An alignment of economics, demographics, climate change and technology has set in motion an ongoing transformation of the global energy system, which has also truly reflected in UN Sustainable Development Goals.
The Government of Bangladesh is committed to the development of a stable and sustainable power supply that will increase electricity access, enhance energy security, reduce poverty and mitigate climate change.
Government has been trying to mitigate these challenges by undertaking plans and programs to ensure supply of electricity according to demand and to maintain a steady GDP growth rate of over six percent for the next few years.
The Power System Master Plan 2010 set goals for fuel diversification with an emphasis on increasing the role of renewable energy in the power generation mix.
The Government has set a goal of total electrification by 2020, and has called for the development of domestic renewable energy resources to ensure that the share of domestic energy supply would remain over 50 percent.
It is recognizes the important role that renewable energy can play in achieving these goals.
Renewable energy resources will ensure a stable and universal power supply that will reduce poverty by sustainable socio-economic growth.
Though Bangladesh has a negligible carbon footprint, but remains one of the most vulnerable nations in the world for the effect of climate change, and we recognize the important role that renewable energy can play in reducing associated risks.
As a low-lying country with many rivers, Bangladesh has a very high flood risk, both due to monsoons and sea-level rise associated with climate change. Rising temperatures have already begun to shorten the life cycle of rice; reducing yields.
Low crop production could increase poverty up to 15 percent by 2030. Higher water levels could lead to higher incidence of waterborne disease, such as cholera, and result in forced migration due to flooding.
Bangladesh is classified as a developing economy by the IMF. Its economic growth has averaged nearly six percent per year since 1996.
"Bangladesh has considerable renewable energy potential, and significant past experience in developing renewable energy projects."
Bangladesh’s GDP was US$ 196.6 billion in Fiscal Year 2014-2015, with manufacturing (17 percent), motor vehicles (13 percent), service (13 percent), and agriculture (12 percent) being the largest value-added sectors.
The economy lost about US$ 2.2 billion (about 1 percent of GDP) as a result of political unrest in 2013 and January 2015, but economic growth in Bangladesh has largely been resistant to political instability, natural disasters, poor infrastructure and global shocks.
Bangladesh was less affected by the global financial crisis because of increased international demand for low-cost exports, and remittance growth of 22.5 percent in 2008-2009.
Inflation in Bangladesh has been constrained by reduced global oil prices and conservative monetary policies.
Growing population, with improved living standards and increasingly concentrated in urban centers, have dramatically raising the demand for energy services.
At the same time, a growing consensus over the dangers posed by climate change prompted people and governments worldwide to seek ways to generate that energy while minimizing greenhouse gas emissions and other environmental impact.
Countries are increasingly looking to reduce their dependency on imported fossil fuels. By reducing energy imports, countries are striving for greater energy independence; avoiding potential supply disruptions, high energy price and price fluctuations.
The technology once considered as niche is becoming mainstream. Renewable energy now is competitive on a cost per kilowatt-hour basis.
As most renewable energy technologies have a relatively high ration of upfront to operating costs, their viability is particularly sensitive to the cost of capital.
There is growing evidence that renewable energy has a positive ripple effect throughout society, simultaneously advancing economic, social and environmental goals.
Bangladesh has considerable renewable energy potential, and significant past experience in developing renewable energy projects.
Most of the existing RE investment has been in offgrid technologies such as solar home systems (SHS), solar mini and micro-grids, and solar irrigation pumps.
The government has set several investment targets for grid-connected technologies including utility-scale solar, wind, and waste-to-energy.
Despite significant potential the development of these grid-connected renewable energy technologies, however, has been slow to materialize.
There are a number of regulatory, financial and technical barriers that, if addressed, could accelerate renewable energy investment in Bangladesh.
Improved regulations, such as establishment of a formal benchmark tariff and provisions for compensating mini-grid investors after transmission expansion, would reduce risk and send strong signals to investors.
Grant funding and low interest financing can help address concerns about affordability for both grid-connected and off-grid projects.
Reduced financing costs can also offset the high cost of procuring land for projects, land scarcity being one of the key barriers to investment.
Overall the paradox of the investment situation is that increased experience with renewable energy projects will lead to increased investment.
Successful renewable projects will provide better access to data on renewable energy; demonstrate successful business models that can be replicated by local banks; and allow local workers the opportunity to learn the necessary technical skills.
The Government of Bangladesh has two sets of directives for renewable energy investment. The first is the 500 MW Solar Program, developed in 2012.
The objective of the program is to add 500 MW of solar generation capacity by 2016 through financing and implementing solar-powered projects in both the public and private sectors.
Government has also set renewable energy development targets for several technologies for each year from 2015 to 2021 (“RE Development Targets”).
The RE Development Targets call for an additional 3,100 MW of RE capacity to be installed by 2021. Most of the new capacity will be provided by solar (1,676 MW, or 54 percent) and wind (1,370 MW, or 44 percent). There are also targets for waste-to-energy (40 MW), biomass (7 MW), biogas (7 MW) and hydro (4 MW).
Business model for most of the solar PV technology options like solar home system, solar mini and microgrid, utility scale solar project and solar irrigations are already explored in Bangladesh and are in progress except grid tied solar rooftop.
SREDA is now developing a business viable model to facilitate expansion of grid tied solar roof top programme in government and semi government buildings, universities and other education institutions, industry, commercial and residential buildings including public facilities like stadium, airport etc.
The philosophy or vision behind launching this grid tie solar rooftop programme includes:
Establishing a practice of distributed solar and renewable energy generation,
Bringing a level of comfort to all stakeholders for further scale-up, and
Encouraging public participation.
The objectives of this Programme are:
Install around 200 MW of distributed photovoltaic rooftop solar systems on public
and private buildings and homes,
Obtain necessary clearances from relevant stakeholders to implement grid connected solar rooftop
photovoltaic systems, and
Set a model for Grid tied Solar Rooftop and generate clean energy.
The stakeholders for this Programme include: (i) Government administrative departments,
(ii) government departments lending their roof/ terrace for installation, (iii) Industry/Educational Institutions/home owners, (iv) Bangladesh Energy Regulatory Commission(BERC) , (v) Local distribution utilities (vi) Financial institutions, (vii) Project Developers, and (viii) Research and development institutions. Someone has to play coordinating role to carry forward these activities.
In this case SREDA will work as nodal agency for this programme. They structure this program and coordinated the bid process for selection of Project Developers and work as Project Implementing Agency.
The Project Developer shall pay to the Terrace Owner a ‘green incentive’ instead of a flat rent. The floor price for the green incentive will be determined by SREDA in consultation with BERC for per kWh generated from the rooftop solar photovoltaic system.
This incentive is generation based in order to incentivise the Terrace Owner to participate in the Programme. The Project Developers and Terrace Owners are bound into contacts through individual Green Incentive Agreements.
In order to comfort the Project Developers, the Government will assured terrace space for hosting 80% of the net installations on government building, in education institution, industry and in public facilities.
It is up to the Project Developers to secure the terrace space for rest 20%, which shall be only on private residences.
The local distribution utility shall buy the solar power generated through the rooftop solar photovoltaic systems at the tariffs bid by the Successful Project Developers.
The Project Developers and utilities are bound into a contract through individual Power Purchase Agreements (PPA). The Project Developers and SREDA sign Project Implementation Agreements (PIA).
Among different options of solar PV technologies solar roof top has added advantages over others and those are:
– Opportunity for consumer participation and investment
– Higher employment generation and entrepreneurship options
– Low distribution losses
– Last-mile support to grid stability, w.r.t. voltage & reactive power support
– Creates case for smart grids
– Widely accepted, Saves space
– Lowest time to commission which include both technical and administrative time
– Lower investment in distribution infrastructure (for lower penetrations)
– Can improve distribution grid capacity
Rooftop solar, like any new sector, experiences teething challenges.
This was the case in Germany, which faced issues at every stage of the sector’s growth.
A key barrier in most developing markets is the absence of clear capacity targets for grid-connected rooftop solar PV development.
The capital costs per megawatt of rooftop solar PV systems are approximately 20 percent higher than that of large-scale PV systems.
This is due to higher installation costs, small-sized components, lower economies of scale, and a smaller base on which to spread fixed costs.
On the other hand the cost of leasing rooftops, including developmental charges, or the opportunity costs in case of self-owned rooftops in urban areas, is sometime higher than the annualized value of land costs.
Government policies and incentives are vital to facilitate implementation of rooftop solar PV in any jurisdiction. Favorable policies and regulatory environments are critical precursors to the development of vibrant solar rooftop markets, even with dramatically reduced technology costs.
The type of metering arrangement for energy accounting, whether it is single meter or dual meter needs to be defined in schemes clearly.
It is very important to spell describe the point of interconnection for kilowatt-scale projects at different voltage levels. This is critical to maintain grid safety.
Connecting various small generation projects without specified interconnection standards to the grid is a threat to the safety of the grid and the overall project.
In addition, the sharing of interconnection costs and any associated network capacity enhancements needs to be clarified with the local distribution utility.
The technical standards for the specification, installation, and maintenance of rooftop projects must be clearly defined to ensure installations are of high quality, safe, and reliable.
This helps ensure efficiency and maximizes life of the assets. Technical standards for interconnection equipment are also essential to ensure reliability and safety of the low voltage grid.
"Government has also set renewable energy development targets for several technologies for each year from 2015 to 2021 (“RE Development Targets”). The RE Development Targets call for an additional 3,100 MW of RE capacity to be installed by 2021. Most of the new capacity will be provided by solar (1,676 MW, or 54 percent) and wind (1,370 MW, or 44 percent)."
This is of particular concern for Bangladesh where availability of the grid at the low-tension level, its monitoring on a real time basis, and functioning of the power evacuation facility, all have commercial implications.
Roof top owners most often are not willing to sign 20-25 years term agreement specially those who have future plan to develop building vertically.
Coordination between many stakeholders like statutory bodies, regulator, chief electrical inspector, distribution utilities, building owners/ government departments, developer, financer, project management are real problem.
Renewable energy offer Bangladesh an unprecedented opportunity to reduce their dependence on imported energy which is a growing concern due to depletion of natural gas reserve.
Solar rooftop PV system can minimize the land requirement and contribute significantly in rapid progress of renewable energy.
It is no longer a utopian scenario rather it reality now. It is within reach, using proven, tested technologies, which already exist today and which continue to improve every year. But technology alone will not be enough to carry forward this mission.
This transformation required the collective long term commitment of all stakeholders, including government, citizens, financiers, private companies and international agencies.
Siddique Zobair, Member, Sustainable and Renewable Energy Development Authority (SREDA) & Energy Policy Expert.