Framing a comprehensive energy policy
Sunday, 23 November 2008
Ferdous Alam
POWER is central to economic activity. But this power supply in Bangladesh is substantially short of even prevailing demand not to mention the potential higher demand in the future. In this situation of power insufficiency, investment operations are understandably lagging from a lack of confidence from otherwise able investors that they would not be able to run their new enterprises under a situation of power shortage.
Thus, there is a pressing need to increase power supply but that involves choices like how to produce the power, whether from burning gas, the availability of which is dwindling, or by using coal, the reserves of which are vast and remain largely untapped. The stepped-up use of coal for power production is a tempting one. But that too has to be weighed against environmental concerns.
Besides, there is also the bright potential of developing off-grid power all over the vast rural interior of Bangladesh where the population is largely concentrated. Supplying conventional power through a nationwide grid in these areas can be less economical compared to a self-sustaining community-based approach through solar electricity production at individual or village levels. Similar possibilities are there for using biofuels, power produced from wind and even hydro-electricity in some areas. A great deal of the power needs of the future can be met by developing these non-conventional sources of energy.
There are opportunities also for conservation of power or optimum use of power by popularising the use of special bulbs and appliances that can be helpful in conserving power. Presently, a vast amount of resources are wasted from direct import of refined fuel oils. But adding to capacities of the local refineries and overhauling them, local refining capacities can be much increased. In that case, a big saving can be made as the need to import refined fuel oil will be reduced substantially.
All of these plans and more must become part of an integrated exercise. The sooner this comprehensive plan is drawn up and its implementation proceeds, the better it is for the economy in all respects. The present piecemeal attempts at addressing the energy needs are increasingly turning out to be a wasteful and hazardous experience.
The energy sector in the country, presently, is a source of worry for short-, medium- and long-term planning. The state of the sector is causing serious concern both at the macro- and micro-levels of the economy. The macro-level concerns are mainly due to the inseparable vital links between economic growth and investments, on the one hand, and the energy situation, on the other. The micro-level anxieties are arising from existing entrepreneurs, who find it hard to cope with dwindling energy supply. Worse still, in this situation of power shortage, they have made further investments in different fields, which in a way has turned out to be a disincentive for them.
It is imperative to address the overall energy situation under a carefully considered master plan that would address all the sides to the development of energy sources. The plan needs to be formulated and implemented at the fastest in view of the worsening energy-related conditions. Once it is firmed up and clear signals are received about its full implementation, the same will raise investors' confidence and accelerate the growth momentum in the economy. Essentially, such a comprehensive plan for the energy sector must be an 'integrated' one, forging relationships in developmental activities between the sub-sectors of the energy sector to lead cumulatively to a desired outcome.
For example, the augmentation of power generation is the biggest need in the power sub-sector. But this task must not be conceived of and attempted in isolation. Power plants that produce power in Bangladesh are predominantly gas-based. For a long time, the inability to supply the gas-fed power plants adequately resulted in their installed capacities not being fully used.
There will have to be comprehensive plans to know what the effective demand for electricity is in the country and what would be that demand, say, twenty years from now. More significantly, it has to be similarly known how much of that power would be aimed for production by using gas. And then it would be very important to take stock of whether this amount of additional gas would be produced in the coming years, in tandem with installation of capacities to produce power from gas. In that case, matching investments will have to be made in the gas sector in exploration and production activities to find new deposits of gas and getting it ready for supply to the power plants. In sum, there will have to be synthesis in the operations of the two major sub-sectors in the energy sector -- power and gas -- so that the main goal of energy availability for the users can be smoothly and progressively met.
The integrated policies in the energy sector must also examine and clearly prepare a vision and guideline for the development of energy sources in the other sub sectors such as coal, non-conventional power from wind, the sun's rays, nuclear power, biofuel, etc. Steps to be taken for the development of all of these energy sources should also be an essential part of the integrated plan for the development of the energy sector as a whole. For instance, plans should provide clear projections of the requirements of the energy to be met by the non-conventional sources so that the same do not conflict with planning objectives in the areas of the conventional sources of energy.
POWER is central to economic activity. But this power supply in Bangladesh is substantially short of even prevailing demand not to mention the potential higher demand in the future. In this situation of power insufficiency, investment operations are understandably lagging from a lack of confidence from otherwise able investors that they would not be able to run their new enterprises under a situation of power shortage.
Thus, there is a pressing need to increase power supply but that involves choices like how to produce the power, whether from burning gas, the availability of which is dwindling, or by using coal, the reserves of which are vast and remain largely untapped. The stepped-up use of coal for power production is a tempting one. But that too has to be weighed against environmental concerns.
Besides, there is also the bright potential of developing off-grid power all over the vast rural interior of Bangladesh where the population is largely concentrated. Supplying conventional power through a nationwide grid in these areas can be less economical compared to a self-sustaining community-based approach through solar electricity production at individual or village levels. Similar possibilities are there for using biofuels, power produced from wind and even hydro-electricity in some areas. A great deal of the power needs of the future can be met by developing these non-conventional sources of energy.
There are opportunities also for conservation of power or optimum use of power by popularising the use of special bulbs and appliances that can be helpful in conserving power. Presently, a vast amount of resources are wasted from direct import of refined fuel oils. But adding to capacities of the local refineries and overhauling them, local refining capacities can be much increased. In that case, a big saving can be made as the need to import refined fuel oil will be reduced substantially.
All of these plans and more must become part of an integrated exercise. The sooner this comprehensive plan is drawn up and its implementation proceeds, the better it is for the economy in all respects. The present piecemeal attempts at addressing the energy needs are increasingly turning out to be a wasteful and hazardous experience.
The energy sector in the country, presently, is a source of worry for short-, medium- and long-term planning. The state of the sector is causing serious concern both at the macro- and micro-levels of the economy. The macro-level concerns are mainly due to the inseparable vital links between economic growth and investments, on the one hand, and the energy situation, on the other. The micro-level anxieties are arising from existing entrepreneurs, who find it hard to cope with dwindling energy supply. Worse still, in this situation of power shortage, they have made further investments in different fields, which in a way has turned out to be a disincentive for them.
It is imperative to address the overall energy situation under a carefully considered master plan that would address all the sides to the development of energy sources. The plan needs to be formulated and implemented at the fastest in view of the worsening energy-related conditions. Once it is firmed up and clear signals are received about its full implementation, the same will raise investors' confidence and accelerate the growth momentum in the economy. Essentially, such a comprehensive plan for the energy sector must be an 'integrated' one, forging relationships in developmental activities between the sub-sectors of the energy sector to lead cumulatively to a desired outcome.
For example, the augmentation of power generation is the biggest need in the power sub-sector. But this task must not be conceived of and attempted in isolation. Power plants that produce power in Bangladesh are predominantly gas-based. For a long time, the inability to supply the gas-fed power plants adequately resulted in their installed capacities not being fully used.
There will have to be comprehensive plans to know what the effective demand for electricity is in the country and what would be that demand, say, twenty years from now. More significantly, it has to be similarly known how much of that power would be aimed for production by using gas. And then it would be very important to take stock of whether this amount of additional gas would be produced in the coming years, in tandem with installation of capacities to produce power from gas. In that case, matching investments will have to be made in the gas sector in exploration and production activities to find new deposits of gas and getting it ready for supply to the power plants. In sum, there will have to be synthesis in the operations of the two major sub-sectors in the energy sector -- power and gas -- so that the main goal of energy availability for the users can be smoothly and progressively met.
The integrated policies in the energy sector must also examine and clearly prepare a vision and guideline for the development of energy sources in the other sub sectors such as coal, non-conventional power from wind, the sun's rays, nuclear power, biofuel, etc. Steps to be taken for the development of all of these energy sources should also be an essential part of the integrated plan for the development of the energy sector as a whole. For instance, plans should provide clear projections of the requirements of the energy to be met by the non-conventional sources so that the same do not conflict with planning objectives in the areas of the conventional sources of energy.