The power miracle

When Sheikh Hasina came to power in early 2009, she was faced with a set of persistent challenges: huge electrical load shedding, gas supply crisis and other energy shortages—among many other issues.

These were persistent because the past governments did not quite manage to solve any of them. Solving these huge issues needed a clear understanding of these problems, good planning and huge investment.

And Sheikh Hasina did exactly what no other governments dared to do—take the challenge by the horn. She thought of solving it in a big way—not one by one, but concurrently.  

The country reeled from a power shortage of 500 to 1000 megawatts back in 2008-- when the country's economy was much smaller than what it is today; Bangladesh today has a power generation capacity surplus by almost double the supply capacity.

In fact, the generation capacity in 2008 was one-sixth of what it is today. Almost all the people of the country today have access to electricity—either by grid connection or by independent solar panels.

Why is electricity generation so important for a developing country like Bangladesh?

In October 2008, the World Bank, in its Investment Climate Assessment report on Bangladesh, said that the electricity crisis has been identified as the number one problem by more than 76% of investors. The power crisis deprived them of utilising their industrial production capacity by more than 12%. As a result, their contribution to the GDP was 2% less than what it could have been.

Bangladesh was missing its opportunity.

Soon after coming to power in early 2009, the Sheikh Hasina government rolled out a series of plans for the power sector. To urgently address the power crisis, the government succeeded in implementing a staggering 126 power projects of different types—some quick rental projects that could be installed within a few months, some government-funded traditional plants, some private power projects and so on.

In 2013, the World Bank conducted an enterprise survey which showed that complaints on power shortage had come down to 28%.

By 2018, power generation capacity had increased to 14,000 MW. Load shedding is now a matter of the past despite some weaknesses in the power supply system. And today, the nation can generate 23,000 MW—a big jump from 2008's paltry 4,000 MW.

The government's initiatives in the construction of the Rooppur Nuclear power project is another example of thinking big. The nuclear power project was conceived in the sixties of the last century. But no government could make headway with the idea till Sheikh Hasina took the initiative a decade back.

With a massive budget of $13.5 billion, the Rooppur project is the country's single largest infrastructure initiative. The 2,400 MW power plant being constructed by Russia will become operational gradually from 2024 and will have a lifespan of 60 years. The plant's longevity will ultimately justify the high project cost—as its operational lifespan would reduce its power production cost.

On the other hand, the country has been facing an acute gas crisis since the early 2000. There was a time when the American oil company Unocal--that had discovered the large Bibiyana gas field in the late nineties—wanted to export gas from Bangladesh. It argued that Bangladesh did not have the domestic market to consume the gas from Bibiyana.

However, from 2002 and onwards, the country began to face a gas crisis—affecting industries at home. It gradually worsened to a point where industries were facing huge production losses because of low gas supply. Since gas fields are limited in number and all reservoirs are gradually getting depleted —the government turned to import Liquefied Natural Gas (LNG) from the Middle East.

To facilitate the import, two LNG terminals have been built, one by the government and another in the private sector. The country today imports around 600 million cubic feet per day (mmcfd) to cover the gas crisis. The liquid gas is mixed with the natural gas in the national grid—so that the existing customers can get uninterrupted supply.

The government has also initiated LNG based power projects, replacing several coal power projects. A decade back, in line with the global trends, the government had floated tenders for several large coal power projects. But with global environmental awareness going against polluting plants, the government has decided not to pursue new coal plants.

From the beginning, Prime Minister Hasina has been trying to diversify the country's energy resources. For decades, natural gas had been the major source of energy in Bangladesh—as we had a number of gas fields. Since our gas reserve had depleted to an alarming level, the government opted for all kinds of solutions--coal, LNG, oil, nuclear and solar and even imported power from India. The idea behind this is that if there is a shortage of one resource, Bangladesh will always have another option.

But that's not all. Sheikh Hasina dreams big. So the country today aims at generating 40,000 MW of power by 2030.

It's necessary to have so much electricity in hand because Bangladesh ultimately wants to become an economic powerhouse in the world.

Accordingly, the government has rolled out plans for 100 economic zones in different parts of the country. As of today, 93 of these economic zones have been approved and some of them have already begun operation.

Once implemented by 2030, these zones will employ 10 million people and fetch $40 billion from exports.