As world transitions, Bangladesh ranks 4th in coal power development
Last Updated on December 3, 2024 5:47 am
A suite of problems continues to plague this fuel, further complicated by political unrest throughout the country in July and August 2024
The global energy transition away from coal has accelerated over the past ten years, evident by the fact that the number of nations with coal power under development [pre-construction and construction] has nearly halved from 75 in 2014 to just 40 in 2024.
Besides, 98% of the coal-power capacity under development is now concentrated in just fifteen countries, with China and India alone accounting for a staggering 86%, followed by Indonesia.
The unfortunate truth is that Bangladesh ranks fourth in the world for coal power under development, with 6.3GW proposed and 3.2GW under construction as of June 2024, according to the Global Energy Monitor’s latest Global Coal Plant Tracker (GCPT) results.
Completed in July 2024, the GCPT catalogues all coal-fired power units 30 megawatts (MW) or larger biannually, with the first survey dating back to 2014.
Coal gambit of Bangladesh
Several countries, including Bangladesh, Pakistan, the Philippines, and Türkiye are continuing with plans to develop a backlog of proposed coal plants in the face of counteraction to the fuel, such as local opposition, policy changes, finance moratoriums, and other challenges.
While coal generation more than doubled from 2022 to 2023, Bangladesh has not announced any new coal plant proposals since 2019. A suite of problems continues to plague the fuel, further complicated by political unrest throughout the country in July and August 2024.
These problems include an ongoing USD shortage, the excessive cost of imported coal and a buildup of unpaid electricity bills, which intensified a nationwide power crisis in the first half of 2024, leading to fuel supply gaps and load shedding, despite sufficient power capacity.
For example, at the Matarbari power station, Coal Power Generation Company Bangladesh had yet to receive payment for power supplied to the national grid from the plant’s operating coal unit from December 2023 to May 2024.
The company is nevertheless seeking to finance an expansion at the power station, after losing the project’s original funding in 2022, when its sponsor, Japan, pledged to stop publicly funding new coal.
At S Alam’s Banshkhali power station, units that had completed construction by late 2023 were still not operating at full capacity in February 2024, due to grid constraints.
The country saw just 0.7GW of coal power come online in the first half of 2024 at the contested Rampal power station, against 1.3GW of planned coal capacity cancelled in the same period.
In March 2024, a planned mine associated with the Phulbari power station – a fiercely contested project that has been proposed in various forms for decades and has resulted in the death of at least three protestors – secured a $1bn funding agreement with PowerChina.
Though the power station was not included in this initial financing agreement, China has not explicitly ruled out funding the plant, despite its 2021 pledge to stop building new coal plants abroad.
The project sponsors say that they expect the coal plant proposal to “become attractive” due to their proximity.
The Banshkhali Coal Power Plant is owned by Bangladeshi conglomerate S Alam Group and SEPCO III Electric Power Construction Corporation, along with HTG Development Group, China.
It is a project under China’s ambitious Belt and Road Initiative (BRI). As per the report from the local land office, S Alam Group bought 660.40 acres of land to set up Genesis Textile and Apparels Ltd, and S Alam Vegetable Oil Ltd, two subsidiaries of S Alam Group.
Five protesters of the power plant were killed by police and goons from April 2016 to February 2017. The group received a tax exemption of Tk 32.71 billion ($382.03 million) from the Bangladesh government in February 2019.
As per the Power Purchasing Agreement (PPA), the expected Commercial Operation Date (COD) of the power plant was 16 November 2019, but the sponsors could not complete the construction work within this deadline.
As a result, the project proponent paid a penalty of Tk 2 billion ($24 million) on 12 July 2020 and received an extension of 2 years up to December 2022.
The villagers of Gandamara stood against land acquisition from the very beginning. At least four people were shot dead on 5 April 2016 when they were protesting the power plant’s construction.
Another villager was killed on 3 February 2017. At least five people were killed, and numerous others were injured when the police started shooting the workers while they were staging protests over several demands including payment of due wages.
Two more workers died in the hospital on 20 and 21 April 2021. Several times, goons shot the local villagers who were protesting the coal power plant’s construction.
The Banshkhali Police had arrested Shahnewaz Chowdhury, who is an engineer and resident of Gandamara Union, under the controversial Digital Security Act 2018 for criticizing the power plant.
10 coal-fired plants scrapped
Back in June 2021, Bangladesh scrapped at least ten major coal-fired power plants as it seeks to scale up its power generation from renewable energy sources.
Nasrul Hamid, the then state minister for power and energy, had said the decision was taken considering technological changes, as dozens of countries halt new coal-fired power projects due to their impact on the environment.
“By 2041, there is a plan to generate 40 percent of power from renewable energy,” the ministry of energy and power had said.
Nasrul had added that Dhaka would also import hydropower from Nepal and Bhutan.
The scrapped power plants would have accounted for 8,451MW of power and included ambitious multi-billion-dollar projects unveiled by the government of the then prime minister Sheikh Hasina since she took office in January 2009.
Nasrul had said they included a massive 1,320MW plant on the ecologically fragile Maheshkhali island and a 1,200MW project set to be constructed by a Bangladeshi-Japanese joint venture.
Most of the plants were set to be built in Bangladesh’s coastal region, home to twenty million people. The announcement is seen as a victory for green activists who have staged a series of protests against the coal-fired plants, saying they would cause irreparable damage to the country’s fragile ecology.