranging a survey ship and carrying out the survey themselves. That too amounted to nothing. Time passed in this manner.

Now Exxon-Mobil has put forward a proposal for offshore gas exploration, according to media reports. It is only when things deteriorate too far that we hurriedly sit up. The steps that should have been taken considering the importance and necessity of gas exploration, were not taken. Unfortunately, we did not give priority to exploring for our own energy.

It is the same regarding onshore energy exploration. It is as if we have taken up a policy to shun foreign oil and gas companies. But they are more technically and technologically skilled than us. Because of their management and production skills, they can extract the optimum gas. Chevron's Bibiyana gas field is an example. The Titas or Sylhet gas field is much larger than Bibiyana, but less gas is being extracted from there. With proper technology and engineering, it would be possible to increase the gas production from these fields. This required technological development and increased investment.

Q :

In the case of purchasing primary energy like LNG for power generation, alongside long-term agreements, why have we taken up the policy to buy this from the spot market? The spot market is always volatile. Isn't that a threat to energy security?

Our LNG import capacity is 7.2 million tonnes annually. We buy half of this under long-term agreement from Qatar and Oman. The remaining half we buy from the spot market. Qatar and Oman had urged us to buy the entire amount under the long-term agreement. We did not do so. In order to ensure steady supply, the standard practice of buying fuel from foreign countries is to buy the fuel for the overall basic demand under a long-term agreement. In any special circumstances if there is an additional demand, then that is bought from the spot market. For example, in winter the demand for fuel is higher than normal times in Europe. Also, if there is a storm or any natural disaster, there is need for additional energy. Then that additional requirement is brought from the spot market. We failed to properly calculate how much we needed to buy under the long-term agreement and how much from the spot market. This was a mistake.

Q :

Whether it was because of wrong policies, strategies or plans, the fact remains that we are facing a power crisis. This problem may not have been so acute had there been no dollar crisis. Taking the dollar crunch into cognizance, what measures can be taken to bring the present crisis to a tolerable level. What do you recommend?

If we are talking short-term, then the deals to purchase LNG must be done with caution. The fluctuations in the market must be taken into consideration and decisions taken accordingly. With the power plants that are coming up ahead, by 2027 coal-fired power production will stand at 7000 MW. Another 4000 MW will come from gas.

Taking these new power plants into account, a list must be drawn up as to which power plants will function in the days ahead and which will be shut down, and when. Rather than any immediate or stopgap decision, this decision needs to be taken with due consideration.

The problem, however, is economic and so the way to resolve the problem is by ensuring economic stability. The policy to curb imports to protect the reserves will be of no use. This is not the way to boost reserves. The cut in imports is harming the country's industrial sector and oil and gas bill are going into default. Even commodity prices aren't falling by halting imports. I am not an economist, but I can say that increasing exports and remittance is the way to increase our reserves, not simply by slashing imports. Artificially holding on to the value of the taka or reducing bank interest rates are making that need rethinking. As the energy sector is import-dependent, there is no alternative but to resolve the dollar crisis and improve the economy.

Q :

Thank you

Thank you too