Energy & Power

Report

Bangladesh Presently Needs Coal Mining More Than Ever
EP Report

A quick decision on coal sector development for the sake of the country's future energy security is a must, says Prof M Tamin, the Chief Adviser's Special Assistant for Power and Energy Ministry.

"We can't wait...whatever the decision is... it has to be taken very fast in a transparent and accountable manner as reserves of natural gas is depleting fast and the country will have to face acute gas shortages only after four years," he said at a symposium on ''Mining and Community Livelihood in Bangladesh'', organized by the Petrobangla.

Energy Secretary Mohammad Mohsin and Petrobangla Chairman Jalal Ahmed also spoke at the seminar.

Mentioning the environment, local community displacement and choice of energy and food security as the three main issues of concern in coal sector development, Dr Tamim urged the experts to evolve strategies to address the issues.

He said it has to be worked out how the impacts on the environment and local community could be minimized apart from setting the priorities between food and energy security. Dr Tamim said the government needs to ensure that the displaced people in coal mining areas would get more benefits than those who were displaced in the Uttara and Purbachal town development projects, "because coal mining is more profitable business".

Describing the international energy perspective and growing energy demand, he said Bangladesh should look into different options for alternative sources of energy.

The CA’s Special Assistant said there might be more undiscovered gas reserves. "If we want to discover this gas reserve, about US$ 8 billion investment will be required. Can we afford to take risk in this huge investment?" he asked.

"The risk factors and high investment have to be understood... We cannot take risk, so we need foreign investment and new technologies to develop the gas sector."

Mentioning the unaffordable cost involved in gas import from Myanmar and Qatar, he said the cost will be from 5 to 7 US dollars per 1000 cubic feet (mcf) against about 2.5 US dollars in Bangladesh.

Similarly, he said, the cost of coal is going up fast like that of petroleum fuel. He said a few years back the price of per metric ton of coal was 30-40 US dollars, now it has gone up to 160 US dollars.

Badrul Imam, a professor of petroleum geology at the Dhaka University, said that Bangladesh's coal was high heating and good quality compared with adjacent neighbor India.

"A conservative approach rather than an aggressive one is required for developing coal in Bangladesh," Badrul said.

Britain's Global Coal Management Public Limited Company has long been waiting with an offer to invest $3.0 billion in a Bangladesh coal project, worth producing 15 million tonnes of coal a year over a 30-year period, officials said.

But the project was put to a hold after the company had already made an initial investment of $34 million for development of the site and feasibility study, because of violent protest by environmental groups and for lack of a government policy on coal mining.

Although open-pit mining allows extraction of up to 90 percent of the coal from a field, but Badrul warned that any open-pit mining in the country could bring about environmental disaster, especially in densely populated Bangladesh.

In the 9-point recommendations, the symposium observed that it is necessary for the country to ensure the “Energy Security” to achieve the Millennium Development Goal.

“At present the energy sector is mainly dependent on gas. It is not possible to provide necessary energy security from indigenous gas for a long time alone. For this reason the basic needs to find out alternative source of energy, said another recommendation stressing “At this moment coal is the best energy security source in an alternative way of gas for Bangladesh.”

The symposium said: Bangladesh presently needs coal mining more than ever and more than any other to handle an impending energy crisis. Although coal mining will be constrained in Bangladesh more than other countries because of adverse geologic and social-economic factors.

“It is necessary to evaluate the reserve and optimum recovery of coal from the discovered coalfield. The government and non-government organizations have to move forward for this reason,” said another recommendation.

The symposium mentioned that about 20% coal can be recovered on the underground mining method. On the other hand up to 90% coal can be recovered on the open pit mining method.

“But we must have a keen sight on the environmental effects in the development of the coalfields. Environmental issues in underground or open pit mining should be dealt with meticulously,” said the symposium.

For the debates related to methods of mining, compensations, community participation/ engagement, resettlement policies and their operations, funding and fund management, the symposium observed “we should have thorough studies and develop appropriate scenarios in black and white so that transparency and acceptability to all remain.”

Finally, the ‘Symposium on Mining and Community Livelihoods in Bangladesh’ has come up with the view that “we make community livelihoods more sustainable, based on respect, trust and partnership and let the country lead to achieve self sustained energy through adding coal in our energy security.”

“Let the coal mining enrich the poors’ livelihood and not to deprive the interests of the poor,” concluded the symposium.

No Early Remedy to Power Crisis

A hot and humid weather continues in the country to put an extra load on the demand for power resulting in frequent and longer power cuts in the capital and elsewhere in the country.

The official load shedding is 1,125 megawatts (MW), while Power Development Board (PDB) sources put unofficial conservative figures at around 2000 MW. Officials say that there is no chance of improvement of this scenario shortly.

Admitting the severe power crisis, a top Power Division official said: Whatever the official figures are, these do not reflect the sufferings of the public.

In such a tight supply-demand situation, the DESA and DESCO are supposed to enforce a daily load shedding schedule, allocating one-hour load shedding for each area in one time. But in reality, load shedding in many areas stretch up to two hours and the authorities do not even respond to any complaints.

On the other hand, gas supply constraint is currently causing various power plants to generate less power.

"The situation might have improved a bit, if the new 90 MW Fenchuganj power plant came into operation as per the schedule. But, due to a feud between the plant's Chinese builder Harbin and the National Board of Revenue (NBR) over exemption of import duties worth Tk 50 crore, the plant's operation is still uncertain," said another official.

Among other power plants, the two-unit 250MW coal-fired Barapukuria power plant is producing only 100MW using just one unit. "There is adequate coal supply, but this poorly built plant can not go for full generation when we need it most, due to technical glitches," he added.

Bangladesh Introduces Improved Stove to Save Fuel

Bangladesh has introduced an improved cooking stove that will consume 50 percent less of the biomass used for cooking in rural areas, a senior official said.
"About 95 percent of Bangladesh, with 145 million people, uses traditional fuels like cow dung, agricultural wastage and wood totaling 60 million tonnes most inefficiently, worth 100 billion taka ($1.46 billion)," said Erich Otto Gomm, program coordinator in Bangladesh of German Technical Cooperation (GTZ).

The Ministry of Power, Energy and Mineral Resources, with the financial and technical assistance of the German Federal Ministry of Economic Cooperation and Development, through GTZ, introduced an environmentally friendly stove that also saves biomass by more than 50 percent, he said.

"Poorly ventilated clay stoves that produce smoke, carbon monoxide and carcinogens pose a serious health threat to women and children," Erich told a news conference.

He said that according to the World Health Organization, 46,000 women and children in Bangladesh die each year, while millions more suffer from respiratory, tuberculosis and cardiovascular diseases and lung cancer due to the "killer in the kitchen".

"Biomass is also becoming increasingly scarce and costly, putting pressure on the farmers to use more chemical fertilizer instead of bio-fertilizer," said Khaleq Uzzaman, senior adviser of Sustainable Energy for Development (SED).

The SED launched a countrywide program to popularize the improved cooking stoves developed by the state-run Bangladesh Council of Scientific and Industrial Research and later modified by the GTZ.

Khaleq said so far 35,000 stoves have been sold and installed across the country and now up to 10,000 were being built every month.

"Our aim is to build 1 million stoves over the next three years," he said, and hoped to have one in every rural Bangladeshi home by the end of 2018.

Currently, only 6 percent of the population has access to natural gas, primarily in urban areas, he told reporters.

Serajul Islam Quadir (Reuters)

Rationale Price Hike of CNG
EP Report

After about five years, the government has raised the price of compressed natural gas (CNG), which had been due for a long. However, the rise is almost double as the price of per meter cube of gas has been fixed at Tk 16.75 from Tk 8.5.

Following the price hike of CNG, the fare of CNG-run auto-rickshaws and taxicabs has also been raised. But, the government stayed away from fare hike of buses, no matter whether those are run by CNG or oil, as the bus fare is already based on diesel price.

Although the government did not bow down to the pressure of raising the bus fare and warned of taking stern action if the fare is raised, the bus owners defied the warning and increased the fare from 10-50 percent based on distance. Not only the city buses, the fare in case of inter-district buses also marked a rise.

On the other hand, the CNG-run autos and cabs still continued to charge bargain price although their fare was officially increased.

Officials said the reason for the CNG price hike is to reduce the losses that Petrobangla has to incur for upward trend in prices of liquid fuels on the global market and the widening spread between buying and selling prices of gas.

In July 2004, CNG was priced at Tk 8.5 per cubic meter when octane would sell at Tk 35 a liter. "At that time, the price of CNG was 25 percent of octane's. Now after the new price, the ratio remains the same as the price of octane by this time has shot up to Tk 67 per liter," observed an expert.

Back in 2002, when the natural gas was introduced as an alternative fuel in the country, its price was Tk 7.45 per meter cube.

Officials said, some 132,000 CNG-fuelled vehicles ply the roads in Dhaka Chittagong and Comilla. The number of CNG pumps stands at 229 with 19 more set to be opened within a couple of months. CNG sector consumes two percent of 1,750 million cubic feet gas produced per day, they added.

Besides increasing the price of CNG, the government has made it compulsory for the filling stations to set up generators within the next eight months.

Petrobangla officials said the new price would help increase revenues of the state-run corporation. From sale of one cubic meter CNG at Tk 8.5, Petrobangla used to earn Tk 2.37 while the rest would go to fuel station owners. Now it will get Tk 9.97 from Tk 16.75.

In the wake of galloping prices of conventional fuels and environmental concerns, the government has been encouraging people to convert their vehicles to run on CNG that is low-priced and considered to be eco-friendly.

The use of CNG as motor fuel started becoming popular with more conversion plants and pumps being installed in the private sector.

Meanwhile, Finance Adviser Dr. AB Mirza Azizul Islam said that a huge fiscal burden imposed by various subsidies has prompted the government to raise the price of compressed natural gas in order to reduce Petrobangla’s losses.

He said that financing subsidies through tax increase or borrowings would have left long-term negative impacts on the national economy.

“There is no suitable time for raising any tariff. But subsidies [for utilities] in Bangladesh are one of the highest in the world — something that we cannot afford to continue for years,” the adviser said when asked whether the time chosen for increasing CNG price was right.

Making argument in favor of gas subsidy cuts, he pointed out that the amount of subsidies more than doubled in the current fiscal year against the initial estimate of about Tk 6,000 crore for the purpose.

About harassment of passengers by the drivers of CNG-run auto-rickshaws by charging higher fares following the gas price hike, the adviser said it was an administrative issue and he would refer it to the relevant authorities for taking necessary measures.