Surplus electricity from next year?
In the budget speech, the finance minister projected that within the next fiscal year, there will be huge surplus power as a result of implementation of dozens of power projects.
He said there will be 1,172 megawatt surplus power by next year while there will be a deficit of 360 MW this year. The situation will continue to improve in the following years. In the past, the government had targeted 2011 to be a zero load shedding year.
Presently, the load shedding level swings between 400 MW and 1,200 MW.
AMA Muhith also mentioned that by next year, the government plans to add 1,285 million cubic feet per day (mmcfd) gas which should be enough to end the present gas crisis of around 500 mmcfd.
The present government added 3,300 MW power to the national grid till last month. But at the same time the demand and per capita consumption of electricity have gone up significantly because the economy is on a path of dynamic growth, he said.
The per capita consumption, which used to be the lowest in the region a few years back, has gone up to 265 kilowatt hour (unit) from last year's 220 unit. Electricity coverage has also reached 53 percent from 47 percent of the population.
Muhith said the government has planned to produce 8,294 MW electricity by next year. Agreements have been signed for setting up 52 power plants, and many of them will begin operation next year.
Besides, he hoped that by next year the country will be able to import 250 MW power from India.
The proposed budget placed a lot of emphasis on the power and energy sector by allocating it Tk 9,544 crore with most of the expenditures set for power development. The allocation is up by more than a thousand crore taka from that of last fiscal year.
The minister was concerned about the increased dependency on fuel- based power plants, which has made power generation costlier and forced the government to allocate Tk 5,200 crore as fuel subsidy for power in the last fiscal year. This time, an updated road map on power and energy spelled out a subsidy of Tk 6,400 crore.
The bulk price of power per unit rose to Tk 4.02 in March from Tk 3.74 while power is being sold at Tk 2 less than the generation cost.
But this will be reduced at a planned rate over the next four years. In the fiscal year 2013-14, fuel will produce 21.6 percent of the total power. This will come down to 6 percent by 2015-16. To achieve that, the government is all set to start producing much cheaper coal-based and other large power plants.
The minister admitted failure in importing Liquefied Natural Gas (LNG) from Qatar. In his Budget speech last year, he had projected that LNG equivalent to 500 million cubic feet per day (mmcfd) gas will be imported by December this year. But this is not happening.
He also regretted that repair and maintenance of old power plants were neglected. But this time, programmes have been taken up to repair the 26 old plants.
Considering high demands, the government now targets 8,644 MW power generation capacity in 2014, which is up from the previous target of 7,154 MW .
In gas sector, the finance minister claimed that the government has increased daily production of gas from 1,750 mmcfd to 2,156 mmcfd. However, gas production had actually reached 2,000 mmcfd back in December 2009.
Coal & open pit mining
The government looks at coal-based power as a solution of mainstream energy in future. So far it has taken steps to set up close to 3,000 MW coal-fired power plants.
In the road map presented at the budget session of parliament, Muhith said Bangladesh has a coal reserve of 3,300 million tonnes, and its heat generation capacity is equivalent to that of about 87 trillion cubic feet of gas. Despite such potentials, there is concern about the method of extraction as well as the technological security. At present, the government has opted for imported coal-based power, but it should take steps to tap the local resources in the future.
Muhith's suggestions include finalisation of coal policy as early as possible. The finance minister has been saying this during every budget speech since 2009.
He also suggested creating mass awareness about open pit coal mining, eliciting public opinion in the locality concerned, ensuring environmental safeguards and rehabilitating the affected people of the area where open pit mining is found to be economically viable.
The finance minister said Bapex has “already discovered oil reserve at Haripur and Kailashtila”. He also said the drilling of wells of “newly discovered gas field 'Sunetro' has begun"'.
Experts term these findings “political discoveries”.
However, oil was discovered in Haripur back in the late eighties but the deposit was abandoned after producing some oil since it was not commercially viable.
In a three-dimensional seismic study, Bapex determined oil deposit in Kailashtila but it is not considered as a discovery since no drilling has taken place to confirm it. Similarly, through a seismic study, Bapex pinpointed gas potentials in Sunetro two years back. But till now there has not been any drilling to confirm it.
US company Chevron, through a three-dimensional study, pinpointed potential additional gas reserves in the Moulavibazar field three years back. But when it drilled wells there, it found nothing last year.
The finance minister's road map for energy also said the present demand for power is about 7,518 MW. But the Power Development Board officially puts this at around 6,000 MW, and unofficially 6,700 MW.