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CABINET SUBMISSION

POWER DIVISION MINISTRY OF POWER, ENERGY AND MINERAL RESOURCES. GOVERNMENT OF THE PEOPLES REPUBLIC OF BANGLADESH

NAZWA WARDA BINTAY SALIM SEP: 706. 2nd APRIL 2012.

Confidential Document Submitted To


The Honourable Minister of The Peoples Republic of Bangladesh: His Excellency- Mr. Enamul Haque, STATE MINISTER FOR MINERAL POWER ENERGY AND RESOURCES.
Key Issue

How Renewable Energy Policies can be developed For A


Greener Economical Bangladesh.

BACKGROUND- Previous Electricity Consumption and Production in Bangladesh

Electricity - production by source: fossil fuel: 93.7%

hydro: 6.3%
nuclear: 0% (UNTIL RECENTLY) other: 0% (2001)

BACKGROUND Arising Concerns NOW!


1. The rapid growth in power consumption in Bangladesh is driven by industrialisation and growing number of consumers having access to electrical/electronic devices.
2. Between 2000 and 2015, the number of people whose power consumption is growing faster than per-capita GDP will double, from 2.5 billion to over 5 billion!

BACKGROUND - Runaway world?


Over the last couple of decades, the amount of energy people use (red line), their economic activity (green line), the electricity they use (black line), the world's population (yellow line), and their carbon dioxide emissions (blue line) have all increased inexorably.

Potentials of Solar -PV, Wind and Biomass


Solar Electrification can be used in: 1. Schools, Community centers, religious institutions, local business organizations. 2.Cyclone Shelters.(more than 1000 at present in our country) 3. Remote Communications, Railway Signalling, operating computers, operating water pumps for irrigation. Wind Energy: is site (geographically) and also season specific. Biomass can be used for: 1. Bio-mass gasification: power for small rural industries & households. 2.Biomass briquetting for cooking and artisan usage. 3.Improved stove. (potential is right now more than 25 million)

Proposed Policy Objectives:


The objectives of the proposed policies are:

to harness the potential of RE, dissemination of RE technologies, facilitate both public and private investment in this sector, and increase energy supplies to substitute indigenous non-renewable energy.

Proposed Policy Goals:


To make electricity available in remote areas by solar home systems (SHS) by 2020.

Improve living-standard, increase income by making room for new-generation employment.


To increase the supply of power by installing on-shore wind turbines by 2020. To explore the potential of municipal wastes to generate electricity as bio-fuels. Create enabling environment and legal support to encourage the use of renewable energy. Promote clean energy for CDM.

Promote appropriate, efficient and environment friendly use of renewable energy with proper training facility .
Achieve the targets for developing renewable energy resources to meet 10 percent of the total power demand by 2018 and 15 percent by 2022.

Proposed Policy 1: Institutional Arrangement SERDI

An institution, Sustainable Energy Research and Development Institute (SERDI). SERDI Board will comprise of representatives of stakeholders from different business community, academics and/or representative from GOs and NGOs, and financial institutions and implementing agencies like: IDCOL, GS etc.

Training & Capacity Development by SERDI 1. Training for local technicians, in-house staff both home and abroad should be carried to develop them into both successful technical and socially ethical engineers.

2. Training for local technicians should be arranged so that cost effective and efficient after sales service is available at the doorsteps of rural clients.
3. Training of users should be performed so that they can take effective care of their renewable energy systems.

Resources, Technology and Program Development by SERDI


SERDI in conjunction with MPEMR shall be responsible for setting priorities for RET development and program implementation. Electricity generated from renewable energy projects, both in public and private sectors may be purchased by power utilities or any consumer through mutual agreement (less than 5 MW). In addition to electricity generation, renewable energy for solar heating and biogas or other means like cooking etc shall be developed. SERDI will encourage HR development and local production of renewable energy equipment, facilitate and monitor quality of renewable energy equipment, and will assist to setup quality control laboratory to test the renewable energy equipment. For large biomass electricity projects (>1 MW) the project developer must demonstrate that the biomass is being sustainably harvested and that no adverse social impact will result from that development. Production and use of bio-fuels may be encouraged in limited scale without jeopardizing the existing crops.

Proposed Policy 2a: Wind-Turbine Project


Sylhet, where tea is manufactured and are exported worldwide is an ideal place of choice. As an expansion and improvement to this project there are areas like: Chittagong Hill-tracks and the Suburbs which are perfect locations for implementing Wind Energy Programme. Feasibility study on generating wind power in the vast coastal areas of Kutubdia, Kuakata should also be carried out to find out the data for wind mapping for future prospects.
Benefits With zero greenhouse gas emissions released during generation, wind energy is sustainable and clean. And with the cost of wind power decreasing nearly 90 percent since the 1980s, it is also an increasingly affordable and stable energy source, not subject to the price volatility of fossil fuels.

Proposed Policy 2b:Wind-Solar Project


The annual average temperature in Cox's Bazar remains at about a maximum of 35 C and a minimum of 16.5 C which are perfect for wind-solar hybrid system management program facilitation. The city is a huge attractive spot of tourism and the electricity generated through the solar-wind program will be greatly helpful in managing the tourism and hotel industry within the Beach-Area.
Benefits:

Hybrid power plants is believed to have profound applications in both rural and urban electrification, for street lighting, water pumps, mobile phone and communication towers.

Proposed Policy 2c: HYBRID Project


Instead of the coal-powered generation plant, which the Government proposed earlier, the Wind-Solar Hybrid in Sunderbans would be a much environmentally friendly approach to gain long-term eco-efficiency with less/no impact on global warming and not disturbing animal/human habitat.

Proposed Policy 3a: Expansion to the Existing Hybrid (Solar-Wind) Power Station at Saint Martins Island
SOLAR (Solar Panel by Evergreen Solar Power Limited) and WIND (Wind turbines by Southwest Wind power) Hybrid Project
Components Solar Array (5000 Watt in total) (Using 150 Watt Panel with $1.75/ Watt) Wind Generator (15,000 Watt in total) Power Conditioning Equipment Price in Ca $ (approx) Price in BDT (approx)

9,000

738,000

42,500 20,000

34,850,000 1,640,000

Power Storage Equipment

30,000

2,460,000

Security Equipment Wiring and Connectors Labour Total Project Budget

20,000 5,000 15,000 1, 41 500

1,640,000 410,000 1,230,000 11,603,000

Proposed Policy 3b: FIT


In the long-run the project can be expanded and FIT program can be initiated.
'Feed-In-Tariff' will be paid at a premium rate paid for clean generation of power. Essentially, a utility company like: BPDB will pay electricity generators from the hybrid a higher amount as an incentive to move towards greener energy production.

Proposed Policy 4: Diversification and scaling Up of GS Activities jointly collaborated by SERDI


GTCs technicians along with the Training Committee of SERDI may jointly create and report to the Ministry of Energy semi-annually concerning prospective or probable energy projects in near future.
GS will also use the GTCs along with SERDI to train women members from the user households. SERDI with GS may collaborate together to enhance more on women empowerments.

Proposed Policy 5: IRE and its Future Improvement Measures to be undertaken by GOB
a) Special/Extra Economic Allocation and a Regulatory Instrumentation Committee is formed within IRE. b) Post-Graduate Students should have an opportunity for getting the required funding from the government in the form of scholarship/ grant to carry on their research procedures. c) Affiliation and correspondence have to be developed within and outside the country boundary with correlated organizations and carry on research for future improvements. d) Financial Support or Assistance is to be provided on a yearly basis for recognizing the private sector organizations who are doing research in collaboration with IRE, and awards of excellence are specified to them as a means of national encouragement to renewable energy resource utilization and management.

Benefits (Economic, Environmental and Social)


The projects would not only have a positive impact on the carbon foot-print of the country, but the most significant implication will take place at the local level, in the form of improved health, more reliable water supplies, and greater opportunities to improve livelihoods and promote truly sustainable development. At the same time it will bless the rural people in the area with the blessing of electricity who are totally cut-off from the national grid and help in their better economical developments in the long-run. It will also promote high employment rates to the youngsters of the next generation.

Possible Adverse Effects


It is assumed and observed that there are

almost no possible adverse effects from


RET though some detailed investigations

need to be done for on-shore wind-turbine


programs before they are taken into hands.

Stakeholders in Support/ Opposition


a. For Energy Policy Formation (laws and rules): Notice and Comments (public hearing/(s) and written comments) will be heard often after releasing proposed law or rule. b. Engage Stakeholder Group Representatives Prior to Issuing Draft Rule, Law, or Plan: Less Formally As Advisory or Sounding Board. State/Federal agencies can develop ideas and see what stakeholders agree and disagree on. c. More Formally as Negotiating Group to Develop Proposed Rule, Law, or Plan If Stakeholders agree, State/Federal agencies can issue it as its proposed rule, law or plan. d. For Energy Projects at Specific Sites Notice and Comment (public hearing/(s) and written comments) will be taken into considerations often after releasing draft Energy Impact Statement.

Alternative Options
Current nuclear plants, though they promise a low carbon footprint, can be expensive and risky to introduce in a densely populated country like Bangladesh with very limited safety. The coal reserve in the country will be difficult to extract and use without assessing environmental and social impacts in the long run. Besides, large-scale addition to hydroelectric capacity is unfeasible right now.

Assumptions It is assumed that GS and IRE will be obliged to participate in forming the collaborative groups with the government and bring in developmental tools and models to contribute to the total economic enhancements.

Some projects defined above need experimental data and data mapping for analyzing the cost-benefit analysis more into details.
Related Concerns Recently a Committee/ Task Force has been formed by the Ministry of Energy to have a thorough and detailed investigations on the major sectors looking out for renewable energy resources.

Investment and Financial Implications by GOB


All renewable energy equipments and related raw materials exempted from charging 15% VAT. SERDI or power division of the MPEMR will fix up the acceptable mechanism to reach the benefits of tax exemption to end users. A network of micro-credit support system will provide financial support for purchases of renewable energy equipment. SERDI will consider providing subsidies to utilities for installation of all renewable/clean energy projects. Renewable energy project investors both in public and private sectors shall be exempted from corporate income tax for a period of 5 years and it will be extended periodically following impact assessment of tax exemption. Foreign Direct Investors should be invited and encouraged to invest into the projects mentioned above with mutual assistance. A total of 50 core Taka (~CAD $ 6200,000) is tentatively estimated to invest into the projects to be taken immediately at hands.

Consultation Record
a. Data collection is done from different sources and review of relevant journals/medias and documents. b. Data validation has been done through cross checking and counter checking. c. Feedback is taken through getting responses from related officials and focused group discussions with stakeholders. d. Discussion and feedback received from the Ministry of Environments, HomeAffairs and Finance.

Issue of Separate Statutory Regulatory Order (SRO)


A separate SRO will be issued for private sector power plants so that the incentives and concessions given under various regulations and directives are consolidated and placed together in one document.

Communications
THE ANNOUNCEMENT WILL BE MADE AT HOTEL SHERATON IN THE CAPITAL
ALONG WITH GROUPS OF SENIOR OFFICIALS FROM THE MINISTRY FOR POWER ENERGY AND MINERAL RESOURCES OF THE PEOPLES REPUBLIC OF BANGLADESH .

HIS EXCELLENCY- MR. ENAMUL HAQUE (STATE MINISTER FOR POWER ENERGY
AND MINERAL RESOURCES OF THE PEOPLES REPUBLIC OF BANGLADESH), WILL BE MAKING THE ANNOUNCEMENT ON THE 15TH OF JUNE 2012 OFFICIALLY THROUGH LIVE TELECAST ON THE BANGLADESH NATIONAL TELEVISION (BTV) AT

7 PM SHARP.
AFTER THE ANNOUNCEMENTS ARE MADE THERE WILL BE A SHORT PRESS RELEASE SESSIONS WITH THE MEDIA JOURNALIST AND RELATED STAKEHOLDERS AT 9PM SHARP IN SHERATON BALL ROOM.

Accuracy of Information and Right to Interpretation


(a) Section headings are for convenience only and shall not affect interpretation of any section. (b) In case of ambiguity with regard to interpretation of any provision of these Guidelines, GOB interpretation shall be considered final. (c) The consultation records with the BERC for which the proposals are being held is correct. (d) Accurate tracking of the responses are also maintained with full integrity and reliability.

Ultimate goal of Bangladesh Energy Sector


According to the present Governments "Energy Challenges for Bangladesh CREATE A Roadmap for Sustainable Energy Solutions", Bangladesh aims to have a power generation capacity of an additional 10,000 MW by 2022.

Questions?