Power sector now and future

Mowdud Rahman | Published: 17:32, Nov 16,2017


ANY moment now, another announcement of power price hike will be made. If this anticipated announcement really comes through, it will be the seventh time in the last seven years that power price is raised by the government. Taking into consideration this history, it is most likely that power price shock is awaiting the people of Bangladesh. It is shock effect will be particularly intense given that we have just witnessed the record breaking price hike for rice and onion.

Policy makers are reluctant to name it as price hike. To them, it is price adjustment. Whatever name or label we prefer; the economic burden for people at large is the same. While people in Bangladesh is bearing the wrath of rent seeking approach of Bangladesh government, people in India are enjoying lowest ever electricity tariff from solar and wind. Solar and wind electricity is now being produced at lower than TK 3.5 per unit there and the government of India have already set a target to install 100 GW capacity of solar and 60 GW capacity of wind power plant by 2022.

The current political party in power introduced furnace and diesel oil based rental and quick rental power plant to tackle ‘emergency situation’ in power sector during their first term. Now, they are about one year away from completing their consecutive second term, but we are still living in the energy emergency situation. Meanwhile, costly means of power generation are becomes costlier, what was once introduced as temporary solution is now permanent. More importantly, to ensure that there is no public debate on government’s policy and activities in the energy sector, it has also quickly enacted a bill — Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010. The Act not only prohibits any public scrutiny of energy sector initiatives and activities, but it also exempts the directors and officials of power companies from all possible damages and expense (Section 9,10). Inevitably, power generation in Bangladesh becomes so lucrative business venture that even country’s popular furniture making house like Otobi as Quantum Power Systems Ltd started to sell electricity, though not successfully (The Daily Star, July 1, 2016).

Expensive liquid fuel based power plant capacity share is encouraged in Bangladesh. It now stands at 30 per cent which was 8.6 per cent in 2008-09. The liquid fuel based power costs up to Tk 15 to 20 per unit whereas natural gas based power plant is producing same electricity at less than three taka. When asked about the rationality behind continued reliance on an expensive method, the government is commonly found saying, it is because of the scarcity of natural gas. However, the hidden, unspoken reason is that the government is prioritising corporate/private sector energy generation. The fact that all four public gas fired power plants has been out of gas supply, while seven private plants are enjoying the same at Chittagong since October this year speaks to this point. Moreover, from the jointly conducted survey by United States Geological Survey and PetroBangla in 2001, we came to know about 32 TCF undiscovered gas reserve potential is there including both in on shore and off shore area. Sadly, that reserve is still unexplored! In the meantime, various contracts have been signed with multi-national corporations, projects have been awarded to companies, public money has been wasted but no actual work has been done. The Bangladesh Petroleum Exploration and Production Company BAPEX is a proved state-run organisation with its efficiency and cost effectiveness but when it comes to commission gas exploration contracts foreign companies always get priority. If BAPEX is lacking in expertise in any area, it is the duty of the government to invest on building that expertise for BAPEX instead of using that as an excuse to commission work to foreign companies.

There is a general lack of willingness to run public power plant efficiently. We are already bearing the brunt of this, prioritising the private sector government has forced us to pay more for expensive private generation system. For instance, in 2015, the total generated electricity was 45.8 TWh coming from different power plants. Even if average standard condition would have been ensured then total generation in that year could have been possible to get from natural gas based power plant alone. But lack of efficiency forced government to buy costly power from other source. The mismanagement and inefficiency of the power sector is something that is not often talked about. However, it is because of the mismanagement and poor efficiency during 2015 that 0.5 TCF gas was burned and produced only 31.8 TWh of electricity from natural gas based plant.

The share of coal in power generation is still insignificant in Bangladesh, but its future target is horrendous. When rest of the world is in competition to declare their fossil-fuel divestment, coal phase out plans, Bangladesh is looking for the fastest ever coal plant expansion project in the history. According to Power Sector Master Plan – 2016, coal fleet capacity will reach up to 19 GW in total by 2041 which is now only 0.5 GW. This plan defies the global trend. France, UK, Canada, and Germany have already declared its plan to phase out coal by 2023, 2025, 2030 and 2050 respectively. China has cancelled 104 coal fired power plant of 120 GW capacities all together which were at various stage of construction in 2017. Chinese government have allocated USD 275 billion budget to invest in 5 years to curb air pollution which is more than double of their defense expenditure. And, to maintain the growing electricity demand, they have decided to invest USD 361 by 2020 in renewable energy sector which in return will not only give electricity but also will create 13 million new jobs.

In India, billions of dollars of investment have already become stranded due to low capacity factor of their coal-fired power plants. Implementation of strict regulation in some cases also contributed to this situation. This year TATA power has proposed to sell 51 per cent equity of its 4 GW Mundra project’s ailing asset for a nominal fee of 1 rupee only! It is worth highlighting that within five years of its inauguration, company accumulated the loss of about 1 billion dollars. Surprisingly, policy makers in Bangladesh are reluctant to learn any lesson from such incidents happening so close to our border. A contrasting scenario is emerging in our energy sector. The coal expansion projects has begun here to the extent that it did not even hesitate to initiate Rampal 1320 MW power plant project adjacent to Sundarbans. It is being constructed under the supervision of National Thermal Power Corporation, an Indian public sector energy company that is notoriously famous for poor performance. On November 1, its recently commissioned Rae Berali 500 MW capacity unit had an accident that left 37 Indian citizens dead and more than one hundred injured (India Today, November 5). This latest fire brought NTPCs controversial legacy in plain sight. Yet, Bangladesh government still adamant to implement the power plant in Rampal in partnership with India and trying to sell it as one to be implemented with ‘most advanced technology,’ and that it is ‘environment friendly.’

Bangladesh’s plan with nuclear power is also going against the global trend. It has set quite an unprecedented target in nuclear power expansion. According to PSMP–2016, nuclear power plant capacity is going to be increased up to 7.2 GW by 2041 when many countries with nuclear plant are setting target for nuclear phase-out in near future. Today, nuclear technology is considered a great burden for the state in terms of its excessive upfront cost. Considering insurance liability, decommissioning cost, and the continuous upgrade of safety measures, nuclear technology is perceived to be the most expensive means to produce electricity. For instance, the Flamanville Nuclear Power Plant with 1.6 GW capacity is located at Flamanville, Manche, France was supposed to be inaugurated in 2012 and initial budget was 3.3 billion euro. However, after the Fukushima accident the project implementer were bound to revisit the design. Now, its revised budget is 10.5 billion euro and expected to be commissioned in 2018. Such cost overrun is very common in nuclear project implementation and such investment creates huge pressure on state’s exchequer. In case of nuclear power, technology cannot guarantee the safety and it has been proved in Three Mile Island, Chernobyl and Fukushima. Instead of revisiting its plan, the government has passed an indemnity bill to get legal shield for any ‘unintended’ tragic occurrences.   

Around the world, the use of renewable energy has become the prime choice for ensuring affordable, reliable, and clean energy services. Germany has set the target to generate at least 80 per cent of its required power from renewable energy by 2050 and Denmark has a target to get 50 per cent of its power from renewables by 2020. For India, the non-fossil fuel based capacity development target is 57 per cent of the total electricity generation capacity by 2027. Sadly, for Bangladesh renewable energy and imported power has presented as substitute for each other in PSMP–2016. In the whole energy mix, only 15 per cent of electricity generation target has been fixed for renewable energy or imported power capacity addition. The renewable energy based generation is shown as 7 TWh in the same document which is going to be only 3 per cent if compared with the total demand by 2041. The PSMP–2016 estimated 3.6 GW renewable energy based power generation potential all together. Although, a recent research predicted that, only from wind, there are 20 GW capacity potentials in Bangladesh (Saifullah et al, 2016). Globally, the cost of renewable energy generation is rapidly decreasing. The PSMP–2016 also mentions that the cost of power generation from renewable sources will decrease in near future. Mysteriously, the PSMP–2016 has no reflection of this global trend.

For renewable energy development, initial investment is not an issue anymore. The downward spiral trend of it’s per unit cost made the payback period shorter than any other means of power generation. To solve problem of land and space constraint, various techniques are already available, for example — floating solar, solar sharing, mini grid, micro grid, off shore installation and more. Fossil fuel based power generation is not possible on river banks, shallow wetlands, road lanes, empty rooftops space of buildings but solar panel is very well fitted for these areas. While conventional power generation is encouraging lavish consumption, renewable energy is fostering innovation and conservation.

Technology Percentage of Production Installed Capacity by 2050 (MW) Estimated Investment Required by 2050 (2013-billion $) Total End-use Power Delivered by 2050 (TWh/year)
Residential rooftop solar 27.8% 66637 550 330.6
Commercial & government rooftop solar 7.8% 19026  
Solar plants 40% 94722


solar plant  (CSP)

11.9% 10915 (additional 6548 MW of CSP and 28375 MW of solar thermal for heat to address intermittency of wind and solar)
Wind (Onshore) 5.8% 5944
Wind (Offshore) 5.8% 13077
Wave energy 0.5% 1584
Tidal energy 0.1% 150
Hydro power 0.3% 230
Geothermal 0% 0  
Total 100% 212285

Table 1: A vision map designed by Stanford University researchers for transition to 100 per cent wind, water, and solar for all purposes (electricity, transportation, heating/cooling, industry) of Bangladesh by 2050 (Ref: Jacobson et al. 2017)

Globally and locally, scholars across different disciplines are working on developing better framework, method and model of renewable energy economy. A group of scientists from Stanford University have been working on clean energy for some time now. In last September, they have published a research paper with all of their findings (Table 1). Their finding shows, by 2050, 100 per cent renewable energy based solution for Bangladesh is not only possible, but also this source will be more economical than any other option. According to this research, per unit electricity cost will be Tk 9 at nominal rate and it will save two thousand taka per person per year by 2050. Therefore, those including the government who are opposing renewable energy are not opposing it from technically solid ground, real reasons behind their opposition is hidden in their profiteering interest. With right and well intentioned investment renewable energy, it could solve our energy crisis. Only mindset and profit-mongering lawmakers are the barrier.  

In today’s economy, not only the availability but also the quality and cost of electricity are important. No one wants to buy and use electricity at the price of gold of course. Unfortunately, Bangladesh is heading towards that direction. According to PSMP–2016, average electricity tariff will be Tk 8.52, 11.02 and 12.79 per unit in nominal price by 2021, 2031 and 2041 respectively. But renewable energy dependent self-reliant energy mix can produce electricity at a very lower rate than this and at the same time will protect our life, livelihood, ecology and environment. What Bangladesh needs now is a people oriented energy sector, not a sector that manipulates the question of energy generation as means of making a handful of people rich and deplete the nations of its biodiversity and natural resources. To get rid of the turmoil in power sector, we need to be aware and challenge the status quo for a better future.


Mowdud Raman is an energy researcher and a recent graduate from the Indian Institute of Technology Bombay, India. He is also an editorial board member of Sarbojonkotha.

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