Ensuring viable use of the coal reserves



THE Bangladesh government is contemplating the preparation of a master plan aiming to develop the country's coal mines and encourage the use of locally extracted coal. Energy ministry sources say the plan is expected to be targeted at achieving an ultimate coal production capacity of 30 million tonnes per annum (Mtpa) in phases over the next two decades.The master plan may suggest export of sufficient quantities of coal in the initial years to cover the large investments to be made by the foreign energy companies. Coal exports might be brought down once the local demand for the fuel rises.A draft coal policy prepared by the Infrastructure Investment Facilitation Centre (IIFC) has laid the thrust on framing of a master plan to ensure the country's energy security in the coming decades. The EMRD under the Ministry of Power, Energy and Mineral Resources (MPEMR) is expected to prepare the master plan with the help of foreign consultants and local experts. The IIFC, a government owned company, did the groundwork and is now providing professional services to the line ministries and agencies of the Bangladesh government to develop infrastructure projects for private sector participation.To accelerate coal sector development within the next 10 years, a sustainable coal production level of 10 to 15 Mtpa or more and a minimum generation of 1000 megawatt (MW) coal fired electricity should be achieved. The government plans to generate at least 3000 megawatt (MW) from coal-fired plants by the next 15 years. At present, there is no coal-fired power plant in Bangladesh, whereas, coal accounts for 30-70 per cent of total electricity generation in many countries, including the developed world. To carry out the transitional activities and functions of the coal sector, a high-powered committee--to be known as the Coal Sector Development Committee--is to be established for a period of five years under the proposed plan.The EMRD Adviser will head the committee, while Director of the Bureau of Mineral Development (BMD) will act as its member-secretary. The secretaries of EMRD, Power Division, Communications and Shipping, the chairmen of Petrobangla and Bangladesh Power Development Board (BPDB) and the director general of Geological Survey of Bangladesh (GSB) will be the members of the proposed committee.Under the proposed plan all existing fees relating to the coal exploration licence and mining leases like application fee, licence renewal fee, annual licence fee, assignment fee and license retention fee would be revised. The fees are to be reviewed after every two years. The Energy Ministry sources said considering the present recoverable coal resources of Bangladesh, the Reserve to Production Ratio Target (RPRT) is to be fixed at a minimum of 50 years. This will ensure coal availability in the country for a period of at least 50 years.If the ratio falls below 50, the GSB or other exploration entities, subject to government permission, will make special efforts to find new coal deposits. The coal mining in Bangladesh is now at its infancy with a known reserve of 2.7 billion tonnes. The coal reserve can meet the country's demand for many decades. But capabilities in terms of technology, skilled manpower and financing of capital intensive coal ventures are yet to grow in the country.Although the production sharing contracts (PSCs) with the international companies on gas exploration and production are criticised sometimes, those PSCs give us a share of 40-50 per cent of the gas. The country must get a share of least 30-50 per cent of the total coal of over 570 million tonnes if any PSC is signed with an overseas company. Comprehensive studies should also be carried out for environmental impact near the coal fields and ensuring availability of more water supply. Any impact on the environment should be properly addressed, managed and minimised.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 coalmines 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 coalmine 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 coalmines 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.The government is trying to build some coal-fired power plants in order to meet the electricity shortfall. Many development partners, including China, are eager to help build these coal-fired power plants.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 power plants as those nations have no significant gas reserves.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. 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.However, 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 development for the huge number of the unemployed ones in the country. Mining generates more employments per unit of energy than do many other sources, such as natural gas.Yet it has negative sides as well. Mining is a dangerous occupation. Coal mines are subject to natural hazards, such as flooding and explosion from methane gas. Coal also breeds a wide range of environmental problems. Burning coal generates more greenhouse gases per unit of energy obtained than does natural gas. However, Bangladesh's coal consumption will inevitably be a trivial fraction of the total world coal consumption.Of immediate concern is the problem of local air pollution. Those living in the vicinity of major coal-fired thermal power plants risk higher incidence of long-term respiratory diseases due to particulates. In order to minimise the air pollution problem, it is necessary to install expensive anti-pollution technology. The government must 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.


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