Thrust on cautious monitoring of energy demand despite BDs projected GDP growth

Despite projections by the Planning Commission of Bangladesh that the country will be taking off at a faster pace in the next five years regarding GDP growth, the Integrated Energy and Power Sector Master Plan (IEPMP) has sounded a note of caution. It states that authorities should closely monitor energy    demand trends and adapt medium-term gas development plans accordingly to meet the countrys needs.

"Natural gas demand is projected under the Advanced Technology Scenario (ATS) where maximum efforts on energy efficiency and conservation should occur. However, in early-stage economic development, such efforts may take time to spread, and gas demand could outpace projections," the IEPMP said. "It is necessary to closely track the demand and adjust gas development plans."

Regarding energy consumption patterns, the IEPMP said: "Electricity comprised 23 percent of energy use. Of that, 45 percent occurred in the residential sector (mostly urban areas), while 43 percent was in industry for on-grid and captive power generation. Though electricity demand swung down in 2020 due to COVID-19 after a transitory 2019 spike, it will likely revert to and exceed the previous trajectory long-term, expanding considerably."

To address urban energy issues, the IEPSMP suggested modernizing city gas systems, especially measurement and pricing, to revitalize the gas business and promote rational urban development.

"Bangladeshs urban energy use patterns pose huge challenges. Because of obsolete supply infrastructure, we should phase out residential and commercial city gas in two stages," said energy expert and former adviser Dr M Tamim. "First, our declining gas reserves cannot support growing demand. Second, we must prioritize gas as a precious resource."

He added that supplying vast urban areas requires large-scale LPG cylinder delivery. "Appropriately allocating cooking fuels - city gas, LPG and electricity - across residential and commercial sectors is crucial."

The IEPSMP said if gas demand grows as per Petrobanglas projections, requiring additional import capacity around 2035, decisions must occur before 2030.

It suggested liquefied natural gas (LNG) transported in 40-foot containers could suit some demand. "This avoids complicated transshipment between origin and destination. However, storage tanks and vaporization systems are still needed at destination terminals," it stated.

For isolated customers near pipelines, compressed natural gas (CNG) could be better than LNG since it eliminates vaporization systems. However, CNG may only suit small-medium users as high-pressure storage is difficult. For large users, branch pipeline installation could be feasible, pending demand size. "These options should be examined when developing the national gas system," it concluded.

The JICA Technical Cooperation Project W/G (Gas Technology Cooperation Project) is actively working on enhancing the gas supply business in Bangladesh.

According to the project, the current configuration of the national gas pipeline is incomplete, featuring a one-sided pressurizing system with a fish-bone structure, resulting in inefficient operation. Additionally, due to a shortage of indigenous gas production, the system is not operating efficiently.

To address these issues, the national gas pipeline network needs upgrading, including larger diameter pipes, improved measuring systems, and a new pipeline connecting Matarbari and Dhaka, along with loops featuring multiple input points to stabilize gas supply in central areas around Dhaka and the western region.

Regarding the energy price issue, the Integrated Energy and Power Sector Master Plan (IEPSMP) acknowledges that the international oil price is projected to rise from 2020 to 2030 due to sustained demand recovery from COVID-19. While the international natural gas price rose in 2021, the ATS assumes that the market will calm down toward 2050 as developed countries reduce fossil fuel consumption, leading to a decline in natural gas demand in the long run. The prices of international hydrogen and ammonia are estimated to follow a declining trend over time.

"Our main hurdle is to supply energy to the consumers end uninterruptedly and with an affordable price, we are working on that issue but it needs some time to address it as the availability of energy is also a challenge here as most of its are imported item," State Minister for Power, Energy and Mineral Resources Nasrul Hamid said.

Though the global LNG market is developed today, LNG import means straight outflow of foreign currencies placing substantial burden on the economy. Increasing domestic production, on the other hand, gas supply will be more stabilized, the economy will be stimulated with investment, and technologies will be accumulated.

Ensuring modern technologies and exploration funds, both of which are not available in Bangladesh, is a key to success in enabling production of the high-risk potential gas. To this end, it is crucial for the country to prepare appropriate conditions to invite foreign investment and technologies, he added.