• Saturday, Jan 28, 2023
  • Last Update : 10:24 am

Diversify energy mix to meet industrial needs, say experts

  • Published at 02:31 pm June 19th, 2021
Payra Thermal Power Plant
Aerial view of the coal-fired Payra Thermal Power Plant in Patuakhali, Bangladesh Dhaka Tribune

Natural gas has not been distributed widely in western Bangladesh due to shortages, resulting in less power generation, industrialization, and employment, experts say

To accelerate industrial growth in a planned and more environmentally-friendly way, Bangladesh needs to focus on the production of alternative, cleaner hydrocarbon fuels and diversify its energy mix, experts said on Saturday. 

The eastern region of Bangladesh, where all of the onshore gas fields are found, has mainly benefitted from local energy sources, they added. 

But natural gas has not been distributed widely in western Bangladesh due to shortages, resulting in less power generation, industrialization, and employment, said Khondkar Saleque Sufi, the contributing editor of Energy and Power magazine.

Local gas and liquefied natural gas (LNG) will be used to generate 35% of 60,000 MW of power by 2040, and unless local gas is discovered, Bangladesh will have to rely heavily on imported LNG heavily, he added.

Sufi made the remarks while speaking at a webinar titled “Future of Industrial Fuel Source in Bangladesh: LPG and LNG,” organized by the Dhaka Chamber of Commerce and Industry (DCCI).

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As the depletion of Bangladesh’s gas reserves has been an issue, the country needs to increase its onshore and offshore fuel source exploration to diversify the energy mix for industrial energy needs, said Md Maqbul-E-Elahi Chowdhury, a member of the Bangladesh Energy Regulatory Commission (BERC).

Elahi also said that if metered gas is implemented for all, it will help to protect system loss and create 1 to 1.2 million more metered connections. 

“We have to strengthen the Bangladesh Petroleum Exploration and Production Company Limited’s [BAPEX’s] capacity for gas exploration as well as open a data center. Besides that, it is also necessary to expedite local gas exploration and if needed, we have to allow foreign explorers to come,” said the BERC member.

Speaking to Dhaka Tribune, Prof Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), concurred the same. 

He said that Bangladesh has little or no capacity in terms of offshore fuel exploration and needs to depend on foreign exports. 

Both offshore and onshore explorations — to meet industrial energy needs — should be carried out, and the possibilities of making energy costs affordable need to be explored to sustain and develop the economy, Rahman added. 

With the depletion of Bangladesh’s proven gas reserves, LNG and LPG can be the perfect replacement, experts said at the webinar.

From 2010, Bangladesh gradually moved from its own exclusive fuel to imported fuel. The country currently produces 3,300 million cubic feet of gas per day (MMCFD), out of which 74% comes from local gas, and 26% comes from LNG. LPG is environmentally friendly and healthy, and at present, 1.2 million tonnes of LPG is being used.

However, although local industries are using LNG and LPG, the dependency is relatively low as they are costly, in contrast to natural gas, which is very cost-effective. 

According to Rizwan Rahman, the president of DCCI, LNG constitutes 1.2% of the total global import, which is around 1,000 MMCFD against the daily demand, while LPG meets 2% of the domestic energy demand.

“Energy plays a pivotal role in the economic development and industrial progress of a country. The growing energy need for diverse economic operations demands a blended energy mix to offset the shortages of gas,” he added.

Industrial energy fuel such as gas is vital for almost all industries, specifically, the ready-made garments (RMG) sector and its backward linkage industries — spinning, dyeing, and finishing. 

Gas approximately contributes 30-35% of the power for the apparel industry, and around 7-8% of the country’s total gas supply is used in the RMG sector, which is insignificant in terms of the contribution to the economy, according to Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

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“The RMG sector’s value addition through the use of gas is Tk53.6 crore in turnover, enabling 3,700 jobs for every 10,000 cubic feet of gas used,” Hassan added.

“At present, the daily demand for gas in Bangladesh is about 3,700 MMCFD while the production against the demand is about 3300 MMCFD. The demand for gas all over the country has increased by 7% over the past decade. And by 2025, the demand is expected to reach 5,000 MMCFD,” he further said.

Cheaper than economical price and easier availability of natural gas greatly facilitated Bangladesh’s rapid industrialization from the 1980s to 2000s, giving rise to energy-intensive, lesser fuel-efficient industries. 

And although it ensured Bangladesh achieved commendable GDP growth consistently at 6-7% for several years, Petrobangla and the Energy and Mineral Resources Division failed to keep pace with demand growth in matters of exploiting the national fuel resource, according to industry insiders.

According to BERC, it has fixed coordinated LPG prices in the country for the first time, and a meeting will be held again to review the price. 

If the price of LPG comes down and becomes affordable for the lower-middle-income people, by the year 2025, about 3 million tonnes of LPG will be needed.

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