When the Energy & Power struck the newsstands in 2003, the slogan was "Country's First & Only". After four years of publication of the fortnightly, we didn't need to change the slogan as the country's first magazine in the energy sector still remained the one and only. It was not easy to run a specialized magazine months after months, but only determination of an energetic team and cooperation from valued patrons could make the things possible. In last four years, the EP always stood by the greater interest of the people, but obviously not based on rubbish emotion. The EP on every single national issue in the energy sector tried to analyze various aspects and without any hesitation put forwarded the right guidelines for the policymakers to take the right decisions. The people of the country are witness that what the BNP-led coalition government did in reality. They not only failed in taking the right decisions, but their unbridled corruption caused the worst damage. Now time has changed, the country is watching what these corrupt people are facing. But, punishment is not the only thing if the sector, ruined by the four-party coalition government, is not rescued. As the Energy & Power stepped into fifth year on June 16, 2007 it arranged a roundtable discussion on "National Energy Policy" where experts gave their thoughtful opinions. In fact, formulating a pragmatic energy policy is now the key for ensuring future energy policy for the nation and the government should not be driven by any sentiment, rather it should give the highest priority for optimum utilization of the natural resources. That's what exactly the experts opined in the roundtable discussion and the anniversary issue carries the cover item on their valuables opinions. People are the ultimate beneficiaries or sufferers for any national policy.


Experts, stakeholders and policymakers have called for formulating an integrated national policy for energy incorporating the sectors of natural gas, coal, renewable energy, and atomic energy, which will feature short-term, mid-term and long-term plans for a Bangladesh secured for energy. 

They also put stress on diversification of energy sources instead of depending solely on gas and pointed out that proper extraction of coal can be the effective substitute to gas at this moment. 

They came up with the views at a roundtable on “National Energy Policy for Bangladesh” on June 10 at CIRDAP auditorium in Dhaka organized by the Energy and Power magazine marking its 5th founding anniversary. 

The Energy & Power Editor Mollah Amzad Hossain presided over the discussion, moderated by Farid Hossain, the Dhaka bureau chief of the Associated Press and a regular columnist of the magazine.

As the country's gas stock is diminishing, the discussants put stress on optimum extraction of coal in right method that would ensure better production and make the initiative financially viable.

Energy Advisor Tapan Chowdhury told the discussion that the government will finalize its coal policy shortly. He also said that private organizations generating power will also be given permission to use the national grid.

"The coal policy is to be finalized by July this year. It will later be incorporated into a National Energy Policy. The policy is being formulated giving highest priority to people’s interests," said the Advisor.

"Now is the time for decision," Chowdhury said putting stress on the importance of involving local entrepreneurs in the power sector. "If private entrepreneurs establish larger power plants they will be given the opportunity to use the national grid." 

This is an unprecedented opportunity, he said, adding that the most complexities in country’s electricity are in power distribution rather that power generation. 

“We are planning to allow the private investors to set up as big power plants as they wish and sell their electricity by using the government infrastructure, for which they will have to pay us transmission costs,” he said.

At present private investors can set up independent power plants after the government invites tenders for setting up such plants at places selected by it. The Power Development Board purchases the power from IPPs and subsidiaries of the board distribute electricity to consumers at a price fixed by the government.

Tapan said that they were planning a hassle-free tender procedure for setting up the power plants as any interested investor would be allowed to do so. 

“The government may only intervene in fixing the price of the gas to be sold to such plants. The private plant owners will fix the prices of power to be sold to consumers as the government wants the market to be competitive,” said the Energy Advisor. 

Tapan said he once believed that the natural resources like oil or gas should be stored for future as the developed nations did. But the reality is that the marginal stock of gas would ensure energy supply for hardly 10 to 12 years.

“If we could take a decision in this regard right now, it would take at least three to five years for enjoying its result,” he said.

The Advisor also stressed the need for an acceptable pricing of gas and other resources. “The price the government is selling at gas costs a huge amount of subsidy and we have to decide how long we would continue the subsidy,’ he said. 

Tapan also stressed on a transparent bidding process to attract the foreign bidders. "Our problem lies in transparency. If the process is transparent investment is not a problem at all,’ he said.

Concluding his speech, Tapan said, ‘Whatever the decision is regarding energy sector it will surely reflect the people’s interest. Nothing would be done without their consent.” 

Energy Division Secretary AMM Nasiruddin regretted the absence of any synchronized policy for energy sector to attain the maximum benefit from the resources. “We cannot even compare our resources with others’ and fail to resolve the debates.”

“We want an elaborated policy for energy to address the disputed issues,” he said adding that a draft has been prepared consulting with the stakeholders and it will be finalized after scrutinizing, reviewing, amending and developing after further consultation with experts. 

He found designing a coal policy as an urgent need saying, "We are facing problems signing deals with companies as we don’t have a specific coal policy." 

He said there are much debates on which method should applied in coal extraction, some prefer open-pit mining and some others say for underground drilling. 

“The decision will be taken after consulting with the experts and we need a consensus on the issue,” he said adding that enough time elapsed in debates, now it is the time for taking decision.

Nasir said despite not having background on energy or minerals he roved around the globe to learn on the issue. “The Australians use both the open-pit and underground methods for coal extraction simultaneously,” he said.

“And the Chinese experience for underground mining is horrible. Each year around 20,000 people die in underground mining there and the government recognizes the death figure at 7,000 a year,” he said citing recurring accidents at Barapukurua coalmine. 

Former Energy Secretary Toufique Elahi Chowdhury said the policy must be formulated in such a way that future decisions can be implemented. "It should be made as a guideline rather than a document." 

Toufique said the policy should be a brief one. A large volume policy would bring no result other than gathering dust. Preparing document is not enough and there should be specific instruction and targets for implementing the policy. 

He urged the government to take serious measures for research and development in energy sector and demanded budgetary allocation for the purpose.

He also called for developing human resource for the energy and mineral sector. “There is an institute styled Bangladesh Petroleum Institute which is incapable to meet the requirement of developing manpower,” he said urging the government for strengthening and capacity building of the institute. 

Ex-Secretary and Power Development Board Chairman Quamrul Islam Siddique said as gas reserve is diminishing we have to focus on coal and for extracting the coal the underground mining method did not give us good experience. 

“We are solely depending on gas for power generation that confined industrialization in the eastern part of the country. There is no industrialization in the northern and western parts,” he said suggesting installation of coal-based power plants in the northern region.

“We have to think about coal seriously and its optimum use. The Barapukuria mine had investment of more than Tk 1,600 crore but it could not bring a minimum return,” Siddque said. 

Professor M Tamim, head of Department of Petroleum Engineering at BUET, thought talking on energy policy is simply waste of time as most of the goals of the previous energy policy formulated in 1996 were yet to be implemented.

“The only thing from the 1996 energy policy has been implemented is that we have got “free gas” [that is, a small a portion of the gas produced] from international oil companies. Although the policy stated that expertise and technical know-how would be transferred and backward and forward linkages would be established, nothing of that sort has happened,” he said.

“Some international oil companies have come for the policy to inspire private investment or some independent power producers emerged and a considerable length of pipeline was established coincidentally,’ he said expressing doubts that the former energy ministers or secretaries had read the policy at all. 

Dr Tamim said: The 1996 policy clearly directed the BAPEX to go on four exploration a year but the company drilled only four wells in the past decade.

“Many things were incorporated in the policy but the reality is a large zero and the BAPEX can maintain only a set of drilling crew amid such a vacuum. We have no funds for high risk investment, have no expert who can estimate the reserves by scientifically acceptable methods,” he said.

He told the EP roundtable audience that the government should have some control over the pricing of power although it is an era of free market economy.

“For energy security, the government should have some control over the price. The market will play its own role but there should be some control over power pricing but it surely should not frighten the companies,” said Prof Tamim.

“No new foreign investors will come in present state of gas pricing, nor would the Petrobangla be capable to mange the situation. The pricing has to be fixed through transparent and proper structure,” he said. 

He regretted the lower price of gas, especially of CNG, in the domestic market. “The price of CNG should be increased immediately.”

“For long, we are being heard that the BAPEX fails to go exploration for fund constraints but I do not know that any drilling program submitted by the company was rejected for funds constraints,” he said.

“Our politicians and some experts who do not deal with gas sector are much vocal for the limitation of BAPEX. I want to know that how many projects submitted by BAPEX were rejected by the government and the government has to publicly inform the reason for each rejection.” 

Tamim suggested gradual transformation from the single-buyer model in energy sector. “As we have allowed multiple producers in power and gas sector, we should opt for multiple buyers gradually. If we cannot buy all gas of new wells, we can allow big clients like Tata to buy the gas for industrialization and there are such clear provisions in the production sharing contracts,” he said. 

Tamim called for repealing the paragraph regarding marginal gas-fields from draft energy policy. “Each line of the paragraph is conspiring and self-contradictory. The draft document contains many mistakes in English and its information and logics are unacceptable too,” he said. 

Putting stress on fuel-diversification, he said coal is another possible source of energy. “But we have bitter experience over it. We all know the result of Tk 1500-crore deep-shaft mining. We have no fund, no manpower, and no technology. We are passing a critical time on borrowed funds, borrowed technology and our own risk.”

“I think amid such situation, the open-cast mining should be given a chance but there are three aspects needed to be considered -- relocation, environment and revenue,” he said. “If the government can relocate thousands of people from Uttara and Purbachal for urbanization without any protest, it should not be tiresome for them to relocate the people from the coal-mine areas after rehabilitating them appropriately,” Tamim added. 

On environment issues, he said there are total or partial resolutions to all the environmental risks for coal mining but no development work can be done without harming the environment at a minimum level. 

"We have to deal cautiously in every phase of the project to save the environment with strong penalty clause,” said the BUET professor. 

Tamim observed revenue as the most contentious issue. “There is a way to resolve it if we can ensure a reasonable return for the investment for developing the coal. We can also give an assumption of fixed return to the foreign investors adjusting the volume of extraction, pricing, and royalty of coal,” he suggested adding, “in that case we would gain much profit in the intentional price increases and we have to bear the loss if the price decrease.” 

He said: If we want to ensure a minimum-fixed-revenue, the investor has to be allowed much profit in risk return.

Tamim said initiatives have to be taken at this moment to advance the coal-based power generation. 

He concluded putting stress on an all-out initiative to expand local skilled manpower on energy issues. Appropriate remunerations have to be ensured out of the national pay-structure to keep in talents in country, he said. 

Professor Ijaz Hossain, who teaches Chemical Engineering at the Bangladesh University of Engineering and Technology, assured that Bangladesh’s gas resources would not be exhausted by 2015. No surveys showed that the gas would be finished by the time rather the production level might be declined, he said adding, "But instead of sitting idle we must continue exploration," he said. 

He said more than 1500 megawatts of electricity was produced by independent captive generators who installed small plants for their factories in last five years. He suggested that the government can buy the electricity they produce additional to their requirement. 

Chowdhury Quamaruzzaman, Associate Professor of the Geology and Mining Department at Rajshahi University, said if the open-pit method was applied to Barapukuria, 90 percent of coal deposits could be extracted and it would turn into daily output of 2200 megawatts of electricity. 

At present there are two underground mining --- coal and hard rock--- in operation in Bangladesh and both are about to be abandoned and remain far, far away from attaining the production target, he said adding, “It has proved the state of viability of underground mining for coal in Bangladesh and there is only option -- open-pit extraction.” 

On environment issues, Quamaruzzaman said the measures are there to manage the environmental losses and it should be done carefully. Nowhere in world mining was done without harming the environment, he added. 

The Khulna Power Company Chairman, Muhammed Aziz Khan, demanded formulating a transparent energy policy covering all aspects and allowing private entrepreneurs to establish large-scale power generation plants and fertilizer factories.

“The Bangladeshi entrepreneurs can easily invest for 100-150 megawatt capacity power generation plant or for fertilizer factory,” he said. Aziz regretted fund was not main problem for energy sector rather the main problem is transparency in fund utilization process.

Citing his experience, Aziz said he had submitted several projects for power generation but most of them remained for paper works due to bureaucratic tangle. 

The Chief Geologist of the Bangladesh Atomic Energy Commission, Dr Yunus Akan, in his keynote paper stressed taking immediate decision to extract coal through open pit mining as it would ensure 80-90 percent extraction of the coal and have lesser risk. 

“Immediate decision is necessary as it would need several years to go on commercial extraction after the decision was taken,” he said.

He said experience from underground extraction in Bangladesh was not good for recurring accidents, repeated deferring of production deadline and much lesser production than the target and much higher production cost comparing to international markets. 

Akan also stressed in formulating proper regulatory framework reviewing the mining act, mine and minerals rules, and laws protecting environment. 

He suggested making 20 percent of total power generation based on local coal citing countries like Australia which depends on coal for more than 50 percent of their power generation. He also suggested installation of nuclear power plants though its initial expense is higher but has nominal production cost.

He recommended developing of human resources on energy and ensuring their institutional capacity building, modernizing the BAPEX, BMD, Department of Environment, and other institutions relating to mineral extraction. 

Former Director of Petrobangla, Muinul Ahsan, regretted that exploration of gas had been totally stopped in past decade. He stressed offshore exploration of gas.

“The government is planning for third-round bidding but there is still problem over maritime borders with the neighboring countries,” he said and urged the government to solve the matter. He also suggested the government to conduct a seismic survey for offshore exploration.

Muinul Ahsan draw attention suggesting establishment a new body named Coalbangla for managing coal extraction following the bad experiences of Petrobangla in coal mining.

He said creation of Coalbangla is not the solution for effective exploitation of the mineral deposits. It is not understood how it would be manned in absence of experienced mining engineers and geologists. “It may facilitate posting of some bureaucrats, but the result will not be worth mentioning at all. Also the cash-flow required to run the organization will remain a problem as temporary loan facilities, as provided to Petrobangla from other companies, will not be available.”

“For successful exploitation of mineral resources private sector participation with foreign direct investment collaboration is the only solution now. However, higher royalty rate is pre-requisite so that the government is also benefited from the earnings from the mineral resources,” he said. 

Vice Chancellor of the Ahsanullah University of Engineering and Technology, Anwar Hossain, said at first we have to decide what we shall do with the coal, and define our requirement. “Should we use it in only power generation or supply it to other industries like brick-fields or we export it?’

“My observation is clear. We shall not export coal before meeting our domestic requirement and the matter is yet to be defined,” he said. “Now we are saying about power generation, many other sectors would emerge after commercial extraction will begin.” 

Anwar lamented the government’s inactiveness in Phulbari coal project. “The government should go there first and apprise the people of the pros and cons of the project. But the government sent the company to the site at first and that created huge confusion and lack of trust among people,” he said. 

Mosharraf Hossain, former Member of the Bangladesh Energy Regulatory Commission, said energy sector in Bangladesh has been always crisis driven and has been on a cyclic order of paying attention to electrical and then to gas not to speak of perennial problems in importing the petroleum products.

“Currently the country is only looking at the power sector, but no attention is visible to ensure supply of primary energy to run those power stations. Not many encouraging gas sector programs are on the anvil as of now. So the scarcity of gas supply to the power stations will be another blow to destabilize the energy system in near future,” he said.

He said use of coal must be enhanced up to 40-50% of energy mix for power generation to supplement the gas resource and coalfields must be opened to private sector with the assurance for buying back the coal from the developers. 

Mosharraf found it unthinkable to export any energy resource in the present supply-demand situation of energy in the country. 

“Export of energy will cause expeditious exhaustion of the indigenous resources compelling the country to fall back on energy import. It may be extremely difficult to get assured source of importing energy, let alone the exorbitant costs that would be associated,” he said. 

He suggested encouraging foreign investment in the energy sector for exploration and development of indigenous energy resources with the assurance of buying the same at an agreed price through a mechanism like the production sharing contracts.

Mosharraf also called for paying due attention to identifying and developing the marginal sources of energy such as renewable sources like wind, solar and bio-fuels and derivatives like coal bed methane, underground gasification of coal, liquid fuel from gas and coal, hydro, geothermal. A special implementing agency for such projects may be considered, he opined.

Echoing Tamim, Mosharraf also regretted the country’s serious shortage in trained manpower in the energy sector especially in gas, oil and coal operations. 

“Coal mines cannot be run by foreign miners. Mobilization of local workforce with special pay structure must be ensured to make the coal mines economical and development a vibrant sector in the country,” he said. 

Mosharraf said it has been almost a consensus recommendation that there should be private investment in the power sector. “The only course of action now is to open the power sector to private participation under strong regulatory measures to safeguard the interest of the stakeholders,” he said.

SM Mahfuzur Rahman, former Chairman of Finance Department at Dhaka University, said: We expect that the new energy policy of Bangladesh would first emphasize the energy situation of the country, and especially the existing and potential sources of energy. 

“We also expect that it will properly asses the importance of coal as a viable alternative for the near future. The new energy policy should also cover many other aspects including search for new gas fields, mining of coal, establishing new power plants, developing other energy sources as well as all major issues relating to pricing of inputs and energy products, their marketing and distribution and participation of private sector, including foreign companies, in exploration of energy sources and production and marketing of energy products,” he said.

We are lucky to have coal reserves and it is high time to take necessary steps for extracting coal for using it in meeting domestic demands, especially in generating electricity, he said. 

“People are worried about the damages that may be caused by open-pit mining and it carries sense simply because, no open mining is possible without displacement of people living in the mine zone or without causing damage to crops, forests and wetland or establishments within such area. But sometimes, these worries are spread as campaigns without having much ground of real statistics,” he said. 

“The much talked about Phulbari coal project is a case for which there are plenty of field-survey-based studies on the impact of the project on the lives of the local people, farmland, forests and wetlands, flora and fauna, human settlements, offices and religious, educational, cultural and other establishments, life and culture of indigenous people and many others,” he said. 

Mahfuz said some of such studies also have rehabilitation plans and there is at least one study where it presents a resettlement plan in a new township with required design and estimates. 

He argued that instead of being carried away by emotional statements on these impacts, the government should carefully review the studies and if necessary, conduct independent assessments. 

Experts in the studies indicate that the impact of the proposed project on all these areas does not lead to any permanent loss in most part and the loss is also not going to take place in one go rather, the anticipated losses are associated with the project’s technical design and its implementation schedule or phasing, he mentioned. 

Review of these reports and the assessments are important for measuring actual losses in terms of financial, economic and social costs as well as of the various types of benefits, he added.

SM Mahfuzur Rahman believes that the government is aware of the need for ensuring proper compensation to all groups of people for whatever losses they are going to incur and it is the government’s responsibility to fix compensation mechanism and also the rates, not necessarily as part of the policy document, which however, must have an outline of the overall framework for such compensation.

On export of coal extracted by any foreign company, which may lead extract more coal than the domestic requirement, Mahfuz suggested the government can regulate it by making the provision that the first priority of any coal project should be domestic consumption.

He estimated domestic requirement at 11 million tonnes of coal a year by running two coal-based power plant of 1000 megawatts – one at mine-zone and another at elsewhere, coal demand to brickfields, use of coal in production of brickets, and other purposes. 

This means that by including the clause of obligation of the companies engaged in exploitation of natural resources in supply of these resources for domestic purposes first would automatically limit their exports, even if the production goes higher than the domestic requirement on grounds of reaching a viable range of annual output, he said. 

The government may emphasize that the prices at both domestic and foreign markets should be competitive and no company would be allowed to sell energy products within the country at rates that are applicable in international market, he concluded. 

Abrar A Ahmed of the CitiBank NA said financing for power or energy sector was not a problem at all if the bidding process was transparent.

“There needs $ 5 billion investment in energy sector and it might not be possible to acquire it from local sources but ensuring foreign investment in the sector is very simple if the process is simple and transparent,” he said.

“We can easily ensure foreign investment by monetization against the gas reserve,” he said stressing the need for finalizing country rating and pricing which hinder foreign investment in Bangladesh. The BAPEX did not explore any field in past few year and many the IOCs who are allocated blocks are not going in exploration for pricing issue, he added.