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Utilising local coal resources a must for cheaper electricity

Published: February 25, 2018 19:34:48 | Updated: February 27, 2018 10:44:12


Fast depleting gas reserve and lack of major initiatives to develop local coal have made it difficult to achieve a sustainable local primary energy source.

According to an estimate, Bangladesh would become 92 per cent dependent on imported fuel by 2030 if local coal is not explored and utilised. 

Generation of electricity in coal-fired power plants will be viable and much cheaper if locally explored quality coal is used as fuel instead of imported one. 

Bangladesh should, therefore, go for all-out commercial exploration of local coal in the next five years to make the power sector, the backbone of the country's economy, sustainable and vibrant, according to the editorial of the current News Bulletin (Oct-Dec 2017) of International Chamber of Commerce-Bangladesh (ICCB) released on Sunday.

The Government will import coal despite the fact that Bangladesh has an estimated reserve of some 3.0 billion tonnes of high-quality coal in five coalfields in northern districts. Experts and the members of the parliamentary standing committee on energy affairs have lent their support for open-pit mining as it is risk-free and cost-effective. But the authorities are reluctant to go ahead with the option of open-pit mining fearing a backlash from the opponents of the system. 

Even though the commitment to restrict funding for coal exploration, other Asian nations including China, India, Japan, the Philippines and Vietnam are increasingly prioritising coal to strengthen their economies too. China, India and Indonesia now burn 71 per cent of the world's newly mined coals, according to the World Coal Association. 

Work is in progress for 22,000 MW imported coal-based power generation in the country by 2041, for which about 66 million tonnes of coal would be needed annually. The government has taken the initiative for setting up a coal transfer terminal at Matarbari with a capacity of 40 million tonnes annually. 

Sustainable and uninterrupted energy is critical for the economic growth. The per capita energy consumption in Bangladesh is one of the lowest in the world (433 KWH as of October 2017). The installed capacity of Bangladesh in 1972 was only 200 MW. Since then, the current power generation has increased to 16,046 MW with 600 MW import from India, 

The capacity has increased due to favourable government policies, which have attracted private investment and Independent Power Producers (IPP). They are now producing 46 per cent of total power in Bangladesh. Though the government has achieved significant success in electricity generation, actual capacity utilisation is 9,507 MW only due to vulnerable and double-digit system loss prevailing in the distribution mechanism. 

The Power Sector Master Plan (PSMP) 2015 has a target of 57,000 MW generation by 2041 – 35 per cent coal based, 35 per cent Gas and LNG based and remaining 30 per cent would come from nuclear power, power import and renewable energy. Of the 30 per cent, about 5.0 per cent would come from imported oil, 5.0 per cent from nuclear and the remaining 20 per cent from renewable energy. 

The government has decided to import LNG for the proposed 15,300 MW LNG-based power generation plants. Contracts have already been signed with private sector operators for 7.0 million tonnes (1000MCFD) of annual LNG import. 

The failure to adequately manage the load shedding, there is a severe disruption in the industrial production and other economic activities. A recent survey reveals that power outages result in a loss of industrial output worth $1.0 billion a year which reduces the GDP growth by about half a percentage point in Bangladesh. It is estimated that the total transmission and distribution losses amount to one-third of the total generation, the value of which is equal to the US$247 million per year. Therefore, there is a need for the development of appropriate infrastructure and effective monitoring system to overcome the major hurdle in efficiently delivering power. 

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