General Policy Issues

2. GENERAL POLICY ISSUES

Policy formulation is a continuing process for decision-making at different levels by different institutions and individuals. At the time of operationalising National Energy Policy there is a need to ensure that these decisions are taken in a synchronised manner to achieve the stated objectives. Various levels at which there is a need for synchronised decision making are stated as follows:

(i) At macro level, policy decisions are to be synchronised to ensure -that the outputs of the energy sector meets the energy demands of all the end use sectors, zones and socio-economic groups on a sustainable basis.

(ii) At the sectoral (energy sector) level, policy decisions are to be synchronised to ensure balanced development of different sub-sectors (e.g. coal, oil, gas, power etc.). As for example, development in power sector may be affected due to inadequate development in natural gas sub-sector.

(iii) At the sub-sector (utility) level, policy decisions are to be synchronised to ensure balanced development of different programmes under a particular sub-sector. As for example, the ultimate outcome of gas-subsector depends chronological development of exploration, appraisal, extraction, processing, transmission and distribution projects. Similarly, in Power Sub-sector, it is necessary to consider chronological development of generation, transmission and distribution systems.

Major policy issues and recommended policies are to be considered to achieve the objectives of National Energy Policy have been presented in the following paragraphs.

A reliable database on different type of energy sources, their conversion, supply, consumption, prices etc. are to be established and maintained by the utilities, concerned agencies and the Planning Commission for systematic planning (e.g. forecasting) and development of energy resources of the country. These data are to be published on a regular basis to support planned development of energy resources.

Geological Survey of Bangladesh and Petrobangla are to complete the geological and geophysical survey of the whole country, so that the survey results can be used to assess the prospects of mineral and fuel resources of the country.

For energy planning purpose assessment of all type of energy resources (e.g. oil, gas, coal, nuclear minerals, hydropower, biomass fuels, solar, wind, tidal, wave etc.) are to be undertaken on a regular/continuing basis by the appropriate authorities.

Special incentives are to be given to undertake exploration and appraisal of petroleum resources in the West Zone and off-shore areas.

Necessary arrangements are to be made to select appropriate technologies for application in energy sector programmes. Different factors to be considered in assessing the technologies are: conversion efficiency, transferability, adaptability, environmental effects, cost etc.

National gas grid will be established for maintaining reliable gas supply. To improve management efficiency, production, transmission and distribution systems of gaseous fuels will be managed as separate cost and profit centers. Each of the units will be corporatised and allowed to operate on a commercial basis.

To consider development of gas fields through private sector, as a part of Government's privatization policy. In allocation of additional reserves the West Zone will get the priority.

In course of time import, processing, distribution and marketing of petroleum fuels will be opened to the private sector provided the private sector investors develop their own infrastructure like pipeline(s) including common carriers, storage and distribution/handling facilities.

Coal will play an important role in meeting the future energy needs of the country. A coal mining project is under implementation to extract coal from Barapukuria Coal Field. To ensure efficient management a Coal Mining Company need to be established for the management of Barapukuria Coal Mine. In future when mining of coal at Khalaspir will be considered, a separate mining company may need to be formed.

To improve management efficiency; generation, transmission and distribution systems of power sector will be managed as separate cost and profit centers. Existing power utilities will be corporatised and allowed to operate on commercial basis.

Rural Electrification Board will be allowed to continue the implementation and m anagement of Area Coverage Rural Electrification (ACRE) programme for designated rural areas of the country.

Enduse based energy planning method is to be undertaken to incorporate energy conservation measures in energy planning process. Energy conservation measures will be considered in generation of power, refining of crude oil and use of energy for various enduses ( e.g. domestic, industrial, commercial, transport, agriculture). Necessary incentives (e.g. technical support, preferential credit, tax exemption etc.) will be given to achieve the targets of energy conservation.

There is a need to adopt Energy Conservation Act (under preparation) to provide a legal basis and to decide appropriate strategies for energy conservation.

Environmental issues will be considered for all type of fuels and in each and every step of fuel cycle; namely, exploration, appraisal, extraction, conversion, transportation and consumption.

It may be reiterated that at present per capita emission of carbon dioxide gas is very low. It is envisaged that in foreseeable future, emission of carbon dioxide gas would not exceed the existing average emission of low-income developing countries.

Tariffs of different type of final energy will be fixed on the basis of economic cost. When it is decided to give any subsidy it will be made at end users’ level and Government shall make necessary arrangement with the utilities on this account.

Considering the energy sector as the infrastructure for development, its projects, when financed by the Government shall be allowed interest rates not more than the lowest slab of interest for commercial loans.

2.13. Zonal Distribution of Energy

Different projects being considered and that may be considered to meet the energy demand of the West Zone are presented below:

(i) Special incentives for the survey; exploration and development of oil and gas.

(ii) Development of Barapukuria coal mine.

(iii) Implementation of energy conservation projects.

(iv) Construction of LPG pipe line upto Elenga for the assured delivery of LPG in the

West Zone.

(v) Development of coal bed methane.

(vi) Development of peat

(vii) Development of Khalaspir coal mine.

(viii) Establishment of coal and oil based power plants.

(ix) Exploration and development of coal in unexplored areas.

(x) Establishment of petroleum depots at Chalna Port and up country to maintain

reliable supply of petroleum fuels.

(xi) Establishment of handling facilities of coal at Chalna, if coal has to be imported

for owner generation.

(xii) Expansion of natural gas pipe line.

(xiii) Construction of Electric Inter-connectors.

(xiv) Implementation of Rooppur Nuclear Power Project.

(xv) Establishment of Petroleum Refinery.

(xvi) Augmentation of tree plantation programme (by the Department of Forest).

Area-based energy planning methodology is to be followed to ensure sustainable supply of biomass fuels and to meet the energy needs of rural areas. At the implementation stage

commercial energy development programmes and biomass fuels development programmes are to be co-ordinated. Areas (thana/district) having scarcity of biomass fuels will be given priority attention under commercial energy distribution programme and biomass fuels conservation programme (e.g. improved stoves). Reliable supply of commercial fuels to rural areas is to be ensured.

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