How would Biden summit help us move toward green energy while US firms dominate Bangladesh’s fossil fuel-based power sector?

Bangladesh is heavily dependent on fossil fuel-burned power generation for its industrial and non-industrial use in which the US is the largest equipment, machinery, and technology supplier. 

US companies supply over 55% of Bangladesh's domestic natural gas production while around 50% of electricity generated comes from natural gas. Moreover, only two US companies' power turbines currently provide 80% of Bangladesh's installed gas-fired power generation capacity. US origin engines and generators are installed in most Bangladeshi fossil fuel-based power plants. 

Now the US is taking the lead in the United Nations Climate Change Conference (UNCCC) which will take place in November this year. The US president is going to arrange a summit (Biden Summit) on 22-23 April which 40 heads of the state/government, including the Bangladesh premier, are expected to join as a preparation for the climate change conference. The world leaders will talk about the issues of which non-fossil green renewable energy is the top priority.

How will the US help Bangladesh head towards non-fossil renewable power generation while American companies are dominating Bangladesh's fossil fuel-fired power sector? Experts said everything in the power sector depends on how big corporations will be benefited but there could be positive results in the upcoming summit and climate conference. 

Professor M Shamsul Alam, an energy expert, said, "We are building oil-based power plants. We are moving towards LNG. The LNG business is now controlled by the United States. Whose interests we are doing these are now a matter we should consider."

He said the summit or the conference would have no impact on the energy sector in Bangladesh. 

"Whatever way we make our national policy and the kind of electricity we want will be how electricity will be generated. Be it the power sector master plan or the five-year plan, I see no progress in renewable energy."

Currently, 89.45% of power is generated from fossil fuel while 9.34% depends on imports and 1.17% comes from renewable sources.

But M Zakir Hossain Khan, senior programme manager (climate finance governance) at Transparency International Bangladesh (TIB), is expecting some positive outcomes from the Biden Summit.  

"Most probably, the US will give $3 billion to the Global Climate Fund (GCF). It realised that health costs are higher than the gain from fossil fuel electricity generation. It also realised that the renewable energy sector creates more employment in America than the fossil fuel-based power industry. 

"In such circumstances, the US may ask its companies to shift towards the renewable sector by offering incentives, which is less than health cost. Once US companies along with other developed countries can shift their companies from fossil fuel to renewable, the rest of the world will be compelled to stop fossil fuel-based power plants," he explained.

"Another separate fund should be created in this regard to compensate the least developed countries for their loss caused by shifting towards renewable energy," he said.

"Some of the initiatives may be taken under the US leadership," he added. 

How US companies dominate Bangladesh's power sector

According to the Bangladesh Working Group on External Debt (BWGED), the US provided machinery for 35 operational power plants in Bangladesh. They will provide machinery for five more plants that are under construction, five proposed, one announced, and one in preparation. 

They also supplied machinery for two phased out and two shelved power plants. However, they are supposed to provide machinery for two more plants which have been cancelled.  

Besides supplying machinery, US companies, banks, financial institutions, and aid agencies have 10-100% investment in 20 plants. Thus US companies are involved in 56 power plants having 22,000 megawatt capacity in Bangladesh.  Among them, 25 are domestic fossil gas, nine LNG, eight heavy fuel oil, eight coal, and two high sulphur diesel fuelled power plants while another is a hydro power plant.   

American companies are suppliers of generators for 32 power plants, gas turbines for 15, steam turbines for 14, and engines for 22. General Electric, a leading US company, is the supplier of steam turbines for 13 power plants, gas turbines for 15, generators for 18, and engines for eight in Bangladesh. 

Caterpillar Inc is the supplier of both generators and engines for 12 plants while Sargent & Lundy LLC is the supplier of steam turbines for one plant, generators for two, and gas turbines for one. 

Moreover, AECOM, a Los Angeles-based consulting firm, has conducted the Environmental Impact Assessment (EIA) for three plants which are now operational. The firm is doing the EIA for one announced plant and one that is in preparation. It was also appointed for doing the EIA for another plant which was cancelled. 

Hasan Mehedi, member secretary of BWGED, said, "Joe Biden's special envoy for climate change John Kerry visited Bangladesh on 9 April to invite our prime minister to the Biden Summit. He questioned the construction of a power plant near the Sundarbans. The most interesting fact is for that power plant at Rampal, General Electric is the supplier of generators, gas turbines, and steam turbines. So it is not an overnight possibility to shift from fossil fuel."

"General Electric is the largest supplier of wind turbines. They also produce other renewable machinery. As they are producing fossil fuel-based power generation machinery, why would they not supply those to Bangladesh?"

What the US is thinking about Bangladesh's power sector?

According to the International Trade Administration under the US Department of Commerce, American companies are among the largest investors in power projects. US origin power turbines currently provide 80% of Bangladesh's installed gas-fired power generation capacity.

Bangladesh currently has two floating storage and regasification units. One of them is in Moheshkhali. It was developed by a US energy company, which will operate it for 15 years. 

As for opportunities for US companies in Bangladesh, the International Trade Administration is also eyeing upgradation of roads, waterways, and infrastructure to facilitate fuel transport, and building terminals and pipeline infrastructure to carry imported LNG and drilled natural gas to distribution hubs. 
Zakir said, "The government is planning to increase LNG-based power plants by decreasing coal-fired ones." 

"Reducing coal-fired power generation is good for the climate and environment, but like coal, LNG is also a fossil fuel which has almost the same adverse impacts on climate. The government should go through renewable energy, especially to solar power generation for sustainability," he added. 

However, the Power Division has already initiated a move to cancel 12 coal-based power plant projects having a proposed combined capacity of 7,461 megawatts of electricity.