The report estimated that greater efficiency in captive power generation and efficient utilisation of the heat generated during the power generation could reduce the import of liquefied natural gas by 50.18 billion cubic feet.

The report also revealed that the average efficiency of industrial gas-fired captive power plant is 35.38 per cent whereas generators with 45.2 per cent efficiency are available in the market.

A survey on 51 industries with 124 gas-fired captive generators with a combined generation capacity of about 250 megawatts was conducted to find out energy efficiency in the captive power plants.

‘Low efficiency in gas-fired captive power generation consumes a significant amount of gas annually. This is despite the average efficiency in captive generation increasing to 35.38 per cent from 30 per cent in the last decade,’ said Shafiqul Alam, lead analyst, Institute for Energy Economics and Financial Analysis, the author of the report.

‘Additionally, a significant percentage of industries do not utilise the waste heat released by these generators,’ he said.

The report found that 54.28 per cent of the studied generators have an operational age of more than eight years.

Although age is not the only parameter affecting generator efficiency, the report said, when industries procured the old stock of generators, the rated efficiency was not as high as the efficiency of newly purchased generators.

This report further finds that 44.22 per cent of industry samples do not use waste heat released by generators, while 79.6 per cent do not use jacket cooling water in productive applications.

‘By using the waste heat recovery boiler/plant and jacket cooling water in a chiller or heater, a substantial amount of gas can be saved,’ said the report.

Replacing inefficient power generators in the captive power production may incur an upfront cost, the report noted, adding that the cost would be recovered between 1.5 and five years.

The return on investment in waste heat recovery is only about one year, the report said.

Bangladesh entered the LNG market in 2018 with a modest import of 31.45 billion cubic feet (Bcf) of LNG. In 2023, imports swelled to 238.72Bcf, more than seven times the 2018 figure.

Over the six years since 2018, rapidly rising imports in a volatile global market exposed Bangladesh’s energy sector’s weak financial health earlier than anticipated.

The power sector is the single largest gas consumer as it accounted for 41.76 per cent of gas production or 389.38Bcf in the fiscal year 2022–23.

Regarding gas consumption during FY2022–23, industrial processes, excluding fertiliser and tea production, consumed 19.17 per cent, while captive power generation consumed 17.6 per cent, the report said.

Bangladesh’s plan to power its economic development with LNG imports was not designed to cope with extreme global fuel market volatility, depreciation of the local currency and weak fiscal conditions, the report noted.

The high dependence on gas is raising import bills and with it, the tariffs paid by consumers, the report said, adding that Bangladesh must urgently re-evaluate its energy strategy and take steps to improve energy efficiency to contain the growing demand for gas.

Bangladesh’s current installed power generation capacity is over 27,000MW, excluding captive power capacity of 2,800MW.

News Link: Inefficient gas-fired captive power plants waste $460m