The Bangladesh Energy Model Board (BPDB) can save Bangladesh Tk13,800 crore ($1.2 billion) of annual losses, funded by executive subsidies, by means of electrical energy sector reforms collectively with focusing extra on renewable sources and limiting distribution losses, based fully mostly on a most as a lot as date document of the Institute for Vitality Economics and Financial Prognosis (IEEFA).
The document highlights that Bangladesh can develop the savings by transferring half of the commercial ask, met by captive mills, to the grid, adding 3,000 megawatts (MW) of renewables, decreasing loadshedding to 5% from the fiscal 2023-24 level and limiting transmission and distribution losses to 8%, reads an announcement.
“With the reserve margin hovering round 61.3%, Bangladesh’s vitality sector has an overcapacity area which contributes to the BPDB’s persisting subsidy burden. No topic a chain of vitality tariff modifications, the hefty earnings shortfall and subsidy allocation will probably persist within the foreseeable future. IEEFA’s proposed roadmap for reform suggests improving vitality ask forecasting systems by factoring within the role of energy efficiency to cut overcapacity,” says the document’s creator, Shafiqul Alam, lead analyst of Bangladesh Vitality, IEEFA.
“Our roadmap recommends limiting new investments in fossil fuels-based fully mostly skills while selling renewable energy deployment. Extra, it suggests modernisation of Bangladesh’s electrical energy grid to wait on industries to shift to grid vitality as opposed to operate gas-based fully mostly captive crops and minimise load shedding. We discover that taking such fixed actions can inspire cut the sector’s subsidy burden,” he provides.
The document finds that all the blueprint by means of the fiscal one year 2019-20 to FY2023-24, the BPDB’s total annual expenditure increased 2.6-fold in opposition to earnings boost of 1.8 cases, prompting the manager to allocate a mixed subsidy of Bangladeshi Tk126,700 ($10.64 billion) to make certain vitality offer to retain the economy afloat. Yet, the BPDB recorded a cumulative lack of Tk23,642 crore ($1.ninety nine billion).
In FY2023-24 on my own, the manager gave a Tk38,289 crore ($3.22 billion) subsidy to the BPDB.
In whisper to yelp the subsidy burden down to merely about zero, Alam recommends guaranteeing industries fully count on the national electrical energy grid. “Moreover, the country must serene gradually transition to electric programs from gas-pushed dwelling equipment, love boilers. This will inspire expand the BPDB’s earnings from selling extra energy while decreasing skill funds to lazy crops,” stated Alam.
“The window to function Bangladesh’s vitality sector sustainable is suddenly narrowing, but there is serene time to rep the sector inspire heading in the right direction by following a accurate roadmap,” he provides.
Because the principle step of the reform, the document calls on the manager to forecast vitality ask from 2025 by factoring in energy efficiency good points and ask shift measures, reads the statement.
IEEFA’s projection by factoring in such variables presentations that the country’s height vitality ask in 2030 is liable to be 25,834MW as in opposition to the Built-in Vitality and Energy Master Realizing’s (IEPMP) forecast, made in July 2023, of between 27,138MW and 29,156MW.
Concurrently, the IEEFA roadmap also suggests halting funding in fossil gas-based fully mostly vitality and limiting the exhaust of oil-fired crops to 5% of total vitality skills. If these steps are taken along with the predicted 4,500MW of fossil-gas-based fully mostly vitality plant retirements, the document expects Bangladesh can cling a plan skill of 35,239MW.
“A tool skill of 35,239MW will inspire Bangladesh meet the peak ask of 25,834MW by 2030. This can yelp the reserve margins down 66.1% in December 2024 to 36.4% (collectively with variable renewable energy) and 20% (except for for variable renewable energy) in 2030. A reserve margin of 20%, except for for variable renewable energy, is comparable to international locations love India and Vietnam,” Shafiqul Alam says.
Lastly, the country can steal into consideration a conservative purpose of placing in a full mixed grid-linked renewable energy skill of as a lot as 4,500MW by 2030 to inspire cut largely costly oil-fired vitality skills all the blueprint by means of the day. The exhaust of battery storage of 500MW with a backup for 3 hours will inspire cut the operation of oil-fired crops within the night. If batteries change into less costly at some point, Bangladesh would possibly well possibly additionally unbiased steal into consideration their rising exhaust all the blueprint by means of the night height.
“On the different hand, the success of Bangladesh’s efforts to repair the vitality sector’s problems will hinge on the blueprint it makes policies extra conducive, whether it shifts focal point from GDP-centric ask projection to other factors, love energy efficiency accomplish, modernises the gird, adjusts gas tariffs to design industries to make exhaust of grid vitality and addresses the challenges of renewable energy expansion,” Alam provides.
