In a webinar titled “Enhancing efficiency captive power generation”, organized by Energy & Power, speakers highlighted the urgency of enhancing energy efficiency in gas-fired captive generators amid the increasing energy prices. Speakers also raised the issue of lack of uninterrupted gas supply to the industries that hinder their operation. Energy & Power Editor Mollah Amzad Hossain Moderated the webinar.
Delivering the keynote presentation, Shafiqul Alam, Lead Energy Analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA) shared that the demand for uninterrupted electricity compelled the policymakers to supply gas to industries for captive power generation as grid power remained unreliable. The insatiable demand for gas outpaced local production amid insufficient local gas exploration tempted the government to frontload efforts to import Liquefied Natural Gas (LNG). Although Bangladesh’s LNG import spell is brief, the relation with LNG has already become turbulent as the government raised gas prices drastically by more than 100% for industries in 2023. There is already a discussion that the government may increase gas tariffs further.
Based on IEEFA’ study “Industrial energy efficiency to curb Bangladesh’s short-term LNG demand growth”, Alam presented that gas-fired captive generators now operate at 35.38%, improving from 30% in 2013. While this is a significant improvement in the last decade, industries can further improve efficiency as generators of more than 45% efficiency are available now.
Alam highlighted that industries can further recover waste heat and utilize jacket cooling water in a chiller or heater, which are financially viable. On a conservative estimate, by enhancing efficiency in captive generation and utilizing waste heat Bangladesh can reduce LNG imports worth 50.18 bcf per annum (equivalent to US$460 million, based on a cheap LNG price of US$9.5/MMBtu in the spot marker).
Alam further highlighted that Bangladesh can accelerate the momentum, building on policy foundations already in place. For instance, the energy efficiency and conservation rules require mandatory energy auditing in selected designated energy consumers, including industries. SREDA, established to help aid clean energy expansion, can design measures to swiftly scale up energy efficiency. Alam concluded “Full energy independence may be a utopian dream, but the country must find ways to rein in its import dependence.”
Attending the webinar as a discussant, Razeeb Haider, Director, BTMA, said, industries have significantly improved energy efficiency in captive generators. If any industry does not use waste heat, it will loose money and will not be able to compete in the market. Bangladesh must consider a holistic energy policy that would ensure long-term energy security.
Moynul Islam, Vice Chairman, Monno Group, said there is not much scope to use waste heat in the ceramic sector. Also, generating power from waste heat is expensive. Moreover, it is the responsibility of the government to ensure a reliable power supply. There is also a need for low-cost financing. Industries interested in installing rooftop solar face high import duties on rooftop solar accessories.
Syed Khalid Masud, Chairman of Dana Group, argued that the overall energy efficiency level in captive power generation can be significantly improved. However, there should be an incentive mechanism to encourage industries to opt for efficiency improvements.
Speaker Engr Yameen Farook, Managing Director, Max Social Enterprise Ltd. highlighted that industrial captive power generation offers enormous opportunities to save energy. We should harness other energy efficiency opportunities in industries. Additionally, other countries are using heat pumps, which can be tried here too.
Engr. Ali Iqbal MD Nurullah, former Director, Petrobangla opined that by enhancing energy efficiency in captive generators, Bangladesh would be able to reduce LNG imports, which will save significant foreign currencies. He stressed that the government should enforce that without waste heat recovery systems, industries should not be able to operate captive power systems.
Responding to queries of the speakers, keynote speaker Shafiqul Alam said that Bangladesh may consider how to tap into the benefits of heat pumps in the future subject to feasibility. As a long-term approach, Bangladesh should consider enhancing the reliability of grid power, undertaking comprehensive energy efficiency measures in industrial processes and operations and increasing the share of renewable energy to the grid. He further added that the Central Banks’ refinancing schemes are offered at up to 5% interest rates and as such, these schemes are attractive. As utilization rates of these schemes are low, the Bangladesh Bank, financial institutions and industries may discuss how these schemes can be made more accessible avoiding complexities.
