an ideal energy policy for bangladesh

8/6/2019 An Ideal Energy Policy for Bangladesh

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An Ideal energy policy for Bangladesh: What are the

essential ingredients?



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Contents

There is one thing is important to mention that this paper is not a complete energy policy. Here we have just tried to mention all those factors or in other wordsingredients which should be included in an ideal energy policy.

The whole writing can be divided into parts;

At First, we have shown the policy objectives at page 3.

Then, the energy situation of Bangladesh at page 4.

Then, the demand and supply scenarios of energy at page 5.

Then, we have discussed the policy by different sources of energy. Such as

Policy for fossil fuel (Oil, Gas, Coal) at page 8.

Policy for renewable energy sources (Solar, bio, air, Hydro«) at page10.

Policy for Nuclear energy at page 11.

After that, we have discussed about the power policy at page 12.

Here, we also discussed about the Energy issues like environment, conservationetc at page 15.

After all those things we have given some recommendations at page 17.

Reference at page 20.

One attachment,

Open Pit method of Coal vs. Underground mining method at page 21.



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1. Introduction

The nature and extent of energy demand and utilization in a national economy are, toa large extent, indicative of its level of economic development. For a productive economyand for rapid and secure economic advancement, the country must pay maximum attention tothe optimal development and Utilization of her energy resources and to the security of supply

of her energy needs.

To do this, the country needs to put in place a coordinated and coherent energy policy,which will serve as a blueprint for the sustainable development, supply and utilization of energy resources within the economy, and for the use of such resources in international tradeand co-operation. The policy must also address the issues of energy manpower development,indigenous participation, domestic self-reliance, the energy needs of various sectors of theeconomy, energy sector financing, as well as private sector participation in the energy sector.Unfortunately Bangladesh is not rich in natural energy resources. The country is endowedwith a few resource types, including Natural gas, Coal, solar, hydro, bio fuels and other renewable energy resources. The national policy should therefore promote the harnessing of all the viable energy resources so as to have an optimal energy mix, while ensuringsustainable and environmentally friendly energy practices.

Hitherto, existing policies in the energy sector have been those of individual energysub-sectors such as electricity, oil and gas, and solid minerals. These had been developedfrom the limited perspectives of each of the sub-sectors and had resulted, in some cases, toconflicting policies and programs, to the detriment of the country as a whole. There is need,therefore, for a comprehensive and integrated national energy policy so as to provide proper direction to the development of the entire energy sector. Furthermore, such a document willassist the international investing community in appreciating the thrust of government onenergy matters.

2. Objectives of the national energy policy

Energy policy objectives are the outcomes sought through the use of energy policyinstruments. Here the policy instruments are the means used by governments to pursue policyobjectives.

There is a range of policy objectives and they include:

� Economic efficiency in the supply of energy� Efficiency in the use of energy� Diversity in the sources of energy� Optimum Development of Indigenous Energy Sources

� Consistency between energy policies and other policy objectives e.g. environmental policy objectives

� Energy security� Cost and availability of energy resources to low income earners� Conversion of energy resources� Public & Private Sector Participation� Research in energy supply technologies� Placing energy supply on a sustainable basis



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3. Energy Si i n & Energy Mix in B ngl esh

These pie char ts added bel shows us the whole energy situation of our country.These also show us two things f irstly our dependency on fossil fuels and the contr i bution of

i por ted energy sources in our economy. The main thing is that we are not self suff icient on

energy. Huge por tions of our foreign exchange arespent to impor t that energy. If we want development then we must have to be self suff icient or in other word self dependent on

energy with our own resources.

By the word pr imary supply we meant that the supply of energy from any sources li e

Bio fuels, Gas, coal, Oil etc used in Commercially and non commercially. And by the word

commercially means the use in mainly industry and other commercial activities.

BF

53%

Hydro0%

NG

30%

Coal

5% Oil

12%



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Chart Two

4. Demand and supply Scenarios

We think that tables of demand and supply scenar ios are self spokenand there is noneed to descr i be them again. From the fear of redundancy we are avoiding the descr i ption.

Economic Growth Rates Used in the Energy policy

Scenar iodef inition

Time frame

1990-1995 1995-2000 2000-2005 2005-2010 2010-2015 2015-2020

Low 4.44 5.25 5.24 5.24 6.65 6.65

R eference 5.0 6.0 6.7 7.2 7.5 8.0

Here we have taken a low and a reference GDP growth rate rather than actual(government calculated) growth rate. This is done to negate the effect of the inf luence of government¶s calculation which is all most always biased towards them.

NG

64%

Hydro

0%

Oil

26%

Coal

10%



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Pro jected Demand for Energy (Commercial and Electricity)

under Low Economic Growth Scenario

1990 1995 2000 2005 2010 2015 2020

Commercial energy

Population(million) 107 118 130 141 153 165 177

GNP Growth Rate(%)

4.44 5.25 5.24 5.24 5.24 6.65 6.65

Per capita GNP ($) 190 214 242 276 317 366 424

Energy Coefficient 1.62 1.37 1.37 1.37 1.08 1.08 1.08

Energy GrowthRate (%)

7.13 7.19 7.18 7.18 7.18 7.18 7.18

Per Capita use(KGOE)

56 68 92 127 157 219 272

Total Energy(MTOE)

6 8 12 18 24 36 48

Energy

Productivity (MJ/$GNP)

12.59 13.54 16.27 19.76 21.13 25.45 27.32

Electricity

Status in energymix (%)

35 37 39 37 33 33 33

Total GWh 8207 11584 18315 26063 30994 46491 61988

Per capita kWh 77 98 141 185 203 282 351

Load factor (%) 55 57 57 57 58 59 60

Total Elec.Demand (MW)

1703 2320 3668 5220 6100 8995 11794

Please refer to the table above.

Pro jected Demand for Energy (Commercial and Electricity)

Under Reference Economic Growth Scenario

1990 1995 2000 2005 2010 2015 2020

Commercial energy

Population(million) 107 118 130 141 153 165 177

GNP Growth Rate(%)

4.5 5.4 6.4 7.2 7.7 8.2 8.7

Per capita GNP ($) 190 214 254 318 416 560 774

Energy Coefficient 1.62 1.37 1.37 1.37 1.08 1.08 1.08

Energy Growth Rate

(%)

7.34 7.4 8.77 9.86 8.32 8.86 9.40

Per Capita use(kgOE)

56 72 94 131 194 269 384

Total Energy(MTOE)

6 8 12 19 31 46 72

Total Energy (PJ) 256 362 531 827 1314 1979 3055

Energy Intensity(MJ/$GNP)

13 14 16 18 20 20 21

Electricity



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Status in energy mix(%)

35 37 39 37 33 33 33

Total GWh 8207 12280 18971 28060 39750 59858 92402

Per capita kWh 77 104 146 199 260 363 523

Load factor (%) 55 57 57 57 58 59 60

Peak Load (MW) 1703 2459 3799 5620 7823 11581 17580


Primary Energy Mi for Power Generation

Type 1990 1995 2000 2005 2010 2015 2020

Total Generation Projected

Low scenario 8207 11584 18315 26063 30994 46491 61998

ReferenceScenario

8207 12280 18971 28060 39750 59858 92402

Gas 7285 10500 15000 15000 15000 15000 15000Coal 0 0 1030 2000 2000 2000 2000

Hydro 800 800 1000 1000 1300 1300 1300

Total generationfrom

indigenous fuel

8085 11300 17030 18000 18300 18300 18300

Deficit*

Low scenario 122 284 1285 8063 12694 28191 43698

Referencescenario

122 980 1941 10060 21450 41558 74102


Demand Supply Balances of Current Option

Time Frame

1990 1995 2000 2005 2010 2015 2020Demand PJ

Lowscenario

256 342 512. 769 1025 1537 2050

ReferenceScenario

256 362 531 827 1314 1979 3055

IndigenousSupply

PJ

Natural gas 168.84 262.31 366.83 366.83 366.83 366.83 366.83

NGL &LPG

1.56 2.97 7.27 7.27 7.27 7.27 7.27

Oil 1.0 0.0 0.0 0.0 0.0 0.0 0.0Coal 0.0 0.0 27.0 27.0 32.4 32.4 32.4

Peat 0.0 0.0 0.0 0.08 0.15 0.15Hydro 11.43 11.43 11.43 14.86 14.86 14.86 14.86



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5. Energy Sources

5.1. Natural Gas

Bangladesh's proven recoverable natural gas reserves , estimated at about 21 trillionstandard cubic feet in her 23 Gas fields. Given the current reserves and rate of exploitation,

the expected life-span of natural gas is about 20 years. At present, more than 90% of power

generation in Bangladesh is dependent on natural gas. It is therefore, strategically importantto undertake major investments in the gas sector in order to prepare adequately for gas as asubstitute for oil for domestic needs.

Policies

� Our country s gas resources should be harnessed and optimally integrated into the National economy, energy mix and industrial processes.

� Government should engage intensively in gas exploration and development with aView to increasing the reserve base to the highest level possible.

� Government should put in place necessary infrastructure and incentives to encourageindigenous and foreign companies to invest in the industry.

� Government should put in place necessary infrastructure and incentives to ensureadequate geographical coverage of the gas transmission and distribution network.

Objectives

� To expand the utilization of natural gas as industrial and domestic fuel, as well as for power generation.

� To increase the use of natural gas as industrial feedstock for petrochemical , pharmaceutical and fertilizer plants, etc.

� To accelerate the process of technology acquisition and diffusion in the gas industry.� To encourage indigenous entrepreneurial capability in the gas industry including the

development of end-use devices.

� To determine the level of gas reserves available to the country.

Strategies

� Encouraging R & D in the production, processing and utilization of natural gas.� Encouraging the establishment of the necessary infrastructure for the effective

Gathering, transmission and distribution of gas nationwide.� Establishing suitable infrastructure for the export of natural gas.� Expanding and promoting gas related R & D outfits in the country.

Sub-total 181.83 276.71 412.53 412.6 412.51 412.51 412.51

Deficit PJ

LowScenario

74.17 65.29 99.47 356.40 612.49 1124.49 1637.49

ReferenceScenario

74.17 85.29 118.47 414.40 901.49 1566.49 2642.49



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� Formulating suitable urban and regional planning regulations needed for the effectivedistribution of natural gas to, and its utilization by, domestic and industrial

consumers.� Ensuring that the price of natural gas is cost-effective, while giving due attention to

the effect on local consumption.� Embarking on deliberate exploration for gas deposits in all parts of the country.

5.2. Coal

Total coal in place in all the 5 fields are around 3300 million tons out of which about884 million tons is recoverable. Jamalganj Coal (1053Mt) is not extractable because of highdepth (640-1158m). This recoverable reserve is equivalent to about 18.00 TCF of gas TotalExtractable Coal from 4 Discovered Coal Fields may vary between 234Mt (undergroundmining method) to 660Mt (open cut & underground mining method) are insufficient to meetrequirement up to 2030.

Besides the above, mineable coal deposit was also discovered in Barapukhuria area of Parbatipur, Dinajpur at a reasonably should depth (240 m) with an estimated reserve of about300 million tons. Based on this, a project for construction of an underground mine has beenundertaken at an estimated investment of Tk. 887.36 core with expected annual output of 1million ton commencing from 2004-2005. Besides this Bangladesh has a reserve of Peats.According to Geological Survey of Bangladesh, the reserve of dry peat is about 170 milliontons. The major deposits are in greater districts of Faridpur (150 million tons), Khulna (8million tons) and Sylhet (13 million tons).

Policies� Government should pursue vigorously a comprehensive program of resuscitation of

the coal industry.� Extensive exploration activities to maintain a high level of coal reserves should be

carried out.� The exploitation and utilization of the coal reserves should be done in anenvironmentally acceptable manner.( Open pit vs. underground mining at page 22)

Objectives

� To promote production of coal for electricity production.� To promote effective utilization of coal for complementing the country's energy needs

and as industrial feedstock.� To utilize coal in meeting the critical national need of providing a viable alternative to

fuel wood in order to conserve our forests.� To minimize environmental pollution arising from the utilization of coal.

Strategies� Intensifying the drive for coal exploration and production activities.� Providing adequate incentives for the large scale production of coal stoves at

affordable prices.� Developing adequate infrastructure for handling and transportation of coal within and

out of the country.� Organizing awareness programs for the use of smokeless coal briquettes as an

alternative to fuel wood.� Encouraging R & D in the production, processing and utilization of coal.



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� Introducing clean coal technologies into coal utilization.� Re-introducing the use of coal for power generation.

5.3. Oil

Exploration activities carried out so far could not discover any significant oil deposit.

The only oil deposits so far discovered in the country is in Haripur, which produced a total of about 650,000 bbls of crude oil till 1994 . Bangladesh is mainly dependent on exportedPetroleum oil. However we need an efficient oil import policy for the betterment.

6. Policy for renewable energy sources

Renewable energy in the form of traditional biomass is the main source of primaryenergy in the country comprising some 35-60% percent of total primary energy use. The sizeand economic potential of the renewable energy resources in Bangladesh are yet to bedetermined and the capacity of renewable energy development is presently low. The major

sources of renewable energy are, Solar, Wind energy Biomass, Bio gas, Hydro, bio-fuels,gasohol, geothermal, river current, wave and tidal energy.

Policy� Government should aggressively pursue the integration of solar energy into the

country's energy mix� Government should maintain an interest in other emerging sources of renewable

energy. � Government should commercially develop its wind energy resource and integrate this

with other energy resources into a balanced energy mix.� Government should effectively harness non-fuel wood biomass energy resources and

integrate them with other energy resources.� Government should promote the use of efficient biomass conversion technologies.

� Government should fully harness the hydropower potential available in the countryfor electricity generation.

� Government should pay particular attention to the development of the mini an microhydropower schemes.

� The exploitation of the hydropower resources should be done in an environmentallysustainable manner.

Objectives

� To increase the percentage contribution of hydro electricity to the total energy mix.

�

To ensure minimum damage to the ecosystem arising from hydropower Development� To develop the country's capability in the utilization of solar energy.� To use solar energy as a complementary energy resource in the rural and urban areas.� To develop the market for solar energy technologies.� To develop solar energy conversion technologies locally.� To promote efficient use of agricultural residues, animal and human wastes as energy

sources� To develop wind energy as an alternative energy resource.

� To develop local capability in wind energy technology.



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� To use wind energy for provision of power to rural areas and remote communities far removed from the national grid.

� To apply wind energy technology in areas where it is technically and economicallyfeasible.

Strategy

� Establishing and maintaining multilateral agreements to monitor and regulate the useof water in international rivers flowing through the country.

� Ensuring increased indigenous participation in the planning, design and constructionof hydropower stations.

� Providing basic engineering infrastructure for the production of hydropower plants,equipment and accessories.

� Promoting and supporting R & D activities for the local adaptation of hydropower plant technologies.

� Intensifying research and development in solar energy technology.

� Promoting training and manpower development.� Providing adequate incentives to local manufacturers for the production of solar

energy systems.� Developing extension program to facilitate the general use of new biomass energy

technologies.� Promoting R & D in biomass energy technology.

� Establishing pilot projects for the production of biomass energy conversion devicesand systems.

� Encouraging research and development in wind energy utilization.� Developing skilled manpower for provision of basic engineering infrastructure for the

local production of components and spare parts of wind power systems.� Intensifying work in wind data acquisition and development of wind maps.

7. Policy for Nuclear energy

Nuclear energy is one of the major sources of base load electricity generation in theworld today. The technology for harnessing nuclear energy demands great responsibility andexpertise. Therefore it requires careful planning of the manpower development and materialresources. There is therefore an urgent need to accelerate the manpower development

program in view of the diverse peaceful applications of nuclear energy.Crucial to any nuclear program is the availability of nuclear minerals such as Uranium

and thorium. Uranium ores are complex assemblages of minerals and therefore differ widelyin details of composition and texture. The characterization of the known uranium ore

minerals in the country has been carried out. There is however the need to develop theextraction processes for each of them, on the basis of which a commercially viable pilot plantcould be established.

In addition to the generation of electricity, nuclear energy finds many other peacefulapplications. In fact, it has been in use in the country for decades for various peacefulapplications in health care delivery system, petroleum industry, agriculture, food

preservation, animal husbandry, water resources management , pest control, industry,materials analysis , and mineral exploration. All these applications will be enhanced by the



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commissioning of the recently acquired nuclear research reactor and the completion of thenuclear accelerator project and the industrial irradiator.\

Policy

Government should pursue the exploitation of nuclear energy for peaceful purposes.

Objectives

� To pursue the introduction of nuclear power into the generation of electricity , in thelong term.

� To apply nuclear science and technology in industry, agriculture, medicine and water resources management.

� To pursue the exploration of nuclear mineral resources in the country.� To institute nuclear safety and environmental protection measures.� To promote the development of nuclear science and technology.

Strategies

� Intensifying manpower development in the utilization of nuclear energy for peaceful purposes.

� Intensifying research and development efforts in nuclear science and technology.� Developing an appropriate institutional framework and infrastructure for the

development of nuclear science and technology in the country.� Creating incentives for career development in nuclear science and technology.� Commissioning the nuclear research reactor.� Completing all the on-going nuclear related projects (e.g. accelerator and industrial

irradiator projects).� Undertaking regular public enlightenment campaigns on applications of nuclear

technology, nuclear safety and radiation protection.

� Identifying accurately the availability and the extent of nuclear and other relatedmineral resources.

� Providing adequate funding for the development of nuclear science and technology.� Establishing a nuclear radiation surveillance program for the protection of the

environment.� Fostering co-operation with the International Atomic Energy Agency

8. Power policy

Electricity is a form of energy, which enjoys considerable and diverse applications because of its flexibility and ease of transmission and distribution. Availability of electricityremains a major factor in the location of industries and a strong instrument of socialdevelopment. Its supply is however still inadequate in the country.



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Installed and Available Power Generation Capacity, Electricity Generation, and

Average Load Shedding

Year

InstalledCapacity(MW)

AvailableCapacity(MW)

ElectricityGeneration(GWh)

LoadShedding(MW)

BPDB IPP BPDB+IPP BPDB IPP1994 2,608 0 1,881 9,784 540

1995 2,908 0 2,133 10,806 537

1996 2,908 0 2,105 11,474 545

1997 2,908 0 2,148 11,857 674

1998 3,091 0 2,320 12,882 711

1999 3,310 302 2,850 13,872 578 774

2000 3,331 380 2,665 14,318 1,244 536

2001 3,320 685 3,033 14,828 2,192 663

2002 3,420 810 3,217 14,449 3,771 367

2003 3,420 1,260 3,428 12,880 6,298 4682004 3,420 1,260 3,592 13,342 7,478 694

2005 3,735 1,260 3,720 14,067 7,939 770

2006 3,895 1,260 3,782 15,416 8,286 1312

2007 3,872 1,330 3,717 15,494 8,244 1345

2008 3,814 1,388 4,130 16,155 9,138 2087

This is the demand scenarios of power that means electricity of our country from thistable we can see that our demand of electricity is increasing but our supply of Electricity isnearly constant. In view of the ever-increasing demands for electricity in the country, there isa need to attract investment funds to the sub-sector, increase substantially the availableinstalled capacity and also decrease transmission and distribution losses. These justify the on-going restructuring of the sub- sector.

Policies

� Government should make steady and reliable electric power available at all times, ateconomic rates, for economic, industrial, and social activities of the country.

� Government should continue to engage intensively in the development of electric power with a view to making reliable electricity available to 85% of the population bythe year 2020.

� Government should promote private sector participation in the electricity subsector,

while ensuring broad-based participation of Bangladeshi.

Objectives

� To stimulate industrialization in the rural areas in order to minimize rural urbanmigration.

� To provide reliable and stable power supply to consumers, especially to industries.� To ensure the removal of bottlenecks militating against the utilization of the full

capacity of the existing electric power plants.



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� To broaden the energy options for generating electricity.� To attract adequate investment capital, both foreign and domestic , for the

development of the electricity industry.� To maximize access by Bangladeshi to the investment opportunities in the electricity

industry.

Strategies

� Rehabilitating existing power plants in order to derive optimum power from theinstalled capacity.

� Completing on-going projects designed to satisfy the national demand.� Reinforcing the transmission and distribution networks necessary to allow consumers

to enjoy steady and reliable supply of electricity� Establishing basic engineering infrastructure for the local manufacture of electrical

equipment, devices and materials.� Encouraging research and development in the generation, transmission and

distribution of electricity.� Reducing high import duties paid on generation, transmission and distribution

materials.� Setting up a National Electricity Supply Training Institute and zonal training centers

where the core of the middle level manpower and artisans, various cadres of professional technical officers, operators, linesmen and cable joiners are to be trained

and groomed in the art of operation and maintenance of equipment for the generation,transmission and distribution of electricity.

� Ensuring the participation and involvement of indigenous engineers and appliedresearch groups in the execution of on-going and future projects right from feasibilitystudies, with the objective of establishing local capacity in the long term.

� Developing and implementing a program for the participation of the private sector inthe various sectors of the electricity industry.

� Developing other potential sites for hydropower, gas and coal-fired power plants for electricity generation.

� Intensifying the national effort in training, research and development with a view togenerating electricity using nuclear, solar, wind and other renewable resources inorder to conserve our fossil fuels.

� Taking effective measures to ensure the security of electrical installations.� Providing appropriate incentives to entrepreneurs to ensure adequate returns on

investment.� Providing appropriate financing facilities to support indigenous investments in the

electricity industry.� Encouraging off-grid generation and supply of power in remote or isolated areas.� Establishing a Rural Electrification Fund to facilitate electrification in the rural areas.

�

Establishing a reduced tariff regime for very low income and especially handicappedelectricity consumers and a mechanism for funding the subsidy.



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9. ENERGY ISSUES

9.1. Environment

The major environmental problems related to energy production, distribution andconsumption in the country are mainly deforestation and pollution. These would result in

negative impacts on the environment, such as soil erosion, desertification, loss of biodiversity, micro-climatic change and flooding. Most of these impacts are already evidentin different ecological zones in the country, amounting to huge economic losses. Pollution isthe other major environmental concern. Combustion of fossil fuels, especially in the transportand industrial sectors, contributes greatly to air pollution in our major cities. The combustion

products (CO2, N

2O, etc) are greenhouse gases (GHG) and lead to global warming, with

attendant negative consequences on agriculture, water supply, forest resources, sea level rise,health, etc. In addition to air pollution, there is substantial water and soil pollution occurringdue to oil spillage during oil production and transportation. As a result of these possiblenegative impacts, there is a need to incorporate environmental considerations into thecountry s energy development and utilization.

Policy

The nation s energy resources should be exploited in an environmentally safe andsustainable manner.

Objective

To ensure that in the course of producing, processing, transporting and utilizingenergy, the environment is adequately protected.

Strategies

� Ensuring the existence of adequate environmental standards for all major energy production, transportation, transmission and utilization operations.

� Strengthening the relevant regulatory agencies in order to ensure the enforcement of appropriate set standards.

� Setting appropriate targets for the attainment of definite progress in the mitigation andcontrol of major energy related environmental problems.

� Putting in place appropriate programs to ensure the attainment of the set targets for the mitigation and control of major energy related environmental problems.

� Ensuring monitoring of vital environmental parameters in the production, processingand utilization of energy.

� Carrying out environmental impact assessments of major energy projects.

� Providing viable alternatives to fuelwood in order to minimize deforestation anddecelerate the rate of desert encroachment, erosion and deforestation.

� Utilizing appropriate technologies in the exploitation of the various energy resourcesto minimize the harmful effects on the environment.

� Encouraging R & D in the optimal utilization of various energy sources to minimizethe associated adverse environmental impacts.

� Encouraging the utilization of environmentally friendly energy sources.



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9.2. Energy Efficiency and Conservation

Presently, energy utilization in our national economy is far from efficient. Apart fromdirect losses, using energy inefficiently has three major implications to the national economy,namely, investments in energy supply infrastructure in excess of what is required with moreefficient equipment and practices; increased environmental problems; and increased cost of

goods. The potential for energy savings in the Bangladeshi economy is huge, especially in thethree main energy demand sectors, namely household, industry and transportation. In thehousehold sector, there is considerable energy loss due to inefficient traditional three-stone

stoves, used for cooking mainly in the rural areas. Similarly, there is considerable scope for energy conservation in the Bangladeshi industries. Energy audit studies have shown that as

much as twenty five percent of industrial energy can be saved through simple housekeepingmeasures. Also, our transport sector has substantial opportunities for savings, most especially

the road transport sub-sector. It is therefore imperative to promote energy conservation andefficient energy utilization in all sectors of the economy.

Policies

� Energy conservation should be promoted at all levels of exploitation of the country senergy resources.

� Government should promote the development and adoption of energy efficientmethods in energy utilization.

Objectives

� To ensure the prudent exploitation of the nation s non-renewable energy resources.� To enhance energy security and self-reliance.� To reduce the cost of production of energy-dependent goods and services.� To reduce adverse impacts of energy utilization on the environment.� To increase the proportion of hydrocarbon resources available for special applications

such as industrial feedstock and for export.� To eliminate avoidable investments in energy supply infrastructure.

Strategies� Ensuring strict adherence to the regulations of the petroleum industry, and relevant

agencies on energy resource exploitation and the environment.� Providing institutional arrangements and incentives for the promotion of energy

conservation and the use of energy efficient methods.� Developing building codes so that buildings are designed to take advantage of

climatic conditions in order to reduce energy consumption.� Ensuring the importation of the more energy- efficient equipment and machinery.

� Reducing energy consumption by improving and expanding mass transportation andcommunication systems all over the country.� Promoting R & D activities in energy conservation and efficiency including the

development and manufacture of energy- efficient equipment and machinery.� Encouraging the production and use of improved and more-efficient cooking stoves.� Taking appropriate measures to reduce energy storage, transmission and distribution

losses.� Promoting public awareness about the benefits of improved energy efficiency.



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9.3. Research, Development and Training

The crucial dependence of the sustainable socio-economic advancement of anycountry on research, development and training activities is now universally acknowledged.This dependence is applicable also to the development of vital sectors of the nationaleconomy, including the energy sector. For this sector therefore, it is important that research,

development and training are given adequate attention with regards to key issues such asenergy resources development and utilization.

Policy

The country s energy resources should be developed and utilized on a self-sustainable basis through research, development and training.

Objectives

� To initiate and promote energy related research and development programs; and

ensure that such programs are applications-oriented and market driven.

� To promote participation in research and development by people in all areas of energyexploration, development and utilization.

Strategies� Developing and promoting local capability in the nation s Energy Centers and

Research Institutes for the design and fabrication of efficient energy devices andtechnologies for the utilization of renewable energy resources.

� Promoting the demonstration and dissemination of renewable energy devices andtechnologies for their adoption and market penetration.

� Monitoring and assessing international technological developments in all energyareas; and initiating and sustaining local capability for their applications in all sectorsof the economy.

� Initiating and promoting energy educational programs and research activities intertiary institutions and research institutes.

� Encouraging result oriented research and development in the energy sector by makingexpenditure on such efforts tax deductible.

� Establishing training programs for the development of specialized energy manpower.

10. Recommendations

Realizing these goals requires several clear strategic decisions by the Government of Bangladesh. We do not attempt an exhaustive list of specific recommendations. We restrictourselves to six crucially important policies.

RecommendationOne

Given what is known of natural gas and other mineral reserves, the Government of

Bangladesh should not approve natural gas exports. It should designate natural gas for



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domestic energy needs, of which electrical generation is the most important. It is importantthat the Government instruct Petrobangla and the Geological Survey to undertake continued

exploration of potential energy resources in Bangladesh. For many purposes, the most usefulform of commercial energy is electricity, and the very low per capita supply of electricity is a

major constraint on national economic development. Natural gas is the optimal fuel for electricity generation in Bangladesh, and available reserves should be designated for a

program of accelerated investment in generating capacity, not for export or for expandedfertilizer production. In order to make rational policy decisions over the strategic use of energy resources, the government needs reliable geological information. To get thisinformation, continued exploration is important.

Recommendation Two

The Government of Bangladesh should place a very high priority on establishing thecredibility of an energy regulatory commission. Bangladesh s need for investment in theenergy sector is acute, and neither the government nor donor agencies can provide adequateinvestment funds. It is crucial to establish a regulatory regime that encourages privateinvestment, while still assuring customers that prices remain reasonable and supply remain

reliable.

Recommendation Three

The government should encourage the Rural Electrification Board (REB) to develop anetwork of small-scale (10 ± 100 MW capacity) gas turbine plants whose power would, on a

priority basis, be distributed independent of the national grid. The REB has a record of administrative competence that makes it an ideal agency to undertake experiments ininvestment by independent power producers (IPPs). To the extent the REB can obtain publicfinancing, or the more successful local cooperatives (Palli Biddyut Samitees) can arrangefinancing, gas turbines may be publicly financed. However, the scale of new power capacityrequired in rural areas is very large. Private investment will be required. The REB customerswould be expected to cover the costs of generation, transmission, and distribution. Inexchange, they should have priority access to the power generated. Any power surplus tolocal needs would be sold to the national grid.

Recommendation Four

The government should encourage the sale of coal for domestic cooking in rural areas.This would also require the distribution of suitable stoves. This innovation has the potentialto reduce the health problems associated with indoor pollution, and to relieve pressure onforest resources.

Recommendation Five

The government should continue to facilitate substitution of CNG for liquid petroleum fuels. The government can consider modest subsidies to encourage owners of automobiles and commercial vehicles to convert to CNG. If use of CNG is to be extended tolarge numbers of vehicles, there is a need for further expansion of CNG filling stations. Morecan be done to increase safety of use: standardize fueling connections, assure adequatetraining among those supplying CNG, and so on.



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Recommendation Si

The government should undertake high profile social marketing activities intended toimprove utilization of biomass fuels in rural areas. As we have discussed, there is a potential

to increase adoption of more efficient stoves and expand forest plantations. These areexamples where government public education activities can have a meaningful impact onenergy policy.



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References y ADB- Asian Development Bank, ³Key Indicators of Developing Asian and Pacific Countries´, Vol. 32,

2001

y BPDB- Bangladesh Power Development Board, ³Key Statistics´, 2002

y WEC-World Energy Council, ³Extract from the Survey of Energy Resources 2001´, EnergyInformation Centre, WEC, London, 2001

y Global Environment Facility, Project Document of ³Solar and Wind Energy Resource Assessment(SWERA)³, May 2001

y Global Environment Facility, ³'World Bank/GEF Solar Home Systems Projects : Experiences andLessons Learned 1993-2000´, Washington, USA, 2000

y Local Government Engineering Department (LGED), ³Sustainable Rural Energy´ web site(http://www.lged.org/sre)

y Mazharul Islam, ³Renewable Energy Scenario: Bangladesh Perspective´, Renewable Energy for Sustainable Development, Oldenburg, Germany, June 2002

y Mazharul Islam, ³Investment Opportunities for Renewable Energy Technologies in Selected

Countries´, Internal Report for EBV Group of

y Ministry of Energy and Mineral Resources, Government of Bangladesh, Draft Renewable EnergyPolicy of Bangladesh´, Dhaka, Bangladesh, October, 2002

y Ministry of Energy and Mineral Resources, Government of Bangladesh, ³Energy Policy of Bangladesh´, Dhaka, Bangladesh, 1996

y Renewable Energy Technologies in Asia, ³A Summary of Activities and Achievements inBangladesh"´ Pathumthani, Thailand, 2000 (http://www.retsasia. ait.ac.th)

y Rural Electrification Board web site (http://www.bangladeshgov.org/reb/index.htm)

y Shakti : Energy Website of Bangladesh, http://shakti.hypermart.net

y UNDP Sustainable Energy, ³Generating Opportunities: Case Studies on Energy and Women´, NewYork, USA, 2001

y World Bank, ³Feasibility Study for a Solar Home Systems Project within the Context of AlternativeOptions for Rural Electrification´, Final Report, Dhaka, Bangladesh, 2000

y World Bank, ³Market Assessment Survey of Solar PV Application in Bangladesh´, Final Report,Dhaka, Bangladesh, July 1998

y World Bank, ³World Development Indicators´, Washington DC, USA, 1998.

y From NEP (GOB, 1996).



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Open Pit Method vs. underground mining

Another burning issue at this point in time is the method of mining to be employed to

extract coal from the various deposits. The pros and cons of the two methods of

mining are listed below:

Open Pit method

1. It damages a large land surface area

2. It displaces people from their ancestral homes

3. It causes agricultural losses

4. Possible environmental degradation of soil and water

5.The likely preference of foreign investors for open cast method is for obvious reasons of

less capital and higher recovery from a larger pool of coal

6. It is a far simpler and economical process than underground mining

7. Adapting open cast method will unlock additional 1000 mt valued at US$50 billion at the

rate of US$50 per ton.

8. From energy security point of view it provides ample energy security in terms of greater extraction volume (around 4-5 times).

Underground mining

1. Involves much higher capital outlay and mechanization.

2. Higher chances of breakdown and accidents compared to open cast mining.

3. Maximum recovery is limited to 16% of reserve.

In the short term open cast mining would definit ely cause inconvenience and even

misery to the people of the mine area, who would have to be relocated. But if they are

generously compensated and rewarded for their land and disruption of their economic

activities, it cannot be an insurmountable problem. A fraction of multibillion-dollar

that is likely to be generated from the project would be sufficient to resettle the



displaced people. Besides, some of the land could be returned to the owners after

some years. North-western part of Bangladesh is relatively less densely populated and

it is possible to relocate displaced people with due care and fairness.

Open cast mining affects adversely on water bodies and underground tables, but these

are not insurmountable. The article of Shahrier of the Daily Star has highlighted

impressively the German experience of open cast mining. Technically these problems

can be addressed which are primarily function of money. If that were not the case, all

mining activities in other countries would have closed down by now. Rath er, India,

China, USA, Australia, Indonesia etc are going at breakneck speed to develop coal-

based power plants to sustain their economic growth, despite the known hazards of

coal mining.

an ideal energy policy for bangladesh

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