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The Integrated Energy and Power Master Plan Part I

Challenges ahead as BD energy demand expected to increase by 3.75 folds by 2050

Published : Tuesday, 12 December, 2023 at 12:00 AM  Count : 433

The Integrated Energy and Power Master Plan (IEPMP) indicates that Bangladeshs energy demand is projected to increase significantly, expanding by 3.75 times from the current level to the year 2050. Simultaneously, electricity demand is expected to surge by 7.82 times, highlighting the pivotal role of electricity as the primary energy source driving economic growth.      

This underscores the importance of comprehensive planning and infrastructure development to meet the escalating energy needs of the country.

IEPMP formulated by the Japan International Cooperation Agency (JICA) is a comprehensive long-term plan for Bangladeshs Energy and Power sector up to the year 2050. The plan is built on the concept of "S plus 3E," with a focus on Safety, Energy Security, Economic Efficiency, and Environment as central pillars. The Ministry of Power, Energy, and Mineral Resources initiated this collaboration with JICA, signing an accord on March 14, 2021, to address the evolving energy needs of Bangladesh.

However, this is first of this kind that discussed the population growth--GDP with a promise to ensure green/clean fuel, JICA called it "Challenging."

"For Bangladesh, the journey to having a low carbon economy is not an easy one as the country is unfortunately not blessed with rich renewable energy resources, notably solar radiation, stable wind flow and/or geothermal power. The country is characterized by flat low land and extremely high population density. The potential of hydro or pumped hydro generation is quite limited. It is said that there are good geological formations suitable for carbon storage, but they have not yet been confirmed technically and commercially. Therefore, it is anticipated that technologies such as nuclear, ammonia/hydrogen and CCS, mainly based on industrial technologies, will play major roles in low carbonization. These technologies are expected to advance significantly in the future. Therefore, it is particularly important to monitor their progress and make decisions at appropriate times in line with the timeline and important milestones of the energy roadmap," it said.

In the power supply plans in this study, hydrogen is planned to be co-fired in 2035 and ammonia in 2030, however, the both of the issues are still at research stage, Japan or India or many other developed countries failed to make a plan accommodating both the sources in their master plan.

"We wanted to review the existing long-term energy plans, such as Power System Master Plan 2016 (PSMP2016) / Revisiting Power System Master Plan 2016 (Revisiting PSMP2016), Energy Efficiency and Conservation Master Plan 2016 (EECMP2016), and Gas Sector Master Plan 2017 (GSMP2017), and consolidate them into a comprehensive national plan setting out a tangible and practicable development roadmap.  However, we requested Japan for necessary support in formulation of the IEPMP with a view to setting out middle-long term energy policies to establish a low carbon-decarbonized society," Power Cell DG Mohammad Hossain said.

Quoting from the "Quarterly Q1 2021" report published by the International Renewable Energy Agency (IRENA), IEPMP said, in the mid- to- long term, the competitiveness of green hydrogen derived from water using renewable energy sources will improve, and the production cost is assumed in some cases to be 20 per cent cheaper in 2040 and 30 per cent cheaper in 2050 comparing to 2030."

Analyzing the present data of Bangladeshs energy sector, the IEPMP said "If no new gas fields are discovered and additional gas reserves are not secured, it is estimated that gas resources will be exhausted by 2025-2031."

It presented some data from the Committee Report on Gas Demand and Supply Forecast (March 2019) of Petrobangla that forecasts the long-term gas demand in three scenario, according to the Scenario-1 of the projection, gas demand would increase by 6.0 per cent annually over 10 years from FY 2020-21 and 3.9 per cent annually over 20 years through FY2040-41, for a total increase of 4,730 MMcfd. The electricity and industrial sectors contribute significantly to the demand increase, with the former estimated to increase by 1,970 MMcfd for the grid power and 1,354Mmcfd for the captive power, and the latter by 1,344 MMcfd.

It also put the data from Hydrocarbon Unit (HCU), HCU developed a medium- to- long-term gas demand outlook for Bangladesh for the decade 2020 to 2030 in its "Energy Scenario of Bangladesh 2019-20" report. As of 2020, the domestic gas demand was about 3,508 MMcfd and it was expected to increase by 1,114 MMcfd over the decade to 4,622 MMcfd in 2030, which is not matching with the Petrobanglas data.

Analyzing the data, IEPMP has said the plan points out that if the development of new gas fields is not successful, a large amount of natural gas import will become necessary. For instance, where gas demand evolves moderately, about 4,500 MMcfd of gas import will be required in 2030 if new gas field development is not successful. Such large amount of import will require precise analysis on the future LNG availability, gas infrastructure development and legislative and regulatory arrangements.

"It is quite challenging to predict the pace of energy consumption growth when an economy is going to take-off. Therefore, the natural gas demand trend must be carefully monitored, and projections should be reviewed periodically in order to guide the industry in the right direction," it remarks.

Focusing on the offshore pipeline issue, it said the offshore pipeline directly from Matarbari to the west is favoured because (i) gas can be pressurized there to send a large volume, and (ii) it can be used as a hub for future development of offshore gas fields. A 36-inch offshore and 42-inch onshore extension from Moheskhali to Gopalgonj, Khulna is proposed.

Gas demand in 2041 has been estimated for the Scenario to be 6,713 million cubic feet per day (MMcfd) based on the PSMP 2016, to attain a high GDP rate it requires 10,208 MMcfd gas, and for moderate (6 per cent GDP growth) it requires 8,346 MMcfd. Gas Sector Master Plan considered that there was a great deal of uncertainty regarding the economic development of each demand sector and geographical regions, which would impact their demand outlook.

"As Bangladesh pushes forward modernization of the country, traditional biomass, notably firewood used at household, will be replaced by gaseous fuels. Under the above policy, the rapidly increasing demand for modern fuel may be supplied with LPG, but a large number of LPG cylinders needs to be delivered in the congested metropolitan areas which will be enlarging along with urbanization. To avoid problems of traffic congestion and safety caused by such cylinder deliveries, it will be more prudent to consider rehabilitation and new construction of city gas systems in the metropolitan areas as  part overall city development plan. This issue must be looked into more in detail on the technical and socio-economic aspects of various options to set out an appropriate balance of city gas, community gas, and LPG," it remarks.

To support economic development of the country, LNG import is expected to inevitably increase, but the demand growth may not be as large as expected because of the start-ups of new power generation units, and the demand outlook has been revised in this master plan. LNG import will increase to 33 million tons (Mt) in 2030 and 46 Mt in 2040 for the Petrobangla case, 9 million tonnes (Mt) in 2030, 21 Mt in 2040 and 46 Mt in 2050, however, if exploration on the high-risk potential resources is not be successful, additional import of LNG will become necessary on top of the projection by 7.1 Mt in 2040 and 9.4 Mt in 2050. On the other hand, if the natural gas demand follows the projection made by Petrobangla, gas supply balance will become tight at an earlier time. To cope with this, LNG import needs to be increased earlier, it said.

"If LNG requirements increase further, the Matarbari LNG terminal may be expanded further. The biggest challenge for this project is dredging of the fairway to secure the water depth for world-class LNG carriers and cargo-ships to enter the port," it cautions.

Consumption of petroleum products is forecast to expand 7.6-fold between 2019 and 2050 for the PP 2041 GDP case and 7.0-fold for the In-Between Case as shown in Table 3-1. The increase will be mainly led by motor fuel such as gasoline and diesel oil in response to increasing demand for mobility. Diesel and fuel oil are also used for sea and river water transport. The share of the overall transport sector will exceed 60 per cent of the oil demand in the 2030s, it said.

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