Why we owe renewable investments to our future generations

Bangladesh has a vision of generating 40% of its energy from renewable sources by 2041. Photo: TBS

This month, countries will gather at the United Nations climate conference for a global stocktaking on how far they have made progress on their commitments under the Paris Agreement to reduce greenhouse gas emissions. 

As a champion of the global fight against climate change, Bangladesh, too, commits to contributing to reducing GHG emissions. And though the country's per capita GHG emissions of just 0.6 tonnes is far less than that of the developed world, it needs to undergo an energy transition for reasons beyond climate change. 

Let me be clear that the transition to renewable energy is not only about decarbonisation or phasing out fossil fuels. There are a few other compelling reasons for that change as well. 

The first and foremost reason is to harness renewable energy to ensure energy security. There was a time when our gas reserves would supply almost 90% of our energy needs, and we did not have to care about the international fuel market. But as our gas reserves depleted and our energy needs increased due to economic growth, we became increasingly dependent on imported fuels like oil, gas and coal. 

Dependency on imported fuel spells trouble for a developing country like ours, as unforeseen events like the Ukraine war usually leave fuel prices spiralling out of control. Despite Bangladesh's surplus power generation capacity, it had to shut off some of its power plants as it could not procure enough fuel. 

As spot market prices become unaffordable during crises, even long-term contracts cannot ensure a steady supply, as suppliers seek windfall profits by selling to the highest bidders. Importing fossil fuels at unexpectedly higher prices has dramatically depleted our hard-earned foreign currency reserves. This has affected the exchange rate of the Taka, the credit rating of the country and the ability of all sectors of industry, particularly import-dependent sectors, to carry on their operations. 

Developing renewable energy capacity can save us from the uncertainty of global energy market volatility. Once installed, a solar or wind energy system can last two to three decades without any ongoing fuel costs. 

Beyond the installation costs, the tariff decided at the beginning of a renewable energy project will apply throughout its lifetime because the prices of sunshine and wind do not zigzag with geopolitical turmoil. 

Renewable energy is becoming the cheapest energy source, as solar power is now priced at 10 cents per unit, which is lower than the per unit cost of coal, oil, or LNG. Solar panel conversion efficiency has risen from 14%, which was the case ten years ago, to 23% now and will keep improving, requiring less land and costs of generation. 

The world is now racing toward the transition to renewable energy, with solar energy alone contributing to more than 1,200 GW out of the total global energy generation capacity of around 7,500 GW. Countries are notching up their ambitions, setting targets and breaking records. 

For example, India set a plan in 2010 to develop 20 GW of solar energy capacity by 2022, according to Jawaharlal Nehru National Solar Mission (JNNSM), and this target was upgraded in 2015 to 100 GW by 2022. Despite the COVID pandemic, India has already achieved 70GW of installed capacity from solar energy. 

Another developing country, Vietnam, has strategically harnessed feed-in tariff support for expanding rooftop solar power and developed 9,500 MW in 2019-20 alone. Last year, 84% of all new power generation capacity installation worldwide was based on renewables, and this share is only set to grow.  

Bangladesh, too, has underscored its ambition for developing renewable energy. In COP-26, our Prime Minister declared the country's hope to have 40% of our energy from renewable sources by 2041. As early as 2008, we formulated a renewable energy policy where we set the target of 5% renewables share by 2015 and 10% by 2020 in our power generation. 

However, we could not attain the targets without a clear roadmap backed by solid initiatives. As the government is now reviewing the renewable energy policy, it should provide a roadmap outlining how much, where and from which sources this renewable energy will be generated. 

A fundamental problem is the inconsistent aims and efforts across national policy documents. The draft Integrated Energy and Power Master Plan (IEPMP), for example, seems to lack a clear target on the share of renewable energy in the future energy mix, bundling renewables with "clean energy" sources like nuclear, waste to energy, ammonia, hydrogen and carbon capture and storage technology. 

Such ambiguity in specifying proper modern renewable energy technologies goes against the grain of our 2041 vision. It allows the entry of unproven technologies, which attempt to decarbonise an increasing share of fossil fuel-based plants and extend their lifespans at a higher cost instead of transitioning to cheaper modern renewables. Moreover, there should be one renewable energy target across all policy documents. 

To be a developed country by 2041, we will need around 60GW of installed capacity for electricity generation, according to the Power System Master Plan 2016. Going by our Prime Minister's vision of 40% energy from renewable sources by 2041 is not an impossible goal. 

People raise two objections against our renewable ambitions – land scarcity and the variability of renewable energy. Land scarcity is a misconception not backed by any proper study. Without hurting agriculture, we could generate more than 12 GW of solar power by earmarking a part of the space of the existing industrial rooftops and in the planned 100 economic zones. 

A recent World Bank study has shown more than 15,000 acres of barren land in the Islampur upazila of Jamalpur district, where around 5 GW of solar power could be produced. Meanwhile, better storage capacity and investing in a smart grid can tackle the other oft-cited challenge of variable generation. 

The main obstacle is the mindset. We should make an all-out effort by offering encouraging tariffs to attract private sector investment and waiving prohibitive taxation like the 38% import duty on inverters. Eliminating these duties on solar components will save precious dollars for imported fuels. Developed countries should gear up their support per their promised $100 billion yearly for climate action.  

Bangladesh has seen transformative change by realising round-the-clock electrification in remote areas so that children can stay up studying at night, small industries can sprout up and people can gain greater mobility on electric transport. 

The next step for us is to ensure sustainable electrification with renewable energy. Investing in fossil fuel capacity may burden the country with stranded assets in the coming years. At this juncture, investing in renewables is an endowment that we owe to our future generation so that they can live in a world of clean energy and energy security. 

Shahriar Ahmed Chowdhury is the Centre for Energy Research Director at United International University.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.