COUNTRY'S huge coal reserve can emerge as a great source of electricity if it is properly utilised. Overseas experiences -- especially that of Australia -- can be followed as a model where majority of electricity is produced from coal-fired power plants.
Coal currently fuels 39 per cent of world's electricity. Yet it is very much unfortunate that not a single coal-fired power plant is in operation in Bangladesh despite having enormous resources. The country has 2.0 billion tonnes of coal reserves in five coal mines across the country, which is equivalent to 53 trillion cubic feet (TCF) of gas, but not a single coal-fired power plant is used in formal power production.
Of the total coal reserves -- Barapukuria coal mine has 390 million tonnes (mt) of coal reserves, Phulbari 572 mt coal, Khalaspir 143 mt, Dighipara 400 mt and Jamalganj 1053 mt of coal in different underground depths. These coal mines are yet to be utilised for generating electricity. On the other hand, the largest electricity generator of Australia -- Mcquaire Generation -- is producing 4640 mega watt (MW) of electricity in Bayswater and Lidell power stations in Hunter Valley of New South Wales consuming approximately 10 mt of coal a year.
In many developed countries, electricity production from water is limited due to the dry nature of the continent. Besides, due to scarcity of gas, some developed countries have no gas-fired powers.
In Bangladesh, the government has initiated to install a 250 MW coal-fired power plant at Barapukuria, which is yet to go into operation. The UK-based Asia Energy Corporation (Bangladesh) Pty Ltd submitted a proposal to install the country's second coal-fired power plant having the capacity of generating 500 MW electricity alongside Phulbari coalmine in Dinajpur.
The plant will generate 3700 giga-watt per hour (GWh) electricity burning 1.5 million tonnes of coal annually, which is about one-tenth of the 15 million tonnes total annual output from the open pit mine of Asia Energy to be developed at Phulbari. The power plant will be designed, constructed and operated to international standards, utilising modern pollution prevention methods to meet both local and relevant international environmental emission limits.
Meanwhile, the government is likely to adopt production sharing contract (PSC) provision for the coalmines while leasing out the country's coalfields to the foreign companies. Among other options for developing the coalfields are joint venture, total lease out or engaging the foreign companies as operators only.
As the government is expected to appoint a consultant for developing a strategy for the country's coalfields, the IIFC did the groundwork. IIFC, a government owned company, provides professional services to line ministries and agencies of the Bangladesh government to develop infrastructure projects for private sector participation.
The IIFC has been interested to look into the experiences of India, Indonesia and Australia on whether Bangladesh needs a separate entity for running the coal sector as the authority. Some experts have suggested keeping both underground and opencast operation open and turning the dependence on gas-based power plants to coal-based power stations.
However, against the backdrop of soaring prices of oil and petroleum products, all eyes are now being focused to century-old coal -- once almost abandoned as an effective fuel all over the world.
Country's existing laws, mostly formulated in 1910, relating to coal exploration and mine development are age-old and obsolete. Hence these rules need to be revised. The present rules allow only 6.0 per cent royalty for the government when a private company invests to develop coal mine. Even the licence fee is remarkably low as for any exploration activities, a private company has to pay only Tk 3000 for the first 100 hectares and Tk 100 for every additional hectare. On the other hand, for the mining purpose, a company has to take a licence from the government by giving a fee of Tk 75,000 for the first 30 hectares and Tk 100 for every additional hectare. If the government goes on signing mining agreements with overseas companies under the present rules, the country stands to lose substantial amounts of foreign exchange. The government was reported to have taken a number of steps to update the coal policy.
The Phulbari coal mine is being developed by the UK-based Asia Energy Company. The life of the mine would be around 30 years and it has an estimated reserve of around 572 million tonnes of coal. Hosaf Consortium, a joint venture of local and Chinese companies, is now conducting a seismic survey on Khalaspur coalfield at Pirganj in Rangpur district. An estimated reserve of 685 million tonnes of coal could be discovered there that can be the largest commercial deposit of the country.
The coal at Jamalganj lies at a depth of 1000 metres and its extraction was found to be not economically viable. Belying all uncertainties, a Sino-Bangladesh joint venture has applied for a licence to conduct feasibility study there. Jamalganj of Bogra is expected to have a reserve of 1100 million tones of high quality bituminous coal. This mine might have a large deposit of industrial coal, also known as coke, which is used in iron industries for melting metals. In the same way, foreign and joint venture companies are vying for the exploration licence of Lakma coalfield in Sunamganj and Dighipara coalmine in Dinajpur where huge reserves of extractable coal are likely to be present.
The interest shown by giant multi-nationals like Tata to use coal in their thermal power plant in Bangladesh has prompted many big miners to go for coal extracting. Frequent queries are coming from different foreign companies -- bases in USA, Korea and Australia. Besides, the country would require around 17,000-megawatt power in a year within a decade. In order to meet the increasing power demand, the country needs to discover more gas fields due to the fact the present gas reserve would dry up by 2020. If more gas fields are not found, naturally coal will be the alternative source of energy for the country.
There are other sources of energy in Bangladesh. But those are too expensive to be commercially viable. Since 1960s, the government is trying to establish a nuclear power plant at Rooppur. Fund constraints and lack of technical expertise has stalled its growth so far. Even then, if the nuclear power is feasible for generation, the cost of the generated power would exceed those of the gas-based generators. Hence, it seems obvious that coal is the cheapest energy source after natural gas. Coal extraction is expected to have a positive impact on the country's economy. Generation of more jobs will be a welcome news for the country's huge unemployed workforce. Mining generates more employments per unit of energy than do many other sources, such as natural gas.
The government needs to take other precautionary measures to make coal extraction safe and ensure its viable commercial use. Updated rules and regulations need to be formulated in order to get a fair deal out of the coal mining and its extraction.