The power sector requires investment of Tk 1655 billion over the next five years, according to a draft on the energy sector reform of the 7th Five-Year Plan presented to the consultative meeting of the National Economic Council (NEC) recently. Out of this, 50 per cent is expected to be met by the private sector.
The high-cost fuel-based power generation will be gradually phased out. So will the low-cost gas-based ones. The government plans to increase power generation by 12,853 megawatts (MW) over the next five years with joint effort of the public and the private sectors. In the last two years of the 7th FYP, around 6,000MW of fresh power will be added to the national grid, most of which will be from imported coal and liquefied natural gas (LNG).
Since the country's gas reserve is depleting fast, there is a need for taking immediate measures to extract coal from the country's coalfields to deal with energy supply shortage. Despite having significant deposit in five coalmines, the country has failed to utilise the natural resource properly due to lack of proper policy guidelines. The way coal is being extracted from the Barapukuria mine, it appears that it may take 300 years to exhaust the deposit, say experts.
On an average, Bangladesh now produces 7,500MW of electricity against the country's installed capacity of 11,500MW. Although the power generation has doubled in the last six years, about 40 per cent of the population does not have electricity connection yet. However, total electricity generation during the 7th FYP will increase by 12,853MW, according to the draft. Around 60 per cent of the electricity will be produced by the public sector and the rest 40 per cent by the private sector.
Energy experts say the government requires investment of about $50 billion in power and energy sector by 2030 to meet the rising demand. Besides Phulbari, the government can extract a huge quantity of coal from Jamalganj, Khalaspir and Dighipara. But lack of proper policy decisions and skilled manpower is hindering coal extraction and acting as one of the main constraints to develop power plants, especially the coal-based ones.
During the 7th FYP plan period, domestic gas will be replaced as the primary source of energy, as its reserves are drying. The country's first nuclear-based power plant, Rooppur power project, is expected to be commissioned during the 7th FYP. It will play a vital role in boosting power generation across the country.
To achieve the power generation target, the specific timeframe for commissioning the power plants have to be met by the government. In order to implement the plans, the government should urgently finalise and adopt the long-pending National Energy Policy. Alternatively, it should prepare a long-term energy master plan.
The master plan in question should address the policies for gas allocation and domestic gas exploration, coal utilisation, energy import, improved cooking stove and energy subsidy pricing. The challenges in the energy sector are enormous and much of these relate to policy and institutional reforms.
These are otherwise tough reforms and a strong political will is necessary, especially regarding the adoption of domestic coal policy. The importance of timely implementation of these reforms cannot be overstated. The efficient power generation strategy is critically dependent on the successful implementation of these reforms which is tied to primary energy.
The draft 7th FYP observes that in addition to a strong political will and leadership, improvement is also needed in the technical and negotiation capacity of the ministry and associate energy agencies.
Meantime, the government gave its thumb of approval to the open-pit mining method for coal extraction. It began work on the coal extraction from the northern chunk of the Barapukuria coal deposit. A 1,300 megawatt (MW) power plant is expected to be installed at the mouth of the Barapukuria mine. The work on coal extraction and power plant will be carried out simultaneously.
What is worrying is that the government is yet to finalise its national coal policy. It remains in the draft stage even after so many reviews. Once the policy is in place, it could certainly help develop the country's energy sector. However, the fact remains that the coal policy is not a requirement to start the development of any coalmine, as there is already a national legislation on mining - covering both the underground and open-pit mining.
As part of the move for intensified energy generation, Bangladesh has set up cross-border electricity grid with India for importing 500-megawatt power from India and also negotiating to import at least 3,500-MW more electricity through bilateral, regional and sub-regional joint venture initiatives from India, Myanmar, Nepal and Bhutan by 2030.
Regional cooperation has, indeed, tremendous potential for unlocking regional long-term energy balance in a cost-effective manner. Cross-border electricity trading with India has otherwise opened up possibility for power trading with Nepal and Bhutan as well.
The benefits of country-wise and regional policies in the energy sector are manifold. Bringing electricity to the millions of poor in the region will alleviate untold miseries of the people. It will give people access to better education, health, water and sanitation services, technologies that will open up communication, information sharing, storage of food grains and several other societal benefits that will bring peace and cohesion to these societies.
All said and done, the coal industry of Bangladesh is still in its infancy with known reserves of 2.7 billion tonnes of coal, out of which 1.4 billion tonnes is recoverable. In a gross domestic product (GDP) growth rate scenario of 8.0 per cent, Bangladesh needs 450 million tonnes of coal a year to generate required amount of energy. Country's five coalfields can cater to the needs until 2030. As such, the government should go for an efficient strategy to meet the increasing demand for electricity as envisaged in the 7th Five-Year Plan.
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