Bangladesh’s coal delusion

About 80 percent of Bangladesh’s electricity now comes from natural gas. But with gas resources waning and an entrenched, inefficient subsidy system, the government has decided to promote coal instead. This shift comes with great risks. Coal power pollutes, and Bangladesh is at once the most densely populated country on earth and one of the most exposed to the effects of climate change, said a report in The International New York Times in its issue of March 4 by Joseph Allchin.
Under its 2010 master plan for developing the energy sector, the government hopes that by 2030, 50 percent of Bangladesh’s power will be generated by coal, up from about prevailing 2 percent now. (Bangladesh currently has one small plant, which runs on local coal.) It expects to accomplish this by building a dozen new coal-run electricity-generating plants, including a controversial one at Rampal, in the southwest of the country. That facility alone is expected to have a capacity of 1,320 megawatts, or about one-fifth of country’s total current production of electricity, the report said.
But the Rampal plant, which is scheduled to be completed by 2016, will be located less than 10 miles north of the Unesco-listed Sundarbans, the largest mangrove forest in the world and the home to the largest population of Bengal tigers and to the endangered Irrawaddy River dolphin.
The forest also acts as a buffer against the deadly cyclones that periodically funnel up the Bay of Bengal. With every storm, estimates Anu Mohammad, an economist at Jahangirnagar University, the mangroves save hundreds of thousands of lives.
In a merry-go-round of fiscal irresponsibility, state-owned banks hand out bad loans to insolvent companies, which only keeps the gas flowing cheaply and wastefully. All in all, the subsidies system cost the state approximately $3.4 billion in 2012, or nearly one-quarter of the budget, according to the Economist Intelligence Unit. Bangladesh has gas reserves in the Bay of Bengal, but exploration has been slow. The state-owned exploration company doesn’t have the capacity or know-how to exploit those resources. And foreign multinationals don’t have the economic incentive.
One result is that in recent years the country has had to import liquid fuels to power stopgap plants. This has increased the impoverished nation’s annual imports bill by around $2 billion, out of around $30 billion, according to Mohammad Tamim, a professor of Engineering at the Bangladesh University of Engineering and Technology. This is untenable in the long term, yet there are few alternatives. Nuclear power is touted, but for a country with little of the required infrastructure, that option seems fanciful.
Although Bangladesh has great potential for renewables, policymakers haven’t put in the necessary investment or planning to developing them.
And so coal it is for now, despite the risks. Coal is plentiful worldwide, and its price is relatively stable. But since exploiting Bangladesh’s own reserves, for example in the north, would displace many people, the government has favoured projects like Rampal: The area isn’t very densely populated, and the plant will run on coal imported from Australia or Indonesia.
Only 50 percent of Bangladeshis are on the grid. But reforms will raise gas prices, and in order to avoid related shocks to the economy and possible social unrest, they will have to be undertaken slowly. Waste is rampant, and illegal connections to gas pipes are said to cost the government at least $30,000 a day. Revamping plants and cracking down on theft would reduce total gas bills, as well as the attached subsidy bills, even if the subsidy system remains in place.
Foreign governments pump almost $3 billion in development assistance into Bangladesh annually. But large-scale projects feeding into a national grid are needed; they would allow economies of scale, the report said.
The government’s environmental-impact assessment for the Rampal coal plant assures that “the long-term concentration” of sulfur dioxide and nitrogen dioxide will not be significant because the pollutants “may periodically” be dispersed by the cyclones that hit the area. Indeed. But those emissions will only feed more winds that later disperse them, again and again – until much of the delta’s silty land is dispersed, too, by the angry rising tides of climate change.