GOVT'S MEGA PLAN TO PRODUCE 7,000 MW BY 2014
Hafeezuddin Ahmad
THE recent mega plan presented by the Ministry of Energy and Mineral Resources to Prime Minister Sheikh Hasina, envisaging zero load shedding by 2010, and increasing generation capacity to 7000 MW by 2014, is a piece of welcome news for the country. It gives a projection of the power scenario during the period 2009-2014.
Long Term 2014: The focus on 2000 MW coal-based power plants in four to five years' time is positive and an indication of the government's resolve to shift from sole dependency on our gas resources, which is depleting fast, to an alternative fossil fuel -- our coal. Although there is talk of importing coal, no doubt exploiting country's substantial coal resources is also on the cards. In fact, the generation cost of Tk 3.5 per unit is an indication of that, as imported coal would be much higher, estimated around Tk 8.5 per unit. The Economic Adviser to the Prime Minister, Dr. Mashiur Rahman has recently admitted in a meeting at the National Press Club that given the gas scarcity, our coal resources could be utilised to generate power. Regarding the opposition to coal extraction method, he said that it is politically very weak, and the government should take a brave decision, subject to ensuring proper compensation for the affected people.
Reiterating what the author has emphasised in one of earlier articles, since Bangladesh has substantial coal reserves at feasible and viable stripping ratios, is it not prudent to switch to coal-based power generation (5,000-10,000 MW) in the long-term using its own reserves? Approximately three million tons of coal are needed to generate 1000 MW per year, so 900 million tons of reserve would suffice for 10,000 MW for over 30 years. This can be sourced exclusively from the contiguous Barapukuria-Phulbari basins, which have an estimated reserve of 572 mt and 390 mt, totalling 962 million tons of thermal coal, out of country's known reserves of over 3.0 billion tons.
Immediate Term 2009-10: Because the mega plan envisages 752 MW new plants scheduled for commissioning by December 09, thereby hoping to alleviate load shedding, at issue is the question of the primary fuel which is needed. Are these gas- or oil (HFO/diesel)- or dual fuel (gas/oil)-based? This is a critical matter if these are gas based (188 mmcfd gas needed), and would be a daunting challenge as gas supply is short of demand. For example on August 03 and 04, 2009, Bangladesh Power Development Board (BPDB) sources show generation reduction due to gas shortage was 505 MW and 510 MW respectively. During these two days, according to Petrobangla sources, overall gas "demand" and "supply" for power generation was 951.5 mmcfd and 784.2 mmcfd respectively -- already a shortfall of 167.3 mmcfd.
So, unless additional gas is produced in excess of current production levels (1944.3 mmcfd), or unless gas is diverted from other consumers (fertiliser, industry, domestic), the new 752 MW-plants will not have gas if they are gas based. In fact, the government has decided to do this precisely i.e. increase generation of installed power plants during the ensuing Ramadan by diverting gas supply from other consumers to them. Otherwise, these 752-MW plants can become operational only (as per mega plan) if they are oil- or dual fuel (oil/gas)-based also.
Interim Term: Six to twelve months (2009-10): 500-1500 MW Rental Plants (HFO/diesel based): Eighteen to twenty four months (2011-2012): 800 MW Peaking Plants (dual fuel-oil/gas):
Government plan is fully endorsed, as being the preferred solution in the interim. They need to be pursued urgently. The rationale for planning dual fuel for the peaking plants is probably based on the expectation that additional gas may/would be available in the interim from existing gas fields, otherwise they would use oil. However, the cost of generation from HFO (about Tk. 10 per unit) or diesel (Tk. 16 per unit) is to be taken note of. Although these seem to be on the lower side, the key fact is generation from oil is much costlier than gas (Tk. 3.5 per unit).
Another point is whether the four peaking plants (each 200 MW) can be installed within a period of 18 to 24 months, considering the project cycle (feasibility, due diligence, financial closure, land acquisition, plant erection, start-up). A realistic time line may be three to four years.
Conclusion: The mega plan is conditionally feasible for the immediate term (2009-10), endorsed and do-able in the interim period (2011-2012), and is definitely sound for the long term (2013-14). For beyond 2014, considering Bangladesh's current state of acute power shortage, its substantial coal reserves, acute gas shortage and uncertainty of future gas supply, the option of more value added use of gas should more gas be discovered, and reserving gas reserves for domestic household consumption and installed gas fired power plants, it follows that the logical course of action is not to wait uncertainly for more gas discoveries (which in any case is at best five to six years away, if at all), but to immediately decide on coal mining in the Phulbari-Barapukuria basins, and to pursue a phased development of coal-fired power plants (5,000-10,000 MW).
In parallel, it is important to pursue renewable power generation capacity (wind in the coastal region, and solar inland), biogas (in rural homesteads) and nuclear. Alongside, efforts for gas exploration should be stepped up and coal exploration and coal gasification power plants in deeper reserves should be pursued.
Such a strategic power sector planning will not only take the country securely, energy-wise, through the next few decades, but at the same time establish global linkages to development and innovation in other forms of energy production which will ultimately replace fossil fuels. Electric power is at the heart of economic, social and political well-being for Bangladesh.
A MoEN/IEA joint workshop on "Fuel Options for Power Generation in Asean" was held in Bangkok on September 22-23, 2008, following the steep increase of oil, gas, and coal prices. Malaysia, Thailand and Indonesia gave presentations. Thailand, where 66% power generation was gas fired, stated that gas fired share would be reduced and coal-fired generation increased. Indonesia, where oil fired generation was 34% in 2007, planned to increase share of coal fired capacity from 41% to 68% by 2016. In the long term, all would consider nuclear power.
Government's mega plan to produce 7000 mw by 2014
