Bangladesh to cut gas supply to old power plants

Sat, Jul 19 03:26 PM

DHAKA (Reuters) - Energy-starved Bangladesh is to cut gas supplies to ageing power plants to ensure more efficient use of a scarce natural resource which is depleting fast, a senior official said on Saturday.

"There will be no gas-fired power plant in future, moreover the committed plants may not receive gas supply as the days of gas based power generation concept has ended," said M. Tamim, special aide to the head of the interim government, responsible for the Ministry of Power, Energy and Mineral Resources.

Bangladesh faces shortages of 250 million cubic feet of gas everyday and the gap between demand and supply is rising, he said.

Bangladesh has more than 100 power producing units with nearly 5,300 megawatts (MW) of capacity. But is barely able to produce 4,300 MW as almost one third of the units are very old, officials said.

Some plants are up to 40 years old and their generation capacity has declined by up to 50 percent, they said.

"The government has a vision to make electricity available for all by 2020 when the demand will be at 1,7800 MW, meaning Bangladesh will need to increase generation every year by 1,000 MW," said Quamrul Islam Siddique, an energy expert.

"Once we talked about gas exports, but now we are talking about gas import as for the last decade there was little effort to explore new gas reserves and new investments," Tamim told a meeting, attended by energy experts and senior officials.

The experts suggested using coal instead of more costly hydrocarbons as the country has more than 2.5 billion tonnes of high quality reserves in five coal fields.

"Most of the countries are now producing electricity by using coal including our neighbour India who is producing nearly 70 percent power by coal, while Bangladesh is producing only 5 percent by coal," Siddique said at the meeting.

He advised extracting coal by open pit mining methods.

"It is unfortunate that despite huge coal reserves Bangladesh, due to lack of policy, is rather importing 3 million tonnes of high sulphur coal annually from India," he said.

He also said private sector and foreign direct investment in the energy sector to produce electricity to the desired level would require at least $7 billion of investment by 2020.

Tamim said coal-fired power plants require huge investment.

"To produce one megawatt of coal-fired electricity is required $1 million, so to produce 1,000 MW in each year will require $1 billion and to get it to the end user will need another $1 billion," Tamim said.

"It is not possible for the government alone as we have many other priorities including health, education and food production and for that we welcome private investment including foreign investment," he said.

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