Bangladesh. Fossil-fuel Subsidy Reform: Challenges and Opportunities. Muhammad Bellal Hossan.

Transcription

1 Bangladesh Fossil-fuel Subsidy Reform: Challenges and Opportunities Muhammad Bellal Hossan Sub-Divisional Engineer, Bangladesh Power Development Board November,

2 Bangladesh at a Glance CHINA Official Name : People s Republic of Bangladesh INDIA Political System: Parliamentary Democracy Population : 151 million Area : 147,570 km2 INDIA GDP total : USD 116 b (FY 2012) SYLHET GDP Per Capita : USD 763 (FY 2012) RAJSHAHI INDIA Total Exports : USD 24 billon (FY2012) DHAKA Total Imports : USD 35 billon (FY2012) INDIA BARISAL KHULNA CHITTAGONG Remittance : USD 13 billon (FY2012) Forex Reserve : USD 12 billion Power Capacity : 8,300 MW 200 miles 500 km Maritime Ports : Chittagong, Mongla Currency : BDT (1 BDT = USD 0.013) 2

3 GROWTH IS REMARKABLY STABLE AGAINST ALL SHOCKS Resilient growth despite regular political, environmental and external setbacks Bangladesh has maintained consistent growth and never defaulted on its internal or external debt obligations despite the Asian and Global Financial Crises, numerous political upheavals and countless natural disasters. This consistency is practically unrivaled amongst countries of a similar level of development Cyclone 2B: Casualty: 400 people 8,000 cattle Very severe tropical Cyclone BOB 01 Asian Economic Crisis Very severe cyclonic storm BOB 06: 300,000 affected, 8755 homes destroyed Slowdown after 9/11 MFA Phase Out Oil Price reaches >US$140/b Economi c Crisis Tropical Cyclone 04B: Casualty: 650 people 17,000 cattle. Most severe flooding in modern history : 66% of the land affected, 1000 deaths 26,000 livestock lost, 16,000 km roads damaged. Severe Floods: 36% of the country flooded 36 mn people affected. Cyclone Sidr: 3500 people killed Major floods: 500 died, 30% of the country affected Tropical catastrophic cyclone Natural Disasters External Shocks Linear Trend line (Real GDP Growth) 3

4 Primary Fuel Supply Options Gas: Only 16 tcf proven reserve; No significant gas discovery in recent years; Depleting gas reserve restricts gas based generation expansion Hydro: Present capacity 230 MW and average energy generation- 800 GWh; No further significant potential Coal: Total 3.2 billion ton reserve in 5 mines; Near term option; Indigenous or Imported; Base Load Oil: Volatile market; High price; For peaking duty only LNG: Necessary to ensure secure and reliable gas supply Nuclear: Safe technology; No pollution; Future Base Load option Renewable: Present capacity only 70 MW; still high cost 4

5 Bangladesh s Power Sector: At a Glance Electricity Growth : % (FY-2012) (Av. 7 % since 1990) Generation Capacity : 8275 MW (Oct, 2012) Peak Demand : 7000 MW (with DSM) Generation : MW Total Consumers : 13.5 Million Per Capita Generation : 272 kwh (incl. Captive) Per Capita Consumption : 238 kwh (incl. Captive) Access to Electricity : 53 % (60 % Including non Grid) 5

6 Energy Generation by Fuel Type: FY 2012 FY FY (Forecasted) Furnace Oil 11.86% Diesel 4.27% Coal 2.52% Hydro 2.21% Furnace Oil 19.01% Diesel 2.28% Coal 2.18% Hydro 2.01% Natural Gas 79.15% Natural Gas 74.53% Total Net Generation: 35,118 MkWh Total Net Generation: 39,939 MkWh 6

7 Present Electricity Generation capacity by Fuel Type HSD 471 MW 5.69% Coal 200 MW 2.42% Hydro 220 MW 2.66% HFO 1804 MW 21.80% Gas 5580 MW 67.43% Total Generation Capacity: 8275 MW 7

8 Liquid Fuel Supply and Subsidy 8

9 Sector wise Sale of Petroleum Products During FY 07 to FY11 In 1,000 Ton Sector % % % % % Agriculture Industry Power Communic ation Domestic & Others Total

10 Sale of Petroleum Products During Last 5 Years In 1,000 Ton PRODUCT JET A HOBC MS SKO HSD 2,334 2,301 2,568 3,239 3,240 JBO FOHS LUBE MTT LPG BITUMEN TOTAL 3,626 3,327 3,757 4, INC / (DEC) 52 (300) 430 1, % 1.46 (8.26)

11 In Billin BD Taka Year wise loss by BPC Loss US $= 83 BD Taka 11

12 AMOUNT RECEIVED FROM GOVERNMENT ( SUBSIDY) in Million US$ FY to Total (in Million US$) FY FY FY FY FY FY Financial Year For Total Energy Sector about 3 billion (about 4 % of GDP) 12

13 Fossil-fuel Subsidy reduction initiative in Bangladesh 13

14 Effective Date Fuel Price Increase GAS (Taka/1000 Cft) HFO ( Tk/Liter) HSD ( Tk/Liter) COAL ( US$/ M.Ton) US $= 83 BD Taka 14

15 Tariff Adjustment of Electricity Average Cost in FY 2012 : 5.50 Tk/kWh Average Cost in FY 2012 : 6.25 Tk/kWh Bulk Tariff Increased since Oct From Feb 2011: 11 % and from Aug 2011: 6 % - From Dec 2011: 16 % and from Feb 2012: 14 % - From March 2012: 7 % (Fuel Price Adjustment) - From September 2012: 17 % Retail Tariff Increase since March In 2009 and 2010 nominal 5 % each year - From Feb 2011: 5 % & Dec 2011: 13 % and - From Feb 2012: 7% & March 2012: 7% - From September 2012: 15 % 15

16 Automatic Adjustment formula for fuel price will be adopted by December Direct Subsidy to consumer for Irrigation Life Line Tariff for poor consumer (75 kwh) Low Tariff for Irrigation Consumer Higher Tariff for higher consumption in Electricity. Natural Gas Development Fund to increased Gas Exploration Maintenance fund for Power Station Fuel Price auto adjustment for Electricity Generation Efficiency Improvement 16

17 Probable Power Generation: Primary Fuel Sources by 2030 Nuclear 4,000 MW 10.34% Regional Grid 3,500 MW 9.04% Others 2,700 MW 6.98% Domestic Coal 11,250 MW 29.07% Gas/LNG 8,850 MW 22.87% Imported Coal 8,400 MW 21.71% Total Generation Capacity in 2030: 38,700 MW 17

18 Challenges Regulation & Policy Guide line Large Investment Required Transparency Create Competitive Market for Electricity Generation & Distribution Public Awareness Political Issues 18

19 Thank You