Md Moallam Hossain
Bangladesh has fulfilled all the three eligibility criteria for graduation from the UN's Least Developed Countries (LDC) list, and is on track for graduation in 2024. Power generation is one of the major concerns for the growing countries with limited energy sources, around the world.
Bangladesh, without any doubt, is faced with the same set of challenges as the energy sources continue to deplete. Renewable energy sources continue to be the most easily available and suitable alternative. As the number of natural gas reserves continues to decrease, the amount of power generated from renewable energy sources has to be increased.
A projection is made from the current condition to predict the possible energy scarcity in the near future. Looking at the current situation, Bangladesh finds itself in a desperate situation to address future power generation challenges near the year 2050. As of December 2019, total installed capacity was near about 22,800 MW where it was started from 4,942 MW in the year 2009 including captive, renewable and imported power. Now about 95 % of the total population has great access to electricity, and the per capita power generation reached 510 Kwh.
Total electricity consumers reached 35.70 million as of December 2019 in comparison to 10.8 million in the year 2009. Against the 22,800 MW installed capacity, maximum generation reached about 12,893 MW which is creating gap and resulting in more capacity payment by the Bangladesh Power Development Board (BPDB), more idle capacity and enhancement of the electricity cost.
Furnace Oil, HFO, Diesel, Gas and Coal-based plants are the best available alternatives for producing electricity. However, oil-based power plants are highly expensive compared to gas and coal-based plants. So, oil based plants are only a short-term solution to mitigate the supply shortage of power within the shortest period of time.
According to the BPDB, as on 30 November 2019 the present electricity generation capacity was 57.19% gas-based, 25% HFO, 7.05% HSD, 2.7% coal, and .2% solar-based. So, natural gas-based power plants are the main source of electricity and those have the highest merit order due to subsidized price of gas. As gas supply is going on a shortage, and plant factor of the gas-based power plants requires to be kept at the minimum, we have to search for the alternative sources of fuel like LNG, Coal and Solar to meet the demand at affordable prices.
According to the Retirement Plan in PSMP 2016, a significant portion of existing generation capacity would go null by 2030. We will have a reduction of Gas & Oil Based Power Plants by 4,675 MW and 2,097 MW respectively. Considering the retirement of existing power plants, it is obvious that a widening gap would occur between generation capacity & demand in the near future. So, the future fuel mix for generation electricity would be 35% Gas/LNG, 35% Coal, 5% Liquid fuel, and 25% others (power import, nuclear & renewable).
Coal will play a significant role in fuel mix and will be required to import 60 MTPA of coal in 2041 and rest 10 MTPA from domestic sources which will increase the import of coal 60 times. We require development of massive coal import infrastructure. The only deep sea port, Matarbari, can take mother vessels with a maximum capacity of about 8.0 MTPA coal. More than 50 MTPA of coal will need to be carried through small vessels of 20-25k tons capacity due to draft restriction.
So, the messages mainly are: present power generation capacity of the country is significantly higher than the demand and fuel supply is the main bottleneck. The inefficient power plants are to be retired and replaced with highly efficient power plants. Liquid fuel-based power generation is to be displaced with cheaper and cleaner fuel.
Coal will play an important role in power generation provided that sufficient coal import infrastructures are developed for huge coal logistics. Indigenous gas fields are depleting rapidly and if no major gas reserve is discovered, the gas-based power plants will mainly depend on imported LNG. LNG-based power projects with secured fuel supply arrangements are the most suitable on the current perspective of Bangladesh. Bangladesh will need to remove the barriers to higher investment posed by low access to reliable and affordable power, poor transportation infrastructure, limited availability of serviced land and uncertain and complex business regulations.
Md Moallam Hossain, FCMA
Head of Accounts & Finance
Bangladesh China Power Company Limited
Payra 1320 MW Thermal
Power Plant Project