Energy Policy of Bangladesh: Hindrence to implement

Introduction
Electricity is the most potential for foundation of economic growth of a country and constitutes one of the
vital infrastructural inputs in socio-economic development .The world faces a surge in demand for electricity
that is driven by such powerful forces as population growth, extensive urbanization, industrialization and the
rise in the standard of living.
Bangladesh, with its 160 million people in a land mass of 147,570sq km. In 1971, just 3% of Bangladesh’s
population had access to electricity .Today that number has increased to around 50% of the population –still
one of the lowest in the world-but access often amounts to just a few hours each day. Bangladesh claims the
lowest per-capita consumption of commercial energy in South Asia, but there is a significant gap between
supply and demand. Bangladesh’s power system depends on fossil fuels supplied by both private sector and
state-owned power system. After system losses, the countries per installed capacity for electricity generation
can generate 3,900-4300 Megawatts of electricity per day; however, daily demand is near 6,000 Megawatts
per day. In general, rapid industrialization and urbanization has propelled the increase in demand for energy
by 10% per year. What further exacerbates Bangladesh’s energy problems is the fact the country’s power
generation plants are dated and may need to be shut down sooner rather than later.
There was no institutional framework for renewable energy before 2008; therefore the renewable energy
policy was adopted by the government. According to the policy an institution, Sustainable & Renewable
Energy Development Authority (SREDA), was to be established as a focal point for the promotion and
development of sustainable energy, comparison of renewable energy, energy efficiency and energy
conservation. Establishment of SREDA is still under process. Power division is to facilitate the development
of renewable energy until SREDA is formed.
While the power sector in Bangladesh has witnessed many success stories in the last couple of years, the
road that lies ahead is dotted with innumerable challenges that result from the gaps that exist between what’s
planned versus what the power sector has been able to deliver. There is no doubt that the demand for
electricity is increasing rapidly with the improvement of living standard, increase of agricultural production,
progress of industries as well as overall development of the country.
Background
In recognition of the importance of energy in socio-economic development, the Government of Bangladesh
has given continuing attention to the overall development of energy sector. It involved survey, exploration,
exploitation and distribution of indigenous natural gas; establishment of petroleum refining facility and
distribution systems; and establishment of power generation plants and networks for transmission and
distribution of electricity. During last one decade, about 20 percent of total public sector investment was
allocated for the development of energy sector. Despite all these efforts per-capita consumption of
commercial energy and generation of electricity in 2000 were about 200 KGOE / year and 120 kWh / year
respectively. Per capita consumption of commercial energy and electricity in Bangladesh in one of the lowest

among the developing countries. At present about 65% of total final energy consumption is met by different
type of biomass fuels (e.g. agricultural residues, wood fuels, animal dung etc.). In 2000 only 2.2% of total
households (mostly in urban areas) had piped natural gas connections for cooking and 30% of households
had electricity connections and only 3.9% of total households used kerosene for cooking. Shortcomings of
the past energy development programs and management practices are identified as follows-
(a) Due to shortage of capital it has not been possible to undertake systematic survey, exploration and
exploitation of energy resources throughout the country. As a result, it has not been possible to ensure
balanced development of energy resources of different zones of the country and balanced development of
different sub-sectors of the energy sector.
(b) Due to shortage of capital it has not been possible to undertake systematic development of Power
Generation, Transmission and Distribution projects and rational use of electricity in the country.
(c) Necessary attention has not been given to formulate appropriate policies to encourage private sector
participation in energy sector development program to meet the shortage of fund.
(d) Development programs of energy consuming sectors (e.g. industrial sector) have been constrained due
to shortage and unreliable supply of commercial energy.
(e) Energy agencies have not been operated and managed efficiently.
(f) Energy prices have not been set on a rational basis.
(g) Effective measures have not been taken to ensure rational use of energy
(h) Unplanned and inefficient use of fuels are contributing to environmental degradation.
(i) Adequate attention has not been given to meet the total energy needs of rural areas.
(j) Adequate attention has not been given to undertake systematic research programmes to develop
indigenous technological capabilities.
(k) Adequate attention has not been given to develop trained manpower for the efficient management of the
sector.
Energy Sector Structure of Bangladesh
According to the source of energy, we can represent the sector in the following structure:

POLICY ISSUES
Policy formulation is a continuing process for decision making at different levels by different institutions and
individuals. At the time of operationalizing National Energy Policy there is a need to ensure that these
decisions are taken in a synchronized manner to achieve the stated objectives. Various levels at which there is
a need for synchronized decision making are stated as follows:
(i) At macro level, policy decisions are to be synchronized to ensure that the outputs of the energy sector meets
the energy demands of all the end use sectors, zones and socio-economics groups on a sustainable basis.
(ii) At the sectoral (energy sector) level, policy decisions are to be synchronized to ensure balanced
development of different sub-sectors (e.g. coal, oil, gas, power etc.). As for example, development in power
sector may be affected due to inadequate development in natural gas sub-sector.
(iii) At the sub-sector (utility) level, policy decisions are to be synchronized to ensure balanced development
of different programmes under a particular sub-sector. As for example, the ultimate outcome of gas-subsector
depends on chronological development of exploration, appraisal, development, production, transmission and
distribution projects. Similarly, in Power Sub-sector, it is necessary to consider chronological development of
generation, transmission and distribution systems.
Major policy issues and recommended policies are to be considered to achieve the objectives of National
Energy Policy have been presented in the following paragraphs.
(1) DATABASE
A centralised database on different type of energy sources, their conversion, supply, consumption, prices etc.
are to be established. These data are to be published on a regular basis to support planned development of
energy resources.

(2) RESOURCES ASSESSMENT
Resources Assessments as have been done and/or being done needs to be institutionalised and the figures
updated at regular intervals (annually) by our own experts. For energy planning purpose assessment of all
types of energy resources (e.g. oil, gas, coal, nuclear minerals, hydropower, biomass fuels, solar, wind, tidal,
wave etc.) are to be undertaken on a regular / continuing basis by the appropriate authorities. Special incentives
are to be given to undertake exploration and appraisal of petroleum resources in the West Zone and off shore
areas.
(3) TECHNOLOGY ASSESSMENT
Necessary arrangements are to be made to select appropriate technologies for application in energy sector
programmes. Different factors to be considered in assessing the technologies are: conversion efficiency,
transferability, adaptability, environmental effects, cost etc.
(4) MANAGEMENT OF GAS SYSTEMS
National gas grid will be established for maintaining reliable gas supply. To improve management efficiency,
production, transmission and distribution systems of gaseous fuels will be managed as separate cost and profit
centers. Each of the units will be corporatised and allowed to operate on a commercial basis. Development of
gas fields through private sector, as a part of Government’s privatization policy will be considered. Private
sector participation in the form of joint ventures may be considered for construction of gas transmission
pipelines where it is beyond the funding scope of GoB/Public Companies. Gas distribution companies may be
privatised in phases for better management of the distribution system.
(5) MANAGEMENT OF PETROLEUM FUELS
In course of time import, processing, distribution and marketing of petroleum fuels will be opened to the
private sector provided the private sector investors develop their own infrastructure like pipelines(s) including
carriers, storage and distribution/handling facilities.
(6) MANAGEMENT OF COAL
Coal will play an important role in meeting the future energy needs of the country. A coalmining project is
under implementation to extract coal from Barapukuria Coal Mine. To ensure efficient management the
mining activities will be conducted through Barapukuria Coal Mining Company.

(7) MANAGEMENT OF POWER SYSTEM
To improve management efficiency; generation, transmission and distribution systems of power sector will
be managed as separate cost and profit centers. Existing power utilities will be corporatised and allowed to
operate on commercial basis. Rural Electrification Board will be allowed to continue the implementation and
management of Area Coverage Rural Electrification (ACRE) programme for designated rural areas of the
country.
(8) ENERGY CONSERVATION
End use based energy planning method is to be undertaken to incorporate energy conservation measures in
energy planning process. Energy conservation measures will be considered in generation of power, refining
of crude oil and use of energy for various end-uses (e.g. domestic, industrial, commercial, transport,
agriculture). Necessary incentives (e.g. technical support, preferential credit, tax exemption etc.) will be given
to achieve the targets of energy conservation. There is a need to adopt Energy Conservation Act (in the process
of approval by the Government for enactment) to provide a legal basis and to decide appropriate strategies for
energy conservation.
(9) ENVIRONMENT CONSIDERATION
Environmental issues will be considered for all type of fuels and in each and every step of fuel cycle; namely,
exploration, appraisal, extraction, conversion, transportation and consumption.
(10) MINING INSIDE THE FOREST AREAS
There should not be any commercial mining and quarrying inside the forest area (as legally defined in the
Forest Act) and within 3 (three) Km from the forest boundary. However between 3 to 10 Km of forest
boundary mining and quarrying may be allowed only where EIA shows that there is no negative impact on
forest. Transportation of mining and quarrying materials should be controlled under the coverage of Forest
Transit Rules.
(11) PRICING POLICY
Tariffs of different type of final energy such as natural gas, petroleum products & electricity will be fixed on
the basis of economic cost. When it is decided to give any subsidy it will be made at end users level and
Government shall make necessary arrangement with the utilities on this accounts.

(12) INVESTMENT POLICY
To allow healthy competition and to ensure efficient operation both public and private sector enterprises will
enjoy similar / uniform investment incentives offered by the Government. Corporatised public sector utilities
shall be allowed to raise finance from the market through floating of shares and debentures and also bank
loans. Considering the energy sector as the infrastructure for development, its projects, when financed by the
Government shall be allowed interest rates not more than the lowest slab of interest for commercial loans.
(13) ZONAL DISTRIBUTION OF ENERGY
Different projects being considered and that may be considered to meet the energy demand of the West Zone
are as follows:
(i) Special incentives for the survey; exploration and development of oil and gas.
(ii) Development of Barapukuria and other coal mine.
(iii) Implementation of energy conservation projects.
(iv) Construction of LPG bottling plants at suitable locations with necessary infrastructure development for
the assured delivery of LPG in the West-Zone
(v) Development of coal bed methane.
(vi) Establishment of coal based power plants.
(vii) Exploration and development of coal in unexplored areas
(viii) Establishment of petroleum depots at Mongla port and up country to maintain reliable supply of
petroleum fuels.
(ix) Expansion of electricity & gas transmission and distribution networks to the western zone of the country
for effective regional balance in energy supply.
(x) Special incentive package similar to those offered for oil and gas exploration in off-shore areas to be
offered for exploration in the west zone.
(xi) Implementation of gas based power plants in the west zone considering regional balance in energy supply.
(xii) Establishment of the second Petroleum Refinery in West Zone of the country. (xiii) Augmentation of tree
plantation programme (by the Department of Forest)

(14) AREA-BASED ENERGY PLANING
Area-based energy planning methodology is to be followed to ensure sustainable supply of biomass fuels and
to meet the energy needs of rural areas. At the implementation stage commercial energy development
programmes and biomass fuels development programmes are to be co-ordinated. Areas (thana / district)
having scarcity of biomass fuels will be given priority under commercial energy distribution programme and
biomass fuels conservation programme (e.g. improved stoves). Reliable supply of commercial fuels to rural
areas is to be ensured.
(15) STRATEGIC / EMERGENCY STOCK
(a) Petroleum Fuels
The strategic stock of petroleum products is to be maintained at 60 days of consumption. Such reserves in
storage tanks are to be distributed all over the country and reserve capacities for each location are to be
determined by considering extreme natural and other events like cyclone, drought, flood and war.
(b) Coal Adequate emergency stock of coal is to be maintained in off-shore islands and flood prone areas to
meet the cooking fuel needs of such places at the time of emergency.
(c) Natural Gas Stand-by wells are to be provided to meet emergency situation. The reserve margin in this
case is recommended to be 20% of the producing wells.
(16) IMPLEMENTATION AND EVALUATION OF PROJECTS
A master plan for the sector is to be developed, identifying projects along with the recommended phasing of
implementation. Bankable project documents are to be produced for projects in accordance with its schedule
identified in the Master Plan. Necessary attention should be given for reducing the delay in the approval
process. The existing procedure should be modified as to enable the concerned utility to complete the projects
in time.
In addition to existing practices followed by IMED, Performance Evaluation Report (PER) should be prepared
to evaluate the actual performance of the projects after its completion.
(17) RESEARCH AND DEVELOPMENT
Systematic research programmes will be undertaken for each type of the energy utility. Necessary facilities
and resources will be made available to implement different research program on a continuous basis.
Collaborative linkages among utilities and R&D institutions will be strengthened to implement different
research programmes. A certain percentage of earnings of the utilities should be dedicated for R&D purpose.
Accordingly various R&D institutions will also be established and strengthened (as applicable) under the
Ministry of Power, Energy and Mineral Resources.

(18) HUMAN RESOURCES DEVELOPMENT
Comprehensive programme of human resources development will be undertaken for each type of energy
utility. Training programmes are also to be organized for consumer groups to create awareness on efficient
use of energy.
(19) INSTITUTIONAL ISSUES
Ministry of Power, Energy and Mineral Resources should undertake the tasks of preparing a long-term energy
plan (perspective plan). The proposed plan should ensure balanced and sustainable development of different
parts of the country. There is a need to develop in-house institutional capabilities to prepare National Energy
Plan. One single Ministry (Ministry of Power, Energy and Mineral Resources) shall sponsor and co-ordinate
the entire range of energy related activities. Appropriate institutional arrangement are to be established to
implement area based energy development programmes to ensure sustainable development of biomass fuels
and to meet rural energy needs. Renewable Energy Developments Agency (REDA) is to be established under
the Ministry of Power, Energy and Mineral Resources for the development and diffusion (dissemination /
extension) of different type of renewable energy technologies. Until REDA is formed Power Cell of the Power
Division of the Ministry of Power, Energy and Mineral Resources will carry out all primary and initial works
related to development of renewable energy. An Energy Regulatory Commission (ERC) will be established
to carry out the following regulatory functions of electricity and natural gas:
(a) To determine efficiency and standard of the machinery and appliances of the institutions using energy and
to ensure through energy audit the verification, monitoring, analysis of the energy and the economy use and
enhancement of the efficiency of the use of energy;
(b) To ensure efficient use, quality services, determine tariff and safety enhancement of electricity generation
and transmission, marketing, supply, storage and distribution of energy;
(c) To issue, cancel, amend and determine conditions of licences, exemption of licences and to determine the
conditions to be followed by such exempted persons;
(d) To approved schemes on the basis of overall program of the licencee and to take decision in this regard
taking into consideration the load forecast and financial status;
(e) To collect, review, maintain and publish statistics of energy;
(f) To frame codes and standards and make enforcement of those compulsory with a view to ensuring quality
of service;
(g) To develop uniform methods of accounting for all licencees

(h) To perform any incidental functions if considered appropriate by the Commission for the fulfillment of the
objectives of this Act.
Power Generation Scenery in Bangladesh
Severe power crisis compelled the Government to enter into contractual agreements for high-cost temporary
solution, such as rental power and small IPPs, on an emergency basis, much of it diesel or liquid-fuel based.
This has imposed tremendous fiscal pressure. With a power sector which is almost dependent on natural-gas
fired generation (89.22%), the country is confronting a simultaneous shortage of natural gas and electricity.
Nearly 400-800 MW of power could not be availed from the power plants due to shortage of gas supply.
Other fuels for generating low-cost, base-load energy, such as coal, or renewable source like hydropower,
are not readily available and Government has no option but to go for fuel diversity option for power
generation.
When the present Government assumed the charge, the power generation was 3200 – 3400 MW against
national demand of 5200 MW. In the election manifesto, government had declared specific power generation
commitment of 5000 MW by 2011 and 7000 MW by 2013.
Over View of Electricity Last Couple of Year
To achieve this commitment, in spite of the major deterrents energy crisis and gas supply shortage, government
has taken several initiatives to generate 6000 MW by 2011, 10,000 MW by 2013 and 15,000 MW by 2016,
which are far beyond the commitment in the election manifesto. 2944 MW of power (as of Jan, 2012) has
already been added to the grid within three years time. The government has already developed Power system
Master Plan 2010. According to the Master Plan the forecasted demand would be 19,000 MW in 2021 and
34,000 MW in 2030. To meet this demand the generation capacity should be 39,000 MW in 2030. The plan
suggested going for fuel-mixed option, which should be domestic coal 30%, imported coal 20 %, natural gas
(including LNG) 25%, liquid fuel 5%, nuclear, renewable energy and power import 20%. In line with the
Power system Master Plan 2010, an interim generation plan up to 2016 has been prepared, which is as follows:

Energy Policy of Bangladesh: Hindrence to implement

NEW GENERATION PLAN OF THE GOVERNMENT (From 2012 to2016) In MW
Power is the precondition for social and economic development. But currently consumers cannot be provided
with uninterrupted and quality power supply due to inadequate generation compared to the national demand.
To fulfill the commitment as declared in the Election Manifesto and to implement the Power Sector Master
Plan 2010, Government has already been taken massive generation, transmission and distribution plan. The
generation target up to 2016 is given below:
Government Upcoming Nearest plan
Government has taken short, medium and long term plan. Under the short term plan, Quick Rental Power
Plants will be installed using liquid fuels/gas and capable to produce electricity within 12-24 months. Nearly
1753 MW is planned to be generated from rental and quick rental power plants.
Under the medium term plan, initiatives have been taken to set up power plants with a total generation capacity
of 7919 MW that is implementable within 3 to 5 years time. The plants are mainly coal based; some are gas
and oil based. In the long term plan, some big coal fired plants will be set up, one will be in Khulna South and
other will be in Chittagong, each of having the capacity of 1300 MW. Some 300-450 MW plants will be set
up in Bibiana, Meghnaghat, Ashugonj, Sirangonj and in Ghorashal. If the implementation of the plan goes
smoothly, it will be possible to minimize the demand-supply gap at the end of 2012.
Government has already started implementation of the plan. Total 31,355 Million-kilowatt hour (MkWh) net
energy was generated during 2010-11. Public sector power plant generated 47% while private sector generated
53% of total net generation. The share of gas, hydro, coal and oil based energy generation was 82.12%, 2.78%,
2.49% and 12.61% respectively. On the other hand, in FY 2009-10, 29,247 million-kilowatt hour (MkWh) net
energy was generated i.e. electricity growth rate in FY 2011 was 7.21% (In FY 2012 (Jul-Dec, 2011) is 13.2%).

Others Kinds of Available Energy In Our Country
Bio- mass
Bio-mass is defined as organic matters by photosynthesis process in plants. The Bio-mass are used as food,
fodder, fuel, manure and building materials depending on their characteristics and quality. A fraction of Bio
mass is used as fuel. Bio mass fuels are obtained from three sources: a) Trees b) Field crops (Agricultural
residue), c) Animal dung (Source from livestock)
The Bio-mass is the main sources of energy in Bangladesh. As per the study about 70% of the requirement of
energy are full filled by the Bio-mass. The country sites are producing trees and bushes. The rural people are
accustomed to use the tree branches and the plants of different kind bushes and jungles for their cooking of
food, heating of paddy for producing rice, processing of daily necessities. The residue of agricultural crops
like paddy, jute, sugar cane etc are used as the fuel for all kinds of economic activities including running the
rice mill boiler.
Bio-mass fuels play an important role (about 65% of primary energy) in meeting total energy need of the
country. Unplanned and uncontrolled use of bio-mass fuels is causing environmental degradation.
In the foreseeable future there are limited prospects of increasing the supply of Bio-mass fuels. On the other
hand, it is not economically viable to substitute all the Bio-mass fuels by commercial fuels. The demand of
Bio-mass fuels in excess of sustainable limits is to be met by commercial fuels.
In future, the demand of commercial energy will increase to meet the growing needs of different end use
sectors.Cow dung, that means animal dung is one of the main energy sources in the rural area. This Bio-mass
is generally used in the area where they produced . The Bio- mass energy has not yet developed as commercial
energy, although fuel wood and the fuel sticks including bamboo and jute sticks are abundantly sold in the
market. This Bio-mass is the prime energy of Bangladesh. The requirement of Bio-mass is still high and
scarcity are found in some areas of the country. Bio-mass is the silent energy protecting the country from
severe crisis of energy.
Solar energy
Solar energy is a well-known energy for human being. Now a days solar photovoltaic technology can generate
altering from solar. The solar energy is mostly used for drying crops, fishes and salt. Bangladesh can get solar
energy on average daily of 5.05 kwh/hqm in winter season and 8.76 kws in summer. Bangladesh having lots

of potentiality for using solar energy by converting into electricity through generation photovoltaic
technology. The God gifted energy sources are remains unused due to our lack of awareness and initiative of
tapping the solar energy for commercial use.
Gas
Bangladesh is blessed with natural gas. It is a primary energy source and using the natural gas in all kinds of
furnace, dryer, and boiler. Natural gas is the primary raw materials for generation of electricity and production
of fertilizer or petro chemicals. Bangladesh have reasonable quantity of gas in reserve.
The natural gas resource in Bangladesh estimated to 4.2 tcf. At present natural gas is fulfilling the requirement
of around 5000 MW electricity generation, and two million tons of fertilizer, production, besides around 1
million household are directly connected through gas pipe line for household cooking in Dhaka, Chittagong
and Sylhet Division. Large numbers of industry are run by the natural gas. The gas pipeline has gone the
western zone of the country through Jumuna Bridge. People of the whole country are demanding for supply
of natural gas through the pipeline. Natural gas is also supply in the CNG filling station. The natural Gas can
be the backbone of economy if properly utilized in proper plan.
Coal
Bangladesh have achieved success in extraction of coal from Barapukuria coal mine. Coal is a primary energy
and it can be used for production of electricity and it can be used for industrial furnace or household cooking.
Discovery of coal dates back to the late fifties when an exploratory oil well was drilled through coal beds in
Bogra. Subsequent explorations resulted in the discovery of the Jamalgonj coal deposit at a depth of about
1000 meter and having an estimated reserve of more than 1000 million tons of coal. Feasibility studies
conducted have indicated that development of this deposit is not yet feasible under the prevailing international
market price. However, with increase in gas price, these deposits may become competitive. In 1984-85
Geological Survey of Bangladesh has discovered another coal deposit at Khalaspir (Pirgonj) of Rangpur at a
lower depth (150 m), with an estimated reserve of 450 million tons of coal. This deposit requires to be
appraised in respect of its potential. An Australian Company BHP recently discovered another coal deposit in
Phulbari with initial deposit of 400 million ton and recoverable reserve of 80 million ton.Total coals in place
in all the 4 fields are around 2527 million tons out of which about 492 million tons is recoverable. This
recoverable reserve is equivalent to about 14.00 TCF of gas.
Mineable coal deposit was discovered in Barapukhuria area of Parbatipur, Dinajpur at a reasonably shallow
depth (240 m) with an estimated reserve of about 300 million tons. Based on this, A project has been completed
for construction of an underground mine at an estimated investment of Tk. 887.36 core with expected annual
output of 1 million ton commencing from 2004-2005. The indigenous coal may be utilized as an alternative

of gas fuel source in the installation of power plants .A coal-based Power Plant of capacity 250 MW at
Barapukuria is under construction with Chinese assistance. The target production is 1 million ton of coal from
Barapukuria coal field. Techno economic feasibility shows availability of coal in Khalaspir or Rangpur district
and Jamalgonj of Jaypurhat district and Fhulbari of Dinajpur district only 20 Kilometer away from
Barapukuria . The use of the coal has not been properly explorated in Bangladesh. Coal is a big resource of
Bangladesh and proper planning for mining of coal to be taken up for sustainable growth of economy.
Peat
Peat is a low category quality of coal. Fortunately Bangladesh has got the availability of peat in the greater
Faridpur district. Peat resource has not been utilized so long. Peat coal is available in the district of Madaripur
and Khulna. So far the study reports has been received, the available peat is Madaripur district may be obtained
and 50 megawatt power station can be run for next 20 years. No proper survey has been yet been made for
ascertainment of peat in Khulna district. Peat a expectable energy source and peat can be used as a primary
energy in the different field.
Deposits of peat occur at shallow depths in different low-lying areas of Bangladesh. According to Geological
Survey of Bangladesh, the reserve of dry peat is about 170 million tons. The major deposits are in greater
districts of Faridpur (150 million tons), Khulna (8 million tons) and Sylhet (13 million tons). Peat requires
drying before making briquettes for use as fuel. Petrobangla implemented a pilot project for extraction of peat
and making briquettes. A details techno-economic feasibility study may be carried urgently for use of all kinds
of primary sources.
CNG
Conpressed natural gases is a secondary energy produced from natural gas. It's suitable for automobiles. It is
environment friendly secondary energy. CNG process has become very popular in Dhaka and Chittagong
city in a short time. Bangladesh can produce CNG in the all gas area of the country. By the conversion of all
automobiles into CNG the demand of CNG may be increased. For better environment use of CNG should get
preference over diesel and petrol automobiles.
In order to reduce the air pollution in Dhaka and other cities, the Government has given emphasis on the best
possible use of environmental friendly fuel CNG in transport sectors. As such government has liberalised and
opened the sector for private participation to supplement the activities of the public sectors. The use of CNG

in all types of road and riverine transports replacing motor spirit and diesel will be commercialized. No duty,
sales tax or surcharge will be levied on equipment imported for compression and refueling of natural gas and
for conversion of vehicles. Local as well as foreign private capital will be encouraged to invest in all phases
of CNG business.
LPG
It’s a secondary energy manufactured as a by-product of oil refining process. Its suitable for used in all kinds
of energy requirements. After meeting the domestic LPG requirement, the surplus may be considered to be
used as automotive fuel.
Most of the LPG is to be allocated for the west zone until the equitable gas distribution system is established,
primarily for the domestic sector. LPG may also be imported for meeting the demand of the country. LPG is
a good quality source and suitable for domestic uses. On the popularity of using LPG can help conservation
of Bio- gas energy. The domestic uses of natural gas through pipeline may also replace by LPG in the long
run. At present LGP produce in eastern refinery and LPG is also importing from abroad. Both private and
public sector is bottling the LPG both in eastern and western zone.
Fuel Oil
The petroleum oil are considered as fuel oil a) Octane b) Petrol c) diesel d) Kerosene, oil are considered as
the fuel oil. Bangladesh are producing very small quantity of crude oil is Khailastila and Rashidpur gas field
in Sylhet district. The balance crude oils are imported. There is only one refinery in the country. Crude oil
used in manufacturing petrol, octane and diesel. Out of the total requirement 40% are manufactured in the
refinery and the balance 60% petroleum oil imported as finished product. Bangladesh Petroleum Corporation
is authorized to import the petroleum oil and marketing through its three oil companies like Padma; Meghna
and Jumuna Oil Company. These are 100 % government own company. These oil companies is strong with
their oil depot in the strategies location of the country and distributing the oil at fixed price by the government
through their 3000 dealer and agents all over the country.
Total yearly (2000-2001) import of petroleum fuels is about 3.44 million tones of which about 1.34 million
tones is imported as crude, while the import of refined products like Petrol, Diesel, Kerosene, Jet A-1 &
Lubricating Base Oil account for the rest. In comparison to this, indigenous production of liquid fuels
(condensate) is only about 2.5% of total annual demand.
Furnace Oil
Furnace oil is the secondary energy good for industrial uses. Furnace oil is basically a residue of petrol and
diesel in the refinery. While crude oil are process in the refinery for manufacturing of petrol, diesel and octane,
The hard and soil contain clay are remain in the refinery as residue, where from no petrol, octane, diesel and

kerosene can be extracted. These residues are drains out from the refining. But due to its energy value it call
as a furnace oil and used in the industry.
Furnace oil a residue of refinery also distributed through the oil companies. The present production is around
3,50,000 tons of furnace oil. This furnace oil is used by the industry. A stable price of furnace oil is necessary
for the industrial growth of the country.
Gas hole
By processing the molasses the residue of sugar-can while manufacturing sugar can be used for manufacturing
of gas hole and ethanol. This can be mixed with the octane /petrol for use as a fuel oil.
There is opportunity of producing gas hole from the 17 sugar mills of the country. This can supplement our
imported petroleum oil and foreign currency can be saved and sugar mill can be more economically viable.
Coke
Coke is a secondary energy can be manufactured by processing the still dust. At present Bangladesh import
in the coke. The manufacturing of coke should be taken up as early as possible to meet up the demand of
Coke.
Animal Energy
There are about 10.3 million draught animals including 0.7 million cows. Milch cows are used for land
preparation to meet the shortage of draught cattle. At present power tillers and tractors are used to meet the
shortage of animal draught power. Energy need for these devices is accounted under agriculture sector.
Wind Energy
The long term wind flow of Bangladesh (specifically in islands and the southern coastal belt of the country)
indicate that the average wind speed remains between 3 to 4.5 m/s for the months of March to September and
1.7 to 2.3 m/s for remaining period of the year. There is a good opportunity in island and coastal areas for the
application of wind mills for pumping and electricity generation. But during the summer and monsoon
seasons, (March to October) there can be very low-pressure areas and storm wind speeds of 200 to 300 kmph
can be expected. Wind turbines should be strong enough to withstand these high wind speeds.

Implementation Challenges
Up till now, only one side of the coin has been discussed. These successes could not be achieved in an easy
way. The picture seems so rosy, but it was not so easy. The government had to cross a number of hurdles
while maintaining the transparency, roll out the public perception of quick rental power plants. Quick rental
was just a nomenclature, but actually rental power plants that were installed following the special act was
named as quick rental power plants. Some corner was trying to create a perception that the electricity cost
was increased due to the introduction of quick rental. In reality, due to prevailing depleting condition of gas,
major power plants were based on liquid fuel either the public sector or the quick rental plants in the private
sector. Therefore, this was the price of the fuel which made the difference between a gas based power plants
and the liquid based power plants. However, the fact is that the electricity cost was bound to increase.
Keeping this in mind, the decision makers and the planners had to go for various permutation and
combination to keep the electricity cost at a tolerant level. We had to go for rationing in operating the liquid
based power plants. The electricity price indeed has emerged as a new challenge for the government. Besides,
poor infrastructure condition, inadequate supply chain of fuel, managing investment etc. have put the
implementation into challenges.
Decisions on energy and power development have been made on ad-hoc basis and influenced by vested
interest groups. Various attributes to lack of good governance in development and management of energy
sector are presented below.
(a) Absence of appropriate institution(s) to prepare long-term energy plan based on analyses of sectoral
demands and supply of different types of energy resources.
(b) Absence of National Energy Institute (NEI) for undertaking policy research and continuously monitoring
and assessing the impacts of different policy decisions. Lack of institutional capability to provide policy
support to select appropriate energy technologies (clean & efficient).
(c) Lack of attention for balanced development of primary energy sources (e.g. exploration, production,
processing, transmission/transportation, distribution etc.).
(d) Lack of attention for balanced development of power sector (e.g. generation transmission, distribution
etc.).
(e) Lack of transparent and rational energy tariff policy (e.g. coal, oil, gas, electricity, renewable power etc.).
(f) Lack of institutional mechanism(s) for assessing techno-economically extractable quantity of different type
of non-renewable energy resources (e.g. coal, oil, natural gas).

(g) Lack of institutional mechanism(s) for assessing techno-economically assessable quantity of different type
of renewable energy resources (e.g. biomass, solar, wind, tidal etc.).
(h) Absence of apex organization for promotion of all type of renewable energy resources and efficient energy
technologies. Sustainable & Renewable Energy Development Authority (SREDA) is in the process of
institutionalization as per SREDA Act 2012.
(i) Absence of legal framework for promotion of efficient energy programs (e.g. Energy Conservation Rules).
(j) Absence of technology specific Research-Development & Demonstration (RD&D) organizations for
different renewable energy technologies (e.g. biogas, improved stoves, solar PV, wind power etc.).
(k) Absence of comprehensive Human Resources Development (HRD) program for the management of energy
sector organizations.
(l) Absence of sustainable recruitment policy.
(m) Absence of Capacity Development Program (CDP) through need based training programs (local and
foreign).
(n) Lack of transparency in making decision(s) to undertake and implement energy development projects.
(o) Lack of coordination among different ministries (e.g. MOPEMR & MOFA).
(p) Lack of commitment to ensure continuity of policy.
(q) Politicization of management of energy institutions.
Proposal for overcoming energy crises in Bangladesh
Short Term Solutions
•Shutting down of all the government owned urea plants. This the only immediate source of additional gas to
be used for power generation. Most of these fertilizer factories use old fuel inefficient process which already
have outlived their effective economic life.
•Going for long term agreements to import urea right now as international price of urea is low. The availability
of urea must be assured but the price should be appropriate; a subsidy is possible but undesirable. At least the
subsidy should be linked to the price of rice.

•More Rental Power Plants need to be installed to overcome the short term power crisis.
•Reducing system loss in the power sector should be a priority as a reduction of 1% system loss can save
around 45 MW of power. The government should implement the merchant power policy immediately
•The government can set up some small coal fired power plants and can import coal from India on a temporary
basis before developing our own coal mines
•Several large barge mounted power plants can be contracted on short term basis which can supply additional
600 MW by the end of the year. This will ease the power crisis for a few years while other fuel sources are
developed and the required power plants constructed
Short Term Solutions
•Captive power generation by the private sector is around 1800-2000 MW; 20-25% of this capacity remains
unutilized which can be added to the national gridline. Provide incentive to the standby captive generators to
run their machine without taking power from grid.
The improvement of the gas pipelines and installation of compressors to increase pipeline pressure -should be
implemented immediately.
•Daylight energy saving. Changing the office timetable to 8 am -2 pm can save more electricity for using in
the evening peak hours. 350 MW at Dhaka and Chittagong can be saved daily
•Using energy efficient appliances and immediate removal of taxes on them
•Importing Liquefied Natural Gas (LNG) from gas exporting countries like Indonesia, Qatar to meet urgent
need
•Nation-wide power conservation awareness program
Mid to Long Term Solution
•Accelerate the exploration for gas. The recoverable proven remaining reserve of gas is will start depleting
after 2012. The maritime boundary dispute with India and Myanmar is a major barrier to offshore gas
exploration, and should be resolved as soon as possible.
•Petro bangla and EMRD must do everything possible to support Bapex to make it a self-reliant exploration
company.
•Install new urea plants that are more gas efficient. As coal fired power plants come on line in five years the
gas can be sold to the urea factories enabling imports of urea to be curtailed.

•Fast-track the development of Phulbari and other coal deposits and simultaneously build large-scale coal-
fired power stations. Gradually remove coal imports (currently about 5 mill MT) and supply ultimately 18
MMT to the power plants [enough for 6000 MWs]. Contract for 3 coal fired power plants each for 1000 MW
sin about 4-5 years. When these plants are available gas is switched to new efficient urea plants and peaking
plants for the power sector and for direct industrial use.
•Public private partnership should be highly encouraged. If needed, energy bond or levies should be charged
to raise funds.
Mid to Long Term Solution
•Government must encourage expansion of Solar, wind and bio fuel energy generation. Efforts to use solar
power on tall buildings, factories, rural areas should be promoted with low cost loans while removing taxes
on solar equipment. Full potential of mini micro hydro generation must also be explored. Energy from solid
municipal waste in major cities can be possibility also.
•Nuclear energy is a long term solution with huge cost involvement of billion dollar per 1000 MW plant, but
essentially this would become a vital source with highest durability and low unit cost of production.
•Many power plants set up in Ashuganj, Ghorashal, Shajibazarhave outlived their effective economic life.
Further investment in those will be waste of money and efforts. There has been considerable drainage of
national resources in maintenance of some plants. These can be replaced with fuel efficient modern plants.
•A more efficient and faster procurement and tendering process should be adopted for quicker implementation
of any project.
Conclusion
Electrical energy plays a vital role in development of civilization. The advancement of a country is measured
in terms of per capital consumption of electrical energy. It is quite impossible to solve over all power crisis
but possible to control load demand by using CFL, transferring holiday, transfer from peak to off-peak hour
only through proper planning by load management, encouraging IPP, reducing transmission loss, more
utilization of renewable energy sources. GOV should give priority to control misuse and corruption in power
sector than generation of power. Alarming signal for the power sector in Bangladesh is the dependence of the
coal/gas which may turn out. In that case our power sector will be collapsed and the nation will go back to
dark from civilization. It is strongly recommended that to search alternative raw-materials for the production
or immediate exploration of new gas and mining of coal deposits that are essential to implement the above
power generation program. In that case nuclear power plant may not be the solution of power crisis in

Bangladesh because of problems in operating a nuclear plant, the disposal and storage of the radioactive waste
material produced by the plant. Bangladesh is a over populated country, any explosion like Chernobyl may
destroy crore people. On the other hand already 50 years have crossed after pilot project in Rooppur no out
put has come. It could be suggested that proper utilization of renewable energy may be the alternative way for
solving the power crisis in Bangladesh because which is low cost and less risk. By incorporating IPP and local
GOV, central GOV should take the responsibility to increase the power generation and ensure its proper use.
Then the nation will find the way to reach with the developing nations.
References
1. Annual Report of Bangladesh Power Development Board (BPDB), 2006-07.
2. "Acomprehensive report on wind power" by BPDB, 2007.
3. A publication of Spilling Energy System 2008 "Gas Expansion Power Plants with Modular System Gas
Expanders" 27, 262-265.
4. Electrical and Electronic Engineering (EEE) Department, Islamic University of Technology (IUT), Gazipur,
Bangladesh, December 2008, Lecture Handouts of the course on "Electricity-the Most Preferred Form of
Energy: Need, Accessibility, Affordability and Sustainability".
5. Mansoor S.A. and Arshad Mansoor, 28-30 December 2004, "Power generation opportunities in Bangladesh
from gas pressure reducing stations" 3rd International Conference on Electrical & Computer Engineering,
ICECE, Dhaka, Bangladesh.
6. Power Division, Ministry of Power, Energy & Mineral Resources, Government of the People's Republic of
Bangladesh (MPEMR, 2009).
www.bpdp.gov.bd
www.reein.org/wind

Energy Policy of Bangladesh: Hindrence to implement

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