Govt. plans 6000MW solar power hub in Jamalpur
New policies are being formulated to reduce tariffs on imported technology and components to promote renewables, especially through rooftop solar panels. These policies are to be introduced soon through Statutory Regulatory Orders (SROs),” he said in a roundtable on rooftop solar projects, jointly organised by The Business Standard and Infrastructure Development Company Limited (IDCOL) yesterday.
Nirod Chandra said the World Bank has concluded a feasibility study for setting up the hub on 20,000 acres of land along the Jamuna River in Islampur, Jamalpur, yielding positive results.
“They have assessed critical environmental factors and received favourable feedback. We anticipate generating 5,000-6,000MW of electricity solely from this char area in Jamalpur,” he said.
Additionally, the Bangladesh Economic Zones Authority (Beza) expressed interest in establishing another solar power hub in select regions of Haimchar, Chandpur, he said.
Saying renewable energy generation is not a hurdle, Nirod Chandra said the challenge lies in effective management. Efforts are underway to develop storage solutions at competitive prices in hopes of resolving these issues. Read More
He expressed confidence that by gradually phasing out power subsidies, people will increasingly turn to renewable energy sources due to their relatively lower costs.
Regarding rooftop solar initiatives, the secretary said the power ministry is facilitating such initiatives. Plans are underway to address concerns related to rooftop solar installations promptly.
Nirod Chandra discussed the circular issued by the Power Division on net metering, noting existing ambiguities.
Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid.
“Efforts are directed towards clarifying ambiguities such as single-phase metering and the 70% capacity barrier. Adjustments, including lifting the 70% restriction on solar grid capacity and the 10 MW limit on generation/supply, are being considered for removal,” said the joint secretary for power.
He said, “If someone possesses a large roof space that is not utilised for their own needs, we will consider implementing an Independent Power Producer (IPP) project.”
The Dhaka University has already executed an IPP project for generating 3.5MW. This endeavour encompasses the rooftops of 72 buildings within Dhaka University, with the Bengal Group overseeing the project. The government is fully committed to extending support for rooftop power initiatives, with the prime minister expressing enthusiasm for these initiatives, Nirod Chandra said.
Regarding hydrogen energy, he expressed scepticism due to its inherent complexities, saying, “While hydrogen generation is feasible, its conversion into electricity presents formidable challenges.”
The Integrated Energy and Power Master Plan places substantial emphasis on rooftop power projects, targeting a production capacity of 12,000MW by 2050. Numerous universities are actively engaged in rooftop projects, with directives issued for the installation of rooftop solar panels on government buildings, said the joint secretary for power.
Nirod Chandra identified the primary obstacle hindering rooftop solar adoption as utility providers, attributing this to the disparity between their electricity rates and rooftop-generated electricity.
Distribution companies procure electricity from the Power Development Board (PDB) at a lower rate and sell it to consumers at a higher price, disincentivising their cooperation in net metering initiatives, he said.
Moreover, industrial solar projects discourage net metering to safeguard their profits. To address this issue, the government is devising strategies to incentivise utility companies to participate in net metering schemes, Nirod Chandra added.
How is IDCOL facilitating renewables?
Presenting the keynote at the roundtable, Serajul Islam, senior vice president for Renewables at IDCOL, said the production cost of 1 kilowatt of solar rooftop electricity is Tk5.5 lower than grid electricity. Consequently, consumers experience nearly a 50% reduction in their electricity bills. Moreover, consumers have the option to sell excess solar power back to the grid or utilise net metering.
He underscored the potential for 3,000-5,000MW of solar rooftop power generation within the country’s industries.
“IDCOL has already financed 60MW of solar rooftop installations, offering consumers an 80% loan. Loans amounting to Tk350 crore have been disbursed to 33 clients, with more projects in the pipeline for generating 108MW. A total of Tk1,000 crore will be disbursed for these projects,” Serajul said.
Regarding project financing, he said 80% of the project cost is provided as a term loan for 10 years by IDCOL. The first year features a principal moratorium, with only interest payments required.
Monthly payments are structured to reflect the project’s impact on the electricity bill. The interest rate is maintained at 5-5.5%, he said.
Serajul Islam said for a 1MW project generating 96,000 units of electricity, if purchased from the Bangladesh Rural Electrification Board at the current market price of 10.24 cents, the monthly cost would be Tk9.98 lakh.
However, if the same amount of electricity is generated via solar power from an IDCOL rooftop, the customer would save Tk3.92 lakh. This equates to Tk47 lakh in savings over the first 10 years. Furthermore, once the loan is fully repaid in the subsequent decade, a total of Tk11 crore will be saved, he said.
IDCOL secures funding for these projects from the World Bank and KfW Development Bank, aiming to finance 300MW of solar rooftop projects by 2025, Serajul added.
Alamgir Morshed, the executive director and CEO of IDCOL, said the organisation has been extensively involved in the country’s power sector since 1977. IDCOL has facilitated the installation of 60 lakh solar panels in areas devoid of electricity across Bangladesh. However, there is a mismatch between the conventional banking sector financing and the financing of solar projects.
“A growing economy cannot run solely on fossil fuels. Every year a large part of our foreign reserves is spent on energy. So, we need a lot of investment in renewable energy,” he said.
Aligned with government targets, Morshed outlined objectives of achieving 20% clean energy by 2030 and 40% by 2040. He underscored the potential of solar energy and emphasised the need for awareness campaigns and technology cost reduction to promote its widespread adoption.
Global adoption of renewables
Sharier Khan, the executive editor of The Business Standard, said, “Solar electricity costs previously stood at around Tk70 per unit but have since decreased significantly.”
He said the whole world is shifting towards renewable energy, noting significant adoption across countries such as America, Saudi Arabia, Australia, China, the Netherlands, and India.
Even traditionally oil-rich regions like Saudi Arabia and the Middle East are shifting towards renewables.
Sharier highlighted the inadequacy of government-produced electricity to meet growing demands, particularly evident during recent heat waves where air conditioning usage surged.
He advocated for leveraging rooftop solar panels to address residential energy needs. He cited examples such as Tesla’s utilisation of solar power for vehicle charging and the adoption of solar-generated electricity for water heating in countries like Nepal.
More govt support needed
SM Nasif Shams, associate professor and director of the Energy Department of Dhaka University, said, “Initially, there was a lot of confusion about rooftop solar, which now has subsided. Solar rooftops and greening should go hand in hand in our busy city [Dhaka]. Apart from IDCOL, other financial institutions should come forward to provide financial support for such initiatives.”
Rakibul Ahsan, head of Engineering at Naafco Pharma, said, “I am getting very smooth power support from solar energy, the quality is good too. I am using 50% solar power and getting the net metering facility at the end of the month. Seeing the use of solar power, foreign buyers are also appreciating us a lot, becoming more interested in buying our products.”
Poritosh Majumder, head of Operations at Samuda Green Energy, said, “The tariffs on imported equipment for rooftop solar installation are high, which is why solar panels in Bangladesh are still more expensive than many neighbouring countries.”
Also, there is a problem with the Rural Electrification Board regarding net metering. After giving excess electricity to the grid, a problem occurs regarding the adjustment of units. The Power Development Board and the Rural Electrification Board are not coordinating in this regard,” he said.
The Power Development Board is not helping but discouraging solar net metering, due to which industries are losing interest in installing solar panels, Poritosh Majumder added.
Mollah M Amzad Hossain, editor of Energy & Power, the country’s only energy sector magazine, said power distribution companies are discouraging industries from installing rooftop solar panels, and are less interested in providing net metering facilities. Rather, they are non-cooperating. However, foreign buyers are now pushing garment export companies to use renewable energy.
Dipal Barua, a renewable energy Specialist and councillor of the World Future Council, said, “I think the government needs to make a Renewable Power Generation Act to facilitate the renewable power generation sector.”
In the closing speech, Enamul Karim Pavel, head of Renewable Energy at IDCOL, said, “Our solar rooftop market is expanding day by day. Not only IDCOL but also other financial institutions should also come forward for financing. If we can store energy, we will reap benefits in the future.”
Mizanur Rahman, general manager (Finance & Accounts) of Naafco, Mezanur Rahman, the chief operating officer of SSREL, Shahin Azad, the chief executive officer of XOLAREN, Mostafizur Rahman, the chief sustainability manager of Rising Group, Wahidur Rahman, executive vice president of IDCOL, Md Ashaduzzaman, assistant vice president of IDCOL, and Riyadh Bin Shahid, manager of IDCOL also were present the roundtable.
TBS Executive Editor Sharier Khan moderated the roundtable held at its office in the capital’s Eskaton Garden.
Collected News:
Al Sams Chowdhury
Student of Dhaka City College
Department of Business Administration.
