Report on Power System Master Plan (PSMP) 2016

Farhan Ahmed
Reg no:2015339010
Dept. MEE

Submitted to:
Mahmud Or Rashid
Lecturer
Dept. of MEE
PSMP 2016

The “Power Sector Master Plan (PSMP) 2016” is a key document detailing the roadmap of the
power sector of Bangladesh. The road map provides a comprehensive analysis of the current scenario of
power consumption and production in Bangladesh. The road map focuses on how Bangladesh can
facilitate sustainable economic growth by diversifying its power generation capability. The Master plan
puts up 5 key viewpoints which is in tandem with the overall economic growth of Bangladesh and also
the Sustainable Development Goals (SDGs) as developed by the World Bank
The five points are:
The entire PSMP is developed keeping in mind these five broad goals. The Master Plan also
lays out a roadmap on how to successfully achieve the five key targets.

1. Enhancement of imported energy infrastructure and its flexible operation

Any country that goes through sustained economic development needs a robust supply of
primary energy, particularly for industrial and transport sector. At present, Bangladesh is overly
reliant on gas based primary energy, but in order to sustain development, the need for
diversification is significant. Investment in increasing domestic generation is a long term process
and as such, viable short term alternative, such as import from neighboring countries are
crucial.

2. Efficient development and utilization of domestic and natural resources (gas and coal)

Bangladesh has a decreasing reserve of natural gas and as such it is important to utilize the
remaining reserve with maximum efficiency. The current mining and extraction technology of
Bangladesh is rudimentary and greater reforms are required to enhance mining and extraction
ability.

3. Construction of a robust, high quality power network

In order to achieve greater economic growth, Bangladesh cannot solely rely on labor intensive
industries. The need for investment and expansion of high value capital intensive industries is a
logical progression in the development of an economy. As such, the demand for high quality
power is imperative. To ensure high quality power supply, massive investment is required to
develop infrastructure.

4. Maximization of green energy and promotion of its introduction

Bangladesh is susceptible to the adverse effect of climate change. Therefore, it is important to

develop environmentally friendly power generation policy. There needs to be investment in
renewable energy as it will help in reducing green-house emission and also result in cheaper
electricity for rural people.

5. Improvement of human resources and mechanisms related to the stable supply of

energy

Investment in power sector shouldn’t be focused on infrastructure and increased capacity only.
The need for more trained human resource as well as ancillary infrastructure and industry is
important. The pricing of electricity is a sensitive issue and it requires a comprehensive policy
which won’t put the
burden on the
consumers or the
producers.

The demand for Power in Bangladesh comes from four major sectors: Residential, Industrial,
Transport and Agriculture.
The supply side of power in Bangladesh, at present is dominated by Natural Gas with more than
50% of the power being generated with Natural gas as raw material. The minimal output
generated from renewable energy (Hydro, Solar, Wind power and others) is a cause of concern
because Bangladesh is at risk of being seriously affected by the climate change. The GoB also
has plans to launch a Nuclear power plant within 2020 to ease the pressure on Natural Gas as
the primary source of raw material for energy in the future.

The projected primary energy supply still shows a reliance on natural gas. It is a cause of
concern for all relevant parties due to the depleting nature of the resource. The recent
developments regarding Coal based power plants in Rampal and the extraction of coal from
Boropukuria is signs that the GoB is looking towards diversifying its raw material sources in
order to achieve higher power generation output.
This write-up dives deeper into the demand and supply sides of power consumption and
production in the Bangladesh economy. Although Bangladesh has been able to become
partially self-sufficient in producing electricity, it still struggles to meet peak demand. The
projected peak demand up to 2040 is:

The current power generation capability of respective sources against maximum power demand
is:

Natural gas:

The predominant source of generating power, Natural gas is not in abundant supply for
Bangladesh. The present power generation capacity is 38%, while the international benchmark
is 45%. The increase in efficiency can result in additional annual capacity of 1,300 MW.
 With the declining domestic gas production, it is important to focus on the distribution and
storage infrastructure in order to attain maximum efficiency. The development of necessary
infrastructure requires extensive capital and financial investment, as such, it is important to
develop a separate Master Plan for LNG gas.

Coal:

In recent years, Energy production from Coal has been on the frontline of energy policy for the
Government of Bangladesh. Despite strong protests from environmentalist groups, steps have
been taken towards extraction of coal mines.

Although GoB has put strong emphasis on the development of coal based power plant, the
current situation is not promising. At present, there is only one Coal power plant in Boropukuria,
which is not producing large volume of coal to the adjacent Boropukuria power plant.

Target:

 To conduct feasibility study on infrastructure of import of Coal and undertake necessary

investments to develop infrastructure.

 Introduction of open pit mining technology in Boropukuria and subsequently in Phulbari.

Renewable energy:

As one of the most susceptible country to the adverse effect of global warming, Bangladesh is in
a strategically key position in terms of renewable energy. However, there are limitations to the
 maximum potential power generation through renewable sources. The two main limitations are
the lack of available land and meteorological conditions. The highest renewable energy power
generation potential is 3,700 MW.

The most promising renewable energy sector is the Hydropower sector due to the geographic
nature of Bangladesh and its neighboring countries. According to a JICA survey, cross-border
hydropower available to Bangladesh is in the range of 3,500-8,500 MW by 2030, mainly

sourced from Nepal and North West India.

Targets:

 The development of technical rules and regulations for grid-connected renewable energy
generation.

 Domestic renewable power generation to be increased to 3,800 MW by 2041.

 Domestic biogas production 3 million m3/day by 2041.