Urgent need to increase reliance on domestic energy : Dr. M TAMIM

Dr. M Tamim is the Vice Chancellor of IUB, an energy expert and former special assistant to the chief advisor of the caretaker government. He talked with the Daily Observer and discussed the LNG import issue and its long-term effect on Bangladesh's economy and power sector dependency on imported gas.  Shanaj Begum, in charge of the power and energy page, talked with him. We are presenting the discussion with our readers to share the energy expert's insights

Expressing concern over the country's overreliance on expensive spot LNG, Professor M. Tamim, Vice Chancellor of IUB, stressed the urgent need to increase reliance on domestic energy, noting that boosting output from existing gas fields could take 2-5 years while new exploration would take even longer. He highlighted the limitations of the BAPEX (Bangladesh Petroleum Exploration & Production Company Limited)-only approach, recommending engagement with international reservoir management firms to optimise output. He also highlighted the need for a clear policy decision on domestic coal development. Emphasising renewable energy as the quickest solution, Prof Tamim suggested that Bangladesh could add 3,000 MW of solar capacity by 2030, alongside an additional 2,000 MW through rooftop systems, reducing reliance on oil-based power plants during daytime and lower import costs.

'I feel that the decision was taken without due thought or consideration to reality. The international market, the risk of availability, supply shortfall, risk of increased prices or hard economic times -- none of this was taken into consideration.' He added.

'Actually this important dependency on LNG was planned. We assumed that the economy would do well and thus proceeded towards import dependency. The logic was that the energy sector of countries like Japan, Taiwan and South Korea was completely import-dependent. The question is whether our economy is as strong as theirs. It wasn't taken into consideration that just as the economy can fare well, it can fare badly too. The Perspective Plan 2041 of the country's power sector calculated a 9 per cent growth over 20 years. This is both over-ambitious and unrealistic,' he said.

He said presently we generate 15,000 MW of electricity, of which 6000 MW is gas-fired. Of this, 5000 MW is from our own gas. That means, energy is imported for 60 to 65 per cent of power production at present. He said in 2018 we began importing LNG. Perhaps that was necessary too. But the mistake we made was not to simultaneously pay attention to gas exploration on grounds that it would take time, and entirely turn to import-dependency. Over the past 20 years, for various reasons, Bangladesh did not turn to gas exploration.

'In power production, we have three primary energy sources -- gas, coal and solar energy. Alongside the emergency measures taken to address the power deficit, if we used our own gas and coal, and also pay attention to solar power, then the situation would not have deteriorated so far,' the energy expert has said.

Our LNG import capacity is 7.2 million tonnes annually. We buy half of this under long-term agreement from Qatar and Oman. The remaining half we buy from the spot market. Qatar and Oman had urged us to buy the entire amount under the long-term agreement.

We did not do so. In order to ensure steady supply, the standard practice of buying fuel from foreign countries is to buy the fuel for the overall basic demand under a long-term agreement. In any special circumstances if there is an additional demand, then that is bought from the spot market. For example, in winter the demand for fuel is higher than normal times in Europe. Also, if there is a storm or any natural disaster, there is need for additional energy. Then that additional requirement is brought from the spot market, he said. We failed to properly calculate how much we needed to buy under the long-term agreement and how much from the spot market. This was a mistake in our LNG import plan, he added.

If we are talking short-term, then the deals to purchase LNG must be done with caution. The fluctuations in the market must be taken into consideration and decisions taken accordingly. With the power plants that are coming up ahead, by 2027 coal-fired power production will stand at 7000 MW. Another 4000 MW will come from gas. Taking these new power plants into account, a list must be drawn up as to which power plants will function in the days ahead and which will be shut down, and when. Rather than any immediate or stopgap decision, this decision needs to be taken with due consideration, he said.

'The problem, however, is economic and so the way to resolve the problem is by ensuring economic stability. The policy to curb imports to protect the reserves will be of no use. This is not the way to boost reserves. The cut in imports is harming the country's industrial sector and oil and gas bill are going into default. Even commodity prices aren't falling by halting imports. I am not an economist, but I can say that increasing exports and remittance is the way to increase our reserves, not simply by slashing imports,' he added.