Our energy plan is full of pitfalls
In 2016, the government prepared a master plan for the energy sector of the country (Power System Master Plan). It was positioned as a comprehensive guide for the country's power and energy sector. However, as time unfolded, the master plan appeared to be a path to financial disaster, due to a number of key issues.
Heavy reliance on external entities
The Power System Master Plan heavily prioritised foreign investment, foreign companies and imported energy sources when perfectly viable domestic alternatives are available. The administration contracted a bunch of foreign companies to build mega coal power plants and terminals, while it heavily relied on foreign banks to fund such projects. What is more problematic is that the master plan, devised by the Japan International Cooperation Agency (Jica), bypassed the recommendations of local energy experts, which raised questions about whether the plan truly aligns with the domestic needs and capabilities of the country.
Ultimately, such reliance on external entities has led to a scenario where vital energy decisions of the country are now being heavily influenced by foreign interests.
While global trends show an increasing reliance on renewable energy, surprisingly, the government's master plan neglects this sector. What's most alarming is that the new master plan for the Energy and Power Sector, titled Integrated Energy and Power Master Plan (IEPMP), which sets out the country's energy plans up to 2050, also developed with the technical expertise of Jica, is more or less a continuation of the 2016 masterplan. The lack of emphasis on solar and wind power development is glaring, particularly, when considering the plummeting costs of these sources.
The perils of imported coal and LNG
The master plan heavily leaned towards imported fuels, such as oil, liquefied natural gas (LNG), and coal. It outlined extensive plans for increasing coal usage, building coal plants, and importing a massive amount of LNG, despite its higher cost and environmentally destructive nature. The experts have long cautioned that such huge plans for coal import (as much as 80 percent of Bangladesh's energy needs by 2041) will have dangerous consequences both for the country's foreign exchange reserves and environment.
Relying heavily on coal also raises ethical questions about the government's commitment to sustainable development. The plan outlined significant coal projects, intending to achieve 35 percent of the energy mix from coal by 2030. Environmental concerns, along with concerns regarding the potentially catastrophic financial impact of a high level of import, have been raised by organisations such as Market Forces. The long-term consequences of such a trajectory could transform Bangladesh into a carbon-intensive nation.
Experts have long warned that this overreliance on imported fuels would put the economy at severe financial risk. The extremely volatile nature of the global market and geopolitical events can drastically impact the availability and pricing of these resources.
In an era where sustainable alternatives are gaining prominence globally, the master plan's focus on traditional and environmentally taxing fuels raises serious concerns about the long-term viability of the energy security of the country.
Neglected domestic gas
What really never made sense was the plan's prioritisation of imported LNG over domestic gas. Experts have consistently warned against neglecting domestic gas exploration and extraction in favour of LNG imports. The cost difference is stark, with imported LNG being highly expensive compared to domestic gas.
Geologists have constantly reminded us about the high potential of unexplored gas reserves in Bangladesh. Investing in domestic gas exploration and extraction could easily reduce dependency on costly imported fuels. However, the government chose to ignore it.
Meanwhile, the failure to secure long-term contracts for LNG at favourable rates in the international market also raises questions about the capability of the administration.
Revisiting the domestic gas potential of Bangladesh is imperative. The master plan's disregard for domestic gas resources has not only inflated energy costs but also left Bangladesh vulnerable to international market fluctuations.
Media and lobbying
There has been some speculation regarding a coordinated effort behind promoting LNG imports, with suspicions of a local and foreign lobby pushing for these changes. Media campaigns highlighting "diminishing gas reserves" and the "dire need for LNG imports" have created a narrative that certainly serves the interests of vested groups. Notable examples include journalists regularly associating with officials of LNG and LPG companies, raising questions about the authenticity of media reporting on vital energy issues.
The media's role in shaping public opinion on energy policies cannot be underestimated. A thorough investigation into media coverage, affiliations, and lobbying efforts is essential for ensuring a transparent and unbiased energy policy-making process. This is important to ensure that the information disseminated is unbiased and reflects the best interests of the public.
While global trends show an increasing reliance on renewable energy, surprisingly, the government's master plan neglects this sector. What's most alarming is that the new master plan for the Energy and Power Sector, titled Integrated Energy and Power Master Plan (IEPMP), which sets out the country's energy plans up to 2050, also developed with the technical expertise of Jica, is more or less a continuation of the 2016 masterplan. The lack of emphasis on solar and wind power development is glaring, particularly, when considering the plummeting costs of these sources. A comparison with India, a country with similar land constraints, highlights the missed opportunities in harnessing renewable energy.
In conclusion, the Power System Master Plan requires a holistic reassessment to address the myriad challenges it poses to Bangladesh's energy sector. The prioritisation of foreign dependency, neglect of domestic resources, and insufficient focus on renewable energy alternatives demand urgent attention.
Maha Mirza is a researcher, and part-time lecturer at the Department of Economics of Jahangirnagar University.
Views expressed in this article are the author's own.
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