The Cabinet decided on August 25, 2014 to extend the Power and Energy Quick Supply (Special Provision) Act, which was scheduled to expire in October next, for four more years. The decision was taken 'to ensure uninterrupted power and energy supply in the country keeping pace with the growing demand.'
The government enacted the Power and Energy Quick Supply (Special Provision) Act in 2010 initially for two years. The Act was extended for two years in 2014.
As the government required quick and decisive actions for improving power and energy supply in the country, it considered it appropriate to avoid cumbersome and time-consuming tendering process for implementing projects in power and energy sector. The law empowered the decision makers to act without hesitation for necessary project development and implementation activities. People generally accepted the move of the government as it was clear that the government required to act on 'fire fighting mode'. The actions of the government significantly helped overcome the severe crisis of power generation and distribution capacity enhancement. For the last five plus years, the capacity of electric power generation in the country has increased from 3,300 MW to 7,400 MW (the installed generation capacity is nearly 11,000 MW). Of the total, imported oil-based power generation capacity stands at 2,500 MW. The quick power generation capacity increment was secured mainly by installing oil-based power plants (some of which were installed as 'rental and quick rental plants'). Bangladesh Power Development Board (BPDB) explains that installation period for liquid oil-based power plant is short compared to gas-based (three years) and coal-based (five years) power plants. As a result, although it was the costlier option, oil-based power plants were preferred by the government.
Moreover, the government had limitations to offer alternative primary energy supply sources for power generation. Therefore, the number of liquid oil-based power plants continued to increase and the share of oil-based power generation capacity crossed the logical limits for energy mix for power generation (not more than 10 per cent). BPDB admits that the government's plan for implementation of base load power plants failed to attain the promised deadline. On the other hand, rehabilitation and modernisation of the age-old base-load (gas-based) power plants has been delayed. So, the stability of power generation and supply arrangements could not be attained so far. One of the major impediments to attaining the energy sector stability is linked with the success of primary energy supply diversity.
Imported coal-based power generation projects have been progressing slowly and there is no practical reason to expect that coal-fired power generation will add any significant power to the national grid very soon. The government still dribbles with local coal development initiatives and no practical coal mine development project has been taken up so far. Referring to the poorly performing small underground Barapukuria coal mine, BPDB Chairman stated in a recent media interview (1 September 01, 2014) that 'it is not correct that all the domestic coal will be cheaper.' BPDB is purchasing coal from Barapukuria at $127 per tonne while on the international market it is $75 (per tonne). He, however, informed that the ongoing study for Barapukuria open pit coal mine (at Barapukuria northern part) may lead to a successful implementation of open pit mine for building a 1,320 MW power plant at the mine mouth. Also, the government did not shift its position to generate 11,600 MW power using coal from the local sources following the Power System Master Plan (PSMP) 2010. It may be mentioned that gas-based power generation capacity in the country will be enhanced to 10,000 MW and coal based power generation capacity to 20,000 MW in 2030 as per PSMP projections. Besides, Petrobangla has engaged BAPEX for carrying out seismic survey for better understanding of the Dighipara coal field in Dinajpur.
Government officials continue to explain the challenges for development of a stable energy and power system. Unfortunately, the impediments to investment, especially the huge investment requirements for primary energy development including for domestic coal development and import of large volume of coal from international market could not be eliminated. Without foreign direct investment (FDI) for coal, oil and gas exploration, development initiatives have little chance to progress at a faster pace. Government-funded (including with hard loan) coal mine could not secure coal production at a competitive rate and volume so far. Therefore, if the government can attract FDI for coal mine development using the Power and Energy Quick Supply (Special Provision) Act for securing faster development and production of coal resources and deliver coal for generation of power at an affordable price, people will welcome such a move.
The writer, a mining engineer, writes on energy and environment issues.
