How much is too much?

BANGLADESH has been overwhelmingly dependent on her own natural gas for a long time. Imported fuel has been a minor part of its energy basket. But the recent depleting trend of the gas reserve is likely to put an end to the better years. Energy observers are pointing out that the country is gradually leaning toward imported supply of energy sources and it will not be too long before the nation is overwhelmingly dependent on imported fuel. According to one estimate, while dependence on imported fuel for electricity generation was less than 10 percent in 2010, it is set to increase to about 70 percent in 2030.

Major changes in the energy infrastructure will be visible as many large coal-based power plants, LNG fuel and nuclear power plants take their share in power generation. On the supply side, large ships from far away countries will unload huge quantities of imported coal in the sea ports of Bangladesh, LNG will be unloaded in special terminals unknown to most of us, the consignment of uranium fuel will be flown in to feed the nuclear reactor -- a scenario only few of us had contemplated before.

No wonder the above will come at high cost. For comparison, the present cost of fuel for power generation and power import is an estimated $2 billion (Tk 16,000 crore) per year; while the cost of fuel and power import would be around $15 billion (Padma bridge costs less than $4 billion) by 2030 should Bangladesh achieve its power generation target by that time.

This will certainly be a challenge for Bangladesh. The challenge will actually be in two fronts: firstly and most importantly, how would Bangladesh cope with the huge cost required for energy imports and how will this affect her economy in the long-run? The second challenge is this: how prepared would Bangladesh be in terms of experience and manpower to manage and supervise such huge and varied fuel supply activities?

Bangladesh is at the end of its term as a low cost gas-based mono energy country and is likely to become a high cost multi-energy country. The following is an outline on the fast changing energy scene.

Gas reserve will lose status as prime energy source

Bangladesh is likely to exhaust its remaining gas reserve in about 10 years, considering an average annual production rate over this period. It has been projected that the annual gas production rate will cease to grow after 2017 and the annual production will continue to drop each year after that time. By 2025, gas will lose its status as an important fuel and will play a minor role in power generation. This scenario may, however, change to some extent should there be major new gas field discoveries.

Imported coal to dominate the energy scene

According to the government plan the power generation capacity of the country will reach about 40,000 MW by 2030, half of which would be produced in coal-based power plants. The amount of coal required to produce 20,000 MW of electricity would be 60 million tonnes per year. Most of the required coal will be imported from suitable coal exporting countries like Australia, Indonesia or South Africa.

The contribution from our own coal fields seems to be little considering the slow and meager pace of development planning of local coal. At present, Bangladesh produces one million tonnes of coal per year from the only underground coal mine in Barapukuria, Dinajpur. There are three more similar coal deposits in the country in which underground mining can maintain the same level of production at ease. If we assume that all four coal fields are developed by underground mining, then total production from these mines would be 4 to 5 million tonnes per year.

 The government shows little interest in a much more productive open cut coal mining method for reasons of serious controversies. There is, however, only one place, i.e. the northern part of Barapukuria coal field, where depths of coal are much shallower and open cut is considered feasible. If implemented, it may produce 3 million tonnes of coal per year. Thus coal contribution from Bangladeshi mines could reasonably be estimated at about 8 million tonnes per year.

The above would still require 52 million tonnes of coal per year to be imported and that would cost about $5.2 billion (current price) per year.

Costly yet reliable LNG fuel

 Liquefied Natural Gas (LNG) has been traded across the world as a clean and reliable source of primary fuel for long-term supply. However, this is costly. Bangladesh is entering into a contract with Qatar for supply of LNG at 500 million cubic feet per day during the initial stage. For this purpose, floating LNG terminal is being built off the Chittagong coast. Later on land-based LNG terminals will also be established and the volume of LNG will be increased to supply 1500 mmcfd.

While this will mitigate the gas crisis as conventional gas is in short supply, it will certainly cost the nation dearly as $3 per unit gas will be replaced for a $14 per unit gas. The cost of 1500 mmcfd regasified LNG will be about $8 billion (Tk 64,000 crore) per year at present value.  Bangladesh expects to start consuming LNG by 2018. 

Nuclear era begins with costliest infrastructure

Bangladesh is embracing an era of nuclear electricity with the technical and financial assistance of Russia which is building a 2400 MW nuclear power plant in Rooppur. However, the cost of construction of the plant is estimated to be a staggering $12.5 billion, the costliest project ever taken up by Bangladesh. The total cost will be even higher if we add the maintenance, fuel and operating costs (A. Rahman, The Daily Star, Dec 30, 2015)

There is one more challenge Bangladesh will have to face and that is the total dependency on Russia for this project, i.e. for its operation, maintenance, fuel supply, radioactive fuel disposal and so on. The construction of a nuclear power plant in a densely populated area with an agro-economic base has been questioned by experts on the grounds of safety reasons.

Limited scope of renewable sources

A large scale contribution to power generation by solar, wind and tide type renewable sources is not likely any time soon. At present, about 175 MW of power is generated by solar and wind which is about 1.5 percent of the total power generation capacity (11,300 MW) in the country. Solar power in the form of SHS has been growing fast in rural Bangladesh. Nevertheless, the contribution of solar, wind, etc., in power generation will remain limited.

Wide scope of electricity import

With a cross border transmission of 500 MW electricity from India, Bangladesh has opened up a new option of adding power into her national grid. Power import from India is expected to increase further in the near future. Furthermore, Bangladesh has shown active interest in importing power from Bhutan and Nepal, the two neighbouring countries whose hydropower potential is huge. India has been importing power from Bhutan and Nepal with win-win contracts with the countries. 

Eyes on ambitious transcontinental gas pipeline

In around 2005 Bangladesh decided not to agree to a tri-nation (Myanmar-Bangladesh-India) gas pipeline proposal according to which gas would be transmitted from Myanmar to India through Bangladesh. This was an opportunity lost, for Bangladesh could have agreed to the proposal on the condition that part of the gas should be sold to Bangladesh and this could have given Bangladesh long-term gas security. Bangladesh now seeks gas from Myanmar, but it is too late for her as the gas is already being sold to China.

The possibility of being connected to the proposed long distance international (Iran-Pakistan-India or IPI) or inter-continental (Turkmenistan-Afghanistan-Pakistan-India or TAPI) gas pipeline seems real; yet this will depend on serious diplomacy and negotiated gas prices. This will not be cheap gas but should Bangladesh succeed in connecting herself with either a TAPI or IPI project, long-term gas security for the country will be ensured. 

The writer is Professor, Department of Geology, University of Dhaka.