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Rooppur Nuclear Power Plant: Boosting Economic Resilience of Bangladesh

Sajedul Islam, Guest Writer |
Update: 2021-06-15 13:35:24
Rooppur Nuclear Power Plant: Boosting Economic Resilience of Bangladesh

Bangladesh is at a critical juncture as the country is observing its 50th Anniversary of its Independence which came after a nine-month-long war against the then occupied military force. Once shrugged as the “bottomless basket,” the country emerged as a development miracle. The consistent realization of year-on-year economic growth hovering around 6% for the last 20 years is a testimony to the appropriate tagline of “next Asian tiger,” as termed by Jonathon Garber- the market editor at Business Insider. Stable political conditions, regular incremental flow of remittances, rising exports of RMG followed by emerging agricultural and pharmaceuticals products, etc., are flagged as confounding factors towards positive economic strides. 

Even amidst the global pandemic of COVID-19, Bangladesh registered an impressive jump of 9% in relation to per capita income which now reaches $2227 in FY 2020-21, surpassing that of the neighboring big nation India by 14.35%. With the gravitational force of economic impetus, now the challenge that lies in front of Bangladesh is to augment industrialization sustainably. To ensure sustainable industrialization and diversification of export base, the government is focusing on setting up hundreds of industrial hubs under the concept of Special Economic Zones with one-stop service facilities across the country. Therefore, scaling up of energy production has to be fine-tuned with the establishment of those SEZs to meet the associated demand for electricity and power.

Power sector in Bangladesh is one of the fastest-growing sectors in the South Asian region. As of July 2020, the country’s installed capacity, including captive capacity, was more than 20 GW, of which 48% was generated through public sector while the rest was from power imports, IPPs, & CPPs. Private sector participation has been significant, accounting for about 60% of the total installed capacity. In order to achieve the National Visions 2021 & 2041, Bangladesh government has planned to generate 23,000 MW, 24,000 MW, 40,000 MW and 60,000 MW power by 2020, 2021, 2030 and 2041 respectively. 

At present, about 97% of the population has access to electricity, however, quality of supply remains an issue, and per capita consumption remains below the regional & global averages for middle-income households, with per capita electricity consumption at 466kWh, 1/7th of avg consumption of middle-income countries. Major chunk of Bangladesh’s electricity comes from utilizing fossil fuels, mainly natural gas. About 63% of the total generated electricity comes from natural gas. Moreover, natural gas happens to be a dominant fuel in industrial setups as well. Natural gas met almost 71 percent of the country's total commercial use of energy. The current gas demand is estimated to be 20 million tons, but it is projected to become more than 45 million tons by 2041. With a limited resource of indigenous natural gas, the country suffers from an internal energy struggle. In order to meet the current and emerging gas demand, the Bangladesh government has taken initiative to import 35 million tons of LNG per year by 2030. However, import dependency on LNG is susceptible to loss making endeavor for Bangladesh against the backdrop of supply chain disruptions and subsequent price hike.

Bangladesh also relies on coal as one of the primary fuels for generating electricity. About 5% of its generated electricity comes from coal. But keeping the rising coal prices in mind and its environmental impacts the government decided to go forward with only three out of 29 planned coal plants.

Insufficient generation (actual generation is less than 12 GW out of 20 GW of installed capacity), challenges with respect to reliability, dependence on domestic gas, and poor transmission capacity are some key challenges faced in Bangladesh. Therefore, the country should increase renewable energy generation in its overall energy mix as far as possible in order to benefit from lowest-cost power generation and avoid dependence on fossil fuel imports. According to Bangladesh's Power Sector Master Plan 2016 (PSMP–2016), the country has the objective to install 3.6 GW of electricity generation through renewables. The government has committed to ensure that 10 per cent of the country’s energy comes from renewable sources but at the moment the total electricity generated by renewable sources has just reached 3 per cent. Renewable sources of power, particularly solar and wind has been slow to take off in Bangladesh, partly due to concerns over land availability and cumbersome process of land acquisition from private owners. 

Against this backdrop, nuclear energy one of the most optimal, sustainable and efficient resource will easily be able to facilitate the country’s upward growth, sustain the export-oriented economy and meet the demands of a growing middle class. Bangladesh is therefore right in implementing one of the biggest projects in its history – the construction of the country's first nuclear power plant at Rooppur (on the eastern bank of the Ganges in the Rooppur settlement of the of Pabna district, 160 km off Dhaka). The Rooppur Nuclear power plant will consist of two VVER-1200 power units with a total capacity of 2400 MW. The Rooppur NPP, nuclear fuel will provide 2400 MW of electricity by 2025. When completed, the nuclear power will make up 10 percent of total power productivity, which will enable new industries. As a technology-intensive renewable energy production facility RNPP tends to have spill over effects on the development and enhancement of productivity of capital, labor and other factors of production. Apart from clean and renewable energy production RNPP also boost up the employment generation. As of now 20000 workers are working in the construction phase of which approximately 3000 foreign workers are from eight different countries.  

RNPP is a crucial part of the next of phase of Bangladesh’s growth and will contribute significantly to the rise of the ‘Next Asian Tiger’ in the years to come. 

Author: Md. Sajedul Islam, Adjunct Faculty, Department of Economics, Independent University, Bangladesh (IUB). Mr. Sajedul is an MA in Development Economics and a SAARC Silver Jubilee Fellow. 

BDST: 1333 HRS, JUN 15, 2021

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