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     Volume 8 Issue 65 | April 17, 2009 |

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Cover Story

The Search forAlternatives

Just seven years ago American oil company Unocal was so pessimistic about Bangladesh's gas market that it went to great lengths to lobby for gas export from its Bibiyana gas field to India. Unocal and other oil companies claimed that Bangladesh was practically “floating on gas". This campaign gained further credibility when local “experts”, including some Buet professors, actively participated in it.

Sharier Khan

It was not long before the bleak truth reared its ugly head. Petrobangla opposed it and a national committee on gas utilisation in 2002 predicted a bleak future for Bangladesh from 2011. Now, even with the Bibiyana field pumping 500 million cubic feet per day (mmcfd) gas to the domestic market-- the country is not only reeling in a severe gas crisis, it does not see any end to the gas crisis in the future. Ever.

Natural gas lies at the centre of the country's energy usage. Once thought to be abundant, 90 per cent of the country's power plants were built using gas as the energy source for generating power. This gas also happens to be used for manufacturing fertiliser. A large number of domestic, commercial and industrial users also rely on gas. And with the introduction of the CNG system five years ago, the country's road transportation sector has become so dependent on using gas that it is saving the country more than 800 million dollars worth of imported oil.

A tailoring shop has to use candles during the long hours of
Generators have become the most sought after devices these days.

The country's power demand amounts to only 5500 megawatt unofficially, and 4600 mw officially. But the power plants under the Power Development Board (PDB) can generate only around 3600 mw. Now with the gas crisis, the PDB cannot generate around 500 to 800 mw power. Earlier this month, the PDB had all the gas supply it needed, and it could generate a record 4200 mw power--just for one day.

The crises in the power and gas sector are largely attributed to the past BNP led alliance government's inaction, mismanagement and flawed policy in the energy sector. Apart from virtually no gas exploration activity even the bleak forecast of the national committee on gas utilisation did not induce the government to look for viable alternatives to this fast depleting resource. Now it seems that apart from a miraculous discovery of massive new gas resources, there is no way the country's energy needs can continue to be met mainly by the gas sector.

Shopping centres carry on business in darkness most of the time.

According to the grimmest of three future projections of Petrobangla, the country will face 142 million cubic feet per day (mmcfd) gas shortfall in 2011, 341 mmcfd in 2014, 838 mmcfd in 2016 and 1714 mmcfd in 2019-20. This projection however did not take into cognisance that gas shortfall is already 200 mmcfd this year.

The best of these three projects included a potential gas discovery in the Bay of Bengal. But even that scenario leaves the country with a 166 mmcfd deficit in 2017 and a 814 mmcfd in 2019-20. To make matters worse, at the present trend of consumption growth, the gas demand will spiral up to 4567 mmcfd by 2019-20. This is enough reason to push the panic button and look for new energy strategies.

Petrobangla has already declined confirmation of gas supplies to a number of upcoming power projects. This means, the government cannot go ahead with its planned power projects without reconfiguring how these will run. Petrobangla has already advocated for allocating future gas only to industries (such as fertiliser factories) and domestic consumption for which there are no importable substitutes. The local energy giant has also suggested that future power projects should be coal-fired or imported fuel based.

According to the PDB, till 2025 if Bangladesh's GDP remains as low as 5.5 percent, the country needs to add 19000 megawatts of additional power and if the GDP is as high as 8 percent, it needs 41000 mw power. It is unanimously agreed by the government that by 2020, the country would need to generate 20,000 mw power to serve all of its

Keraniganj is heavily dependent on generators for its power needs.

population. Such a target would be impossible to achieve if the national focus sticks to gas based energy.

So what are the costs of alternative sources of energy?
While power plants will need billions of dollars of investment, the government would also have to consider different types of costs of generic average power production of such alternatives. Presently the world consumes 5000 gigawatts a day. Most of it is being generated from coal, followed by natural gas, oil and nuclear technology. A very insignificant part of the world's power generation comes from renewable solutions like wind and solar.

On an average, coal fired power costs US 5 to 6 cents per kilowatt hour, nuclear power also costs the same, gas 6 to 7 cents, wind 8 cents and solar 30 to 35 cents globally. Although solar power is the costliest solution, energy experts in recent years, have lauded it as the best solution to the energy crisis as it is renewable, environment friendly and very flexible to install. Power giants such as General Electric are investing heavily in developing solar power to make it cheaper in the future. GE predicts a surge in global consumption of 10000 gigawatts a day before 2030 and there is no way any country could rely on a single source for generating such enormous power.

Research and trials have shown that Bangladesh is not suitable for wind power. Importing power or gas from neighbouring countries like Myanmar, India and Bhutan requires mutual understanding and willingness to cooperate. The government cannot just rely on such concepts unless the neighbours are willing to export energy to Bangladesh.

Fortunately new strategies are being thought of. Energy adviser to the prime minister Dr. Towfiq-e-Elahi Chowdhury has so far come up with two new ideas to deal with the current scenario. The first is to make all upcoming power projects “duel-fuel” instead of making them gas-fired only. Duel fuel implies that the plant will be both gas-fired and oil-fired. This idea will keep the future plants working when the gas crisis becomes more severe. The second idea is to import Liquefied Natural Gas (LNG) along with the floating terminal that carries it, have the terminal docked at the Sangu offshore platform and use the Sangu gas pipeline to transport the LNG to the national grid. This idea will keep the existing gas consuming industry running.

Nuclear Power
Going nuclear has also been a much talked about alternative. Earlier this month the government had discussions with Russia for two 1000-megawatt nuclear power projects. The memorandum of understanding for these plants will be signed by the end of this month. Nuclear power is also very capital-intensive, while fuel costs are relatively much more significant for systems based on fossil fuels. Development of nuclear power could provide work for local industries, which build the plant and also minimise long-term commitments to buying fuels abroad. Overseas purchases over the lifetime of a new coal-fired plant in Japan, for example, may be subject to price rises which could be a more serious drain on foreign currency reserves than less costly uranium.

The site is set at Ruppur. Such a project would also require heavy investment in power transmission as well. The maintenance cost, moreover, which includes taking safety measures addressing environmental concerns--is also very high. The government will have to carefully deal with the issue of dumping nuclear waste as it is still a problem for even the most advanced nations.

A nuclear power plant cannot be built overnight and it is also a very costly investment. The project's financing has also not been found. If the government can ensure finance and strike a deal for these two plants within a few months, these would come into operation from 2017-18. Therefore, it would not solve the on-going problem.

With gas supplies depleting at a frightening rate the need for alternative sources is
immediate. Photo: Petrobangla

Solar Power
Solar power is still globally the most costly solution but definitely a practical one because of the relatively simple installation of the power system in rural Bangladesh. It should work in the same way mobile phones became widely popular in the villages. Presently over 300,000 households are using solar energy equivalent to 15 megawatts. But solar power did change lifestyle in coastal to hilly regions. With the view to developing renewable energy resources to meet five percent of the total power demand by 2015 and 10 percent by 2020, the government has already lifted duties on solar power panels to popularise solar power in remote communities. This has cut down solar panel prices by 15 percent.

But in terms of megawatts, it offers nothing bigthough it will provide an easy solution in the rural settings.

Rental power
The concept of rental power projects is new in Bangladesh, and few people really understand the difference between rental power and independent power projects (IPP).

While IPPs are permanent set ups, along with long-term contracts and require 10 months to 18 months to install, the rental plants can be installed within 3 months for a short term and are temporary in nature. An IPP contractor procures plant equipment after getting the contract and the rental power contractors must already have equipment before getting the contract.

Unfortunately, the past BNP led alliance government turned the rental power system into a farce when it started awarding 40 plus deals to various ministers and party men much in the same manner as they would dole out relief materials.

During the caretaker regime, several rental power contracts totalling 300 mw capacity were signed. There was distinct favouritism for a local company Energy Prima-- owned by the Hosaf Group, though it was not a rental company. As a result, these deals did not produce the desired result.

But don't let the bad deals dishearten you. Rental powers, if implemented by genuine contractors, are quick and short-term solutions for the on-going power crisis. These plants can be petroleum based and they can be installed to cover a good part of load shedding for the period while large duel-fuel IPPs are installed.

Bangladesh's other natural resource is coal--which remains nearly untapped. The first coal in Bangladesh was discovered in 1958 in Jamalganj--1000 metres below the ground. Ever since, four more discoveries were made in Khalashpir, Barapukuria, Phulbari and Dighipara. It is primarily estimated that these deposits have 2700 million tonnes of coal--equivalent to 37 trillion cubic feet (TCF) gas.

Presently the country has 7.7 TCF proven gas and 12.90 TCF probable gas reserve.

Of these five discoveries, the Barapukuria coal deposit is being tapped through an underground mine. However though Barapukuria has 391 million tonnes of coal, the mine will produce only 30 million tonnes in 30 years. The high quality coal from this mine is being used for a 250 mw power plant and the present mine can at best produce additional coal for another 125 mw. But if Barapukuria was an open pit mine, more than 90 percent of that 391 million tonnes reserve could have been extracted.

Solar energy is ideal for rural areas.

The debate on new coal mining arose over British company Asia Energy's proposal to develop an open pit coal mine in Phulbari. A pressure group that is campaigning against the proposal on grounds of environmental damage and human resettlement is now seen as a political problem by the government in taking decisions on open pit mines, which has become inevitable.

According to the PDB, if the country's power sector switched to coal based power plants, it would need till 2025, 136 million tons (mt) of coal in a low GDP scenario and 450 mt coal in the high GDP scenario. To have such quantity of coal, the country has no option but to go for open pit mining wherever it is possible.

In addition, the country may consider “coal gasification” in Jamalganj, where the deposit rests at a depth that poses problems even for underground mining. In coal gasification technology, pipes are drilled down to the coal seams and methane gas is drawn out to generate power. Two years back, Pakistan signed a deal with a British company to generate 400 mw power on gasification technology.

The government needs to take its decision on coal as soon as possible by adopting a coal policy. New coal power plants will take at least four-five years to come into operation even if a decision is taken today. But it will be cost effective and provide the country with a long-term solution.

Other new technologies
One of the emerging new technologies in the power market is the 'nuclear battery'. A Japanese company through modifying technologies of nuclear system of a submarine has developed the nuclear battery. The technology is only a couple of years new and it has only been applied in installations of the US navy.

The Japanese company has however opened the window for wholesale utilisation. It has signed a deal few months back with the Peruvian government to install two 50 mw plants. Such batteries are installed under the ground and a plant can be set up within 10 months period. Industry insiders say the company is preparing a proposal for Bangladesh.

Besides increasing power generation, new technologies have been introduced to increase efficiency of power consumption. One such technology is the light-emitting diodes (LED), which is now revolutionising lighting technology and saving tonnes of megawatts in consumption, according to a report in the Economist. An LED is made from two layers of semiconductor.

The conventional light bulbs may be cheap to buy but they use only 5 percent of the electricity to generate light and waste the remaining 95 percent electricity. They also last up to 1000 hours of use. But LEDs promise saving 80 percent electricity with a working life of 45000 hours. However LEDs are very costly to buy presently, though in the long run they are cheaper than the conventional bulb.

About 20 per cent of the world's electricity is used for lighting. America's Department of Energy thinks that, with LEDs, this could be cut in half by 2025, saving more than 130 new power stations in America alone.

Low-cost LEDs would also bring light to new areas. Philips, for instance, is planning to launch a small solar-powered LED reading light for Africa, where an estimated 500m people live without electricity. The simplest version, which it hopes to sell for less than $15, is designed to allow children to do their homework in the evenings without a candle or smoky kerosene lamp. Bringing down the cost of LEDs this way will really let in the light.

A catastrophe as potentially devastating as the energy crisis calls for sensible not to mention clever strategising which includes short term and long term planning. The most intelligent approach at this point would be to consider a combination or package of energy alternatives to ensure adequate and consistent supply of energy in the future. It is time to break away from the over dependence on one source - gas, which is already showing signs of running out.

Sharier Khan is Deputy Editor (Reporting) of The Daily Star

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