Solar power the saviour
Bangladesh could generate 6,500 megawatts of solar electricity in the next three years if the country invests $11 billion in solar instead of importing LNG from the spot market at the same cost, said global energy think-tank Ember.
At the same time, the investment in green energy could save the country $2.7 billion and reduce its dependence on LNG (liquified natural gas) by 25 percent, the London-based group said in its recent analysis on Bangladesh's energy security.
Bangladesh is committed to ensure 40 percent of the energy from green sources by 2041 as outlined in the Mujib Climate Prosperity Plan published in 2021.
Highlighting the case of India, Ember said India was building solar power plants spending $560 million for each gigawatt. Assuming 50 percent more project cost in Bangladesh, around 6.5 gigawatt could still be installed with $11 billion, which Bangladesh might have to spend on spot market LNG purchase in just three years.
"Bangladesh can turn the current power crisis caused by the spiralling gas prices into an opportunity. Redirecting its efforts to ramp up renewable energy capacity and grid augmentation investments now can solve so many problems," said Aditya Lolla, senior electricity policy analyst of Ember, in the analysis published earlier this month.
Such an approach will embolden Bangladesh's stance in climate change negotiation. It will also reduce the country's reliance on expensive LNG imports, offer protection from global fossil energy price fluctuations, reduce the fiscal burden on the government and improve overall energy security, the report said.
Ember data show electricity demand in the country saw a rise on an average of 8 percent annually. Of the demand, 62 percent was met by gas power, while its renewable energy production accounted for only 1 percent of the country's total power generation.
"The Mujib Climate Prosperity Plan published in 2021 laid out ambitious solar targets. Had this plan been fully implemented, additional solar generation could have reduced these imports by 25 percent between 2022 and 2024, saving about $2.7 billion," Ember's report said.
Bangladesh's Energy and Mineral Resources Division data show that by financial year 2021-2022, LNG imports accounted for 22 percent of the country's total gas requirement.
On the other hand, IEEFA's (Institute for Energy Economics and Financial Analysis) recent analysis shows about 59 percent of its LNG imports come from the spot market, exposing the sector to volatile prices.
Before the government decided to stop purchasing liquified natural gas from the international spot market in June, Petrobangla was supplying over 3,000 mmcfd (million cubic feet per day) gas to the national grid. The portion of LNG was over 770 mmcfd on average in June, which stood at 470-480 mmcfd since July.
Recently, the LNG price on the spot market has decreased, standing at under $40 per MMbtu (metric million British thermal unit) now, according to Petrobangla officials.
Petrobangla Chairman Nazmul Ahsan told The Daily Star that they were not thinking about buying LNG from the spot market again until the price came down.
"The share of LNG from the spot market is about 10 percent of the total supply," he said and hoped that there would be no need to buy LNG from the spot market in the near future.
In 2021-22, the government spent Tk 7,614 crore to buy the 10 percent LNG from the spot market, whereas the 75 percent local gas production cost only Tk 5,196 crore, according to Petrobangla data.
In 2021-22, the government imported 18 shiploads of LNG from the spot market against its plan for importing 30 cargoes.
Contacted, Mir Mohammad Aslam Uddin Khan, deputy chief information officer of the energy ministry, told The Daily Star that currently the share of solar power production is 971 megawatts in the country.
"But we have more than 4,000 megawatts in the pipeline. The problem we face when planning for solar power is scarcity of land. Many initiatives linger due to land shortages. As the potential of solar power is abundant in the country, we are looking for a way out to solve the land crisis," he said.