Friday, June 19, 2009

Keep export option, build green city: Expat experts suggest at discussion on coal

Refayet Ullah Mirdha, back from Tangail, The Daily Star, June 19, 2009

A panel of non-resident Bangladeshi experts yesterday suggested that the government formulate a coal policy with an option to export the surplus fossil fuel.

It talked about merits and demerits of open-cut and underground methods of coal extraction, but did not recommend any.

At a post-workshop press conference at Jamuna resort in Tangail, the energy experts said the government should build 'green cities' near the coal mines to ensure locals are safe from environmental hazards.

They also stressed the need for arranging alternative means of livelihood for the people affected by coal mining.

Nafis Ahmed, a panel member, said they have asked the government to develop a database through geographic information system for a 30-year land management in the mining localities.

"We have also suggested regular dialogue between the government and experts on protection of the environment from the perils of extraction," he added.

The panel observed that the country would be able to have four 500-megawatt power plants if coal mining at Barapukuria and Fulbaria runs on full throttle.

It said it favours exporting the coal in excess of the domestic demand because extraction, once underway, cannot be stopped.

The experts drew up a draft coal policy during the workshop titled 'Brainstorming with Non-Resident Bangladeshi Experts on Coal Mining in Bangladesh'.

The four-day group work, which began on June 15, was organised by the energy ministry and Petrobangla, the state body mandated to oversee production, transmission and marketing of gas, oil and other mineral resources.

In the draft, the expatriates' team suggested securing energy security for 20 years, provided the GDP growth would hover around 8 percent a year.

M Khalequzzaman, one of the specialists, said that while sketching out the policy, they focussed on energy security, institutional and legal framework, resource mobilisation, environment, health and safety issues, and resettlement and rehabilitation of those who would be affected.

Alongside its own coffers, he noted, the government should count on stock markets, public-private partnerships, banks and security bonds for funds.

Mohammad Mohsin, secretary of the energy ministry, said they would discuss the suggestions at the secretary-level committee to include those in the government's draft coal policy.

"The government wants a coal policy as soon as possible. However, I cannot give you an exact time by which the proposed policy would be finalised," he told reporters.

Muktadir Ali, acting chairman of Petrobangla, said he has already recommended export of 2 lakh tonnes of surplus coal produced at the Barapukuria coal mine.

Among others, Toufiq-e-Elahi Chowdhury, power and energy adviser to the prime minister, was present at the press conference.

Experts’ suggest coal export in ‘special circumstances’

Staff Correspondent, NewAge, June 19, 2009

The non-resident Bangladeshi ‘experts’ have recommended that the government should keep open in the coal policy an option for coal export in ‘special circumstances’.

They have also recommended not banning or favouring any coal mining method in the policy and stressed that a mining method is selected for ‘maximum extraction of coal’ considering environment.

The recommendations came in the four-day coal mining workshop that ended on Thursday at Jamuna Resort in Tangail.

Explaining special circumstances for coal export, the coordinator of the ‘experts’ Dr Nasif Ahmed, an expert on networking of people, told reporters in a press briefing that if any surplus coal remained stockpiled for days, there would be no alternative but to export them.

‘If two out of four coal-based power plants go out of order and the coal cannot be stored, it can be exported in this circumstance. This kind of situation has already become obvious in the Barapukuria coal field,’ he said.

Petrobangla chairman Muktedir Ali told reporters they had requested the government to allow export of two lakh tonnes of coal from the Barapkuria coal mine as they could not store more coals at present.

‘We have 2.5 lakh tonnes of coal stockpiled at Barapkuria as the 250MW coal-based power plant is not operating in its full capacity. The field is producing around 3000-4000 tonnes coal a day. There is no more space for storing coal,’ he said.

Muktedir said that they had already invited local tender to sell the coal but did not get satisfactory response.

Professor M Khalequzzaman from Lock Haven University of Pennsylvania, USA, said they thought Bangladesh was not in a position to export any energy resources like coal as it was facing energy shortage.

He said they could not reach on any ‘specific agreement’ on coal mining method but they reached a consensus that mining method should focus maximum extraction keeping environment into consideration.

Khalequzzaman read out the recommendations that included expansion of use of coal beyond power generation, building institutional capability and develop skilled manpower on coal by developing ‘Coal Bangla,’ a national organisation.

He said the environmental quality standard had to be formulated for coal extraction.

Nafis claimed that they had given their independent opinions on the coal policy.

The government gave them the latest version of coal policy, which was formulated by the interim government by changing the draft policy finalised by the committee headed by former BUET vice chancellor Abdul Matin Patwari, before the eight NRB ‘experts’.

The panel also said Bangladesh would be able to run four power plants each with 500MW capacity if the coal could be extracted from both the Barapukuria and the Fulbaria coal mines.

They suggested mobilising fund for coal extraction from government exchequer, stock market, public-private partnership initiatives, bank loans and security bonds.

At the press briefing, energy secretary Mohammad Mohsin said, ‘The government wants that the coal policy is formulated as soon as possible. But I cannot say exactly when the proposed coal policy will be finalised.’

Thursday, June 18, 2009

Expat experts begin reviewing coal issues: Barapukuria mine operating amid high risk, they observe

The Daily Star, June 18, 2009

While dissecting the draft coal policy at a four-day brainstorming session, a panel of expatriate and local experts emphasised on health and environmental aspects in finalising the policy that should additionally be trimmed down.

They said that the policy should dictate that health and environment should represent at least two percent of any coal mining cost.

According to sources present at the brainstorming session being held at the Jamuna Resort from June 15, the experts agreed on the draft's suggestion on forming a “Coal Bangla” like Petrobangla to spearhead activities in the coal sector.

Bangladesh Energy Regulatory Commission (Berc) will have an inspector of mines as a tool to regulate the mining standards from geological perspective, while the Department of Environment would deal with the surface environment, they said at the session that concludes today.

The Petrobangla and the energy ministry invited the expatriates at this programme to stimulate a fresh perspective on the draft coal policy, land subsidence at the Barapukuria coal mine site and human resettlement issues.

“The discussions here have been highly academic. The non-resident Bangladeshis are not related to any private company working in Bangladesh and they have not been involved with the drafting of the policy in the past. They are not debatable, though some quarters are trying to make the people suspicious about this session,” said an official of Petrobangla present at the discussions.

The discussants felt that the draft coal policy had a lot of chapters not relevant as policy. “We all agreed that this document should be confined within policy matters,” said a source.

The draft also seeks to ensure coal reserve to meet 50 years of demand. The discussants felt that it was not realistic as, in the course of time, there would be many unpredictable developments that would demand changes in the strategy.

The country did not have adequate data on proven coal reserve except for the case of Barapukuria and Phulbari deposits and therefore it should take up extensive feasibility study of other discovered coal deposits.

Bangladesh should mark a mining zone and begin exploration extensively, they said.

The draft policy projected coal demands mainly on the basis of power sector requirements. But the policy should take into cognisance other sectors' requirements.

In the high-energy demand scenario, the experts find no reason to allow export of coal. However in some peculiar conditions, the provision of export should be kept there. For instance, due to power plant failure in Barapukuria, the coal mine there now has so much surplus coal that these should be exported or removed to other places to ensure safety.

To develop the coal sector huge resources are required. This resource may be derived from public private partnership, share market, issuance of bonds, loans from development partners, leasing etc.

Besides the session discussed about financial incentives for investors and gathering of baseline data from the coal deposit areas.

Double PhD holder from UK and Australia on minerals, Dr. Nasir Ahmed is acting as the coordinator of the expatriate group. Other expatriate experts are: Dr Saad Andalib, Professor and the Chair of Marketing, Pennsylvania State University, USA, Dr Khalequzzaman, head of Geology Department of Lock Haven University, Pennsylvania, US based environmentalist Dr Sarwat Chowdhury, mining engineer working in Queensland coal and iron mines Masud Hossain, and Melbourne based Global Positioning System and Global Information System expert Sultana Nasrin.

The chairmen of Petrobangla and Power Development Board (PDB), members from Geological Survey of Bangladesh, Bureau of Mineral Development, Barapukuria Coal Mine Company, Titas Gas Transmission and Distribution Company Ltd, Dr Hossain Monsur of the Geology Department of Dhaka University, and representatives from the Rajshahi University and the Chemical Engineering Department of the Bangladesh University of Engineering and Technology (Buet) are participating in the session.

Wednesday, June 17, 2009

NRB experts divide over mining method, export of coal

Staff Correspondent, NewAge, June 17, 2009

The non-resident Bangladeshi experts are divided over the coal mining method, rate of royalty and coal export issue, said the sources present at the four-day workshop on coal policy that began at the Jamuna Resort in Tangail on Monday.


‘There was a clear division among the NRB experts who came from the USA and Australia. Majority of the experts, came from Australia, were in favour of open pit mining method, fixing low royalty rate and keeping the coal export issue open,’ said the sources.
 Eight NRB experts are attending the workshop on the coal mining method and coal policy,’ organised by the state-owned Petrobangla.


Two experts, came from the USA, highlighted the impact of open pit mining of coal on the environment and people, presenting the examples of the USA.
 They also opined that Bangladesh should not allow export of coal to secure its future energy reserve.


There was a ‘clear motive’ in projecting the underground mining at the Barapukuria coal field as a complete failure by the experts from Australia and their choice for open pit mining method, the sources said.
 Moreover they claimed that if the royalty rate was fixed at a higher rate, the cost of power generation using coal would get increased.


They also recommended that the coal policy should not impose ban on the coal export from Bangladesh.


The NRB experts are reviewing the draft coal policy that was prepared by an advisory committee, headed by former vice-chancellor of BUET, Abdul Matin Patwari.


The Patrwari committee recommended ban on coal export, development of coal fields under the leadership of the state-run companies, fixing royalty rate based on some criteria like coal price in the international market and operation of a small scale open pit mine at Barapukuria field to see the feasibility of such mining method in Bangladesh before going to apply it in other fields.


‘It seems that the workshop will adopt the recommendations of the experts, loyal to the UK-Australian company Asia Energy, who opposed the recommendations of the Patwari committee,’ the sources said adding that the ‘experts’ would come up with a complete set of recommendations today.


The National Committee to Protect Oil, Gas, Mineral Resources, Power and Port, and different rights groups are protesting at holding of the workshop by the government terming the ‘Jamuna Resort meeting’ a conspiracy to allow the controversial Asia Energy to extract coal through open pit mining method at Phulbari field and export of coal.

Tuesday, June 9, 2009

PDB plans big for six coal-fired power plants: over 2,900MW to be added by 2015; ten rental plants by year-end

Sharier Khan, The Daily Star, June 9, 2009

In view of the gloomy gas supply scenario, the Power Development Board (PDB) for the first time shifted its focus from gas-fired plants and proposed for six coal-fired power projects -- five of them very large -- totalling 2,625 megawatt to be installed by 2013-2015, sources say.

In addition, PDB in its proposal to the power ministry recommended setting up of three more 100MW duel-fuel power plants by 2013.

At the same time, PDB sees a power crisis of 1,467MW by this December and recommends setting up of 10 small non-gas rental power projects of 400MW capacity for one-year term to ease the crisis throughout 2010.

The proposal says of the six coal-fired plants, five would be 500MW in capacity each. These would be set up on the basis of partnership between the public and private sectors or as independent power projects (IPP) like the Meghnaghat plant, having 25 years of contract for each.

The PDB incurs loss from purchasing power from rental and liquid fuel-based private power plants, as their tariffs are higher than PDB's selling price.

PDB's loss is higher for rental power projects. The PDB proposes that the government allocate it subsidy to cover up the losses.

If the ministry in principle approves these projects, PDB would take steps to determine technical and financial feasibility, location selection, fuel types and types of contracts for rental, IPP and public-private partnership.

The five large coal-fired plants will be located in Khulna, Chittagong, Meghnaghat-3, Meghnaghat-4 and Maowa. The first two plants could be commissioned by 2013 and the rest in 2015.

The coal could be imported or locally produced. Sources say coal has been chosen as the main alternative source of power, as the other options like imported oil or liquefied natural gas (LNG) are costlier.

On an average, coal-fired power costs US 5-6 cents per kilowatt hour, nuclear power also costs the same, gas 6-7 cents, wind 8 cents and solar 10-15 cents globally.

Besides, PDB could undertake a 125mw coal power project at the cost of $190 million at Katakhali in Rajshahi. The PDB may also take up three 100MW duel-fuel (having the capacity to use both gas and oil) projects, each costing $160 million in Faridpur, Hathazari and Dohazari.

On the one-year rental power projects, PDB recommends heavy fuel-fired plants in Thakurgaon of 20MW capacity, Khulna barge-mounted 50MW capacity and Noapara 50MW capacity.

The remaining rental plants would be fired by liquid fuel. They are 50MW Ashuganj, 40MW Bheramara, 40MW Barisal, 50MW Katakhali, 50MW Cox's Bazar and 50MW Shikalbaha.

The government had bitter experience with rental power projects, none of which could launch operation in time and some of which could not launch operation at all.

PDB sources say this negative experience was caused by selection of wrong contractors during the caretaker government.

"The upcoming power crisis demands that the government take quick measures to minimise the crisis. If awarded to competent contractors, rental plants can be a very effective solution, though it will be costlier than conventional plants," said an official.

As per the Power System Master Plan (PSMP) update 2006, the power demand in December this year should be 6,066MW, while the installed capacity should be 7,313MW.

But the power projects under implementation would add 811MW by December, leaving a power crisis of 1,467MW.

Presently the official capacity of PDB is around 5,000MW, while it can practically generate less than 4,000MW.

The PSMP update also says the demand will shoot up to 8,364MW in 2013, while the installed capacity should be 9,979MW.

"Presently the government has taken up various power projects which will bring 3,200MW power by 2014. The flaw in this plan is that these projects are not enough. We project that there will still be a power crisis of 2,000MW. This is why we are preparing a proposal," said a top PDB source.

The parliamentary standing committee on power had earlier reviewed the power projects under implementation and felt that they were not enough to address the country's problems.

The committee asked PDB to work on the plan and send it to the power ministry, sources say.

"The standing committee told PDB that it would strongly recommend the new power projects," a PDB official added.