Where is the Sense In Using Solar Power in Bangladesh ? By Shabbir A. Bashar shabbir_bashar@yahoo.com The Daily Star reported on the 14th December, 2009 that a local Bangladeshi renewable energy company has been tasked with setting up solar power supply to Bangladesh Bank at a cost of Tk 1 Crore for a system with a capacity to deliver 20 – 25 kW. I would like to questioon the wisdom of this investment based on current energy cost in the Bangladeshi market, the current cost of such a system in the global market and the life expectancy of such a system and ask whether it makes any technological or economic sense in the context of Bangladesh's current and medium term energy needs.
Energy Bangla, an internet based energy related information website (www.EnergyBangla.com) reports that the cost of electrical energy to the Bangladeshi consumer is Tk 5.50 per kilowatt hour. This agrees well with what I am now paying (US$0.08) for my personal use here in the United States and gives me confidence that their figures are accurate. If we assume that the consumers (banks and government offices) operate 8 hours a day, 5 days a week, 48 weeks a year, their yearly electricity bill per 22.5 kilowatts (median capacity of the system) comes to Tk 2,37,600. Dividing the capital cost of the reported solar power system by this figure gives us the number of years it will take for the investment to pay for itself: 42 years.
In my calculations I have not accounted for the inevitable maintenance cost of the system – particularly the storage batteries and associaated inverters and transformers that are required for converting the direct current (DC) output of a solar cell to alternating current (AC) before it can be used in most office appliances. If those costs are added, the payback period will be even longer. Also, there will be days during the year when the solar system will not be able to deliver to its full specified capacity due to cloud coverage and rainfall. This will further prolong the time. I would recommend that the curious amongst your readership Google search the cost of a solar energy system as a whole to verify the statements I have made. Personally, I found the website of GreenEcon (www.Greenecon.net) – a site that is dedicated to understanding the economics of solar and other alternative energies - to be a good first reference stop.
A study published by Rezwan Khan et al of Bangladesh University of Engineering and Technology in 2002 reveals that the daily average sunlight hours in Bangladesh ranges from 10 to 7 for summer and winter and respectively; they further reduce this by 54% (or 4.6 hours of peak sunlight) to account for rainfall, cloud, fog and dust over the solar panels. For comparison, here in the United States , a country which is a further 20 degrees north of the equator and therefore subject to greater daily and seasonal variation, the peak sunlight hour is about 3.5. Typically, there is another 10% efficiency loss during the DC to AC conversion – so the nominal (median) 22.5kW capacity now droops to 20kW.
Multiplying the 4.6 hours of peak sunlight per day by the 20kW, this system will deliver approximately 92kW hours of electrical energy per day or 33,507 kW hours in 365 days. The lifespan of one of today's solar power systems is approximately 20 years; therefore, in 20 years, the reported system it will deliver 670 megawatt hours of power. Dividing 670MW Hour by its cost of Tk 1 Crore, we get a cost of Tk 15 per kilowatt hour. In comparison, the energy derived from coal is 42 paisa per kilowatt hour; from oil it is Tk 3.50 and from gas it is Tk 2.10 per kilowatt hour respectively.
The typical breakdown of a solar system is as follows: 63% for solar panels; 25% for batteries; 9% for DC to AC converters and 3% for installation in Bangladesh . I have reduced the installation and engineering costs for installation to reflect the cheaper local labour market. In the United States installation costs are actually 16% of the total cost. With advances in manufacturing technology, the production cost of solar panels will drop – taking advantage of econommies of scale. Similarly, with research and development (R&D) in the solar cell design and improvements in material science, the typical efficiency is set to rise from the 15%. Both of these require capital investments to the tune of billions of dollars per year.
While the United States and Europe (Germany in particular) are some of the biggest R&D contributors, China has been taking manufacturing to the next level. In fact, many Chinese companies have recently come over to the US to manufacture the panels locally so they can penetrate the north American market.
What is Bangladesh's technological contribution to all this? Frankly, I don't believe it is the right time for Bangladesh to be the consumer of this immature technology but rather focus on it's components which are labor intensive where it can clearly play an advantageous role by creating an exportable product such as fully assembled panels and functioning system including the batteries and the converters – all of whicch Bangladeshi engineering companies are capable of doing.
Let's also look at the space requirements of a solar panel. A square foot of solar panel produces approximately 10 watts of power. The reported system will thus occupy no less than 2,250 square feet of space or size of a spacious apartment block. What utilities can be run on 22.5kW? A typical office with n air conditioner, couple of light bulbs and a computer will easily consume 1.5kW. Thus the investment of Tk 1 Crore will only be sufficient for 15 offices. The local renewable energy company representative boasted that up to 500 megawatts of solar power can be produced by 2015; this will require 50 million square feet of space that is open to direct sunlight – orr the equivalent of approximately 430 football stadiums.
What about Bangladesh's future? According to International Energy Agency (IEA) and World Bank data for 2005, the per capita energy consumption in Bangladesh is 1230kWhr; the figure for India is 3,860kWhr, for Thailand it is 14,570kWhr, for UK it is 48,650kWhr and for the USA it is 99,620kWhr. If we consider the per capita energy consumption as a reasonable indicator of a country’s productivity, it would be obvious that in order to transition from a traditional agrarian economy of a poor developing nation to that of an industrialized middle income country, Bangladesh needs to build its energy capacity by a factor of 10 to 20.. In other words, it needs to drastically increase its production from 1830 megawatts per hour in the next 5 to 10 years. Given this reality, if the future needs and aspirations of the country were to be met by solar power alone, this would require panels that can deliver 27,400 megawatts per hour. The space requirement for these would be almost a thousand square miles; given the habitable land space (say 75% of the official 55,600 square mile area) and a population of 160 million, Bangladesh has a population density of almost 4000 people per square mile. These solar panels will take away the space that would otherwise be available for 4 million people. It will cost Tk 1.2 million crores – equivalent to US$ 1774 trillion or 15 times the current US national debt!
The obvious questions that to come mind are as follows: (a) why is Bangladesh investing its tax money in a technology that costs about 7 times more than conventional energy? (b) What is the logic in capital investment in a product whose life expectancy is half (20 years) of the pay back period (42 years)? (c) Given that Bangladesh does not have the ability to manufacture solar panels (which forms 63% of the total cost), isn't this tantamount to losing valuable foreign exchange which could be better spent on more immediate needs such as upgrading the national grid transmission lines in order to build power distribution capacity? (d) the local renewable energy company is also supplier of the batteries that are required for which they provide a warranty of only two years; since these batteries constitute 25% of the Tk 1 Crore cost, who will pay the additional Tk 12.5 Lakhs per year (or Tk 5.3 Crore over 42 years)? The economic logic just starts to crumble and the picture starts to appear very crooked.
At this point it makes no economic or technological sense for Bangladesh to embark on wholesale solar power based energy production. The economics of solar cells as they are, make such a system wholly unsuitable for one of the most densely and yet at the same time one of the poorest countries of the world like Bangladesh .
Shabbir A. Bashar, PhD
Vancouver , USA
Shabbir Bashar holds a PhD in Electrical Engineering and has several patents to his name. He has been working in the UK and US photonics device related industry for the last 15 years. http://newsfrombangladesh.net/view.php?hidRecord=298137 ---------------------- Solar power to light up BB Rahimafrooz Renewable Energy tasked with the Tk 1cr job After allocating a Tk 200-crore low-cost revolving fund for refinancing banks' green power projects this year, the central bank will now set example for the banks by installing a solar power system at its headquarters.
Rahimafrooz Renewable Energy Ltd (RREL), the largest solar power system provider in the country, has already been selected as the lowest bidder for the project."Bangladesh Bank is expected to install the system in one month," said Governor Dr Atiur Rahman. Rahman hoped the BB move would encourage the commercial banks to go for green power systems in their respective offices soon.
According to RREL officials, the system with a capacity of generating 20-25 kilowatts will cost the BB over Tk 1 crore. Earlier, RREL had installed a solar power system at the Prime Minister's Office at a cost of around Tk 99 lakh.
Energy sector people have hailed both the initiatives.They said such moves are indicative of the government's seriousness about increasing power generation through renewable sources at a time when conventional energy sources such as gas and coal are becoming scarcer.
The government has decided in principle to install solar power units in all public and semi-government offices to promote expansion of renewable energy.It has also set a vision for generating power from the sun, wind, biomass and biogas with an aim to meet 5 percent of the country's total power demand by 2015, and 10 percent by 2020.
Currently renewable energy contributes less than one percent to overall power generation in the country, with solar home systems being installed mainly in off-grid areas and leading the green energy segment.
More than four lakh homes across the country have now been powered by solar energy with a capacity of generating over 20 megawatts of electricity, according to state-owned Infrastructure Development Company Ltd.The central bank governor said: "I urge all banks to install solar power system to save conventional power for industrial use."
Niaz Rahim, chairman of RREL, termed the BB initiative a good move for further expansion of solar power system in the country.He said solar energy would be able to generate 500 megawatts of power by 2015 in Bangladesh.Eastern Bank Ltd, a private commercial bank, has already shown interest to install solar power system at its head office."We have requested quotation from RREL for installation of the solar panel at our head office," said Ali Reza Iftekhar, managing director of the bank.
sajjad@thedailystar.net http://www.thedailystar.net/story.php?nid=117681 |