Energy security: What Bangladesh needs to do
Resources have been mobilised and measures have been taken over the last decade to accelerate power generation capacity of the country without paying enough attention to the energy sector development
Different countries are reeling from the Ukraine-Russia war and the following sanctions on Russia. If any lesson on the energy front we could draw from the crisis is that the global energy model is fragile.
While it is still uncertain as to how or when the Russia-Ukraine war will end, it is understandable that the serious ramifications of this crisis will be longer with far-reaching impacts.
The impacts of this war on Bangladesh is multidimensional- including the challenges in the energy and power sectors. It has only been several months since Bangladesh celebrated 100% electricity-coverage inside the country but it has already returned to the state of nation-wide load shedding after several years.
The country, despite having a total installed electricity capacity of over 22,000 MW, is serving less than 13,000 MW during the evening peak, as mentioned on PDB website on 23 July 2022. In fact, the highest electricity demand served by the national grid thus far in the country's history was 14,782 MW on 16 April 2022, reported on Power Cell website. Hence, there is a gap between the maximum demand served and the demand is currently being served.
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Furthermore, significant gap persists between the total installed capacity and maximum power generated on 16 April 2022 in the country. Apparently, the high fossil fuel price in the international markets, led by the Ukraine crisis, is to blame here for under-utilisation of the power plants and forced load shedding as the government finds it non-viable to run power plants with expensive fossil fuels.
However, there are other dimensions to look into in relation to the energy sector of Bangladesh.
For instance, resources have been mobilised and measures have been taken over the last decade to accelerate power generation capacity of the country with less attention paid to the energy sector development. The budget allocations for different fiscal years are also testament to the disparity between the power sector and the energy sector. There is no economic sense if we ramp up installed capacity with such high investment in capital and other operating issues and keep them shut due to fuel shortages.
This eventually brings forth the energy security issue. It has two dimensions – internal and external. We are too much dependent on external fossil fuels, like LNG, coal and oil. While Bangladesh is not the only country to experience the impacts of Ukraine-Russia fall-out, our dependence on imported energy has only increased over the last decade. True it is, the country has registered impressive economic growth during this period, but reliance on import with less attention on internal energy resources is now taking the toll. Depreciation of local currency against US$ and diminishing foreign currency reserves are also concerns of the country at this moment. All these have encouraged the government to implement austerity measures, like load shedding, closure of pumps for a day etc.
It remains to be seen to what extent these austerity measures would contain national energy consumption. However, as we move forward, we need to increase focus on energy security, both in terms of allocating budgets and spearheading measures, to ward off the effects of unforeseen future supply-chain disruptions, market volatility and insecurity. And we have cheap renewable energy options to explore as the internal energy security option.
Although land scarcity is a serious constraint to the large-scale adoption of solar power, available reports substantiate that rooftops of different industries could allow several thousand megawatts of solar capacity. We already have some good examples of industrial solar rooftop projects implemented in different cities. Supported by the national net metering guidelines, hundreds of industries could harness cheap solar power to meet a certain percentage of their overall electricity demand and contribute to national energy security.
Commercial buildings could also follow suit. The financial benefit that industries and commercial buildings would receive, attributable to replacing part of electricity consumption from the national grid, under the approved net metering guidelines, is more than several other countries of the South and Southeast Asia. Therefore, industries and commercial buildings should be motivated to install solar systems on their rooftops.
On large scale solar projects, we need to identify land that could be utilised without affecting agricultural production. While as much as we realise that we won't be able to find many lands like different big countries, we must start working to earmark the available land for large solar projects at the earliest. This will help assess the feasible solar power potential of the country. Alongside this, the opportunities for agro-photovoltaic and floating solar systems with net benefits shall be assessed.
As we have mentioned time and time again, for internal energy security, resources shall be allocated for local gas exploration. Otherwise, increasing reliance on imported LNG will continue to expose the country to external price shocks. These shocks may not be foreseen and are of a sudden nature but have adverse effects on the economy.
Finally, as another internal energy security measure, energy efficiency and conservation shall be pursued with specific and ambitious goals. Mandatory energy auditing and reporting of large energy consumers would help save significant energy. Additionally, awareness raising measures are imperative to develop energy saving culture in the country. One-off events will not suffice; rather, campaigns shall be carried out consistently for months. Countries like India, Singapore and others, are some good examples where nation-wide events and award programs are organised to induce behavioural change to conserve energy.
To conclude, Bangladesh must invest to enhance energy security and thus ensure resilience against the shocks, like the one that originated from the Ukraine-Russia crisis. Climate change, energy security concerns across different countries, wars/sanctions etc. may impact international fuel markets at unprecedented scale in future.
Therefore, we need to gear up local gas exploration, installation of cheap solar power systems, and efforts on energy efficiency and conservation. The time is now ripe to concentrate on energy security instead of only electricity security. And whatever we do on the energy security front, we must try to do better than what we did in the past and avoid the needless wastage of resources.
The author is an environmental economist. He is a Clean Energy Fellow of the National Bureau of Asian Research, USA)
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.
