Upholding Bangladesh’s Energy Security Requires Short-Term and Long-Term Policy Planning

For a long time, Bangladesh has been facing several challenges regarding energy security.

These problems have resulted from corruption, misgovernment planning, irrational use of public resources, adverse impact of accelerated electricity rental or quick rental, etc, accomplished by the Awami League regime. However, the current interim government has taken up the responsibility for reforming Bangladesh's energy security policy as soon as it came to power, which it did as this government considered this task following the overthrow of the former government. Bangladesh's overall supply generation ranges from 10,000 Megawatts to 13,000 Megawatts per time of the day. In this regard, the capital of Bangladesh, Dhaka, consumes around 4,000 to 5,000 megawatts of electricity daily. As a result, in the coming summer, Bangladesh would likely face severe electricity shortage as well as gas shortage. The challenges therefore for Bangladesh’s energy policy are both short-term and long-term.

Electricity generation mainly comes from natural gas and coal-fired power plants, diesel-powered facilities, and a new Roppur Nuclear Power Plant under construction, which has a planned capacity of 1200 megawatts (MW) with two VVER-1200 reactors. Nevertheless, to ensure the country's energy security and maintain the reliability of electric service, the caretaker government of Bangladesh needs to take some significant steps. The state-owned Petro Bangla recently announced a 7.04% increase in the overall supply of natural gas.

This amount is for an unaccounted gas or UFD, under consideration for the fiscal year 2022-23. The Sustainable and Renewable Energy Authority has started to create energy rules alongside the new interim administration, which has passed a new strategy to become sustainable for energy efficiency in 2030 Bangladesh. Simultaneously, the masses want affordable, reliable, and uninterrupted power. Currently, Bangladesh has 28 natural gas fields in operation, while the country's energy needs are being met with more than 53% of the gas. Bangladesh heavily depends on imported liquefied natural gas (LNG) from Qatar and the U.S. to meet its energy supply needs. As of 2017, Bangladesh has proven gas reserves that included 7.25 trillion cubic feet (Tcf). This ranked it 42nd in the globe and contributed for around 0.105% of the total natural gas reserves in the world, which totalled 6,923 Tcf. Bangladesh's natural gas deposits were also an important contributor to the country's economy.

The most crucial issue became the corruption could be named as the to the government. Public sector organizations and private sector organizations alike were deeply affected. In the case that Bangladesh successfully extracts at least one to two trillion cubic feet of gas from its resources. Only then will it be able to sufficiently meet the demand for a power supply? Yet the problem is worsening, as Bangladesh imports 1,496 megawatts of electricity from India every year. At the same time, the country's previous administration signed a controversial agreement with the Adani Group of India that has made it harder to operate the energy industry in Bangladesh. India's biggest power supplier is said to have negotiated a controversial deal with the Hasina regime to supply electricity from a power plant in Godda, Jharkhand, for an estimated 1.7 billion dollars. Despite insufficient power supply, Bangladesh was paying a capacity charge of around 400 million. Bangladeshis are paying comparatively high prices for their electricity. Due to the country's dwindling reserves of dollars, Bangladesh has become unable to maintain its annual payment dues.

Considering the current economic crisis and fuel shortage, the government needs to take proactive measures to reduce energy consumption to overcome the challenges likely to be posed by the scorching heat of the coming summer. Firstly, it must identify illegal connections and stop those from stealing electricity. Moreover, in city areas, ‘the sudden surge of the Auto Rickshaws’ has increased the demand which is still unaccounted. These garages are also using cheap household lines. Authorities must inspect these garages and bring them under commercial package before the summer. The government may also decide to shorten government office time by one hour, as well as reduce school time by one hour. Reducing office and school time would not bring any negative impacts, it would reduce energy consumption for a short-term instead.

As a long-term strategy, Bangladesh has signed a Heads of Agreement (HOA) with the U.S. to meet its energy need. Louisiana-based company "Agent LNG" mediated the agreement. Besides, Bangladesh is working to import hydro-electricity from Nepal and Bhutan. For long-term energy security, the caretaker government should concentrate on bilateral energy security treaties as well as expanding partnerships with global companies with favourable terms. It should invite oil companies like ExxonMobil and Chevron to come to Bangladesh. The government would review the deal with the Adani group and renegotiate it to make it more favourable for Bangladesh.

Strategically, Bangladesh aims to achieve energy independence, reduce geopolitical threats over energy import, and generate power locally at the lowest rates. Bangladesh should be less dependent on the power sector's demand by increasing its power supply by maximizing its use for generating gas by reducing Unaccounted for Gas or UFG. Limiting this UFG within 3% will assist Bangladesh in recovering 40.51 billion cubic feet of gas, improving electricity generation. Such improvements could save more than $442 million in LNG imports and increase energy affordability and reliability. They are the burden of proof by which people can simultaneously reduce their dependence on fossil fuels and call for the surveillance of the formation of sustainable development to ensure energy security. On the other hand, the Roppour nuclear stations with a combined capacity of 2400 MW could greatly ease Bangladesh's energy problem, even though they are almost universally seen as a white elephant project. Bangladesh's government and the Russian State Atomic Energy Company "Rosatom" inspected the facility to accelerate the process of constructing the nuclear power plant. However, Bangladesh is exploring other ways to import power from Nepal. On October 3, 2024, Bangladesh, Nepal, and India signed a tripartite agreement. Under the agreement, Nepal was supposed to supply Bangladesh with 40 megawatts of electricity. The treaty seeks to improve bilateral commercial cooperation and electricity supply to strengthen connectivity. These agreements can drive long-term strategic engagement between Nepal and Bangladesh. Now, the main difficulty lies with the connection as India has been reluctant to provide electricity transit from the very beginning. But, the government of Bangladesh is looking forward to extending their bilateral agreements with the USA while reducing dependence on India for electricity.

Bangladesh's interim administration should explore alternative means of generating electrical supplies to transform into a modern energy producer as a long-term policy goal. This should include the reduction of electric plants burning coal, as fossil fuel power generation plants cause pollution in the environment; therefore, due to the costs of coal, the authorities must pay more attention to alternative energy resources like wind power and use solar more often. Furthermore, to reduce pressure, private small production through solar panels as well as a self-sufficient household policy should gain traction where small companies and private citizens get the opportunity to contribute clean energy to the national grid; or at least become self-reliant. Government policy should provide a subsidy and tax-break for such initiatives.

A critical recommendation for Bangladesh is adopting the Singapore narrative. In Singapore, authorities collect all municipal waste, burn it constantly at a facility, and extract energy from the heat generated. As a result, electricity will be cheaper in Bangladesh. The Government of Bangladesh can invest in deep-sea research & expeditions for mineral resources. This makes it possible to build a stable energy supply by promising natural gas or oil sources. Moreover, it should be made sure that new technologies are deployed to reduce dependency on non-renewable sources and get the most out of these sources. Such plans will provide energy security for Bangladesh by adjusting to the ever-increasing price of the world market.

Sent in By: Jaidul Karim Iram

Jaidul Karim Iram, has completed his graduation and post-graduation from the Department of International Relations, University of Dhaka.

×