Integrated planning for the energy sector
Thursday, 18 October 2007
Mahmudul Hasan
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 from existing entrepreneurs finding it hard to cope with short supply of energy and the disincentives that have been created for further investments by them in different fields from these conditions of paucity of energy.
It is imperative to address the overall energy situation under a carefully considered master plan that would address all 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 energy sector's sub sectors 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. The situation in this respect has improved somewhat -- very recently -- after the going into operation of a major gas field operated by a foreign company.
But this is still piecemeal strategy. 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 sub-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 coordination 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, sun's rays and waves, radio-active elements, biofuel, etc. Steps to be taken for the development of all of these energy sources should also be an integral part of the integrated plan for the development of the energy sector as a whole. For instance, plans should provide clear projections of the energy requirements of 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.
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 from existing entrepreneurs finding it hard to cope with short supply of energy and the disincentives that have been created for further investments by them in different fields from these conditions of paucity of energy.
It is imperative to address the overall energy situation under a carefully considered master plan that would address all 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 energy sector's sub sectors 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. The situation in this respect has improved somewhat -- very recently -- after the going into operation of a major gas field operated by a foreign company.
But this is still piecemeal strategy. 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 sub-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 coordination 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, sun's rays and waves, radio-active elements, biofuel, etc. Steps to be taken for the development of all of these energy sources should also be an integral part of the integrated plan for the development of the energy sector as a whole. For instance, plans should provide clear projections of the energy requirements of 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.