The Utility of The Future - Scaling RE in Bangladesh

Disruption or Digital Disruption is taking almost in any sector. Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services.Same way the value of human life cannot be measured interms of money. That is why the most risky sector aviation industry has been given utmost importance. Though more than a 100,000 aircrafts are taking off and landing daily, but a single accident is not acceptable. Thinking of their safety, all the Stakeholders came to a unanimous decision that accidents in aviation industry due to human error cannot be afforded.This led to full digitization and automation of Commercial Aviation Industry with minimum interference by humans. This was possible due to IT/ICT and now Internet of Things (IoT).

Today we find DigitalDisruption is taking over our all activities. Some of the examples of Digital Disruption aregiven below.

We all have used Uber more or less. What a transport Taxi business at global level. The traditional Taxi thinking about almost monopoly and syndication were not fair with the Riders. Then came the brain child Uber. It utilized or hired Cloud, private Cars of the individuals and with the customer and driver friendly software started the business of Uber. Today it has No Taxi or Car of their own. Only the Software. It is worth more than US $ 60 Billion though it started business from 2009.

Why Electricity is important? This digital disruption is dependent on uninterrupted and quality electricity supply.

Almost every way we make electricity today, except for the emerging renewable & nuclear puts out CO_2.  And so, what we're going to have to do at a global scale is create a new system. And so, we need energy miracles - Bill Gates

Can you name a product whose quality cannot be measured before it delivery” It is Electricity.But you have to continuously supply quality electricity. It can be compared with Japanese “Just in Time”(JiT) service. Can you imagine its complexity specially when parameters for quality electricity supply are more complex today due to massive digitization in all other sectors, harmonics, renewable integration and demand variation? The electrical system can be compared with a huge battery where millions of lights are being on/off, air-conditions etc getting on/off, extreme variation of demand with which supply is to be harmonized.

Cost of Electricity

In dayto day life, it was found that the actual cost of electricity interruption or outages may not be significant, but the overall economic losses due to electricity interruption are immense. With the world moving towards automation and digitization, the necessity to have round the clock uninterrupted power supply became inevitable. The difficulty with stable electricity supply was to make a balance between electricity production and its consumption. If unbalancing is substantial the whole system may become unstable. The problems of today’s grid may be summarized as under.

·         Massive growth of distribution networks with increase in electricity use and dependency on it.Specially with global improvement of economy. This has led to more use of electrical products. Again less expensive electrical gadgets are also more electricityconsuming leading to more and more consumption.

·         Aging of existing infrastructure. Existing age old grid is inefficient which has led to excess power loss in transmission and distribution. The load growth made the system more vulnerable and loss prone. This was mainly due to age old inefficient equipments some of which were obsolete or installation of less costly but unreliable and inefficient equipments.

·         Present power supply system is mainly One-way, as a result continuous supply and to cope with instantaneous demand and supply variationhas more limitations.

·         Difficulty in Integration of renewable and management of its variable supply.

·         Limitation to cope with real time challenges specially those related to cyber concern.

·         Scarcity of experts mainly due to brain drain specially of Engineers.

This led to overcapacity of generation to cope up with so many variables, as a result power cost increased and became uneconomical. From Consumer point of view, another concern was monopoly of the Electric Utilities. Often their attitude made Consumers (who should be actually treated as Customers) sometimes helpless. They were compelled to accept whatever services provided by the Utility at their  predetermined cost though they are paying for the services. The Energy Regulators were engaged to look after the Tariff and Customer’s interest in a balanced way but they had many new issues. Today Energy sustainability and security is one of the main agenda for any Country.

The electric Utility industry is seeing the business challenges which are dynamic and diversified. They are also under pressure to reduce cost, make operations efficient and meet tight regulations for security and environment issues.

Renewable Energy Sources

Mainly we have six sources. Solar which is abundant but Grid integration is a challenge. Water flow which gives us mini hydro or large hydro. There water supply variation is a problem. Wind is another source in most of the countries. Bangladesh is still in research stage about wind speed. Biomass is another product which is also an environment concern. Geothermal and Hydrogen are two important sources but more research is required.

The Future Electric Utility – Disruptions due to Electric Vehicles

The future of the electric utility will be tied to the future of the grid which will be mainly low carbon. The Electric Vehicle will play a significant role in diminishing the role fossil fuel based vehicles. Unlike fossil fuel run Cars which have around 20000 moving pats, the Electric Vehicles have very less moving parts. As a result they are more sustainable. Again the Lithium ion batteries cost is going down at a very high rate due to improvement in supply chain and quality improvement. It has been found thatElectric Vehicles run on fossil fuel based electricity generation still make less pollution and global warming. With cost reduction we may not find any NEW fossil fuel based Car after 2025. You may find old fossil fuel based Cars on road in developing countries.

In Bangladesh we have Battery operated Easy Bikes, Vans and now battery operated motor cycles are seen on road.These are run by ordinary batteries and charged during night time which is their off period. So Solar run Charging Stations may not be that helpful. But in case of electric cars they have highly efficient quick charging batteries. So Utilities will have challenge to face this additional demand due to inefficient EVs.

Disruption due to Solar Generated Electricity

Another disruption is massive reduction in solar panel cost together with improved storage system. In USA they have analyzed that in 2018 cost of 1 MWhr (1000 kWh or units) will be maximum $ 20 for Concentrated Solar Panel (CSP). The Solar electricity will cost less than Coal generated electricity. This will be due to massive addition of renewable and a connected, digital webbed grid in much the same way the Internet is today will develop. In addition Distributed Generation will have significant impact. The biggest challenge will be “How to balance an entirely different sort of grid with so many variable inputs. The aging Grid’s renovation and modernization with digitization will be time consuming and expensive affair and will require the participation of Distributed Generators to make over all system sustainable. Micro Grids will become favourable to counter blackouts.

Disruption due to Roof Top Solar

Till now Consumers are confused about Roof Top Solar, its cost, life, rate of return etc. Now Vendors will approach the Roof Top Owner with proposal to lease the roof on Profit sharing basis and electricity costadjusted through Net Metering. This will have disruption in two aspects. First the Utility income will be minimized due to Roof Top Solar and Electricity Consumer will also become Electricity seller. Another aspect is abnormal tariff during Peak hour. Due to reduction in energy storage cost, Consumers will have the option to charge the batteries during lean period at late night and consume the same during Peak hours. Result Utility business and monopoly gone.

Technology itself is not real disruptor, Non Customer centric biggest threat

The Future Electric Utilities will have to take care of its Customers and community, the political circleincluding the media and other stakeholders. The Regulators will want the utility to stay in business and earn a fair return. At the same time, Electric Utilities will have many opportunities to provide better services. It will be mostly privatized or semi private with Regulators to control.

The Future Electric Utility will have to give more emphasis on Demand Side Management. There is massive growth in electricity demand which could not be predicted. Another reason, Bangladesh going to become a fully middle income country and affordability of common people has improved leading to more electrical gadgets use. The Utility may be compared with a battery. There are tens of millions of customers making random decisions every second, turning lights on and off, turning on/off their TVs, Air Conditioners and other electric gadgets. The Electric Utility will have to efficiently handle all these massive variations in consumption without any interruption and offcourse quality electricity is to be supplied.  The electrical infrastructure acts like a battery accommodating all variations.

Electricity sale is the main source ofincome for Electric Utilities. Another challenge will be declining electricity demand of the Utility due to individual electricity production through renewable and introduction of micro grids. The Customers will be selling electricity to the Utilities through “Net Metering” and “Feed in Tariff” will further aid. By 2030/2040 most of the existing Power plant could be retired and need to be replaced. Now it  will be the task of Engineers to design the system of future digitalgrid, which is a long process, but it will in the end make the system more efficient and reliable. With semi privatization of Electric Utilities and a loss business in many aspects, these will challenge for future.

The Regulators will be more towards a balance between Tariff, Customer interest and Electric Utility sustainability to some extent.

The Utilities will have to make enough profit to sustain in the competitive market satisfying its customers in the digital era.

Asian Super Grid

After Fukushima Tsunami and then nuclear crises, there was huge hue and cry to shut down the nuclear electricity generation plants. But Japan had no primary fuel of its own but huge electricity demand. So Future Grid was planned which would have been deep integration of renewable infrastructure and ICT which was crucial for New Grids to come online. Initially four countries Russia, China, South Korea and Japan signed MOU to form Super Grid. Then Mongolia also joined the Super Grid. The resources of various regions like Wind and Solar from Mongolia region, Hydro & Thermal power in Russia’s Far East region, PV & Wind power in South Korea and Japan, Wind and Solar power in China all were combined to form Pan Asian multinational grid. It had total transmission line of 36,000 km. This was a replacement to nuclear power generation of Fukushima through massive renewable flow.

Transactive Energy: One step ahead of Smart Grid

Transactive Energy is a new hot topic in the energy industry. It was developed considering the existing limitations. It is a new concept. Carl Imhoff, manager of electricity infrastructure for the Pacific Northwest National Laboratory summed it up by saying, “Transactive energy is a means of using economic signals or incentives to engage all the intelligent devices in the power grid from the consumer to the transmission system to get a more optimal allocation of resources and engage demand in ways we haven’t been able to before.” The customer has options to have energy from multiple buyers or sources through same infrastructure.

The intelligence driving Transactive Energy is based on instantaneous market value and economics (instantaneous pricing) of the energy or electricity. The Smart grid technology refers to the ability of the electric grid to communicate between generation, end-user and even points in between, but the Transactive Energy takes this at least a step further and introduces the additional consideration of electricity financial or economic value at the time of delivery. This whole process is fully automatic with M2M contact with decision making capability as per Customer requirement or desire.The concept of Transactive Energy is based on role of dynamic pricing in the energy industry. Wholesale power markets use dynamic pricing to value energy based on demand at the time of transaction or delivery. So the price of electricity can vary throughout the day as per multiple Suppliers. The Customer has the options to avail it from any supplier through the same receiving system. The Transactive Energy system actually makes electricity use decisions based on price signals. This could include a building energy management system programmed to respond to a high price signal by curtailing energy use through automated demand response, using micro grid generation, or even shifting load to onsite energy storage, renewable etc minimizing the peak demand and also demand charge. The Supplier can also fix variable price depending upon competition, power quality etc. The technology that makes this possible includes software capable of interpreting essential data, and distributed generation sources such as micro grids, energy storage, and even energy reduction in the form of automated demand response. In fact, facilities with distributed generation resources can even contribute excess electricity back to the power grid in a Transactive Energy system.

Transactive Energy is truly a two-way transaction system where Utility monopoly ceases and pricing is competitive. In the end Customers are contended with the service of their choice.  

Bangladesh Present Electrification State& Preparation for Future Utility

Bangladesh has rapid electrification for last few years. It has at present 80% electrification in which urban electrification is 90%. And has planned to have electricity for all by 2020. Present electrical connection is 26.4 million. Its SHS program has created another record and is now 4.81 million connections. Besides it has more than 100,000 solar lanterns in use in rural areas.

Bangladesh has one achievement. A country plunged with power crises ten years ago with only 35% electrification now on way to 100% electrification by 2019. This was mainly possible due to an effective Short, Medium & Long term Master plan for electrification. First it gave emphasis on Generation and the transmission. Now it is going at full pace at distribution infrastructure. Best is its most population is rural population. So it is going for rural electrification and done at an extraordinary pace with per month connection more than 500,000. But it has given equal emphasis to renewable. Bangladesh main problem is lack of land for large solar power plants. Its population is more than 160 million on only 55,000 sq miles of land. It has the challenge of solar connection to irrigation projects. It has given connection to more than 700, but has planned to connect few hundred thousand connections run by diesel or electricity

Solar roof top is another disruption. It is generating more than 200 MW. But it will bring real disruption. Coverage of drinking water through solar run pumps is another challenge and has more than 150 such connections. Mobile communication through solar run BTS is over 100. All these are very small number but it will bring disruption in long run. Solar street lights are another item. It has more than 35,000 solar street lights. But safety and security of these lights is a challenge.

Other renewable achievement is wind, biogas etc. Wind mapping is not all done but so far it has 3 MW of wind power. It has biogas/biomass based electricity around 1 MW. It has one 230 MW largehydroplane. Small hydro is not that popular till now. It has also explored biogas plants and has installed72,000. Improved Cook Stoves (ICS) is another achievement, 3.56 million.

Bangladesh has also given emphasis to SDG#7achievement. Bangladesh developed policies for RE. It has plan to achieve 10% RE by 2020 and also EE 10% by the same. The priority areas considering development and digitization for grid integration and infrastructure. Energy security is another challenge and the environment. Climate change through mitigation for lowest pollution. Another continuous challenge is development of expertise.

Challenges for Bangladesh to Develop Renewable Energy

Bangladesh has all policies very friendly for development of solar power but land scarcity is a problem due to its over population 160 million on just 55,000 sqmiles of land. For Roof top the mindset of the common people to develop roof top solar is an obstacle. Is there any incentive, what is the value of my roof, how much is third party model attractive, signing 25 years lease etc all are not acceptable to the common. For wind power, mappings not 100% complete as such full map not developed. Our wind pressure is lower than minimum allowable which require more advanced tech to develop more electricity with less pressure. Cyclone is another problem for safety of wind generators. But above all Government of Bangladesh has maximum support for RE.

The Future Utility

The Future Grid will deploy digital and Transactive technology. Grid will be green and Renewable Energy will govern. For sustainability micro grid will come up. Super Grids will come up to substitute fossil fuel power. Monopoly of Utilities will go with Transactive energy. Renewable energy will prevail for RE for all.

(The paper The Utility of The Future-Scaling RE in Bangladesh jointly presented in Asia Low Emission Development Strategies (LEDS) Partnership Forum in Vietnam in December 2017)