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Coal in spotlight as energy crisis continues

Govt wants to boost local production for new coal-fired power plants
Ashraful Islam Raana
20 Aug 2022 00:00:00 | Update: 20 Aug 2022 16:24:50
Coal in spotlight as energy crisis continues

The government is highly considering various measures to extract coal from several fields in Bangladesh to boost power generation to limit the energy crisis, load-shedding and additional import costs.

According to Petrobangla officials, open-pit mining of the new deposit on the northern side of the Barapukuria coal mine in Dinajpur is being considered at first.

They said all preparations are complete to begin the mining process in that new deposit at the only coal-producing mine in the country.

Then, Petrobangla is looking into mining coal from four other fields, including the highly discussed one in Dinajpur’s Phulbari amid strong opposition from environmental activists, mining experts and economists.

They say the coal mining in that densely populated region will have a severe impact on agriculture and the environment while the economic loss will be several times higher than the profit.

Recently, State Minister for Energy, Power and Mineral Resources Nasrul Hamid told the media that the government wants to use the coal from local mines at the coal-fired power plants that are being constructed.

But the mining and environment-related problems will have to be solved scientifically first, he added.

Considering the environmental and agricultural losses, the discussion to extract coal from the other local fields has been stuck for over one and a half decades.

The country currently has two operational coal-fired power plants. The government with domestic and foreign partners is also building several more, which the Power Division said will run on imported coal, with the plan to add a total of 9,000 megawatts (MW) of electricity to the national grid by 2024.

However, the government is now trying to cut down coal imports and boost local mining to meet the demand in future.

Anu Muhammad, a former economics professor at Jahangirnagar University, said the government built the coal-fired power plants, which will be catastrophic for the environment anyway, by promising to run them with imported coal first.

“And now, citing the energy crisis, the government wants to boost coal production by opening new mines. This will further destroy the environment,” said Anu, an activist who has been working to protect the country’s mineral resources for a long time.

New plants will hike coal demand

Bangladesh Power Development Board (BPDB) says four coal-fired power plants with a total capacity of 7,000 MW are currently under construction. They are expected to come into production by 2024 and will run on imported coal.

The Power Division is also set to seek funding from Saudi Arabia for Matarbari 2X600 MW Ultra Super Critical Coal-Fired Power Project (Phase 2). This project had hit a dead-end after Japan cancelled funding in June.

At present, of the two operational plants that generate 1,845 MW together, the 525 MW one in Barapukuria runs on coal from the mine there and the 1,320 MW one in Payra, Patuakhali runs on coal imported from Indonesia.

According to BPDB estimates, it takes 3 million tonnes of coal to generate 1,000 MW of electricity annually — which means the country will need 27 million tonnes of coal if seven plants are to add over 9,000 MW to the national power grid from 2025.

Since the Russian-Ukraine war started in February, the global coal market has been volatile with the price skyrocketing. On Wednesday, the high-grade coal price was $358 per tonne. It was $80-90 last year.

The slightly lower grade coal used in the Payra power plant is currently trading at $180-200 per tonne in the global market, said BPDB sources.

If this continues, Bangladesh will have to spend Tk 4,860 crore every year to import coal from 2025.

Mollah Amzad Hossain, the editor of Energy and Power Magazine, told The Business Post that imported coal alone will not be able to meet the fuel demand of the power plants from 2025. “A final decision is needed right now on domestic coal production, which has become urgent.”

Untapped reserves

According to Petrobangla, five major coal deposits have been discovered so far in the northwest region of the country.

Three of them — Barapukuria, Phulbari and Dighipara — are in Dinajpur, one in Rangpur’s Khalashpir and the fifth is in Joypurhat’s Jamalganj.

Of the five, coal extraction is happening only at Barapukuria, which still has a 300 million tonne reserve.

Since underground mining will not allow extracting more than 25 per cent coal from the mine, the government is now considering open-pit mining to get to the other 75 per cent.

According to Petrobangla, Barapukuria, Phulbari, Dighipara, Jamalganj and Khalashpir have 8,125 million tonnes of coal reserves in total. Of them, Jamalganj has the largest reserves — 5,445 million tonnes.

Phulbari has a 580 million tonne coal reserve, Dighipara has 860 million tonnes and the reserve in Khalashpir is 850 million tonnes.

Every meeting has discussed the extraction of coal from the local fields since the gas crisis started, said sources at Energy and Mineral Resources Division.

“The discussion on domestic coal extraction actually began after the Russia-Ukraine war kicked off and started impacting the global economy,” Petrobangla Chairman Nazmul Ahsan told The Business Post.

“First, we want to start open-pit mining on the northern side of Barapukuria. The Dighipara field is also being prioritised,” he said.

The Phulbari conundrum

The Phulbari coal mine project has been one of the most discussed topics in the country’s energy sector for many years for the controversies surrounding it.

It has been “radioactive” since three people were killed and hundreds injured when law enforcers opened fire on a procession of locals protesting against the open-pit mining project on August 26, 2006.

Awami League, which was the opposition party at the time, supported the protesters and pledged to not open the mine if/once it comes to power. However, amid the ongoing crisis, the government is wholeheartedly considering all aspects — environmental, economic and political — and taking precautions to even discuss mining at Phulbari, said officials.

Meanwhile, multiple sources have confirmed that both local and foreign syndicates are using the energy shortage as an excuse and lobbying hard to get the government to restart the Phulbari project.

Even Asia Energy, which rechristened itself to Global Coal Management after facing mass protest in 2006-07 when it was working on implementing the project, has approached Petrobangla to get its hands again on the Phulbari coal field. The company gave a presentation at the energy division recently, highlighting the benefits, sources said.

It’s been said that the total amount of coal from the Phulbari field will be able to generate 6,600 MW of electricity for 30 years and the government will earn $7.5 billion in taxes and royalties, said sources at Petrobangla.

Talking to The Business Post, energy expert Professor Badrul Imam said that domestic coal extraction has become a highly debated issue. “We need energy but we need to protect the environment as well.

“We need to find out the right methods and technology to figure out the most feasible way to extract coal from the local fields without harming the environment while protecting the national interest,” he stressed.