Renewable power development with incentives
THE government's target for generation of 5% of our total electricity from renewable sources within 2015 is indeed a challenge. Approximately 500 MW electricity generation target within 2015 has been proposed. As planned, approximately 340 MW power from solar parks, solar irrigation, solar mini-grid, solar rooftop will be generated from commercial solar power projects within 2015. The published data indicates that so far nearly 2% of the total generated power in the country is being produced from renewable sources excluding hydro power. Including Kaptai Hydro 230 MW (installed capacity), approximately 360 MW renewable power generation capacity has been installed in the country.
The chairman of Bangladesh Energy Regulatory Commission (BERC) says that the renewable energy development in the country will not thrive without subsidies and guaranteed long-term package incentives. Stakeholders have been urging the government to introduce 'feed-in tariff' (a tariff structure which guarantees the renewable energy producer a long-term contract with electricity tariff rate higher than the existing retail market rate. Feed-in tariffs also offer cost-based compensation to renewable energy producers, providing price certainty and long-term contracts that help finance renewable energy investments) for generation of power from renewable energy sources.
The state minister for power, energy and mineral resources confirmed in a seminar on April 13 in Dhaka that the government thinking of providing subsidies to the renewable energy sector to encourage development of power for commercial uses in the country. So far, solar energy and wind energy sources have been receiving primary attention as potential commercial resources. It is estimated that approximately 2.8 million solar home systems have been installed in the country, and their cumulative power generation capacity is 115 MW electric power.
In the meantime, the Renewable Energy Policy 2008 has been revised and the revised draft has been circulated for obtaining public opinion and suggestions. The power division of the government in association with the Energy and Power magazine and GIZ organised a roundtable discussion meeting on April 13 involving major stakeholders on the revised Renewable Energy Policy 2014.
BERC has been working on 'feed-in tariff' structure to be offered to renewable energy producers. Experiences from India, Sri Lanka, China, Japan and many other countries of the world for renewable energy development in the recent years have encouraged the Bangladesh government. India is generating more than 17,000 MW of electric energy from solar sources and more power is expected from the same sources in the near future. Only rooftop solar power contributes approximately 1,000 MW in India now. On average, renewable (excluding hydro) energy contributes 12% of the total power generation mix in India. Germany expects 35% share from renewable sources within 2020. But the Germans pay highest amount of electric power bills per month in comparison with other nations in Europe.
Development partners like Asian Development Bank, USAID, World Bank, GIZ also render support and encourage the government to focus on harnessing commercial energy from renewable sources. Published reports say that the power division of the government has started collecting wind energy related data to assess the possibilities of commercial wind farm development for power generation. In this regard, a number of potential locations have been identified for wind and solar power generation through commercial projects. More studies are ongoing for wind resource assessment at different potential sites at different heights. A wind map production initiative is underway. The draft Renewable Energy Policy 2014 included a number of incentives for potential investors both for solicited and unsolicited offers.
Although the promotion of renewable energy, including assurance for guaranteed purchase of generated power produced from renewable sources, have been a key point in the Renewable Energy Policy 2014, the power sector utilities like Bangladesh Power Development Board (BPDB), Rural Electrification Board (REB) said that they could not assure purchase of total power to be generated from renewable sources, specially by the private entrepreneurs. The utilities want creation of a special fund for compensating the losses the utility companies would incur due to guaranteed purchase of power from renewable sources at a rate higher than the prevailing conventional power prices.
The draft Renewable Energy Policy 2014 assures investors that the government would accept any proposal for power generation from renewable sources without tender (unsolicited proposal) within a guideline for price fixation. Therefore, it is important that the entrepreneurs in the renewable energy sector not be required to shuttle endlessly for an agreement with the public sector utilities for agreeing to buy the produced power. In addition, the power evacuation system development timeline should synchronise with renewable power project developments and commissioning. Again, the pace of public sector power transmission infrastructure building has to be confirmed while agreeing to a power purchase agreement with renewable power generators.
The writer is a mining engineer.
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