[🇧🇩] Energy Security of Bangladesh

[Saif]

Increasing renewable energy use -- a key imperative for Bangladesh

Greater availability of energy promotes economic development and facilitates meeting diverse needs associated with the manufacturing industry and agriculture. It also provides a better lifestyle for citizens. These factors lead countries to seek additional energy from hydrocarbons-- coal, oil and n

thefinancialexpress.com.bd

Increasing renewable energy use -- a key imperative for Bangladesh
Muhammad Zamir
Published :
Dec 01, 2024 23:29
Updated :
Dec 01, 2024 23:29

This photo taken on February 17, 2024 shows a 50 MW Chinese-built photovoltaic power plant in Mymensingh District, Bangladesh Photo : Xinhua

Greater availability of energy promotes economic development and facilitates meeting diverse needs associated with the manufacturing industry and agriculture. It also provides a better lifestyle for citizens. These factors lead countries to seek additional energy from hydrocarbons-- coal, oil and natural gas. However, such a dynamic has led to the assumption that greater use of hydrocarbons and fossil fuels is contributing to global warming and to climate variability. This has led the world to seek alternatives through the creation and use of renewable energy - in the form of solar energy, bio-gas, bio-fuel and wind energy.

This functional approach regarding global warming has also led to the recognition that Bangladesh will be one of the most severely affected countries and there is a need for our relevant authorities to undertake necessary measures directed towards adaptation and mitigation. The civil society has also been monitoring how Bangladesh can play a more interactive role within the evolving paradigm envisioned through the Framework Convention on Climate Change (UNFCCC).

The urgency of such a dynamic has been felt since the 24th Conference of Parties (COP24) that was held in Katowice, Poland. According to environmentalists this was seen as a significant factor that needs to be pursued very carefully and given attention by all relevant authorities. This aspect has led scientists to describe that this has raised the need for environmentalists to ascertain as to whether measures are also being taken to ensure conservation of biodiversity as well as protection of forestry.

It needs to be stated that the use of renewable energy in different forms has increased throughout the country, particularly in the case of our rural regions. Solar power through the use of solar panels has now become part of the functional matrix in these areas.

Recent estimates have mentioned that solar panels are now being used in more than three million homes. This is facilitating students to continue their studies after evening, helping families to watch television, helping to recharge nearly 100 million mobile phone users within our rural parameters, generating required power for water pumps necessary for lifting underground water for the purpose of irrigation and recharge conveyances that run on batteries. In addition, there is growing awareness and use of biogas as bio-fuel in rural kitchens.

These factors are contributing towards the socio-economic growth in our economy. It is this awareness that also persuaded our relevant authorities to try and boost the use of solar power not only in the rural but also in the urban areas.

Measures were taken to boost solar power so that its contribution within the energy platform exceeds 10 per cent of the total power generation capacity. Attention was also directed to providing approval to 19 on-grid solar power parks being created by different companies in the private sector. However, the private sector has been pointing out that they are facing one big challenge-- acquiring land being used for cultivation and agricultural purposes. They have drawn attention to the fact that a solar project with power generation capacity of 100 MW needs about 300 acres of land.

Nevertheless, it is being felt that the efficiency in generating solar power will increase in the future through new technological advances.

No discussion on use of renewable energy will, however, be complete without reference to the potential use of wind power to generate energy. This is particularly true in the case of Bangladesh.

A recent study carried out by the US Department of Energy's National Renewable Energy Laboratory has indicated that the coastal belt of Bangladesh holds wind power prospects. A comprehensive wind mapping exercise has demonstrated that the average wind flow in nine places is between 5.0 to 6.0 metres per second. This was good news for Bangladesh as, for commercial production; one needs wind speed of between 2.3 to 2.5 metres per second.

It needs to be mentioned here that electricity from onshore wind energy, according to German energy specialists, is nowadays one of the most affordable forms of renewable energy generation. The yields attainable in this respect, according to experts, depend on good energy sites, the impact of tower height and the size of rotors. In this context one needs to refer to a US study carried out on behalf of the Power Division some time ago. It found that the coastal areas of Khulna, Barishal and Chattogram Divisions have more than 6 meters per second available wind speed at the 120-meter height- sufficient for generating electricity from wind turbines. It has also come out from the mapping survey that, for wind speeds of 5.75 to 7.75 m/s, there are more than 20,000 square kilometers of land with a gross wind potential of more than 30,000 MW. This means that if we can exploit this proven potential, Bangladesh can reach the 10 per cent renewable energy target agreed upon in 2021. Unfortunately, delays in taking decisions and arranging for funds have affected this outreach.

At present some wind turbines with 3 MW capacities have been in operation for the last few years in coastal Kutubdia. However, because the centre-point of the blades are only 18 meters above the ground, they are yet to run up to full capacity. The wind turbine in Feni, with the blades centre-point 50 meters above the ground has, however, generated power reasonably well.

The Sustainable and Renewable Energy Development Authority (SREDA) has correctly formed a working Committee in this regard. Environmental engineers are trying to also set up towers to collect site-specific data in different coastal areas including Kuakata and Patuakhali.

These aspects indicate that we have several challenges ahead of us. However, we need to move forward to further our strategic interests and overcome our energy challenges. It will not only need bipartisan participation between the public and the private sectors but also active engagement from foreign investors.

Renewable energy will not only ease dependency on foreign fuel, but can have a host of positive social effects and help us move into the green belt.

It has been recently reported that the Centre for Policy Dialogue (CPD) has suggested for scrapping a total of 42 power plant projects on August 27, including 37 renewables plants with a combined capacity of around 3,102 megawatts (MW). Of them, 30 plants were to be set up under joint ventures or build-own-operate (BOO) initiatives by investors from 15 different countries.

It has also been advocated that necessary measures need to be undertaken for attracting Chinese investment in renewable projects.

Khondaker Golam Moazzem, research director of the CPD, while presenting the keynote paper also pointed out that "The Power Development Board (PDB) is now preparing to issue tenders for the development of 10 grid-connected solar power plants in the private sector, each with a capacity of 50 MW, totalling 500 MW. Chinese investors now have a particularly good opportunity to invest as they are known to offer more competitive prices than other foreign or local investors."

In this regard attention has also been drawn to the fact that nearly US Dollar 39.74 billion in global funds is available for renewable energy investments in Bangladesh, which can be accessed in the form of loans, equity, technical assistance and financial aid. According to CPD, Chinese investors prefer using funds from Chinese financial institutions such as the China Development Bank (CDB), Asian Infrastructure Investment Bank (AIIB), Exim Bank of China and Silk Road Fund. It has also been clarified that Chinese investors usually do not engage in the planning phase of renewable energy projects. They prefer local private firms or the government to plan projects and then bid for investment and equipment supply. This leads one to believe that if Chinese companies get involved, local investors can apply for financing from Chinese institutions.

However, Gan Peng, chairman of Chint Solar (Bangladesh) Co Ltd, expressed concern about higher tariffs compared to neighbouring countries. This appears to have prompted Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis, to call on the interim government to reduce import duties to encourage foreign investors. Two other factors have also been suggested by the CPD - (a) that in view of Bangladesh's foreign reserve crisis, the Bangladesh Bank should establish a dedicated local currency conversion channel for renewable energy investors, ensuring timely conversion of returns from BDT to USD, and (b) that the government should continue pursuing China's proposed loan assistance of US Dollar 5 billion in Chinese currency to mitigate foreign reserve pressures and further strengthen investor confidence.

In addition, it has been underlined that tax incentives, subsidies, and a favourable regulatory environment for green bond markets and venture capital investments must be provided. Simplifying administrative processes and reducing bureaucratic barriers might also lower the cost of accessing finance. This will make the investment environment more attractive. It has also been suggested that Bangladesh Bank and local private banks should establish state-backed green banks or dedicated renewable energy funds to offer lower-cost financing and accelerate renewable energy projects.

Muhammad Zamir, a former Ambassador, is an analyst specialized in foreign affairs, right to information and good governance.​

 

[Saif]

Energy projects under AL should be carefully examined

THE committee to investigate economic corruption under the deposed Awami League government in its report submitted to the interim government on December 1 termed the energy sector as a ‘conduit of corruption’. The findings of the committee confirm the observation of economists, energy experts...

www.newagebd.net

Energy projects under AL should be carefully examined
03 December, 2024, 00:00

THE committee to investigate economic corruption under the deposed Awami League government in its report submitted to the interim government on December 1 termed the energy sector as a ‘conduit of corruption’. The findings of the committee confirm the observation of economists, energy experts, and anti-corruption watchdogs, who have all along urged the government to reform the energy sector and talked about how arbitrary tariff fixing, overhauling project costs, heavy import reliance, and the guaranteed payment against idle power were bleeding the economy. With an investment of $30 billion in power generation since 2010, at least $3 billion changed hands as kickbacks, and about 10 per cent of the project cost was spent as commission. Irrespective of investment, the tariff negotiation was done by benchmarking previously tendered tariffs or other negotiated deals, allowing favourable rates, terms and conditions to political and business cronies. Meanwhile, people suffered from inflation, and industries lost competitiveness, and 65 per cent of the country’s primary energy still needs to be imported at an annual cost of $10 billion, and by 2030 this will rise to $20 billion.

The power and energy sector in Bangladesh has become a hub for corruption, largely due to a lack of accountability stemming from the Quick Enhancement of Electricity and Energy Supply Act, 2010, which allowed immunity to both government officials and political leaders. A gazette notification was issued on November 30, which repealed the act and stated that actions taken under the 2010 law would be considered legally done while activities undergoing by the power of the law would continue and be completed as if it had not been repealed. The AL party members, lobbyists, private businesses, and independent power producers became major stakeholders in this sector, and the indemnity law facilitated the bypassing of due processes. For example, the White Paper termed the Rooppur Nuclear Power Plant as a misadventure and overpriced, as the unit cost of power produced by the plant stands at $5,500/kWe, which is much higher than a similar power plant in India. With the same kind of investment, 6,000 to 8,000 MW of renewable, gas, or coal power plants could be installed. The cancellation of the act is a major step towards reforming a sector that was designed for corruption, but the government needs to revisit the decision to consider all action taken under the act as ‘legally done,’ because it allows activities under some unfair and environmentally hazardous deal to continue.

The government should, under the circumstances, consider revisiting the business and trade agreements secured through political favouritism, nepotism and other unfair means, evading due process under the recently repealed energy sector indemnity law, and bring all errant government officials and others involved in the illicit transfer of public money to private pockets.​

 

[Saif]

NBR grants 15-year tax exemption for new renewable plants

With the objective of facilitating clean energy generation, the National Board of Revenue (NBR) has granted a 15-year tax benefit for investments to establish renewable energy-based power facilities..The revenue authority issued a circular in this regard on November 27, saying it would exe

www.thedailystar.net

NBR grants 15-year tax exemption for new renewable plants

With the objective of facilitating clean energy generation, the National Board of Revenue (NBR) has granted a 15-year tax benefit for investments to establish renewable energy-based power facilities.

The revenue authority issued a circular in this regard on November 27, saying it would exempt all taxes on income from renewable energy projects if the plants start commercial production between July 1 next year and June 30, 2030.

A full tax exemption will be applicable for the first 10 years after starting production, according to the circular.

Half of the income will be tax-exempt for the following three years while 25 percent will be exempt for two years thereafter, the circular added.

The producer or the company will require a no-objection certificate from the Ministry of Power, Energy and Mineral Resources to avail of the benefit, it added.

Officials said the tax benefit was offered in line with a request from the Power Division to encourage private investment in clean energy ventures and cut dependence on fossil fuel-based electricity.

The NBR has previously offered tax breaks for privately-run power plants, except for coal-fired ones.

In June 2023, it provided a 12-year extension to a tax holiday on the income of private power plants, except for coal-fired ones, that started electricity generation before June 30, 2024.

On August 27 this year, the interim government cancelled 42 power plant projects, including 37 renewable facilities, with a combined capacity of around 3,102 megawatts (MW).

It announced that it would float tenders against all of those power plants, aiming to reduce tariffs.

Currently, the country has 893 MW of power generation capacity from renewable sources, accounting for about 3 percent of total capacity.​

 

[Saif]

Govt yet to decide on raising energy prices

The interim government is yet to decide whether energy prices will be increased, said Muhammad Fouzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources.

www.thedailystar.net

Govt yet to decide on raising energy prices

Photo: Collected

The interim government is yet to decide whether energy prices will be increased, said Muhammad Fouzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources.

Khan said he was not the authority to raise gas price and proposals have been sent to Bangladesh Energy Regulatory Commission (BERC) for further consultation, while views must also be availed from industry people.

This is a conflicting issue because the industries need gas, but at the same time the government also needs to reduce the subsidy burden, he said.

The adviser was responding to a query of a journalist at a roundtable on "FDI Ecosystem to Boost Sustainable Economic Growth" organised by the American Chamber of Commerce in Bangladesh (AmCham) at The Westin Dhaka on Monday.

Businesspeople from both America and Bangladesh, government high ups, diplomats, leaders of different business chambers and trade bodies and experts attended the roundtable.

The adviser said he was not the authority to raise gas price and proposals have been sent to the BERC for further consultation

The industry people, especially spinning mills, have been complaining over the last few years about inadequate gas supply severely affecting production, causing most to run at just 50 percent capacity.

Bangladesh has been having to import liquefied natural gas (LNG) as local supplies of natural gas can hardly meet the demand of industrial units.

There is no easy solution when it comes to gas prices and supplies may not improve in the short- term, but there are plans to import more LNG to meet industrial demand, said Khan.

Many suggest increasing supplies to industrial units by limiting that to refuelling stations and homes, but that will put transportation and cooking in difficulties, he said.

The LNG is imported at Tk 70 per unit and sold at Tk 30 to industries, for which Tk 30,000 crore has to be paid a year in power sector subsidies while Tk 20,000 crore in gas supply, he said.

Some bottlenecks within the government must be removed to attract more foreign direct investment (FDI), said Lutfey Siddiqi, the chief adviser's special envoy on international affairs.

He said they were working with various ministries and regulatory bodies to develop a culture that supports foreign investment, not as regulators, but as facilitators, according to a statement from AmCham.

The statement quoted both Khan and Siddiqi as saying that the business community would soon be able to avail a better One Stop Service (OSS) portal of Bangladesh Investment Development Authority, which would help resolve current grievances.

The duo encouraged business to continue to share their challenges and suggestions to foster a more conducive environment for FDI.

Eric Walker, vice-president of AmCham and president of Chevron, Peter D Haas, strategic adviser at Excelerate Energy and former US ambassador to Bangladesh, and Md Habibur Rahman Bhuiyan, country manager of Excelerate Bangladesh, also spoke.​

 

[Saif]

Renewable energy sector gets a boost

Much to the delight of the countrymen, the government has started working to bring necessary reform to the energy sector as is evident from the annulment of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 that has earned the notoriety of being a 'black law' for g

thefinancialexpress.com.bd

Renewable energy sector gets a boost
Sarker Nazrul Islam
Published :
Dec 03, 2024 23:32
Updated :
Dec 03, 2024 23:32

Much to the delight of the countrymen, the government has started working to bring necessary reform to the energy sector as is evident from the annulment of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 that has earned the notoriety of being a 'black law' for giving immunity to deals suspect of gross financial anomalies under it. It may be remembered that the High Court on November 14 declared the immunity provision (Section 9) of the law 'illegal and unconstitutional'.

According to an FE report, the interim government has also unveiled a plan that includes transition from the indemnified Independent Power Producers law that allows only private-to-public electricity business to a mechanism called merchant power plant policy that provides for business-to-business electricity trade. This transition is expected to boost the highly critical development of renewable energy sector.

It is known to all that the greenhouse gases emitted from burning of fossil fuels are responsible for global warming and its adverse impacts on earth's climatic condition. Although green energy from renewable sources is universally recognised as a way out of global warming, the Hasina government had a different idea. It gave lip service to green energy mainly for its self-aggrandisement. This is why instead of 10 per cent of power-mix target by 2025, Bangladesh has achieved a meagre 3.2 per cent installed capacity and 1.8 per cent generation capacity. These prove the past government's lack of seriousness about renewable energy.

Power, energy and mineral resources adviser of the interim government Muhammad Fouzul Kabir Khan revealed on Saturday that the government is working out a new renewable-energy policy with provisions for helping the sector flourish. Nullifying the previous government's false claim about shortage of land and fund, the energy adviser informed that the policy in the offing will not only facilitate funding but also provide vital infrastructures like installation sites and connection to the transmission line. Private renewable energy producers will be able to use these facilities in exchange for a minimum charge. Under the policy of business-to-business electricity trade, the producers will have to find their own customers while the government will purchase a minimum 10-20 per cent of power from such plants. A salient feature of the coming policy is that it will bring an end to the previous government's informal loan approval during lunches or dinners without going through rigorous evaluation and at the same time will ensure offering renewable power generation contract through open tender so that genuine businessmen get the opportunity without having to grease the hands of the high-ups. Meanwhile, as an additional encouragement, the tax exemption for renewable energy-based power plants has been extended up to 15 years. According to the FE report, the power plants starting commercial production between July 1, 2025 and June 30, 2035 will be eligible for the tax benefits.

However, to achieve the target of 30 per cent renewable energy by 2030, the key challenge will be mobilisation of finance amounting to Tk876.57 billion for the next six years. But stakeholders consider mobilisation of fund possible through what they term a comprehensive mechanism including budget allocation, tax exemption and long-term soft loan from public and private financial institutions. Banks' reluctance to providing fund for the green energy promotion should also be removed to facilitate development of this important sector.​