Cost Benefit Analysis of Rampal Hydropower Project

8/10/2019 Cost Benefit Analysis of Rampal Hydropower Project

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Benefit Cost Analysis of the Rampal Power Plant Project: Power

Generation or Forest Destruction?

Milu GaoSaidur Rahman

SPEA V 541: BENEFIT COST ANALYSIS 1

Background

On September 24, 2013, thousands of people joined in a 400 km long march from

the capital city of Dhaka to Rampal in Bagherhat district of Bangladesh (Bara, 2013).

The five-day long march was a protest against the proposed coal based Rampal

Power Plant in the vicinity of worlds largest mangrove forest Sundarbans. The

proposed power plant intended to produce 1320 MW electricity which would

require 4.72 million tons of coal

each year (Bara, 2013). With a

slogan of Save the Sundarbans,

environmental groups and social

activists under the name of

National Committee to Protect Oil,

Gas, Mineral Resources, Power and

Ports (NCPOGMR) urged the

government to stop the power plant

and find an alternative solutions to

the energy crisis (Star Online Report, 2013). Earlier when Government of

Bangladesh (GOB) wanted to initiate open pit mining in Phulbari, another huge

protest took place and eventually the government agreed to ban the project

(Cultural Survival, 2011). However, this time the protest was not successful as

Prime Minister of Bangladesh backed the project and inaugurated the project on

October 5, 2013 along with the Prime Minister of India (Dhaka Tribune, 2013).

Figure 1: Painting by Dhiman Sarkar in protest

against the Rampal Power Plant

Source: http://www.huffingtonpost.com/chaitanya-

kumar/bangladesh-power-plant-st_b_3983560.html


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Figure 2: The Royal Bengal Tiger

Source:

http://calcuttanow.blogspot.com/2011/05/sunderb

an-royal-bengal-tiger-kolkata.html

Currently, one of the major crises Bangladesh is facing is in energy sector which is a

major obstacle for the country to achieve the desired growth rate. During the

summer, the energy demand gets really high and the whole country experiences a

significant amount of load shedding. With increasing energy demand, the situation

will get worse in the future. Bangladesh Power Development Board (BPDB) has

taken an ambitious plan to catch up with the future demand by adding up about

10500 MW generation capacity to the current capacity within next five years

(Bangladesh Power Development Board, 2014).

Bangladesh also suffers from natural disasters like cyclone, tornado, floods, drought

etc. In recent times, two major cyclones Cyclone Sidron November 15, 2007 and

Cyclone Aila on May 25, 2009, hit the coastal belt and damaged the area severely

(Asian Disaster Reduction Center, 2014). Sundarbands mangrove forest was able to

minimize the impacts of these cyclones as the large vegetation of the forest

mediated the storm surge velocity and

sedimentation process (Barbier,

2006) (Government of Bangladesh,

2008). However, cyclone Sidr

damaged 22 percent of the

Sundarbans mangrove forest

(Shamsuddoha, et al., 2013). Since the

GOB took various measures to

regenerate the forest, which got again


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disrupted by Cyclone Ail. Sundarbans mangrove forest, inscribed as World Heritage

Site by UNESCO in 1997, is rich in biodiversity with endangered species the Bengal

Tiger and the estuarine crocodile (United Nations Educational, Scientific and

Cultural Organization, 2014).

Such a situation puts us in a classic economic situation where we have to decide

between environmental sustainability and energy generation. Even though an

Environmental Impact Report has been published by the GOB that supports the

project, environmentalists rejected the report saying it biased and inaccurate. In the

following chapter we will discuss the environmental and economic benefit of a

mangrove forest with specific example of Sundarbans mangrove forest in greater

details.

Mangrove Forest

Mangrove forests are considered as

the most productive forests in the

world due to its diverse plant

varieties and wide range of services

(Organisation for Economic Co-

operation and Development, 2005).

Such forest grows naturally in the

confluence of land and sea in the sub-

tropical and tropical regions of the

world (Alongi, 2002). The characteristics of mangrove trees are aerial roots,

Figure 3: Sundarban Mangrove Forest

Source:

http://www.sundarban.org/about_sundarban.php


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viviparous embryos, and rapid rate of canopy production, highly efficient nutrient

retention mechanisms, and ability to cope with salt and maintain water and carbon

balance (Alongi, 2002). The forest has a complex food wed and provides nutrient

and habitat for a wide range of species including juvenile fish, crabs and shrimps

(Organisation for Economic Co-operation and Development, 2005). Another distinct

characteristics of mangrove forest is its ability to protect coastal region from floods,

coastal erosion and storm surges (Organisation for Economic Co-operation and

Development, 2005). However, the forest itself is vulnerable to climate change and

human activities. The benefits and services from a mangrove forests are listed in

Table 1.

Table 1: Benefits and Services of Mangrove ecosystems

Direct Use Values Indirect use Values Non-use Values

Forestry products (timber, fuel

wood, charcoal, housing material,

poles, shingles)

Flood and erosion control Biodiversity

conservation

On-site fishery products (crabs,

fish)

Shoreline stabilization Carbon sequestration

Support of off-site fisheries

(shrimp, fish)

Storm protection

Aquaculture products (shrimp,

fish)

Nutrient sediment rapping

Other products, such as food,

medicinal plants, honey

Habitat and nursery

provision

Recreation and tourism

Source: (Organisation for Economic Co-operation and Development, 2005)

However, mangrove forests incurs a substantial loss annually. Globally, mangrove

forests experienced an annual loss of 3 x 103km2since 1980, almost an overall loss

rate of 2.1% (Valiela, Bowen, & York, 2001). The potential threats of mangrove


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forests are deforestation, aquaculture, pollution, combustion of fossil fuels and

global warming (Valiela, Bowen, & York, 2001). If we fail to protect our mangrove

forest thought sustainable management system, a large portion of the mangrove

forests along with some valuable species will be gone. Sundarban is the largest

mangrove forest in the world where a coal-based power plant will worsen the

situation. The following section will state the present status and future concern that

are specific to Sundarban.

Sundarbans Mangrove Forest: Present Situation and Future Concerns

Sundarban constitutes the most diverse and richest forest of Bangladesh. Sundarban

the largest mangrove forest in the worlds has a total area of 10,000 km, and

extends to Bangladesh and India. Among the total area of the Sundarbans, 6,000 km

is in Bangladesh and about 4,000 km is in India (Getzner & Islam, 2013). The

Sundrabans has been already declared as Ramsar Site and Natural World Heritage

Site (Chowdhury, 2013). The mangrove forest has a rich biodiversity comprising of

66 species of plants, over 200 species of fish, 42 mammals, 51 reptiles, 8

amphibians, and a lot of invertebrates (Chowdhury, 2013). Sundarbans is the home

of several endangered species like Royal Bengal Tigers, Ganges and Irawadi

dolphins, estuarine crocodiles and the critically endangered endemic river terrapin

(Gopal & Chauhan, 2006). Apart from biodiversity conservation, Sundarbansrole in

local, national and regional economy is pivotal. Local community utilizes the forest

resources in through direct consumption and livelihood generation (Getzner &

Islam, 2013). According to one estimate, 4 millions of people (Iftekhar & Islam,


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2004) are dependent on the Sundarbans in the form fishermen, honey gatherers,

leaves, and grass gatherers. Around 200 thousands people go to Sundarbans to

extract natural resources for their livelihoods (Chowdhury, 2013). However, the

Sundarbans also acts as shelter belt to protect coastal people form storms, cyclones,

tidal surges, sea water seepage, salinity intrusion. As a tourist place, Sundarbans has

growing interest to travelers, which will be enhanced if supported by adequate

infrastructure and promotion. However, recent disasters like Sidr and Aila has

destroyed a good portion of forest and currently the government has taken different

conservation approach for the regeneration of this forest considering the economic

and ecological value of the forest.

Current concerns associated with the Sundarbans are sea level rise, salinity

intrusion, overexploitation of resources, conversion of land use and endangered

species. The forestry department most often fails to protect the tidal forest by taking

proper actions against ongoing over extraction of natural resources and corruption

by public officials. As a result, most of effort toward ecosystem management and

biodiversity conservation in Sundarbans areas has not been successful. With the

growing intensity of natural hazards, the situation of Sundarbans will be really

threatening, which in turn effect the country both environmentally and

economically. When the forest department is currently struggling to find a

sustainable management system, building a power plant will create a really

complicated situation. Though the country is in dire need of electricity generation to

achieve desired economic growth rate and provide electricity connectivity to

growing demands, the environmental risk of establishing a coal-based power plant


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can be irreparable. In the next session, we will illustrate the present energy

situation of Bangladesh and available alternatives for electricity generation.

Present Energy Situation in Bangladesh

Government of Bangladesh intends to provide electricity to all citizen by 2021 at an

affordable cost with better connectivity. The per capita generation is only 236 kwh

and only 48.5% of the population has access to electricity (Mahmud & Haque, 2012).

The electricity statistics is very low compared other developing countries and one of

the major bottleneck behind countrys desired economic growth. The country

experiences a severe shortage of electricity and situation get worse during the

summer. On a hot sunny day, most households and offices experience one hour of

load shedding after every one hour of electricity consumption. Most industries and

offices have their own generators as a backup to support the production and

services, which is expensive and inefficient simultaneously.

Table 2 provides an account of the historical development and future projection of

the average maximum demand, average generation, difference between these two

and average load shedding from 2007 to 2015.

Table 2: Energy Situation in Bangladesh

2007 2011 2015 Proposed)

Average maximum Demand 3970 MW 4833 MW 5696 MWAverage Generation

3378 MW 4103 MW 4828 MW

11500 MW vision by 2015)

Difference

592 MW 730 MW 668 MW

Average Load Shedding

516 MW 656 MW 795 MW

Source: (Mahmud & Haque, 2012)


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Between 2007 and 2011, the increasing rate of electricity generation was 5.37%, the

increasing rate of electricity demand was 5.43%; this gap resulted in an increase in

the rate of load shedding which accounted for 6.72% for the same period (Mahmud

& Haque, 2012). So, countrys target to provide electricity to all its citizen is doubtful

at the moment unless government immediately undertakes projects like Rampal

Power Plant. The country, in addition to lack of power generation capacity, also

experiences a substantial amount of power loss in electricity generation, wchih we

discuss in our next section.

Power System Loss Scenario in Bangladesh

Power system losses accounted for 14.02% in 2012, which is really high compared

to the electricity shortage in the country. Power system loss occurs for two reasons:

nontechnical reasons and technical reasons. Among the nontechnical reasons, single

fuel independence is a major one as 85% of the current electricity generation is gas-

based (Mahmud & Haque, 2012). Available alternatives are coal, diesel and heavy

fuel oil, which has still been in rudimentary stage in the country. Another reason is

improper privatization improper privatization policy; between 2010 and 2011,

private sector electricity generation increased only by 4% (Mahmud & Haque,

2012). Lack of innovation and political stagnation has further contribute to the

nontechnical power loss.

The significant technical issues for power losses are (Mahmud & Haque, 2012):

Lengthy distribution lines: long distances, high line resistance


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Inadequate Size of Conductors: does not match with carrying capacity

Distribution Transformers not located at load center

Overrated Distribution Transformers and hence their Under-Utilization

Low Voltage Appearing at Transformers and Consumers Terminals

One of the most immediate way to increase the power generation is to reform the

whole energy sector to an efficient one. However, the government has ignored the

rapid modernization in the energy sector for a long time. The government also has

failed to promote the renewable energy as an alternative was of electricity

generation, even though it has a hug potential. The next section illustrates the

present efforts in renewable energy which can be another solution to solve the

energy crisis in Bangladesh.

Present Status of Renewable Energy in Bangladesh

Currently, only 10% of the rural households in Bangladesh have access to electricity

and a good portion of the remaining part will not be connected to the national grid

even if in next 30 years (Anam & Husnain-Al-Bustam, 2011). There are many

sources of renewable energy that can be efficiently adopted in the context of

Bangladesh like solar power, wind power, biomass, biogas and micro hydro.

The daily average solar radiation varies between 4 to 6.5 KWh per square meter,

where maximum radiation can be available in the month of March-April and

minimum in December- January (Anam & Husnain-Al-Bustam, 2011). In


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Bangladesh, current solar energy based installation is about 20.75 MW (Chowdhury,

Reza, Nitol, & Mahabub, 2012). Island and coastal areas can be potentially areas set

up windmills to produce electricity. The estimated maximum average wind speed is

5.3 ms-1during April and minimum is 2.6 ms-1during December (Ambia, Islam,

Shoeb, Maruf, & Mohsin, 2010). Present capacity of wind turbine installation in

Bangladesh by different organizations is about 19.72 kw (Chowdhury, Reza, Nitol, &

Mahabub, 2012). Being an agricultural country, Bangladesh produces a substantial

amount of biomass in the form of cow dung, agricultural residue, poultry dropping

and tice husk. The estimated potential electricity generation from 7 million metric

ton of total rice husks, which is only 20% of the total rice production in Bangladesh,

is 264 MW (Chowdhury, Reza, Nitol, & Mahabub, 2012). Currently one commercial

biomass based power plant in Gazipur with a capacity of 250 KW is in operation

(Chowdhury, Reza, Nitol, & Mahabub, 2012). Bangladesh has a favorable climate,

which is from 6oC to 40oC, to use biogas for electricity generation. Already, Grameen

Shakti, an NGO, has installed 13,500 biogas plants and government is planning to set

up 18,713 biogas plants by 2012 (Chowdhury, Reza, Nitol, & Mahabub, 2012). Micro

hydro can be another source of renewable energy; government has installed the first

micro-hydro power unit in Chittagong with a capacity of 10 KW, which is presently

generating 4 KW.

So, we can see the country has already alternative way to produce a substantial

amount of energy from both renewable sources and efficient electricity generation.

Such system will be less costly both environmentally and economically. The next

section describes the proposed project of coal-based Rampal Power Plant.


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References

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2a

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Cost Benefit Analysis of Rampal Hydropower Project

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