Bangladesh Plans Dual-Fuel Policy For Power Plants
Reporting by Serajul Islam Quadir, PlanetArk.org, 18-May-09
DHAKA - Bangladesh, where natural gas reserves are falling while demand for power is rising fast, will not allow new power plants that cannot use both gas and coal, Finance Minister Abul Maal Abdul Muhith said on Sunday.
"In the future we are going to adopt a dual-fuel policy for installing new power-generation plants, meaning the plants must be capable of being fired by both gas and coal," he told reporters.
Muhith, who was outlining the focus on energy in the next fiscal budget starting in July, said the government was eager to finalise a policy that may allow the open mining of coal to maximise extraction, despite the concerns of environmental groups.
"All the new power plants will have dual-fuel firing facilities as the government wants maximum utilisation of fossil energy," the minister said.
He said the coming budget would give top priority to energy as "we want to raise power generation to 7,000 megawatts (MW) in 2014 from 5,000 MW now."
Bangladesh has 13.54 trillion cubic feet of proven and recoverable gas reserves but faces up to 250 million cubic feet of gas shortages a day, officials say.
The situation will turn more critical after 2011 unless the country finds new gas fields and generates more power, they have said.
The minister said the government would temporarily close down six fertiliser manufacturing plants and divert the natural gas used there to generate up to 450 MW more electricity.
The country has five coal fields with around 2.55 billion tonnes of reserves but is unable to extract them until a national coal policy has been finalised.
Muhith also said: "Bangladesh needs to sustain 7 percent economic growth to halve its poverty by the next eight years. And to meet these challenges we must have energy security."
At present about 80 percent power in Bangladesh is produced with natural gas, and the country sees power shortages of up to 2,000 MW a day.
"It may take some time to finalise the coal policy, but meanwhile, if necessary, we may import coal from our neighbouring country," Muhith said.
Last year state-run Bangladesh Oil, Gas and Mineral Corporation said the existing natural gas reserves could be fully exhausted by 2020 if there are no new finds.
"The latest scenario prompted us to rethink about future electricity generation strategy, and so we decided to make the dual-fuel options mandatory for all future power plants," the minister said.
Gas and electricity demand has soared at an annual rate of more than 10 percent since 2001 due to expansion in manufacturing and services sectors, officials say.
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