It may not be possible to get solar electricity in Bangladesh at only 3.0-3.5 US cents per unit like in India, but it is possible to bring it below 7.0 US cents by adopting appropriate strategies. Solar energy resources in the desert areas of India are 7 kWh/m2/day as compared to only 4~5 kWh/m2/day in Bangladesh, and low-cost vast stretches of land for large-scale solar projects are also available in India but in Bangladesh, it is challenging to organize such land. In most cases, land development is not needed in India but in Bangladesh, most of the projects need land development and erosion protection measures. Among others, these are a few main reasons why it is not possible to get solar power at a price like India’s. However, the tariff can be significantly reduced by acquiring and developing land for grid-tied solar, constructing infrastructure required for the evacuation of power to the grid, and ensuring long-term concessionary financing. Priority should be given to the selection of entrepreneurs through competitive bidding rather than awarding contracts based on unsolicited offers only.
Shahriar Ahmed Chowdhury, Director of the Centre for Energy Research (CER) of United International University,shared his thoughtsin an exclusive interview with Energy & Power Editor Mollah Amzad Hossain.
How do you evaluate the present state of renewable energy developments in Bangladesh? Bangladesh is lying way behind now. What are your thoughts?
I will not say we are lying way behind. It is a positive indication that we have started giving priority to renewable energy development, though a bit late. There is no doubt that Bangladesh lags behind other countries in the region. The most important matter is whether we could create an enabling environment for renewable energy development. Till now, required incentives for this sector could not be provided. I think incentives similar to those provided to fossil fuel-based power generation can be provided now. Getting land for grid-connected solar is a major impediment. There are other issues like the Right of Way for power evacuation and associated required investment. The government should waive import duties and VAT on renewable energy equipment. Rooftop solar has huge potential but the 26% import duty on solar PV panels, 37% on inverters, 58.6% on solar mounting structure and service walkways, 58.6% on solar DC cables, and 89.32% on lithium batteries must be withdrawn.
The development of solar and wind power will progressively reduce the stress on fossil fuel-based electricity. That in turn will reduce the import of primary energy, benefiting the economy. I hope the government will address these issues in the upcoming annual budget.
What are your views about the government's vision of achieving a 40% contribution of clean energy into the energy mix by 2041, as incorporated in the IEPMP? Do you think that Bangladesh is now riding on the right track for this?
I think the plan in this regard is not clear and the technological aspects are not tested either. These require clarification. It is important to know how much of this 40% will come from renewables like solar, wind, regional hydropower, and nuclear. The targets set in the Delta Plan and Mujib Climate Prosperity Plan or the Perspective Plan of Bangladesh are not reflected here. Rather, technologies that have not been globally tested and proven, like carbon capture, ammonia, and hydrogen co-firing have been emphasized in the document significantly.
I believe before launching an initiative for implementation, the IEPMP would be reviewed and realistic targets for solar and wind power be ascertained.
A research organization claimed that the average generation cost of power will be reduced if fossil fuel-based generation is replaced by renewables. Now the cost of grid-connected solar is 15 US cents/unit, wind power 12 cents/unit, and the cost under all new contracts is 11 cents/unit. Then how can the replacement of fossil fuel-based generation with renewable reduce the cost of generation?
Note that in the discussion of this generation cost, the recent trend needs to be given attention. If we review the power tariff over the past decade, the cost of power generation from gas and coal has progressively increased, whereas the solar tariff has been reduced. The cost of grid electricity generation rises from BDT 5.73/Unit (2012-13) to BDT 11.03/unit (2022-23) and it is expected to rise further as we are gradually shifting from domestic fuel (dominantly own gas) to imported fossil fuel for power generation. On the other hand, the tariff from the first grid-connected utility-scale solar plant at Sharishabari was 18.97 US cents/unit (LoI issued in 2015). After that, the tariff of solar PV power started gradually declining and now stands at 9.83 US cents/unit.
The efficiency of commercial solar PV panels was 12-13% and within 10 years it has increased to around 22% to 23% and will increase further in the coming days as we achieve technological improvements. This has increased generation using the same area of land as before. The cost of solar PV panels per Watt-peak is also continuously declining. Tariffs are also reduced even without receiving any incentives. Tariffs will be reduced substantially if the investment is sought through acquiring and developing land, and constructing power evacuation infrastructure up to the project site by the government, as done in India. The lead time of project implementation as well as the risk premium on investment will be significantly reduced. These will eventually reduce tariffs further.
I have no doubt, that if an appropriate strategic action plan is implemented, by 2030 solar energy will become cheaper than all types of imported fossil fuel-based electricity. The energy security and emission reduction potential of renewable power should also need to be considered.
There are thoughts that renewable may not be as cheap as that of India or Middle Eastern countries, but it is possible to bring down the tariff to 6-7 cents per unit. Do you agree? If you agree what are your recommendations for achieving this?
Of course, it is possible. To achieve these, some strategies need to be adopted. The country can provide developed/buildable land and construct power evacuation facilities up to the project site. Low-cost concessionary financing can also be provided. Power can be supplied below 7 cents if entrepreneurs are encouraged by such initiatives of the government. It may take some time to organize all these but we should start it now. It is good news that the Power Division has already started working on developing a solar power generation hub.
Another important matter should be kept in mind. In India and other countries, it takes not more than one year to implement after awarding the project. But in Bangladesh, it requires years to arrange land, develop it to become buildable, and complete a slew of other formalities. This increases the risk of the investors and the investors expect a premium for these risks. In other countries, low-cost long-term concessionary financing is available. Owing to various risks, investors in Bangladesh also expect a higher return on investment. This is reflected in the tariff.
How do you evaluate the energy transition- that is the transition from fossil fuel to clean energy- in Bangladesh? India and China have set 2060 and 2070 as targets for achieving Net Zero. What should be a realistic target for Bangladesh?
It is challenging for Bangladesh to achieve the net zero target on a stand-alone basis, by relying only on its domestic variable renewable energy sources. We need to have regional grid connectivity and large-scale grid energy storage systems to increase the grid flexibility to accommodate more variable renewable energy generation. We also need to adopt a smart grid. With the combination of regional power connectivity/trading, local solar and wind (both off and onshore), green power import from neighboring countries (like hydro from Nepal and Bhutan and low-cost solar and wind energy from India), grid storage, other modern energy carriers, regional grid connectivity, smart grid, nuclear power, and carbon capture techniques, it is possible to achieve the Net Zero target. After ensuring all these we may set up achieving Net Zero targets like India and China.
Recently the State Minister for Power & Energy claimed that projects constituting 12,000 MW of solar power are at different stages of approval. How much of these projects can be realized by 2030 or beyond, and your thoughts?
The process for applying for unsolicited solar projects is dynamic and ongoing, which means that some of the existing applications will result in completed projects, and some may not. On the other hand, new applications are also going to be submitted continuously in the coming days. Therefore, given the above-recommended support facilities, a comparable level of solar generation capacity may be achieved.
A national solar energy road map was prepared by SREDA with the support from UNDP, where I was involved in the drafting. The final report was submitted in 2020. In the roadmap, three different implementation scenarios were stated and the high-deployment scenario was recommended for adoption. In the high deployment case scenario, the target was to achieve 9,000 MW by 2030 and 30,000 MW by 2041. 13 solar power hubs were recommended to be developed to accommodate 12,000 MW of solar power capacity. Rooftop solar is another sector from where a significant portion of solar power can be achieved. As a low-lying delta with lots of rivers, lakes, Haor, and Baors (including the Kaptai Lake), Bangladesh has a lot of water bodies. It is recommended that Bangladesh should undertake a nationwide comprehensive study to find out the potential of floating solar PV projects. While conducting this study we should be careful to address the issues of the environment, bio-diversity, usage of water and its surfaces, etc. Cheaper renewables from neighboring countries can also be imported to include more RE in the future energy mix. The roadmap also recommended making the qualification criteria easier for the developer for RE project development, so that more entrepreneurs can contribute to the sector and there can be a more competitive environment.
As a land-scarce country, land use efficiency can be increased by the use of agro-photovoltaics or by creating multilayer uses of solar installations, like raising the height of the solar panels, and using the land below for low radiation agriculture (like spices, mushrooms, orchids, vegetables, etc.) or grazing pasture for livestock, or planting the land with flowering plants for apiaries or developing pisciculture. Thus, the debate of food security versus energy security can be eliminated and both food and energy security can go hand in hand.
What are your views about the present state of Solar Rooftop Power Generation? How much success can Bangladesh achieve from this?
Some success has started emerging from the rooftop solar system sector with the Net Metering policy. It is high time to make some amendments to the net metering policy to provide the prosumers more flexibility and support. The policy has a provision that a consumer can only set up solar facilities for up to 70% of its sanctioned load. This should be changed to 100%. At present, only 3-phase consumers are allowed to avail of the NEM facilities. Single-phase consumers should also be allowed to avail of the NEM facility. Export-oriented industries have issues with Green Compliance. Some of the RMG/ Textiles industries have to achieve green compliance but they may not have sufficient space in their industry premises for installing required rooftop systems, though they may have space in other regions in the country. They should be allowed to install solar PV systems or other RE systems in remote available locations and should be allowed to obtain the energy generated as NEM prosumers from the remote installation by giving a wheeling charge to the utility/ utilities. At present, industries inside Economic Zones or Export Processing Zones are not encouraged to have NEM facilities, consumers inside EZs and EPZs should be allowed to have NEM facilities. Industries should be allowed to import rooftop solar equipment on a duty-free basis, just like IPP owners. If all the above can be done, a significant level of success can be achieved from solar rooftop systems.
What percentage of variable renewable energy (VRE) in Bangladesh can be utilized without a storage facility? How can we increase the penetration of VRE into the grid?
Grid flexibility analysis of Bangladesh shows that around 20% of the load can be supported by variable renewable energy without significant impact on the grid. Traditional fuel-based power plants need to be made ready gradually for catering to peak load. FGMO (free governor mode of operation) must be set up at every possible power generation plant. Finally, Bangladesh's power grid needs to be linked with regional grids to increase the grid flexibility to accept more variable renewable energy. Bangladesh has already decided that any solar energy generation plant having over 100MW capacity should be accompanied by a 20% storage facility to eliminate a sharp change in generation and to maintain a certain ramp, which will enable the conventional power plants to accommodate the change in generation from VRE plants. Base load power plants should be prepared to operate on a flexible basis.
Bangladesh now cannot regularly pay the bills of private sector investors for the power it purchases due to the dollar and taka crisis. There are issues in the repayment of loans as well. Do you think such a situation may negatively influence investments in renewable projects?
Such a situation will create a negative perception among potential investors. The government is assuring that they will soon get out of the situation. If not, this will create a challenge in getting FDI for renewable energy projects.
