Chowdhury

SHAHRIAR AHMED CHOWDHURYDIRECTOR, CENTRE FOR ENERGY RESEARCHUNITED INTERNATIONAL UNIVERSITYDHAKA, BANGLADESHEMAIL: shahriar.ac@gmail.comMobile: +8801812243581 The Practical Challenges and Solutions to PV Development in Bangladesh1 Bangladesh: FactsArea: 144,000 km2Population: 161 MPopulation density: 1120/km2Location: 20o33’ – 26o38’ (N) 88o02’ – 92o41’Neighbors: India, Myanmar and Bay of BengalPer Capita Income: 1314 US$ (Bangladesh become MIC from LDC) Per capita electricity Generation: 371 kWh/yrAccess to electricity: 74%Average Irradiation : 4.6 kWh/M2(Horizontal surface)2 Government Policy and Targets 3Renewable Energy Policy:v 5% of total power generation by 2015 and v10 % by 2020According to PSMP 2010, in the year 2020 national demand will increase to 20,000 MW.So, RE contribution will be 2000 MW.So far Solar PV is the proven technology to fulfil the target.So, by the year Bangladesh needs to Install around 2000 MWp of Solar PV systems. Challenges of PV developments in Bangladesh4 Capacity: Limited capacity for renewable energy project development Government own utility / Off-taker Policy makers Industry  Banks / Financial institutions Lack of information  Know how. State of the art technology High Upfront Cost Solar PV system has higher upfront cost with low rate of return Challenges of PV developments in Bangladesh5 Policy : Absence of specific guideline or procedures  Individual negotiation for private sector development.  Difficult to get low cost Financing Commercial interest rate is more than 12% in Bangladesh. Bank require Collateral for the debt portion Technical Capacity (EPC contractor / O&M Service provider)  Design, install, operate, manage and maintain renewable energy services. No local EPC contractor with experience of large scale solar system integration  Local O&M Challenges of PV developments in Bangladesh6 Population density and higher land requirement for solar PV project development: Bangladesh is one of the most densely populated country. More than 1100 people/sq. km lives in Bangladesh. So, Land for large scale solar project is limited.Land is very fertile. Most of part of the country, three corps are produced per year. Government is not encouraging to develop solar project in agricultural areas. So, use of land only for large scale solar project are limited. Challenges of PV developments in Bangladesh7 Red Tape : Burocratic requirements and hurdles  Change of policy  No written or clear guideline for private sector participation Lack of Infrastructure  Grid Network Communication Way Forward8 Government Incentives:Duty exceptions for solar items.Incentive tariff.Tariff indexed to US$. Foreign financing is easier.Exemption of corporate income tax for 10 years.Plants & equipment without payment of customs duties, VAT & any other surcharges.No double taxing for foreign investors or employees. Way Forward9 Government is keen to increase it Solar PV share into the national energy mix and has a target to install over 1700 MWp by 2100. Both Government and Private sectors are encouraged  Encouraging Tariff  So far Government has signed one PPA with private sector with Tariff of 18.97 US¢ (3 MWp) LoI is given to SunEdison at 17 US¢ (200 MWp) Way Forward10 Multiple use of land can reduced the pressure on limitation of lands (Poultry, dairy, crops that can be produced with limited sunshine along with the PV plant) Government is encouraging roof top systems and is eager to buy PV power from rooftops of residential, commercial and industrial buildings.  There are lands in the northern and southern part of Bangladesh that not that fertile and very limited corps are cultivated.  Bangladesh is a riverine country . The sandbars of river can be suitable places for large scale solar PV project. Way Forwars11 Foreign Investment: As government are encouraging PV power and also the tariff are indexed to US$. So it is encouraged to come with the foreign financing. Due to low cost financing the project can be viable and RoE can be more than 20%. Lot of local entrepreneurts are eager to invest in this sector, but due to the lack of technical know how they can not proceed. For the private sector , Government has made it mandatory to have some JV partner who has the experience of running such project. This has open up the opportunities for the international business to develop such project with local entrepreneurs. Way Forward12 Government is now encouraging unsolicited proposal from the individual, this is an opportunity for the foreign industry to investment in Bangladesh. They needs to organize land, build evacuation system upto the nearby S/S and orgnize equity. Government has now allowed the local banks to organize and lend US$ funds. Including the Libor the interest rates of funds (US$) from local banks stands at 5 -6%. Way Forward13 Bangladesh Government has set the target for the state owned utility to develop solar power projects.  In the coming years several projects will be installed by the government owned utilities. Scope for the EPC contractor. After successful implementation of some project government will have the expertise to develop their own projects. 14