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Seminar on “Predictable Energy Pricing and Supply Stability”
In the last 50 years, the economy of Bangladesh has transformed from an agrarian to industrial economy. Therefore, it is necessary to ensure uninterrupted energy supply at a sustainable price to grow business activities in the country, told Ashraf Ahmed, President of Dhaka Chamber of Commerce & Industry (DCCI) at a seminar titled “Predictable Energy Pricing and Supply Stability” organized by DCCI on December 7, 2024.
Ashraf Ahmed also said that in the last two decades, our energy consumption has increased almost 4 times to almost 45 million “Tonnes of Oil Equivalent (TOE)". To meet the growing demand of power and energy in the industrial sector in Bangladesh, we have no alternative but to import and enhancing local energy production, he said. "We have to focus on increasing our capacity to use energy in this regard. In view of the current situation, there are various challenges in extraction of domestic coal, but the extraction process across the country needs to be enhanced. The DCCI President also said that despite the potential of solar power, we are lagging behind due to lack of necessary land and complex procedures and delays in land allocation management, which needs to be actively considered. He pointed out that some of our power plants are quite old and their production capacity will be significantly reduced by 2030. Nuclear energy, renewable energy-based power generation need to be increased, at the same time, government’s energy import procurement policy should be revised to keep the price stable. He also opined that tech-based energy storage system will bring in energy efficiency in the power consumption system. The Dhaka Chamber President also requested the government to focus more on the overall development of power and gas management.
Muhammad Fouzul Kabir Khan, Honorable Adviser, Ministry of Power, Energy and Mineral Resources, Government of the People’s Republic of Bangladesh was present as the chief guest. He said government still gives subsidy to the consumers for electricity. Regarding gas, he said that we need at least 4000 mmcfd gas but the supply is lower than 3000 mmcfd. He also informed that in Vola we have 60-70 mmcfd reserve of gas and for that government is going for an open bidding method. Not only for Vola, but also for all procurement process related to power and energy, government from now on will go for open bidding system to ensure fair competition. And for that we have already changed the law of 2010, he added. In the power sector, IPP is outdated and merchant power plant system should replace it, he opined. He also commented that government will soon go for drilling of 50 gas wells in the country and it will be increased up to 100 in phases. Regarding solar projects funding, he said that the lending by the banks should be asset based and cash-flow based rather than collateral based loan. Advertisement for 40 solar power plant projects will be published in the newspapers soon for which government will arrange land for the interested investors, he mentioned.
Dr. Mohammad Tamim, Professor, Department of Petroleum and Mineral Resources Engineering, BUET in his presentation said that a long term energy pricing will not be practical rather it is workable for 3 to 5 years. Bangladesh has to import energy and in near future the country will have to import energy. Therefore, he stressed on exploring our own gas to mitigate price. He also said that we should utilize our rooftop to generate renewable energy. Cost of generation of power especially after FY2020-21 by gas has increased a lot mainly because of devaluation of taka, high inflation, increasing fuel import and international energy price hike. At least 5% gas has been lost due to system loss which is equivalent of 130 mmcfd, he added. He also said that Bangladesh only uses 40-45% as plant factor of its energy generation capacity and that plant factor should be at least 60% as standard. He later suggested for surface mining of coal upon feasibility study. For LNG import he suggested for long term contract or hedging system, besides, LNG storage capacity should be enhanced for future, he added.
Dr. Badrul Imam, Honorary Professor, Department of Geology, University of Dhaka said despite the huge potential of natural gas, the reluctance of exploration has led us to today's situation, besides, we have shown more interest in importing LNG to produce gas. He noted that geographically, we are located in place like Nigeria and the United States, with a huge deposit of gas under the soil. He therefore urged upon to give more focus on own gas exploration that will give us a good return in the long term.
Dr. Ijaz Hossain, Professor & Dean of Engineering, Department of Chemical Engineering, BUET said industrialists should increase their involvement with the government so that the government cannot increase the price of energy without consulting with the business community. Due to instability of the dollar price in the local market, our import of energy becomes expensive, that has an impact on inflation and the overall economy, so we need to increase our natural resource exploration activities, he opined. He later proposed to utilize unused or underutilized lands for solar power projects to produce low cost renewable energy.
Imran Karim, Vice Chairman, Confidence Group said Bangladesh has to import 62% to 65% of its energy need. Despite the import cost of energy is high, but at the consumer level the unit price is relatively low comparing to other neighboring countries, he said. He also suggested to make the taxation policy for this sector homogeneous and layer free. He also mentioned that 40% use of total energy production capacity with the imported fuel cannot be viable whereas it should be at least 60%. To handle more FSRU, we have to build more pipeline in future, he said.
Engr. Md. Nurul Aktar, President, Bangladesh Solar & Renewable Energy Association and Convenor, DCCI’s Energy standing committee said since we have no option but to import energy, in that case, we have to be energy efficient in consumption. Mentioning that about 15% of the electricity is wasted, he said, especially in the residential, industrial and commercial sectors, the rate is up to 30-40%, in which case our regulatory authorities need to be more efficient. He stressed on energy audit system for every two years as well as standardization of equipment. He also suggested to make it mandatory to use rooftop for solar energy in the city areas. We should also promote energy storage and LNG storage system, he said.
Barrister Shahwar Jamal Nizam, Partner, DFDL Bangladesh said that to make the renewable projects bankable is a challenge in Bangladesh. He said due to land scarcity in the country and to ensure food security for all, country like Bangladesh lags behind in solar powered energy production. But there is a huge unused barren land we have that can be used for this purpose, he added.
Mr. Saumitra Kumar Mutsuddi, Head of Corporate Affairs, BSRM said that for uninterrupted commercial production, priority should be given to smooth supply of energy to the industries. He also said that if government needs to increase energy price, in that case private sector should be well informed before implementing the decision but upon consultation.
DCCI Senior Vice President Malik Talha Ismail Bari, former Senior Vice Presidents, DCCI Kamrul Islam, FCA and Humayun Rashid and former Vice President M. Abu Horairah also spoke on the occasion. Vice President, DCCI Md. Junaed Ibna Ali was also present during the seminar.
Published on: 2024-12-07