West will ultimately switch to renewable energy

In the very short term, i.e. as long as the Ukraine war continues, the world may incline towards fossil fuels and nuclear energy to cope with the current energy crisis triggered by the conflict between Russia and the West.

In the process, some European countries will turn to the nuclear and fossil fuel based power plants that they abandoned a while ago and reopen those. 

However, in the mid- to long-term, the West, especially Europe, will definitely switch to renewable energy. The case of the US is a bit different; they are comparatively more self-sufficient in energy. They have their own gas, which is also cheap, although they import oil.

But the rest of the world – Japan, Korea, Taiwan and others – which are more dependent on importing fossil fuel, will continue using their current source but at a higher price. They are having to increase the tariff domestically, and cut down the usage. This is how they have to cope with the crisis.

Bangladesh's choices are rather limited. Our power plants run on gas, oil and coal. We cannot switch to renewables overnight. Solar energy will not help us much at night because our storage capacity is not advanced.

But still, efforts may be put behind renewables for power supply during the day, some incentives may be handed out, and some factories and others may become more interested in such energy sources due to the high price of fossil fuel electricity. 

Although on paper our power plants have a 22 gigawatt (GW) production capacity, last summer we produced close to 14 GW electricity. This year, the demand is expected to rise to at least 15 GW, since the economy is recovering. Therefore, we cannot afford to abandon any of the fossil fuel plants.

On 21 March, the prime minister will inaugurate the full 1,320 megawatt (MW) Payra coal-powered power plant. In May last year, the price of coal was $80 per tonne, which has now become $412-420. So the price has increased five times. Relatively, oil price has hiked less. Crude oil price is now under $100 per barrel.

The price of oil may slump further as far as the war does not spread any further. If the war spreads, the price may reach $150-200. The gas price, however, is not expected to come down soon.

In the case of renewables, the private sector in Bangladesh should give more emphasis on it than the government. Industries should come forward and under corporate social responsibility, they can set up renewable power sources, which will serve society as well.

Net metering is now available in the country, so if the factories invest more in renewable energy, they can save money and at the same time help the country spend less on fossil fuels.

Although most of us are not the participants of the ongoing Russia-Ukrainian war, we are victims of it, and the world economy has been devastated due to it. 

Inflation is rising globally; in our country it is reaching double digits. In this context, conservation is very crucial. The less power we can consume, the better. Just like when we reduce consumption of essentials at our homes when prices soar, the same way, we'll have to cut unnecessary use of electricity. 

Also, we'll have to improve efficiency. With older plants, one unit gas can produce half unit electricity, but with newer technologies, the production can be doubled. There are many ways through which we can conserve power: we can set our air conditioning systems at a higher but comfortable temperature (25-degree C and 55% humidity is most comfortable) instead of turning the room into a polar region.

In the coming days, everyone will have to act responsibly in using power, and the government should run campaigns to that end.
Subsidising the energy sector will depend on how the government reads and analyses the economic and political impact of a fuel price hike. In an earlier study, we've seen that with a 50 % price hike of energy, GDP growth can fall by 1-2.5%. 

We hope that the war will stop soon, but in the meantime, we should not go for further price hikes of energy which have been on the table, and rather observe the situation closely. Subsidies will surely hamper development projects, but people's survival is the first priority. The prices of energy and essentials need to be maintained on a par with people's purchasing power.

Dr M Tamim is a professor of Petroleum and Mineral Resources Engineering, Buet