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Energy Policy of Bangladesh

11

June, 2013

A.S.M. Abdul Hye
Benjamin Knoll
Saad Been Emran











Introduction
Domestic resources, geopolitical situation
Indicators
Fuel/Energy mixes
Energy security
Energy intensity
Introduced energy policy instruments
Governmental plans on changes in energy policy
Conclusion

2
 Electricity Growth
 Present Generation Capacity

: 7.0 % Av. since 1990
: 5250 MW

 Total Consumer

: 11.5 Million

 Transmission Line

: 8,300 km

 Distribution Line

: 2,60,000 km

 Distribution Loss

: 14.6 %

 Per Capita Generation

: 220 kWh / annum

 Access to Electricity

: 47 %

Current Avg. Daily Gas Prod.

: 1970 MMCF

Curr. Daily Actual Gas Demand

: 2200 MMCF

 Remaining Gas Reserve (P1+P2) : 12 tcf
Estimated Coal Reserve

: 3.3 billion tons
3
4
5
6


This mine has a capacity to
produce about 1 million tons of
coal per year. The mine started
partial production from 14th
April 2002.Commercial
production under a Management,
Production and Maintenances
Services (M&P) Contract
commenced on 10th September
2005. Under the Contract M&P,
the total production of coal was
5,71,706.720 metric tons up to
April 2011 in the fiscal year
2010-11. 65% of
the production will be used in a
250 MW coal fired power station
and rest 35% to other domestic
consumers

7


The mine has the capacity to produce about
1.65 million tons of hard rock per year.
It's trial production started in 1998 and
finally commercial production started on
25th May, 2007. Granite mine during
development phase are finding good
market. During the mine development
period, 4,59,506 metric ton granite was
produced from which 3,93,050 metric ton
have been sold and during the fiscal year
2010-11 and up to April 2011,the
company had produced 2,19,390.400
metric ton of granite. The granite produced
is expected to be used mostly as
construction material and will substitute
import. As a diversification, MGMCL is also
studying the market potential and technoeconomical feasibility of producing tiles
from the colorful granite blocks, as a
replacement of equivalent imported tiles.

Maddhapara,

Fulbari, Dinajput, BANGLADESH

8


It is the one and only dam of
Bangladesh that is used to generate
hydro-electric power. This plant
was constructed in 1962 as part of
the 'Karnafuli Multipurpose Project',
and is one of the biggest water
resources development project of
Bangladesh. The water storage
capacity of the Kaptai dam is 11000
km2. In 1962, the the dam,
spillway, penstock and two units of
powerhouses were built. Each of
the powerhouses was capable of
generating 40MW of electricity. In
November 1981 another 50MW
generating unit was completed. In
October 1988, the 4th and 5th
generating units were installed
which raised the total generation
capacity to 230MW.
Kaptai

dam, Bangladesh

9




Indigenous biomass fuels and animal power
Nuclear, solar photovoltaic, and wind power
Imported commercial energy

1

0



Indicator 1: Per Capita Carbon Emissions
Table 1 presents a snapshot view of the primary energy consumption in 2004. As can be
seen, even at the beginning of the 21st century, biomass still provides nearly half of the
total energy. Less than 35% households have electricity connection, and only 4%
households have natural gas supply. Renewable energy (other than biomass and hydro)
constitutes a very small percentage of the total energy consumption. This excludes the
use of sunlight for various drying operations by. Present capacity stands at
approximately 3 MW with nearly 60,000 installed units. The total installed wind capacity
is less than 1 MW. Biogas and improved cook-stoves programs have had little success in
the last 25 years.


Table 1: Primary Energy Consumption in Bangladesh for 2004

1

1




Indicator 2: Households with Access to Electricity
Table 2 summarizes the status of rural electrification in Bangladesh, while Table 3 gives
the achievement of the electrification program. Experts maintain that given the
inaccessibility of many places, 100% coverage is not economically feasible and that a
more realistic figure is 80%. Less than 50% of the households in electrified villages will
be able to enjoy the fruits of the government’s electrification program. The total
available generation capacity is approximately 4000 MW23 although the dependable
generation capacity is much lower. The peak load on certain heavy demand days
exceeds 5000 MW.


Table 2: Status of Rural Electrification (June, 2003)

1

2



Indicator 3: Resilience to External Impacts: Energy Trade
In 2002, the government started a CNG program, but limited it to the
conversion of gasoline vehicles. While a large number of CNG buses have
been imported, the major portion of the transport sector is still dependent
on imported oil. Since 1990, the oil demand has registered a steady growth
of 7% per year. In the last two years, the growth rate has declined to 5% per
year. The importation of oil using scarce foreign currency has always been a
big issue in Bangladesh. Even though the oil import bill is a small portion of
the GDP (Table 4) at the high price of US$ 50/bbl., it is the scarcity of foreign
currency that is of major concern. The oil import bill is a significant portion
of the exports and has jumped from being 5-6% of the total imports just a
few years ago to over 12% in 2004 and was expected to reach 15% in 2005.

1

3



Indicator 4: Clean Energy Investment
With regards to renewable energy, the government’s only role has
been to cooperate with bilateral/multilateral organizations. Most of
these cooperative ventures have been the implementation of grants
for pilot studies on renewable energy. The most significant is the
construction of a 1 MW wind generator at a cost of US$ 1.25 million.
In the last two years, mainly through the efforts of NGOs such as
Grameen Shakti, some success has been achieved in clean energy
investment.

1

4



Indicator 5: Energy Intensity
Bangladesh’s per capita commercial energy consumption is one of the lowest
in the world, and is only one-third that of its neighbours, India and Pakistan.
Table 5 gives a snapshot view of the economic and energy data of
Bangladesh along with the energy intensity for the years 1990 and 2004. A
slight decrease in the energy intensity can be observed. This is a good sign,
but a serious shortage of electricity prevails in the country.

1

5





Indicator 6: Renewable Energy Deployment
At present the capacity stands at approximately 3 MW with nearly 60,000 installed units.
The total installed wind capacity is less than 1 MW, and the biogas and improved Lookstoves programs have had little success in the last 25 years following the recent
successes, the Infrastructure Development Company Limited (IDCOL) will bring a total of
140,000 rural households under the solar power system by 2009. Initially IDCOL had a
target of financing 50,000 SHSs in a five and half year period from January 2003 to June
2008 with financial assistance from the World Bank and Global Environment facility
(GEF). This target was successfully achieved by September 2005, three years ahead of
schedule. IDCOL’s solar electrification program is mainly being implemented in remote
areas
Far from the existing grid at a total cost of 35 million USD. Table 6 shows the data.

1

6
1

7
 Establish LNG terminal project to import LNG
 Installation of Mega Power Projects through imported coal

 Ensure regional energy security through mutual cooperation and import of
energy
 Use of liquid fuel to mitigate demand within short period
 Nuclear power plants for future base load
 Renewable energy as alternative energy resources

1

8
A. Energy:
Indicator

January 2009

December 2009

Gas production (MMCF)

1764

1945

Coal Production (ton)

677,000

858,000

B. Power:
Indicator

PRS Target Achievement
(2005-2007)
(2005-2007)

Achievement
(2009)

Distribution loss of BPDB 21
(%)

16.58

14.6

No. of consumers of REB 1.8
increased (million)

1.7 (total: 7.3)

7.9 (total)

Access to electricity (%)

47

45

47

Installed Capacity (MW)

7000

5269

5700
19
Year

FY-09

FY-10

FY-11

FY-12

FY-13

FY-14

Demand-Supply
Gap (MW)

1750

1400

1800

1850

1500

1750

FY 2013

FY 2014

9000

8000
7000

MW

6000
5000
4000
3000
2000
1000
0
June,09

FY 2010

Year

FY 2011

FY 2012

Max. Demand considering DSM
Depandable Capacity (with gas crisis)

20
2

1
2

2












In National Energy Policy (NEP) in the year 2008 (covering Renewable
Energy):
The major objectives of the NEP are:
To provide energy for sustainable economic growth so that the
economic development activities of different sectors are not constrained
due to shortage of energy.
To meet the energy needs of different zones of the country and of
different Socio-economic groups.
To ensure optimum development of all the indigenous energy sources
(e.g. Commercial fuels, biomass fuels, and other renewable energy
sources).
To ensure sustainable operation of the energy utilities.
To ensure rational use of total energy sources.
To ensure environmentally sound sustainable energy development
programs Causing minimum damage to environment.
To encourage public and private sector participation in the
development and Management of the energy sector.

2

3
 To make electricity available for all by the year 2020
 To ensure reliable and quality supply of electricity
 To provide electricity at a reasonable and affordable
price
 Regional energy security through mutual cooperation
 Diversification of energy source
 Accelerated adoption of an environment friendly policy
to harness coal resources

24
 Short term: 6-12 Months
- Rental Plants (liquid fuel) : 530 MW

 Medium term: 18-24 Months
- Peaking Plants (liquid fuel): 820 MW

 Long term: 3-5 years
- Combined Cycle Plants: 1100 MW
- Peaking Plant (Gas or dual fuel): 200 MW
- Coal plants: 2000-2600 MW

25
Demand-Supply Gap up to 2015 with
new initiatives
12000

10000

MW

8000

6000

4000

2000

0

June,09

FY 2010

FY 2011

FY 2012

FY 2013

Year
Max.Demand considering DSM
Depandable Capacity( with gas crises)

FY 2014

FY 2015
SL

Name of the Project

Fuel

Capacity (MW)

Gas

300-450

Gas and
HFO

300-450

Gas

150-225

1.

Bibiyana 2nd Unit

2.

Meghnaghat dual Fuel CC

3.

Bhola 2nd CC

4.

Savar Peaking
(near tannery industry)

Gas and
HFO

100

5.

Kaliakoir Peaking
(near IT park)

Gas and
HFO

100

6.

Imported Coal Based Steam
Plant

Imported
Coal

2000-2600

Total

3925 MW
2

7
Description

Total Investment
(Million US$)

Equity
(Million US$)

Debt
(Million US$)

New Initiative 530 MW
Rental Projects

424

106

318

( 25 % )

( 75 % )

New Initiative 820 MW
Public Sector Peaking
Plant

1000

400

600

( 40 % from GOB)

( 60 % )

Combined Cycle and
Peaking Plants in Private
Sector: 1325 MW

1500

375

1125

( 25 % )

( 75 % )

Solar and Wind Projects:
110 MW

200

50

150

( 25 % )

( 75 % )

1000

3000

( 25 % )

( 75 % )

1925

5175

2600 MW Coal PPP

Total

4000
7.1 billion US $

2

8
 Generation

: 7,000 M US $

 Transmission

: 1,000 M US $

 Distribution

: 1,500 M US $

Total for Power

: 9,500 M US $

 LNG terminal

: 320 M US $

 20-26 tcf Gas by 2025

: 7,700 M US $

 Gas Transmission

: 1,500 M US $

Total for Gas

: 9,520 M US $

2

9
 Sustained primary
petroleum products

fuel

supply:

gas,

coal

and

 Financing capital intensive projects
 Enhancing operational and financial efficiency and
transparency
 Improving sector efficiency by strengthening
regulation capacity and ensuring good governance

30
 Private Sector will play a key role to meet the challenge of huge
amount of financing requirement
 Continuous efficiency improvement ensuring good governance
is key for sustainable development
 Concerted efforts from all quarters can ensure affordable and
quality power supply to the people of Bangladesh

3

1
3

2

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Sustainable Energy development bangladesh

  • 1. Energy Policy of Bangladesh 11 June, 2013 A.S.M. Abdul Hye Benjamin Knoll Saad Been Emran
  • 2.          Introduction Domestic resources, geopolitical situation Indicators Fuel/Energy mixes Energy security Energy intensity Introduced energy policy instruments Governmental plans on changes in energy policy Conclusion 2
  • 3.  Electricity Growth  Present Generation Capacity : 7.0 % Av. since 1990 : 5250 MW  Total Consumer : 11.5 Million  Transmission Line : 8,300 km  Distribution Line : 2,60,000 km  Distribution Loss : 14.6 %  Per Capita Generation : 220 kWh / annum  Access to Electricity : 47 % Current Avg. Daily Gas Prod. : 1970 MMCF Curr. Daily Actual Gas Demand : 2200 MMCF  Remaining Gas Reserve (P1+P2) : 12 tcf Estimated Coal Reserve : 3.3 billion tons 3
  • 7.  This mine has a capacity to produce about 1 million tons of coal per year. The mine started partial production from 14th April 2002.Commercial production under a Management, Production and Maintenances Services (M&P) Contract commenced on 10th September 2005. Under the Contract M&P, the total production of coal was 5,71,706.720 metric tons up to April 2011 in the fiscal year 2010-11. 65% of the production will be used in a 250 MW coal fired power station and rest 35% to other domestic consumers 7
  • 8.  The mine has the capacity to produce about 1.65 million tons of hard rock per year. It's trial production started in 1998 and finally commercial production started on 25th May, 2007. Granite mine during development phase are finding good market. During the mine development period, 4,59,506 metric ton granite was produced from which 3,93,050 metric ton have been sold and during the fiscal year 2010-11 and up to April 2011,the company had produced 2,19,390.400 metric ton of granite. The granite produced is expected to be used mostly as construction material and will substitute import. As a diversification, MGMCL is also studying the market potential and technoeconomical feasibility of producing tiles from the colorful granite blocks, as a replacement of equivalent imported tiles. Maddhapara, Fulbari, Dinajput, BANGLADESH 8
  • 9.  It is the one and only dam of Bangladesh that is used to generate hydro-electric power. This plant was constructed in 1962 as part of the 'Karnafuli Multipurpose Project', and is one of the biggest water resources development project of Bangladesh. The water storage capacity of the Kaptai dam is 11000 km2. In 1962, the the dam, spillway, penstock and two units of powerhouses were built. Each of the powerhouses was capable of generating 40MW of electricity. In November 1981 another 50MW generating unit was completed. In October 1988, the 4th and 5th generating units were installed which raised the total generation capacity to 230MW. Kaptai dam, Bangladesh 9
  • 10.    Indigenous biomass fuels and animal power Nuclear, solar photovoltaic, and wind power Imported commercial energy 1 0
  • 11.   Indicator 1: Per Capita Carbon Emissions Table 1 presents a snapshot view of the primary energy consumption in 2004. As can be seen, even at the beginning of the 21st century, biomass still provides nearly half of the total energy. Less than 35% households have electricity connection, and only 4% households have natural gas supply. Renewable energy (other than biomass and hydro) constitutes a very small percentage of the total energy consumption. This excludes the use of sunlight for various drying operations by. Present capacity stands at approximately 3 MW with nearly 60,000 installed units. The total installed wind capacity is less than 1 MW. Biogas and improved cook-stoves programs have had little success in the last 25 years.  Table 1: Primary Energy Consumption in Bangladesh for 2004 1 1
  • 12.   Indicator 2: Households with Access to Electricity Table 2 summarizes the status of rural electrification in Bangladesh, while Table 3 gives the achievement of the electrification program. Experts maintain that given the inaccessibility of many places, 100% coverage is not economically feasible and that a more realistic figure is 80%. Less than 50% of the households in electrified villages will be able to enjoy the fruits of the government’s electrification program. The total available generation capacity is approximately 4000 MW23 although the dependable generation capacity is much lower. The peak load on certain heavy demand days exceeds 5000 MW.  Table 2: Status of Rural Electrification (June, 2003) 1 2
  • 13.   Indicator 3: Resilience to External Impacts: Energy Trade In 2002, the government started a CNG program, but limited it to the conversion of gasoline vehicles. While a large number of CNG buses have been imported, the major portion of the transport sector is still dependent on imported oil. Since 1990, the oil demand has registered a steady growth of 7% per year. In the last two years, the growth rate has declined to 5% per year. The importation of oil using scarce foreign currency has always been a big issue in Bangladesh. Even though the oil import bill is a small portion of the GDP (Table 4) at the high price of US$ 50/bbl., it is the scarcity of foreign currency that is of major concern. The oil import bill is a significant portion of the exports and has jumped from being 5-6% of the total imports just a few years ago to over 12% in 2004 and was expected to reach 15% in 2005. 1 3
  • 14.   Indicator 4: Clean Energy Investment With regards to renewable energy, the government’s only role has been to cooperate with bilateral/multilateral organizations. Most of these cooperative ventures have been the implementation of grants for pilot studies on renewable energy. The most significant is the construction of a 1 MW wind generator at a cost of US$ 1.25 million. In the last two years, mainly through the efforts of NGOs such as Grameen Shakti, some success has been achieved in clean energy investment. 1 4
  • 15.   Indicator 5: Energy Intensity Bangladesh’s per capita commercial energy consumption is one of the lowest in the world, and is only one-third that of its neighbours, India and Pakistan. Table 5 gives a snapshot view of the economic and energy data of Bangladesh along with the energy intensity for the years 1990 and 2004. A slight decrease in the energy intensity can be observed. This is a good sign, but a serious shortage of electricity prevails in the country. 1 5
  • 16.    Indicator 6: Renewable Energy Deployment At present the capacity stands at approximately 3 MW with nearly 60,000 installed units. The total installed wind capacity is less than 1 MW, and the biogas and improved Lookstoves programs have had little success in the last 25 years following the recent successes, the Infrastructure Development Company Limited (IDCOL) will bring a total of 140,000 rural households under the solar power system by 2009. Initially IDCOL had a target of financing 50,000 SHSs in a five and half year period from January 2003 to June 2008 with financial assistance from the World Bank and Global Environment facility (GEF). This target was successfully achieved by September 2005, three years ahead of schedule. IDCOL’s solar electrification program is mainly being implemented in remote areas Far from the existing grid at a total cost of 35 million USD. Table 6 shows the data. 1 6
  • 18.  Establish LNG terminal project to import LNG  Installation of Mega Power Projects through imported coal  Ensure regional energy security through mutual cooperation and import of energy  Use of liquid fuel to mitigate demand within short period  Nuclear power plants for future base load  Renewable energy as alternative energy resources 1 8
  • 19. A. Energy: Indicator January 2009 December 2009 Gas production (MMCF) 1764 1945 Coal Production (ton) 677,000 858,000 B. Power: Indicator PRS Target Achievement (2005-2007) (2005-2007) Achievement (2009) Distribution loss of BPDB 21 (%) 16.58 14.6 No. of consumers of REB 1.8 increased (million) 1.7 (total: 7.3) 7.9 (total) Access to electricity (%) 47 45 47 Installed Capacity (MW) 7000 5269 5700 19
  • 20. Year FY-09 FY-10 FY-11 FY-12 FY-13 FY-14 Demand-Supply Gap (MW) 1750 1400 1800 1850 1500 1750 FY 2013 FY 2014 9000 8000 7000 MW 6000 5000 4000 3000 2000 1000 0 June,09 FY 2010 Year FY 2011 FY 2012 Max. Demand considering DSM Depandable Capacity (with gas crisis) 20
  • 23.         In National Energy Policy (NEP) in the year 2008 (covering Renewable Energy): The major objectives of the NEP are: To provide energy for sustainable economic growth so that the economic development activities of different sectors are not constrained due to shortage of energy. To meet the energy needs of different zones of the country and of different Socio-economic groups. To ensure optimum development of all the indigenous energy sources (e.g. Commercial fuels, biomass fuels, and other renewable energy sources). To ensure sustainable operation of the energy utilities. To ensure rational use of total energy sources. To ensure environmentally sound sustainable energy development programs Causing minimum damage to environment. To encourage public and private sector participation in the development and Management of the energy sector. 2 3
  • 24.  To make electricity available for all by the year 2020  To ensure reliable and quality supply of electricity  To provide electricity at a reasonable and affordable price  Regional energy security through mutual cooperation  Diversification of energy source  Accelerated adoption of an environment friendly policy to harness coal resources 24
  • 25.  Short term: 6-12 Months - Rental Plants (liquid fuel) : 530 MW  Medium term: 18-24 Months - Peaking Plants (liquid fuel): 820 MW  Long term: 3-5 years - Combined Cycle Plants: 1100 MW - Peaking Plant (Gas or dual fuel): 200 MW - Coal plants: 2000-2600 MW 25
  • 26. Demand-Supply Gap up to 2015 with new initiatives 12000 10000 MW 8000 6000 4000 2000 0 June,09 FY 2010 FY 2011 FY 2012 FY 2013 Year Max.Demand considering DSM Depandable Capacity( with gas crises) FY 2014 FY 2015
  • 27. SL Name of the Project Fuel Capacity (MW) Gas 300-450 Gas and HFO 300-450 Gas 150-225 1. Bibiyana 2nd Unit 2. Meghnaghat dual Fuel CC 3. Bhola 2nd CC 4. Savar Peaking (near tannery industry) Gas and HFO 100 5. Kaliakoir Peaking (near IT park) Gas and HFO 100 6. Imported Coal Based Steam Plant Imported Coal 2000-2600 Total 3925 MW 2 7
  • 28. Description Total Investment (Million US$) Equity (Million US$) Debt (Million US$) New Initiative 530 MW Rental Projects 424 106 318 ( 25 % ) ( 75 % ) New Initiative 820 MW Public Sector Peaking Plant 1000 400 600 ( 40 % from GOB) ( 60 % ) Combined Cycle and Peaking Plants in Private Sector: 1325 MW 1500 375 1125 ( 25 % ) ( 75 % ) Solar and Wind Projects: 110 MW 200 50 150 ( 25 % ) ( 75 % ) 1000 3000 ( 25 % ) ( 75 % ) 1925 5175 2600 MW Coal PPP Total 4000 7.1 billion US $ 2 8
  • 29.  Generation : 7,000 M US $  Transmission : 1,000 M US $  Distribution : 1,500 M US $ Total for Power : 9,500 M US $  LNG terminal : 320 M US $  20-26 tcf Gas by 2025 : 7,700 M US $  Gas Transmission : 1,500 M US $ Total for Gas : 9,520 M US $ 2 9
  • 30.  Sustained primary petroleum products fuel supply: gas, coal and  Financing capital intensive projects  Enhancing operational and financial efficiency and transparency  Improving sector efficiency by strengthening regulation capacity and ensuring good governance 30
  • 31.  Private Sector will play a key role to meet the challenge of huge amount of financing requirement  Continuous efficiency improvement ensuring good governance is key for sustainable development  Concerted efforts from all quarters can ensure affordable and quality power supply to the people of Bangladesh 3 1