3,800MW power generation, 1780mmcfd gas, some contentious issues for AL

Staff Correspondent

FE, 12 November 2010

 The average power generation capacity during peak hours was at around 3,800MW and the total gas production at around 1,780 million cubic feet per day when the Awami League-led alliance government took office on Tuesday.

 The Awami League in its election pledges said it would increase power generation to 5,000MW by 2011 and to 7,000MW by 2013.
   ‘It is possible to generate 5,000MW soon with the ongoing electricity generation programmes of our government. We have taken power generation to a stage where the next government will get some breathing space,’ M Tamim, special assistant to the chief adviser to the interim government, Fakhruddin Ahmed, which handed over charge to the Awami League government, told reporters Tuesday afternoon.
   The power generation, which had hovered around 3,800MW for a few days, came down to 3267MW during the evening peak hours on Tuesday after four power units at Ashuganj and Baghabari plants had tripped. Power officials said generation would be around 3800MW again in a day or two.
   When he was asked whether the Awami League government would get primary fuel to increase generation to 7,000MW by 2013, Tamim said the next government would need to install imported coal based power plants if it wanted to achieve the target as the country was facing gas shortage and it would take years before coal production would begin in other fields.
   When the interim government assumed office on January 12, 2007, power generation was around 2,920MW while the total gas production was around 1,550mmcfd.
   Power generation has been increased in the two years with the installation of some costly rental power plants and maintenance of existing power plants although the interim government could not fulfil a half of its pledge to add 1,164MW electricity to the grid by December.
   ‘This new generation will be added by June when some rental and small power plants would start operation. The total generation would be around 4,000–4,200MW this summer when our targeted plants would start operation. If generation remains more than 4,000MW, it will be a huge relief for the next government although there will be some power outages,’ said Tamim.
   Power generation was around 3,100MW when the BNP-Jamaat government had assumed office in October 2001, but the government failed to increase generation by any substantial amount because of politicisation of the tender process for the installation of power plants.
   Power and energy officials are sceptical whether the Awami League government could increase generation to more than 7,000MW by 2013 even if it could complete tenders without controversy as there would be gas shortage.
   The Awami League-led government will be in a better position in terms of availability of funds for the installation of power plants as the government has already signed contracts with the Asian Development Bank, World Bank and the Japan Bank of International Cooperation for around $1 billion in loans for the installation of power plants with the capacity of 1,000MW. Three to four more power plants are in the pipeline whereas the investors have interests in the installation of around 1,000MW independent power plant.
   The country faces gas shortage of around 250mmcfd with the exiting production of 1780mmcfd. When the interim government assumed office, the production was around 1550mmcfd.
   The current production has increased after the Bibiyana gas field, operated by US company Chevron and developed during the BNP-Jamaat government, started operation in April 2007. Gas crisis likely to deepen every year and the crisis will be severe in 2011, according to Petrobangla officials. The total gas production was around 1,100–1,200mmcfd when the BNP-Jamaat government had assumed office in 2001.
   Even if the Awami League government goes for massive gas exploration, it will be unlikely that any substantial gas production could be achieved before 6 to 7 years.
   The Awami League-led government will need to deal with some contentious issues in energy sector such as formulation of a coal policy taking into account national interests, demand for the cancellation of the agreement with Asia Energy for the Phulbari coal field and the award of offshore blocks to international oil companies.
   The BNP-Jamaat and interim governments have left the coal policy and Asia Energy issues undecided amid protests over open-pit mining method. Three people were killed by law enforcers during the BNP-Jamaat government in 2006 when they were protesting at Asia Energy’s open pit mining at Phulbari.
   The Awami League government will need to deal with an agreement the BNP-led government signed with protesters to expel the coal mining company from Bangladesh.
   It will also need to make a decision on awarding two international oil companies nine offshore blocks.
   Rights group and energy experts have said the companies should not be awarded the blocks as the model production sharing contracts had a provision of export of up to 80 per cent of gas while Tamim said it was ‘misinformation’ and the PSCs were better than that of the existing ones for onshore blocks.