Bangladesh experienced a substantial surge in coal-fired power production in 2023, nearly tripling its output.
According to a comprehensive Reuters analysis of official data, this surge played a pivotal role in mitigating the nation's most extensive power outages in over a decade while simultaneously curbing escalating generation costs.
Challenged by depleting dollar reserves and a weakening currency, the government strategically turned to coal, displacing cleaner fuels and transforming its energy mix.
The Power Grid Company of Bangladesh (PGCB) reported a remarkable upswing in coal-generated electricity, reaching an unprecedented 21 billion kilowatt-hours (kWh) in 2023, a significant leap from 7.9 billion kWh in 2022.
With expectations of further growth, a new power unit is slated for commissioning this year, promising to fortify coal's share in the energy landscape.
A senior energy ministry official emphasized a sustained reliance on gas, while liquid fuels are anticipated to witness a decline.
Eight coal-based megaprojects are currently under development and planning, according to the government agency Power Cell: Maitri Super Thermal Power Plant, Rampal, Bagerhat- 1320 MW; Ultra SuperCritical Power Plant, Matarbari, Cox's Bazar- 1200 MW; Maheshkhali, BPDB and Singapore Joint Venture- 1200 MW; Maheshkhali, Cox's Bazar- 1320 MW; Maheshkhali, BPDB and TNB Malaysia Joint Venture- 1200 MW; Maheshkhali, BPDB & CADHK, China Joint Venture- 1200 MW; Maheshkhali, BPDB & KEPCO, Korea Joint Venture- 1200 MW and
Payra, Patuakhali, NWPGCL and CMC, China Joint Venture- 1320 MW.
PGCB data highlighted the shifting dynamics, indicating an increase in coal's contribution to the power generation fuel mix from 8.9% in 2022 to 14.2% in 2023. Conversely, natural gas experienced a marginal increase from 51% to 55.2%, marking its first uptick in four years. However, due to soaring international fuel prices limiting its usage, the share of natural gas remained significantly lower than the 66% average observed over the preceding decade.
Liquid fuels such as fuel oil and diesel underwent a reduction in their contribution to power generation, decreasing from 29.6% in 2022 to 20.1% in 2023, largely replaced by coal and natural gas.
Facing unplanned power outages on three out of every four days in 2023, Bangladesh, with a population exceeding 170 million, saw total shortages surge by almost 40% annually to 2.7 billion kWh, equivalent to 2.8% of demand. The latter half of the year witnessed a decline in shortages, attributed to increased coal-fired power plant output.
To meet its surging power demand, which rose by over 5% in 2023, Bangladesh aligned itself with major Asian economies like India and Vietnam, relying on relatively inexpensive coal. Consequently, the nation is poised to experience a reduction in average generation costs for the first time in four years, with the 11-month average cost dropping to 5.23 Bangladesh Taka (4.78 US cents) per kWh, representing a 9% decrease compared to 2022.
Contrary to the global push for renewable energy, data from the Bangladesh Power Development Board indicates that coal, often dubbed "the dirtiest fossil fuel," only provides 13% of Bangladesh's energy needs.
Coal, considered one of the primary energy sources with the lowest global costs, is derived from five coal fields—Barapukuria, Phulbari, Dighipara, Khalashpir, and Jamalganj. These fields hold a combined estimated reserve of 7.82 billion metric tons, as per a June 28, 2023, The Business Standard reported.
The Barapukuria coal mine, the nation's first coal mine, covers about 800 acres of land, operated by Bangladesh Oil, Gas, and Mineral Resource Corporation (Petrobangla). Currently producing between 4,000 and 5,000 metric tons per day, this mine primarily fuels the country's oldest coal-fired 250 MW power plant in Barapukuria, with the remainder used in various industries.
Despite plans for environmental improvements, with the COP26 commitment to reduce carbon emissions by 89.47 million metric tons by 2030, Bangladesh remains among the top ten economies heavily reliant on fossil fuels. While initiatives include commissioning a long-delayed nuclear power plant and expanding solar capacity, industry experts foresee renewable energy contributing less than 5% to the total output in the coming decade, with fossil fuels retaining dominance in the power generation landscape.
