October 19, 2008
Mollah M Amzad Hossain
Shahidul I Khan, Director of Center of Energy Studies at BUET, has said Bangladesh needs foreign investment for developing its energy sector and ensuring future energy security. Referring to FDI in the telecom sector, he said people are getting modern service at a competitive tariff only because of foreign investment. “Those who are opposing FDI in the energy sector are not realistic,” he said in an interview with the Energy & Power.
EP Editor Mollah Amzad Hossain took the interview. Following are the excerpts:
EP: How do you evaluate the overall energy sector of the country?
SIK: The overall situation of the country’s energy security is not good at all. If we look at the power situation in the summer we will see a gloomy picture. Our summer demand is 5,200 megawatt, but supply over 3,400 MW is not possible. The reason is gas crisis coupled with maintenance of the old plants. The proper management can improve the situation a bit, but totally overcoming the crisis is not possible. There is no alternative to set up new plants. And for that we have to ensure primary energy supply.
I think Bangladesh cannot afford running power plants by fuel oils. The solution is discovery of new gas and finding out other alternatives.
EP: Why we are not being able to set up new power plants. In fact, in last seven years there was no new plant.
SIK: In fact, we suffer from image crisis. That is why none is showing interest to invest. Also, the government alone cannot make the investment. One out of four companies selected as technically capable had submitted tender for the 450 MW Sirajganj plant during the fag end of the previous government. The response for Bibiyana is also not overwhelming. The country reached today’s state due to indecisiveness in the past.
EP: You are talking about FDI in the energy sector. But a section of intellectuals and “Committee to Protect Oil-Gas” are opposing the FDI.
SIK: The mentality of opposing the FDI is not correct. I think investment must come in any sector in a transparent manner no matter whether it is domestic or foreign. People are getting modern service at a competitive tariff in telecom only because of foreign investment in the sector. We have to give up the mentality of refusing FDI in the energy sector.
EP: Referring to your opinion, I would like to go back to discuss the gas sector again. We need new discovery, but the plan to offshore exploration has been witnessing opposition from the very beginning. The government is also delaying the matter.
SIK: We must not waste a single day in regards to offshore exploration. It is a question to me also that why the government is delaying the process. It will be unfortunate if the government takes decision based on opposition of a section of our civil society.
I think all the efforts– local or foreign– have to be exploited for offshore exploration. We must not waste a single day.
EP: You mentioned about alternatives. Coal can be one such alternative. But here we engaged into an endless debate.
SIK: Look, if we go for development there must be some impacts on the environment and ecology. Specially, in case of energy it is not possible to keep the environment totally harmless. But, the world progressed much. The technology of extracting energy resources maintaining minimum impact on environment is now at the hands. We are debating on coal without any reason. You know 40 percent of total power generation of the world is coal based. Also, in the developed world the share of coal-based electricity is 60 percent of their total power generation.
We all know what is happening in Bangladesh. We are opposing coal extraction in the name of environment. But we do not say anything when, we keep our eyes closed and mum kept when coal with more than one percent sulphur is imported suspending the import policy.
However, we have developed Barapukuria coal mine. The Chinese company developed it under an agreement and also they are producing under a management agreement. We gathered some experiences although it is very limited.
On the other hand, we are opposing open pit mining in Phulbari and making people unrest. Do we really inform people about the truth? Specially some people who do not understand the coal policy or do not want to understand it are misleading people. That is the reason the alternative for electricity is not being developed. We have to come out of it.
EP: But, it is said that the agreement with Asia Energy is not legal. Country’s interests were also not protected.
SIK: What I want to say is that we have to produce coal. We need electricity and for that we need coal. The government will determine who will produce the coal. But, the government has not right to sit idle after taking a decision. I am not saying that Asia Energy has to be assigned for the job. If the agreement is illegal, if it is against the interest of the country the government has the right to cancel or amend it. Much have been discussed about it, but the government should project the truth before the nation. The government should inform people that how they want to develop the coal sector.
EP: But, it is alleged that the government is confused due to huge opposition.
SIK: I believe those who are opposing FDI in energy sector and those who are welcoming the FDI and the government…. all want development of the energy sector. Now it is the responsibility of the government to go for open debate and reach a consensus. If the government wants, I believe real energy experts will come forward. And I think the experts should talk realistically, they should not give speeches like the politicians.
EP: Now another aspect, we are wasting gas in generating electricity. The average efficiency of the PDB run power plants is 29 percent. On the other hand, two IPPs’ efficiency is 45 percent. As a result we are producing less power by putting more gas. What should we do?
SIK: Without any debate, the answer is we have to come out of it. But it is not possible all of a sudden. So, skilled use of energy has to be ensured for all the future plants no matter small or big. I think we have to give highest priority to efficiency in selecting the technology. If necessary, we have to adopt the investment option for increasing the efficiency. However, we have to ensure efficiency also at the consumers’ level.
EP: How can we ensure efficiency at the consumers’ level? Should it be through enacting law or campaign?
SIK: First of all we have to ensure market price of energy. People do not go for skilled use of electricity or gas as it is cheaper in Bangladesh. I do not think enacting a law is the answer. Thirty to 35 percent of our electricity is used for lighting. We can reduce the demand by 80 percent by using CFL and LD technology. The government has to take special measures.
Also, unskilled use of electricity is also taking place due to imported low standard motors and appliances. The government should ensure standardization and labeling.
EP: You worked on renewable energy. What is the prospect in Bangladesh?
SIK: Look, many countries in the world including India have separate authorities for renewables, but we do not. Also, we do not have any policy. However, I appreciate the draft based on what the works are on in the country. This policy will play an important role in flourishing the renewable energy in Bangladesh.
I think if we can take our RE based electricity to 80 MW or one percent when we are expecting 8,000 MW total generation.
Date: 16 October 2008