Blue gold report by Ferdous Rana

Scoping study ON RENEWABLE ENERGY SUPPLY IN THE BLUE GOLD AREA

FEASIBILITY STUDY ON RENEWABLE ENERGY SUPPLY IN THE BLUE GOLD AREA

Acknowledgements This research was made possible with a financial contribution of the Innovation Fund of the Blue Gold Program and the Government of the Netherlands We acknowledge the Satkhira Palli Bidyut Samity , the Khulna Palli Bidyut Samity and the Blue Gold Program as for their enormous support for making this important research program a success

Disclaimer

These views and expressions mentioned in the report are those involved in compilation of the report from Grey Shack and do not necessarily represent the view of the Netherlands Embassy in Dhaka or the Blue Gold program.

CONTENTS 1.Introduction 6 1.1 Background of the research �� 6 1.2 Objective and scope �� 6 1.3 Methodology & sampling �� 8 1.4 Road map of the report �� 9 2. Energy and sustainable development nexus in social and economic context

3. Status of power in selected geography 13 3.1 The Budhata Union ��13 3.2 Surkhali Union ��14 4. Socio-economic challenges 15 4.1 Household level ��15 4.2 Enterprise level ��18

5. Socio-economic impact of electricity

5.1 Impact on income ��20 5.2 Impact on expenditure ��22 5.3 Impact on savings ��22 5.4 Impact on credit ��23 5.5 Impact on investment ��24 Business level ��24 Industry level ��25 5.6 Impact on irrigation and water management ��25 5.7 Impact on education and children’s heath ��25 5.8 Impact on health ��28 5.9 Impact on gender dimensions ��28

6. An Overview of Power Sector 32 6.1 Institutional framework for rural electricity ��32 6.2 Capacity and consumption ��33 6.2 Challenges and strategies for power provision ��35 6.3 Current renewable energy strategies ��36 7. Issues for the solar grid system in selected geography 37 7.1 Electricity demand in the no-electrified area ��37 7.2 Willingness to pay for the energy ��37 7.3 Solar Energy Resource Assessment ��37 8. Conclusion and recommendations

References 40 Annex 1: Categorization of Solar Grid

Annex 2: Solar Based Mini Grids in Bangladesh

Annex 3: Advantages and disadvantages of different mini-grid business models

Annex 4: Government institutions

Annex 5: Activities of International Development Agencies regarding renewable

energy in Bangladesh 44

ACRONYMS BBS

Bangladesh Bureau of Statistics

BPDB

Bangladesh Power Development Board.

BUET Bangladesh University of Engineering and Technology CMES

Centre for Mass Education in Science

DESA

Dhaka Electric supply Authority.

DESCO

Dhaka Electric supply Company.

FGD

Focus Group Discussion.

HIES

Household Income and Expenditure Survey

IDCOL

Infrastructure Development Company Limited

kWh

Kilowatt Hour.

LED

Light Emitting Diode

LGED

Local Government Engineering Department

MDGs

Millennium Development Goals

MPEMR Ministry of Power Energy and Mineral Resources. MIS

Management Information System.

MWH

Megawatt Hour.

NRECA National Rural Electric Co-operative Association. NTPC

National Thermal Power Corporation Lim ited (India)

PBS

Palli Bidyut Samity.

Photovoltaic.

PGCB

Power Grid Company of Bangladesh.

PPA

Power Purchase Agreement.

REB

Rural Electrification Board

RERC

Renewable Energy Research Centre

RPCL

Rural Power Company Limited.

SEDA

Sustainable Energy Development Agency

Small Industries.

SHS

Solar Home System.

USAID United States Agency for International Development. WMA

Water Management Association

WMG

Water Management Group 5

1. Introduction 1.1 Background of the research In Bangladesh, about 38% of the population in the coastal regions lives below the poverty line. They face high vulnerabilities in terms of insecurity of food, income, water and health. There are ample opportunities to harness the resources of the coastal areas that, if successfully achieved, can raise the population from poverty, create a sustainable environment and provide security and quality of life to present and future generations The objective of Blue Gold is to reduce poverty of the people in the coastal areas by enhanced productivity of crops, fisheries and livestock and increasing incomes by improved processing and marketing of agricultural products including value chain development. It is universally accepted that electrification enhances quality of life at household level and stimulates economy at a broader level. Some recent evidence suggests that electricity may increase female labor supply (Dinkelman, 2011; Grogan and Sadanand, 2012 in Torero, 2014) or improvements in educational outcomes, consumption and income. Electricity can impact income or expenditure, resources to invest in new tools and complementary inputs, knowledge on how to operate these technologies, and demand for the goods and services produced with this new method (Torero, 2014)

In view of this aforesaid vision, Blue Gold Program is interested to understand how access to renewable energy can contribute towards the goals of the Blue Gold program. This means not only improving livelihoods by providing access to sustainable energy, but how renewable energy can contribute to water management, income generation, business creation, societal benefits and the overall improvement in the lives of the community and its people. Grey Shack, a communications and consultancy company which provides support to development organizations, multi-nationals, large corporations, SMEs, NGOs, institutions and individuals has been commissioned to conduct the assessment in sleeted geography and this report is illustrate the findings of the study. 1.2 Objective and scope The general objective of the study is to provide a comprehensive picture of the program intervention area with regards to the scope of utilization of renewable energy to enhance the lives of the individuals and the community as well as the sustainability impact on economic activities over the course of the program lifespan and beyond. Here, renewable energy refers to the power generated through solar energy which can be stored and can be shared with the community through a mini grid system.

Specific objectives of the study are as follows: • • • •

Identify the opportunities and challenges for income generation, business creation, societal benefits, water management, private sector investment and the overall improvement in the lives of the community in the Blue Gold Program area. Provide information on the current initiatives of the government and/or other organizations and donors to provide access to renewable energy in the target area. Provide an overview on the infrastructural needs and estimated cost for setting up a sustainable, renewable energy system for the Blue Gold Program area. Identify external interest to invest in a possible consortium for setting up a renewable energy solution for the Blue Gold Program area

The Blue Gold Program covers a gross area of 160,000 ha in 12 polders1 in the Districts of Satkhira, Khulna and Patuakhali. Among the Blue Gold intervention area, Fingri and Budhata Union of polders Polder 2 under Sathakhira district and Surkhali Union of polder 31(part) under Khulna district was covered in the study. Surkhali union has 30 villages and the polder 31(part) contains only 14 villages. Thus the villages inside the polder were considered for the study.

Polder is an area of low land that has been reclaimed from sea and river and it is protected by dikes

1.3 Methodology & sampling The study employed verity of methods to identify the scope of renewable power supply in the selected area. The overall methodology of the study can be divided into three stapes. First step involves gathering of secondary data. Possible source of information may be divided in to three broad heading; Government sources, private sources and NGO/ DP sources. To have in-depth information of the local level, the secondary data has been supplemented by the primary data. Therefore, in second step, survey was conducted in the project area, which includes In-depth Interview (IDI), Key Informant Interview (KII) and Focus Group Discussions (FGDs). The third step of the methodology involved discussion with strategic stakeholders to share the findings of study and identify the possible collaboration and way forward in implementation. The survey administered detailed questionnaires for household, commercial and industrial units with and without electricity. Household questionnaires included information on household consumption, income, energy use pattern and appliances. The survey covered electricity use, grid connection and quality of service use of solar home systems and also womenâ&#x20AC;&#x2122;s empowerment and

general health condition. There were also qualitative questions on problem faced by individual household without electricity and their potential use of electricity. Questions in commercial enterprises and industry survey involved the nature of the businesses including their operation, cost and revenue, and consumption of various types of energy including electricity. Also qualitative questions on problem faced without electricity and the benefits they will get by using electricity. A total of 720 household and commercial enterprises were surveyed. The sample contains roughly 1:3 split between those with and without electricity. 84% sample was household and 33% respondent was female. Total 4 FGDs has been conducted (2 in each area) to go into depth and detail on questions of energy supply, usage, expenditures among the respondents and challenges and opportunities for water management, income generation, business creation, societal benefits and the overall improvement in perspective of reliable energy supply. Moreover, for irrigation information like usage patterns, cost of operation and energy consumption were collected though KII and FGD.

1.4 Road map of the report This paper is organized as follows. Section 2, discuss the overall impact of electricity in socio-economic development context and linking it with the contemporarily development challenges. Section 3, provides some basic information on energy use patterns in selected rural areas. Section 4 account findings based on survey and tells about the socio-economic challenges evolves due lack of access to electricity. The impact of having electricity has been discussed in Section 5 by looking at the benefits of long-term exposure to electricity.

An overview of rural electrification in Bangladesh is given in Section 6. This section examines the institutional development and role of the Rural Electrification Board (REB) in providing electricity to rural customers. It also discusses the some key issues of power generation and distribution. Moreover it explores the contemporary policies and implementations related to renewable energy. Section 7 explores some technical aspect to aid in fixing the strategy in the selective area regarding the renewable energy. Finally, the last section provides conclusion of the paper.

2. Energy and sustainable development nexus in social and economic context ` Electricity not only creates a condition for economic growth, but it is essential for basic human needs and economic activities. Access to electricity can improve socio-economic conditions through its influence on key components of poverty; namely health, education, income and environment (Barakat et al, 2009). Lack of access to energy and more precisely, electricity is one of the major impediments to economic development. Empirical studies have found that a strong correlation exists between rural poverty and access to electricity because electricity is a pre-requisite for productive activities (Chaurey et al 2004 in Bose et al 2013). In addition to improving productivity by giving access to more efficient means of production, access to an electrical grid and better electricity services could also lead to household time savings and allow them to work more hours and also increasing their access to markets (Barron and Torero, 2014).

Rural electrification programs seem to be crucial to improve living conditions and promote development. Here the figure 1 illustrates theoretical mechanisms through which electricity access improves welfare. Access to the electricity has a causal effect in household behavior. Households use electric lights and acquire televisions, radios and mobile phones. It decreases indoor pollution and increases householdâ&#x20AC;&#x2122;s access to information. These changes in turn will influence the number of hours of labor, health outcomes, education that increase productivity. Decreases in health expenditures and coping cost (such as kerosene expenses, battery charging expenses), will promote income and consumption growth.

Figure 1 Impact Pathways of Rural Electrification Programs

Source: The figure is adopted from Torero, 2014 Electricity access has substantial influence over attaining the MDGs. The MDGs include the reduction of poverty, hunger, disease, illiteracy, environmental degradation, and gender inequity. These goals may not be met unless there is rapid progress in extending efficient and affordable energy services to the poor. Table 1 shows the linkages between MDGs and energy especially electricity 10

Table 1: Importance of Energy to Achieving specific millennium Development goals MDGs

Steps Toward Goal

Electricity Contributes by

1. Cutting Extreme • Reduce by half the proportion of • Reducing share of household income spent on cooking, lighting , and space heating poverty and Hunger people living on less than $ 1 a day • Reducing post-harvest losses through better preservation • Reduce by half the proportion of • Enabling irrigation to increase food production and access people who suffer from hunger to nutrition. • Enabling enterprise development, utilizing locally available resources, and creating jobs. • Generating light to permit income generation beyond daylight. • Powering machinery to increase productivity.

2. Universal Primary • Education

Ensure that all boys and girls • Providing light for reading or studying beyond daylight. complete a full course of • Creating a more child-friendly environment (access to clean primary schooling water, sanitation, lighting, and space heating/cooling), which

can improve attendance in school and reduce drop-out rates.

• Providing lighting in schools, this can help retain teachers. • Enabling access to media and communications that increase educational opportunities. • Reducing space heating/cooling costs and thus school fees.

3. Gender Equality • and Women’s Empowerment

Eliminate gender disparity • Freeing women’s time from survival activities, allowing opportunities for income generation. in primary and secondary education preferably by 2005, • Reducing exposure to indoor air pollution and improving and at all levels by 2015 health. • Lighting streets to improve women’s safety. • Providing lighting for home study and the possibility of holding evening classes.

4,5,6. Health

•

Reduce by two-thirds the • Providing access to better medical facilities for maternal care. mortality rate among children under five • Allowing for medicine refrigeration, equipment sterilization,

•

and safe disposal by incineration, Reduce by three-quarters the maternal mortality ratio • Facilitating development, manufacture, and distribution of

•

Halt and begin to reverse the • Providing access to health education media. spread of HIV/ADS

•

Halt and begin to reverse the • Reducing exposure to indoor air pollution and improving health. incidence of malaria and other • Enabling access to the latest medicines/expertise through major diseases

drugs

renewable energy based telemedicine systems.

7. Environmental • Sustainability

Integrate the principles of • Boosting agricultural productivity, increasing quality instead of quantity of cultivated land. sustainable development into country policies and programs; • Reducing deforestation for traditional fuels, reducing erosion reverse loss of environmental and desertification resources • Reducing greenhouse gas emissions.

Source: The table is adopted from Energy for Development: The Potential Role of Renewable Energy in Meeting the Millennium Development Goals. Paper prepared for the REN21 Network by The Worldwatch Institute 11

In country context, a USAID funded study regarding impact of the rural electrification program in Bangladesh (Barkat et al, 2002) states

•

93.7% of the electrified households have reduced fuel cost.

•

78.2% household has extended working hours.

•

62.0 % household has an increase in household income

•

81% household has reported an increase in reading habits

•

93.7% household has reported an increase in children’s study time.

•

92.0% household has reported an increase in amusement as well as standard of living.

•

94.7% household has reported an improvement in security.

•

64% women of the electrified households reported TV as the main source of knowledge.

•

19. 11% women of the electrified households involve in income generating (handicraft/sewing) activities.

•

The members in the electrified households, on average, consume daily 46 grams (4.8%) food more than the non-electrified households. In terms of intake of energy (kilo calories), it was 60 K.Cal (2.6%) more.

3. Status of power in selected geography 3.1 The Budhata Union The Budhata Union is part of polder 2 and under the Sathkhira Palli Bidyut Samity (PBS). Some portion of the Union is electrified from the mid 80â&#x20AC;&#x2122;s (PDB connection). Afterwards the union is covered by PBS services. Since commence of the PBS, the growth in connectivity in this area was stuck up still 2013. But the situation changes in recent times, as the national electricity situation has improved. In last two years they have proceeds 3915 new connection2 and the total count progressed from 1203 to 5154. Current consumption of the area is 3,51,683 kWh/ month. According to the plan, in next two years, PBS will provide 2500 new connections.

neighboring shop / business. Sathkhira PBS denies the issue of load shedding or frequent power cuts but the field assessment identifies that on average load shedding in winter is 2 hours pre day and in summer it is 7 hours per day. The occurrence of load shedding is less in the area that is nearby major markets and industries (e.g. ice factory).

It is mentionable that in some of the electrified villages (covered under the PBS) a substantial number of household remains outside the grid connection. For example, in Shethpur village there are 710 household. Only 50% of the households have been covered by grid connection. Moreover, 11 out of 24 villages of the union are out of PBS coverage. As estimated, about 3000 households (46% of the population) yet to be connected to the PBS grid. On the other hand, out of 5 major market places, 4 already have the connection and only 1 under the process of getting it. In electrified markets, 90% shops and business can use electricity. Due to the hassle of getting own connection, 50% of the business has taken connections from the

Each electrified household use about 76 kWh and spends about BDT 343 per month on electricity. At the same time a business unit use 66 kWh and spend BDT 570 per month for electricity.

Rechargeable lights (67%) and kerosene lamp (20%) are the main source of light during power cuts. Among the household users, 40% are dissatisfied with the PBS connection mainly due to frequent power cuts.

Use of kerosene lamp (kupi) and lantern (hurricane) is most common in non-electrified households. On average each household use 3.5 liters of kerosene and spends about BDT 280 per month for the same purpose. At the same time 51.7% household have Solar Home system (SHS). About half (51%) of the solar systems have capacity of 30 watt and below and could fulfill minimum lighting requirements. .

Usually it takes few months to a year to get the actual electricity from the time of approval of the connection

3.2 Surkhali Union Surkhali union is under the Khulna PBS. 15 villages and 3 market places of the union is inside the polder 31 part. In� side the polder 4 villages and 2 markets have grid connec� tion. The grid connected villages and markets are mainly on the northern part of the polder. The southern part of the polder is entirely out of grid connection. This part consists about 66% of the total household. At present PBS has 519 clients and planned to include 350 in next two years. Cur� rent consumption in the area is 29,372 kWh/ month. It is assumed that the actual electricity users may go up more than the enlisted PBS clients. Some of the households in the border of the polder have got connection from village outside the polder. Besides, in this area sharing of connec� tion among several household is common. Ratio of own connection (PBS connection) and shared connection (con� nection taken from the neighbor) is 6:4. At the enterprise level the, rate of sharing a connection goes little high.

In Surkhali, rate of load shedding is relatively less than that of Budhata. On average, there are 1.3 hours and 4 hours of daily load shedding respectively in winter and summer. Kerosene lamp (57%) and rechargeable lights (23%) are the main source of light during power cuts. Among the house� hold users, 25% are dissatisfied with the PBS connection due to the frequent power cuts. On average, each electrified household uses about 46 kWh and spends about BDT 284 per month on electricity. At the same time a business unit use 57.4 kWh and spend BDT 457 per month for the same. On the other hand, non-electrified household use 2.7 liter of kerosene and spend about BDT 218 per month for light� ing. At the same time 55.6% household have Solar Home System (SHS). Over half (57%) of the solar systems have capacity of 40 watt and below and could fulfill minimum lighting requirements

4. Socio-economic challenges 4.1 Household level

Source: Field assessment 2015 About 48 % respondents believe that their childrenâ&#x20AC;&#x2122;s education is affected due to lack of grid connection. In summer the average temperature rises to 34o c which not only causes enormous sufferings but also generates some skin diseases. Some respondents believe electric fan could provide some relief. Therefore, 38% respondent said, they would not suffer or become sick if there is electricity connection. 15

35% respondents said that to protect the fish farms by lighting night and to get security of the household and neighboring area affected due to lack of electricity. The fuel cost causes significant impact in profitability of any business or investment. Some affordable and profitable farming, like poultry or dairy farm (exotic variety) needs some apparatuses (e.g. water pump, fan, light etc) to ensure optimum production. Per unit cost of the alternative power to run the apparatuses is relatively much higher than that

Case

Halima Kahntunâ&#x20AC;&#x2122;s exotic cow

Halima Kahntun(32), housewife of Lombadanga Village has a small dairy farm at her house. She mainly rears cross breed and improved variety cow. Beginning of this year, she bought an exotic calf at BDT 31000 for rearing. Each day she had spent about 100 taka for its food and medicine. After six month of rearing, in this summer the cow suddenly died due to heat stroke. She believes that if she used a fan in the farm, the cow might not have died. Market price of such cow in now -a-day is BDT 70,000 to 80,000.

Case

Shohidul Gaziâ&#x20AC;&#x2122;s sweets shop

Shohidul Gazi (37) is a Sweet maker and businessman in Surkahli Bazar. Generally he processes 10 liter of milk to produce yogurt and sweets. Not all of the sweets are sold on the same day. Some times, 2-3 KG sweets are left over unsold. In the syrup, sweets can be kept for 2 days only. But if the sweets are kept in refrigerator, that can be preserved upto 15 days. If there is electricity connection in his shop, he would have bought a refrigerator. Moreover, with electricity connection, he would have set up TV in the shop to attract the customers. In that case, he could have process 25 liter milk and produce different variety of sweets. Currently his daily profit is about BDT 200 but with the electricity connection, his profit could go up to BDT 500/per day.

of the electricity. People interested to make investment in such sectors (e.g. farming) are much concerned about the profit. High cost of energy prevents households to start a new venture or expand the current one. 17% respondents said that they incurred loss in business and 14% said that they could not make new investment due to lack of electricity. Besides the economic aspects, some of the non- electrified households (5%) find themselves as deprived in all aspects (economically, socially etc).

We don’t have light (electric bulb) in house. My son goes to other people’s house to study. If there is electricity, he could study at home… he could study more -Kobita Das (40) Housewife, Lombadanga. Budhata

Stealing of fish from the farms at night is common incident … we face problem in financial transitions. Due to electricity problem, there is no Bank in the area. -Asgar (38), Fish cultivator & Businessman, Roypur. Surkhali

Case

… Can’t do any other work at day time… can’t work for long period at night. If I got electricity connection, I’ll run a shop in house in day time and work for longer period at night. -Fulmoti Rani Das (32,) Craftsman (Kutisilpi), Lombadanga. Budhata

Cannot take any new initiative… cannot go outside home after dark… - Susma Sarkar (30) Housewife, Bhogobotipur, Surkhali

Nonigopal Mollik’s farming and business

Nonigopal Mollik is a village doctor and eminent farmer of Ghoriyal village. He likes to rearexotic cow and poultry in his household. But this farming needs some electric apparatus to be installed for optimum output. For this purpose, he had built a cow-shade but could not start the farm. Moreover, last year he had tried to run a poultry farm but made loss about BDT 20,000. He has 0.5 acre of pond area and 3.3 acre of cultivable land. He could not cultivate fish and rice in each season as the fuel cost of irrigation is very high. Besides, he cannot preserve some life-saving drugs in his dispensary due to lack of a refrigerator. He is eagerly waiting for getting the electricity connection to start the farming and invest more in medicine store

4.2 Enterprise level At the enterprise level, 70% nonelectrified shops and businesses have realized that they are not getting the business up to their potential level due to higher operating cost and less business transaction. In case of non-availability of electricity, the operating cost of business shoots higher for alternative energy (see table 2 as example). It is found that 42% shops and business do not have the proper lighting. Of the respondents, 38% claims to be victim of theft.

Source: Field assessment 2015

Table 2: Comparison of two milk chilling factories With electricity access

No electricity access

Start of business

2012

2011

Capacity (liter)

2400

2000

Daily production (liter)

760

550

Monthly cost energy (BDT) maintenance

13,500

26,000

500

4000

Average chilling cost / liter

0.62

1.81

Source: Field assessment 2015 Damage of products due to heat is common in some busiďż˝ ness like grocery, restaurant medicine store etc. They could not store or preserve some essential products in refrigerator due to lack of electricity. It is causing higher operating cost and also hampering heath of the people.

16% business owners said that they could not use necesďż˝ sary apparatus due to unavailability of electricity. Among the respondents 11% faces problem to work in day time due to heat. Due to light, 2 % faces problem to work in night. Due to unavailability of electricity, 7% said that they could not expand the business.

Due to lack of proper lighting we are in (business) loss... Some� times customers steal valuable cosmetics from the store

People become sick and the medicines run to waste due to heat. If there is electricity, med� icines could be stored in fridge (refrigerator)

I can’t run the TV for longer time in the store… customer’s like to watch TV... I could have earned more if there was electricity

-Rubel (30) Proprietor, Cosmetic store, Surkhali Bazar. Surkhali

-Rokibul Hassan (32), Village Doctor, Surkhali Bazar

-Arab Ali Shek (33) proprietor Teal stole. Surkhali Bazar

Case

Akimuddin’s Saw-mill

Mr Akimuddin has a saw-mill in Paithali Bazer. As there is no electricity connection in the area, he has to run the mill with generator. Each month he has to spend about BDT 15000 for the fuel of the generator. Wood sawing costs in his mill about BDT 4.6/cft. Whereas, in any electrified saw-mill of the nearby area, the wood sawing costs only BDT 1.6/cft. He could have saved about BDT 10000 each month if he could run the mill with electricity. Besides, the operating cost, the wastages is high in his mill due to lack of proper lighting at night.

Case

Khadem Ali’s Layer firm

Mr. Khadem Ali of Padmabewla village has a Layer farm with 40 chickens near his house. Each month he could earn about BDT 2000 from this farm. He has bought a 10 watt Solar Home System (SHS) by spending BDT 3000 for the farm. The SHS can run a 5 watt bulb for 10 hours. But it does not produce enough lighting for the farm. Besides he can’t run fan with the SHS. But light and fan is essential for the optimum production. Due to lack of proper light and ventilation, chickens don’t eat properly and become sick frequently. He has a plan to increase the size of the farm with all the necessary equipments (light and fan) when there will be grid connection

5. Socio-economic impact of electricity Electricity is a vital infrastructure which facilitates a broader range of economic activities at the same time it works as catalyst for social change. At the household level electricity is crucial to ensure better standard of living. A recent study (Boas et al 2013) in the similar geographic context has detected that due to the electrification, there is favorable changes on the production costs, profit margin, development and modernization of business, women empowerment, quality of life, and human development. A base line study (Barkat et al, 2009) has found that additional time attributed to electricity, has facilitated the electrified household members to explore new range of activities as well as to extend time for the old ones. The study also found that increased time allocation for activities like income generating activities and access to information has improved gender status

5.1 Impact on income The field assessment in the both the polders reveals that the average monthly income of electrified household is 11.9% higher than that of non-electrified households. Precisely, per capita income of the electrified house hold is 14% higher than that of non-electrified households. The data also identifies that with the duration of access to electricity the household average income increases.

Tables 3: Average household income Type

Area

Grid

Polder 31

8798.38

26397.70

Polder 2

11561.40

33145.46

Overall

10144.47

29655.24

Polder 31

9071.56

26525.87

Polder 2

9047.50

25387.88

Overall

9059.56

25959.24

Non grid

Household Average monthly income

Per capita annual income

Source: Field assessment 2015 Besides, the study identifies, non- electrified households have comparatively more income through agriculture and manual labor that that of electrified households. On the other hand, electrified households have 45.5% and 57.9% higher income respectively in business and services than that of non-electrified households. Electrified households also shows comparatively higher (70%) remittance of earnings.

Source: Field assessment 2015

5.2 Impact on expenditure

r he Ot

r ta

in m en In t st al lm en ts

rt po

En t

Tr a

ca lth He a

s he ot Cl

rg y En e

n tio ca

Ed u

Figure 6: Share of household expenditure (In %)

Fo o

On average, electrified household’s ex� penditure is 10.2% more than that of non-electrified households. Both electri� fied and non-electrified households spend similar amount for food (BDT 3,743: BDT 3,748) but in terms of share of total family expenditure, non-electrified households spend 10% more on food items. In terms of share of family expenditure, non-elec� trified households spend 5% and 2% more on education and health respectively. But in terms of average expenditure, electri� fied households spend 5% and 8% more on education and health respectively than the no-electrified household.

Source: Field assessment 2015

5.3 Impact on savings

The influence of electricity on household savings is evident from the higher average propensity to savings in the elec� trified households. It is mainly due to the relatively high income. Paradoxically, the average savings amount is higher in non-electrified households. Table 4: Average household savings Type

Grid household

Non Grid household

Area

Household have monthly savings (%)

Average monthly savings (Taka)

polder 31

747

polder 2

1642

Overall

1138

polder 31

1526

polder 2

1098

Overall

1327

Source: Field assessment 2015

5.4 Impact on credit The average amount of credit of the electrified households is BDT15,034 and average credit of non-electrified households is 10,091. As the income found to be higher in the electrified households, they have relatively high credit worthiness. They tends to take credit more from the institutional lenders. 95% credit that has taken by the electrified households is from bank and NGOs. Average size of the credit taken from institutional sources by the electrified households, is much higher than the nonelectrified households. ` Source: Field assessment 2015

Source: Field assessment 2015

5.5 Impact on investment Each area has its own potential investment portfolio based on its access to grid connection. Electricity can boost up economic activities and so thus the investment. The investment will be at three levels; household, business and industry (SI). Household level: Poultry and livestock have a major role in rural household income. Generally, even landless and small farm holdings own poultry and goat. Therefore, 22% households in Budhata and 17% household in Surkhali want to start poultry farm (on average 100 chickens) depending on the access of electricity. In the same way, 19% households in Budhata and 10% Source: Field assessment 2015 household in Surkhali want to start dairy farm (initially 2-4 exotic variety cows). Besides, 18% households in Budhata and 19 % household in Surkhali want to buy electric water pumps to provide water in dairy farm and nearby cultivated field or pond. Moreover, 8% households in Budhata and 13 % household in Surkhali like to engage in some income generating activities at night with access of electricity. Business level: The investments at the household level have a significant impact on the respective market / value chain. As the milk and poultry market develops, at local level, backward and forward business linkage will be developed. But due to lack of electricity many business opportunities cannot be taken by local entrepreneurs. Besides, high cost of fuel / alternative energy of several farm and non-farm activities are arresting boost of economic growth. It is found that 10% households in Budhata and 13 % respondents in Surkhali interested to start new business. In The same way, 10% households in Budhata and 8 % household in Surkhali like to expand farm and non-farm activities.

Almost every house of this village has cow. Current production of milk in this village is about 150 liter /day. If there is electricity, getting 500 liter/day from the village will be a matter of time â&#x20AC;Ś -Abu Sayed(40) Farmer, Lombadanga, Budhata

Industry level: in Budhata, several industries have been set up in the portion where the electricity is available. But considering the communication and transportation factors, there is opportunity of setting up few automated rice mills, spice mill and saw-mills in the non-electrified portions (especially in Paikhali ), within very short period of access to grid. In long run, if the milk and fish market grows in the area a milk chilling factory and an ice factory may be set up.

Besides the high cost of irrigation, water logging is the chief hindrance of cultivation in some areas in both polders. On a rough estimation, only in Kundariya beel (Budhata union), 240 hector lands have the water logging problem. Here farmers can produce rice once in a year. But before the water logging problem they use to produce rice twice a year in same piece of land. As estimated annual production loss of paddy due to the water logging is 0.4 Tonne/ hectors.

Surkhali union is only 27 kilometer from the Khulna and have both road and waterway communications to the city. These two factors have given the area a unique opportunity to attract promising industrial investors. At his moment development of large industry nearby Khulna city has two major challenges; scarcity of land and government permission. Therefore potential investors are looking for a suitable place nearby Khulna. Already few investors have visited probable locations in this union. Besides the outside investors, local entrepreneurs also like to invest in industries. But due to non-availability of the electricity nobody has started visible activity. The industries that might have been be established with the access of electricity in the area are automated rice mills, ice factory, tiles factory, bakery and a foam factory.

To resolve water logging problem, in 2010-11 an experi� ment of draining out water from the Boalmari beel using the electric pumps was done in Fingri union (polder 2). By using the pumps about 3000 hector of cultivable land was reclaimed from the beel. The project was initiated by local benevolent personals in anticipation of getting the neces� sary fund from Government or donor. After two consec� utive years of operation, the project was stopped due to lack of funding. Therefore, this experience could be used for resolved the water logging problems in other beels in the region.

5.6 Impact on irrigation and water management Electricity has substantial impact on agricultural cost and productivity. During field assessment in the selected ge� ography, it was found that in Robi season (mid-October to mid-March) per-hector fuel (diesel) cost of irrigation in paddy field is about BDT 2428. Whereas the electricity cost for the same irrigation is about BDT 765. The fuel cost is not the only factor that affecting the farmers. The main� tenance cost of the diesel pumps is comparatively high� er than the electric pumps. In each cultivation season the farmers have to spend BDT 500-1000 for maintenances of the machine. Generally, in each season farmers make agreement with the local mechanic for the maintenances in barter of 0.2 to 0.28 Tonne paddy. The high cost of cul� tivation has prevented small and marginal farmers to cul� tivate in dry season.

5.7 Impact on education and children’s heath The quality of education can be measured in terms of household expenditure on education and time spent for study by students at night. Study on the selected geogra� phy found that average household expenditure in electrified household is 5% more than that of non-electrified house� holds. At the same time, students of electrified household study 7 minutes more than non-electrified households. Most of the non-electrified household’s student reads at night by using the solar or kerosene lamp. But it does not provide enough illumination. Thus, head ace and eye burn� ing is relatively common in non- electrified households. On the other hand, 82% students of the electrified households do not have any problems. The convincing evidence of positive impact of electrifica� tion on the children’s study: Reduction of problems during study at night.

Figure 11: Problem faced during satudy at night in nongrid houseolds (in%) 87

Insufficient illumination

Head ace

Eye burning

Bad smell

Used to

No problem

Figure 12: Problem faced by childern during satudy at night in grid houseolds (in%) 82

Insufficient illumination

Head ace

Eye burning

Bad smell

Used to

No problem

Our school is one of the best schools in the area… we have to teach computer subject … as we don’t have electricity in the school; we don’t have any computer from the govt. The teacher brings his personal laptop to show in the class but it is not possible to let students using it. It is just like showing them sweets in showcase! -Suvas Datta, Assistant Head Teacher, Kunduriya PN High school

5.8 Impact on household health Kerosene has being used to light in all kind of household in rural areas. In 55% of the non-electrified households kerosene is the main source of illumination and 40 % of the electrified household uses it during load sheddings. Kerosene emissions include fine particular matter (particles with aerodynamic diameter ≤ 2.5 μm; PM2.5), carbon monoxide (CO), nitric oxides (NO2), and sulfur dioxide (SO2). Kerosene burning devices can impair lung function and increase cancer risks as well as incidence of infectious illness and asthma. There is extensive evidence

that indoor air pollution is strongly linked to human health, especially among children (Barron and Torero, 2014). On the other hand, electrified households are much better endowed than the non-electrified households in terms of awareness of crucial public health issues; use of hygienic latrines, use of hand washing materials etc. TV plays a major role in enhancing knowledge on health issues (Barakat et al 2002)

From the survey of the grid and non-grid households it is evident that electrified household suffers less regarding the diseases associated with Kerosene3 and water4

Source: Field assessment 2015

5.9 Impact on gender dimensions Electrification has contributed to the positive development towards gender equality and women’s socio-economic status. Electricity has left a profound impact on women’s mobility, participation in income generating activities, decision making, freedom in using income and savings, better utilization of credit etc. (Barkat et al 2002). Among several dimensions of gender disparity, three aspects has been compared in the study; women’s participation in family’s economic decision making, freedom of movement and right to choose/ vote

Asthma, Tuberculosis, Eye disease, Acute Respiratory Infections

Skin disease, Diarrhea

It was found that in electrified area household heads’ exercise of autocratic decision-making in family’s economic matters is little less than that of the nonelectrified area. Moreover in electrified household’s, rate of consensus decision making is 39% higher than that of non-electrified households.

Source: Field assessment 2015

In case of going outside village or places like market or relatives house, womenâ&#x20AC;&#x2122;s self decision making is almost similar in both types of households. In electrified households in 74.5% cases women took advice from their husband, father or respective male member of the family but the decision is made by her-self. At the same time male imposed decision is less in electrified households. Figure 15: Decision making on movement of female members Non Grid household 74.5

Grid household

60.1

18.9

20.3

19.1

6.4 Self

Self but discussing with male member

decided by male member

Source: Field assessment 2015

others

Women of electrified house tend to participate in election more than the non-electrified household. In selection of representatives, they have more capacity to choose the candidate of their own.

Figure 16: Decision making on vote of female members Non Grid household Grid household 47.9

28.5

33.3

34.0 20.8

6.9

12.5 4.9

2.1

Donâ&#x20AC;&#x2122;t cast vote

Self

Influenced by Male

Influenced by Female

4.2

Decided by male

4.9

Influenced by neighbors

Source: Field assessment 2015

6. An Overview of Power Sector 6.1 Institutional framework for rural electricity Since the inception, electrification program was carried out by the Bangladesh Power Development Board (BPDB) and was mainly limited to urban centers and at best to their peripheries. The first major initiative to extend grid electricity in rural areas was taken in 1975 under a scheme called ‘Total Electrification Programme’. The program looked beyond grid connectivity to rural areas and considered establishing an institutional structure which would develop the technical, economic, financial and social analysis, and organizational requirements for a rural electrification project in Bangladesh. Rural Electrification Board (REB), a national agency, was established on 29 October, 1977 and started functioning on 1 January, 1978 under the ministry of power (Khandker 2009). To achieve the objectives of the rural electrification program, at the implementation level, the Board established Palli Bidyut Samities (PBS) [Rural Electric Societies] based on the model of Rural Electric Cooperatives in USA. A PBS, owns, operates and manages

a rural distribution system within its area of jurisdiction is an autonomous organization registered with REB. The member consumers participate in policy making of PBS through elected representative to the PBS governing body known as Board of Directors. REB’s role is to provide PBS with assistance in initial organizational activities, training, operational and management activities, procurement of funds, and providing liaison between PBS and the bulk power suppliers like PDB and other concerned Government and Non-Government agencies. As on April, 2015 a total of 72 PBSs are working in some 52,714 villages in 61 districts and serving more than 11.3 million rural customers all over Bangladesh. The REB con� sumers are mostly domestic users, but there are signifi� cant numbers of industrial and commercial customers including irrigation pumps. REB plans to cover 75,000 vil� lages of Bangladesh by the year 2020 (REB 2015)

Asccording to 1991 census, total number of villages in Bangladesh is 86,038. The 11,038 villages those are not included in REB’s plan as they are included in BPDB, DESCO & DPDC or Chittagong Hill Tract Districts]

Source : BPDB 2015

Note: The utilities responsible for generation of electricity are: (1) Bangladesh Power Development Board (BPDB), which is the largest authority to generate electricity from the conventional sources (like indigenous gas, hydro, diesel, furnace oil) and through Independent Power Producers (2) Rural Electrification Board (REB) generating electricity through Rural Power Company. Transmission of electricity from different power plants are done by BPDB and itâ&#x20AC;&#x2122;s subsidiary company Power Grid Company of Bangladesh (PGCB). Distribution of electricity to the consumer end is performed by - BPDB, Dhaka Electric Supply Company Ltd. (DESCO) Dhaka Power Distribution Company Limited (DPDC), West Zone Power Distribution Company Ltd (WZPDCL) and REB. (For details please look at Annex 4)

6.2 Capacity and consumption In case of production, Bangladesh has shown significant increase in installed power capacity in last few years. In 2010 to 2014 the annual growth rate of installed power capacity was 16% per year. Comparing to the previous period of 19992009, the growth rate was less than 5%. At June 2015 the electricity production capacity was 11,534 MW6 with highest production up to 8,177 MW (13 August, 2015).

Without captive and SHS

As if June 2015, about 17.5 Million electricity users covers the 74 % population of the country (BPDB 2015). In 2010, BBSâ&#x20AC;&#x2122;s Household Income and Expenditure Survey (HIES), found that there is a gap in between rural and urban level householdâ&#x20AC;&#x2122;s access to electricity. 90% of the urban households had electricity access whereas; only 42% households had access in rural areas. BPDBs current electricity sells also mirroring that the rural and urban gap. REB, which has mandate to serve electricity to 70% of the population, is consuming only 42% of electricity.

Source BBS 2010

Source: BPDB2015

6.2 Challenges and strategies for power provision In 2010 the Government adopted the 20-year master plan for power generation named Power System Master Plan (PSMP 2010). Considering the 7 % GDP growth rate, PSMP 2010 has estimated that the peak demand to be about 10,283 MW in 2015, 18,838 MW in 2021 and 33,708 MW in 2030. To meet the existing and emerging demand, Govern� ment provides incentives to the privet sector investment and import. Consequently, the share of private power sup� ply in terms of installed capacity increased from 26% in 2008 to 42% in 2013. This has also led to an increase in the marginal cost of electricity.

The power sector is heavily reliant on gas. In 2009, some 83% of power-installed capacity was gas-based; some 5% was coal based; 4% was hydro-based; and the remaining 8% was fuel oil based. But the natural gas supply is in� creasingly getting constrained relative to demand. Most recent data suggests that the current reserve will likely be depleted in less than 10 years (Alam 2015).

Source : Alam 2015

Considering these aspects, government has planned to set up two big coal fire plants with capacity of 1320 MW each, in Khulna and in Chittagong. The Khulna plant will be set up in joint venture with BPDB of Bangladesh and NTPC of India. Coal will be the dominating fuel in the future gener� ation. By 2030, at least 50% electricity will be produced by

coal. Besides, Government has also sets targets for devel� oping renewable energy resources to meet the anticipated demand. According to Renewable Energy Policy 2008, re� newable energy resources will meet 5% of the total power demand by 2015 and 10% by 2020.

Table 4: Probable Power Generation: Primary Fuel Sources by 2030 Sl. No.

Description

Capacity (MW)

Probable Location (S)

Domestic Coal

11,250

North West Region at Mine Mouth

Imported Coal

8,400

Chittagong and Khulna

Domestic Gas/LNG

8,850

Near Load Centers

Nuclear

4,000

Ruppur

Regional Grid

3,500

Bahrampur- Bheramara, Agartola-Comilla, SilcharFenchuganj, Purnia-Bogra, Myanmar-Chttagong

Others (Oil, Hydro and Renewable)

2,700

Near Load Centers

Total

38,700

Source : USEA - Briefing on Bangladeshâ&#x20AC;&#x2122;s Power Sector; the table is adopted from the presentation made by A K Azad, Secretary Power Division for United States Energy Association on July 2011 6.3 Current renewable energy strategies Several fiscal incentives have been extended by the government to Renewable Energy project developers and investors. Dedicated funding support has also been extended through government financial institutions like Bangladesh Bank and IDCOL7 as well as through private commercial banks (Alam 2015). At the same time development partners has extended their support to the initiative by providing refinancing and grant support to IDCOL. Initially World Bank and GEF supported the program. Subsequently, German Development Cooperation (KfW), German Technical Cooperation (GIZ), Asian Development Bank (ADB), Islamic Development Bank (IDB), Japan International Cooperation Agency (JICA), USAID, DFID, GPOBA (managed by the World Bank) joined in the program (for details look Annex 5). Till 2014, 3.3 million solar home system, 230 solar irrigation pumps (69 in operation), a 100 kW solar mini-grid project and 30 biomass based power plants (average 200 kW) was financed by IDCOL (Annual report 2014). IDCOL has

a target to finance 50 solar mini-grid projects by 2017. Apart from that, PDB and REB have their own solar based electricity and irrigation system projects. Moreover, in line with the Renewable Energy Policy 2008, Government has planned to develop at least 500 MW power from renewable energy by 2015. Out of 500 MW, 340 MW is commercial solar projects which include solar irrigation (150MW), solar mini-grid (25MW), solar park (135MW) solar rooftop (30MW) and other 160MW is for the social sector solar power projects. As an institutional framework Government establish Sustainable Energy Development Agency (SEDA) in 2012 for coordination and assisting government in taking care of all activities such as development, implementation and promotional related matter of renewable energy technology

Infrastructure Development Company Limited (IDCOL) is a non bank financial institution owned by the govt. engaged in bridging the financing gap for developing medium and large-scale infrastructure and renewable energy projects in Bangladesh.

Table 5: Project wise distribution of 500 MW generation plan Type of project

Capacity MW

Commercial Solar Power project Solar irrigation

150

Solar mini grid

Solar park

135

Solar rooftop

Total

340

Social Sector Solar Power Project

160

Total (MW)

500 Source: Power Division, MoPEMR 2013

SEDA has made a road map on generating 3103.8 MW from renewable sources in between 2015 to 2021. Out of this target 1675.8 MW will be solar based and particularly 44.25 MW would be Solar Mini/micro/nano-grid. In Bangladesh, the concept of solar grid is relatively new. The first solar based mini-grid (solar-diesel hybrid) was installed in 2010 with the capacity of 100 kWh in Sand�

wip Island. Total cost of the project was BDT 56.78 crore. 50% of the cost was subsidized by IDCOL’s grant (Khan and Huque 2014). At present 4 solar mini-grid projects has been completed and 6 others are under construction. Out of these 10 mini-grids, 4 are in Chittagong division, 2 in Rajshahi and 1 each in Dhaka, Barishal Sylhet and Rang� pur division. There is no solar grid in Khulna division (see annex 2).

7. Issues for the solar grid system in selected geography 7.1 Electricity demand in the no-electrified area

7.3 Solar Energy Resource Assessment

In both areas, substantial number of the household is outside the reach of grid electricity. Average demand for the electricity in non-electrified households is assessed to be 45.4 kWh and 65.4 kWh per month respectively in wither and summer time in Surkhali. In Budhata, electricity demand for the non-electrified household is 46.2 kWh and 65.4 kWh per month respectively in winter and summer. Therefore based on the household number of nonelectrified villages, daily electricity demand in Surkhali and in Budhhata are respectively 6125.8 kWh and 6579.2 kWh in summer time.

According to the Renewable Energy Research Centre (RERC) of Dhaka University, the daily average Global Horizontal Insolation (GHI) of Bangladesh varies from 3.16 (kWh/m2) to 5.46 (kWh/m2). According to Bangladesh Meteorological Department, the mean annual estimated GHI values over Khulna and Satkhira region is 4.39 (kWh/ m2/day)

7.2 Willingness to pay for the energy In Surkhali 96% and in Budhata 91% respondents are ready to pay for the connection. On average, willingness to pay for the connection is BDT 3854 and BDT 3086 respectively in Surkhali and Budhata. At the same time respondents are ready to pay BDT 474 and BDT 468 as monthly bill respectively in Surkhali and Budhata.

8. Conclusion and recommendations The study has identified that in both areas there is a true demand for electricity to enhance the lives and livelihood of the individuals and the community as well as facilitating social change. Most of the respondents are willing to pay based on their capability. High income households are willing to pay more. It was also evident that the expenses on energy increases with the income level. Electricity supply provisions: Complaining the government plan, REB has aimed to cover all the villages in its jurisdiction by 2020. At the root level, Sathkhira PBS has planned to provide 2500 new connection in the Budhata in next two years. The new connections can cover about 83% households of the non- electrified villages. At the same time, Khulna PBS has planned to provide 350 new connections in Surkhali which can cover about 12% households of the non-electrified villages. In case of generation of electricity, there are several NLG and coal based power plants are in pipeline near the coal landing port in Payra, Patuyakhali. These plants will take 5 to 10 years to be operational and will be connected to the national grid. There are no Independent Power Produce plants near by the selected geography which could supply energy in the area. Therefore, PBSsâ&#x20AC;&#x2122; extension planes are subject to additional electricity supply from the national grid. Provision for Renewable Energy: Bangladesh has made a great progress regarding electricity generation capacity. The generation is heavily depending on natural gas supply. To ensure energy security and to get out of dependency on gas, government has identified the renewable energy as one of the potential source of electricity especially at off grid areas. Government has sets targets for developing 10% of the total power demand by 2020 from renewable energy resources. The government is encouraging Renewable Energy project developers and investors through financial and policy support. Over half of the households of the selected off grid villages are using the Solar Home System (SHS). SHS has provided reliable power for lighting and operating low powered equipments like small electric fans. But these SHS could not meet the householdsâ&#x20AC;&#x2122; living and livelihood demand of electricity. Choice of Renewable Energy technology: In the selected areas, electricity demand for the non-electrified households is assessed to be 45.4 kWh to 65.4 kWh per month. The uses of electricity varies from lighting to irrigation. A grid system can provide sufficient electricity to meet such demand as it has some advantages over the standalone systems (SHS, solar lanterns etc.). The system has flexibility regarding load capacity, type of load (AC/DC) and phase required (single/three phase). It supports parallel creation to support business, irrigation and other local industries. Growth in these sectors enhances the local economy, facilitating further services and connections, and stable electricity revenues. Among the renewable energy resources Bangladesh has some experience of developing Biogas, Biomass, Wind and Solar based electricity plants. Among the resources, Biogas and Biomass based plants needs constant supply of the sufficient amount of input (e.g. 38

rice husk). Wind based plants are ideal for the places with open sea, water areas or farm land with very few buildings and trees. On the other hand, solar energy has abundant supply in Bangladesh as well as in the selected geography. According to the map of global horizontal Insulation, average solar radiation in Khulna and Satkhira region is 4.39 (kWh/m2/day). This indicates that the area has huge scope of solar based electricity plants due to its position. The way forward: In both Unions, the respective PBSsâ&#x20AC;&#x2122; are positive about expanding the coverage. To do so, only source that they have at this moment is the additional electricity supply from the national grid. But governmentâ&#x20AC;&#x2122;s initiatives for the increasing net generation capacity is slowing down due to the red tape (e.g. delay in developing floating LNG terminal). At the same time, government is promoting electricity generation trough renewable technology; especially in the remote off grid areas. Considering these circumstances, there are opportunities in both areas to meet the power demand as well as facilitating economic growth through solar grid. The Blue Gold Program may consider conducting a pilot and start with need assessment study in its potential intervention areas to identify the technical and financial requirements to set up solar grid(s). Generally, catchment area of solar grid is 1-2 square kilometers. The program intervention areas inside the polders are quite large for any pilot. So, it has to narrow down to the area having potentials of maximum benefits. A rapid assessment can be made in the selected area to identify the potential mix of electricity users (household, commercial and industrial) and it its demand in different places to identify the area with the maximum potentiality. The assessment should be followed by a feasibility study to identify the technical, financial and economic viability of the pilot and aid in developing the business model. There are several mini grid business models (for details look Annex 3). The Program may follow the community model and encourage respective WMAs / WMGs to form a consortium and manage the venture. The Program can provide the equity and technical support. Different Institutes, Universities and Research organizations (both public and private) are carrying out Research and Development (R&D) activities on diversified fields of renewable energy technologies. Some organizations namely LGED, RERC, Grameen Shakti, CMES, BUET, Rahimafrooz, Micro Electronics, Energy Systems could be consulted for the technical support. The cost of renewable energy appears to be costly with comparison to conventional energy. The higher cost of renewable energy development demands high reimbursement for the energy supply. This may not be affordable for all rural users. IDCOL is largely involved with renewable energy infrastructure development financing activities. The project could be subsidized by IDCOLâ&#x20AC;&#x2122;s grant. 39

References Ahammed, F and Taufiq, A .2008. Case Study: Applications of Solar PV on Rural Development in Bangladesh. Journal of Rural Community Development 3 (2008): p93â&#x20AC;&#x201C;103 Bhuiyan, A. M. W, Kazi S I, Haque M. M, Md. Rashid R. M, Rahman M. 2011. Community-Based Convenient Hybrid Mini-Grid: Implementation Proposal and Analysis for Bangladesh. International Journal of Innovation Management and Technology, Vol. 2, No. 5 Dr. Alam. G. M. K., 2015. Strategy for Infrastructure Sector. Background Paper for the Seventh Five Year Plan by Policy Research Institute of Bangladesh Asian and Pacific Centre for Transfer of Technology Of the United Nations â&#x20AC;&#x201C; Economic and Social Commission for Asia and the Pacific (ESCAP). Bangladesh Renewable Energy Report Christopher, F and Molly H. A.___. Energy for Development: The Potential Role of Renewable Energy in Meeting the Millennium Development Goals. Paper prepared for the REN21 Network by The Worldwatch Institute Barkat, A., M. Rahman, A. Osman, A. Poddar, S. Khan, S. Zaman, S. Halim G. Mahiyuddin, M. Badiuzzaman, M. Majid. 2009. Socio-economic Baseline Study of the Rural Electrification Development Project (REDP). Report to National Rural Electric Cooperative Association (NRECA) International, Dhaka Barkat, A., M. Rahman, S. Zaman, A. Podder, S. Halim, N. Ratna, M. Majid, A. Maksud, A. Karim, and S. Islam. 2002. Economic and Social Impact Evaluation Study of the Rural Electrification Program in Bangladesh. Report to National Rural Electric Cooperative Association (NRECA) International, Dhaka Barron, M and Torero, M .2014. Household Electrification: Short Term Effects with Long Term Implications, mimeo, Department of Agricultural and Resource Economics, University of California, Berkeley. Bose T. K., M. Reaz U. and Monda A. 2013. Impacts of Electricity Access to Rural SMEs.International Journal of Managing Value and Supply Chains (IJMVSC) (2013) Vol.4, No. 4. Kabir K. M. H. and Uddin M. K. 2015 Prospects of Renewable Energy at Rural Areas in Bangladesh: Policy Analysis . Journal of Environmental Science & Natural Resources, 8(1): p 105-113 Khan H. J. and A.Huque. 2014. The first solar mini-grid service in Bangladesh. Retrieved 24 October 2015 from http:// progressbangladesh.com/the-first-solar-mini-grid-service-in-bangladesh/ IDCOL Annual report 2014 International Renewable Energy Agency (IRENA). 2015. Off-Grid Renewable Energy Systems: Status and Methodological Issues. Working paper Nasrin, A. 2013. Energy Need Assessment and Preferential Choice Survey of Rural People in Bangladesh. Master of Science Thesis. KTH School of Industrial Engineering and Management Energy Technology. Division of Energy and Climate Studies (ECS) Torero, M. 2014. The Impact of Rural Electrification Challenges and Ways Forward. Paper prepared for the 11th Conference AFD PROPARCO/EUDN: Energy for Development Power Division, Ministry of Power Energy and Mineral Resources. 2013. 500 MW Solar Program: an Initiative to Promote Renewable Energy in Bangladesh. Khandker S. R, Barnes D. F. and Hussain A. S. 2009. Welfare Impacts of Rural Electrification: A Case Study from Bangladesh. The World Bank, Development Research Group. Policy Research Working Paper 4859 Unnayan Shamannay and Development Design Consultants Ltd. 1996. .A Socioeconomic Impact Evaluation of The Rural Electrification Program in Bangladesh. Final Report to NRECA /Sheladia Associates, Inc., Dhaka, Bangladesh

Annex 1: Categorization of Solar Grid Size (KW) Stand-alone systems

Capability

Complexity

0-0.1

Pico-gird

0-1

• Single controller

Nano-gird

0-5

• Single voltage • Both grid-tied and remote • Single price systems • Controllers negotiate with other • Preference for DC systems across gateways to buy or sell • Typically serving single build� power ing or single load • Single administrator

Micro-grid

5-100

• Incorporate generation

• Manage local energy supply and demand

• Varying pricing possible

• Provide variety of voltages • Provide variety of quality and reliability options • Optimize multiple-output ener� gy systems Mini-grid

0-100000

• Local generation satisfying

• Interconnected customers

• Transmission limited to 11 kv Source: The International Renewable Energy Agency (IRENA) Annex 2: Solar Based Mini Grids in Bangladesh Project Name

Administrative Division

Project Status

Installed Capacity (MW)

141 KWP Shouro Bangla Ltd Mini grid

Dhaka

Complete

0.141

100 KWP GHEL Solar Mini Grid project

Chittagong

Complete

0.100

141 KWP Hydron Bangladesh pvt. Ltd. Solar Mini Grid

Rajshahi

Complete

0.141

100 KWP PGEP solar mini grid project

Chittagong

Complete

0.100

Solar Mini Grid Power Plant

Chittagong

Under Construction

0.500

Solar Mini Grid Power Plant

Chittagong

Under Construction

0.500

Renewable Energy Based Power Generation Pilot Project in Sylhet Remote Haor Area

Under Construction

0.650

177 KWP Solar Electro Bangladesh Ltd Solar Mini Grid

Barisal

Under Construction

0.177

158.3 KWP GRAM erAlo Ltd. Solar mini grid

Rangpur

Under Construction

0.158

148.5 KWP AVA Development Society Solar Mini Grid

Rajshahi

Under Construction

0.149

Source: Preparation of SREP Investment Plan Bangladesh Energy Sector Development Project (08-6-2015) 41

Annex 3: Advantages and disadvantages of different mini-grid business models.

Model Community

Advantages • •

Private

• • •

Utility

• • •

Hybrid

•

Disadvantages

Increase ownership which improves • maintenance Can be more efficient than bureaucratic utilities •

Communities may lack technical and busi� ness skills (e.g. design and installation; tariff setting), leading to higher costs to bring these in Governance of systems needs to be well managed

Greater efficiency May have capacity to offer better oper� ation and management services May be better able to navigate political interference

• •

Lack upfront financial support in most cases Often difficult to find enough experienced companies, so often schemes are run by smaller companies with less capacity

Responsibility lies with an experienced organization Often good links to policy so have bet� ter access to legal systems Their scale means that they may have better access to spare parts and main� tenance

•

Liberalization means that they are market driven, so may not priorities decentralized systems in rural areas Often inefficient and bankrupt Often driven by political agendas

• •

Combine the advantages of the models • above, such as the technical expertise of a utility and the financial expertise of the private sector

Differences in the management systems of each entity can increase transaction costs

Source : The table is adopted from GVEP international Policy brief, September 2011

Annex 4: Government institutions

•

Bangladesh Ministry of Power, Energy and Mineral Resources (MPEMR) is in charge of electrification activities as well as of improved cook stoves. The Power Division is responsible for the Country Action Plan for Clean Cook stoves (CAP).

•

Bangladesh Energy Regulatory Commission (BERC): BERC has authority over consumer protection, approval of tariffs and pricing, issuance of generation and distribution licenses, and promotion of competition.

•

Power Cell: Within the MPEMR power division, the Power Cell oversees power sector reform.

•

Rural Electrification Board (REB): REB oversees operations of consumer-owned rural electric cooperatives (PBSs). It performs supervisory and regulatory duties to ensure that technical standards are met and performance is monitored.

•

Sustainable and Renewable Energy Development Agency (SREDA): SREDA will act as a focal point for sustainable energy development and promotion, ‘sustainable energy’ comprising renewable energy and energy efficiency. (This institution is not established yet but concrete steps have been taken in this regard by the Government, with SED support).

•

Bangladesh Power Development Board (BPDB): BPDB operates most publicly owned generators and some urban distributors; it acts as a single buyer, purchasing from public and private generators and selling to distributors.

•

Power Grid Company of Bangladesh (PGCB): PGCB is a wholly owned subsidiary of the BPDB, operates the national transmission grid, schedules grid operations and wheels energy to distributors.

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The Dhaka Power Distribution Company Ltd. (DPDCL): DPDCL distributes energy and conducts commercial operations in Dhaka and adjoining areas, except for Mirpur and Gulshan.

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Dhaka Electricity Supply Company Ltd. (DESCO): DESCO distributes energy and conducts commercial operations in the Mirpur and Gulshan jurisdictions of the Dhaka metropolitan area.

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West Zone Power Distribution Company (WZPDC): The WZPDC is responsible for regional distribution in Khulna. Source: The table is adopted from Energypedia 2015

Annex 5: Activities of International Development Agencies regarding renewable energy in Bangladesh •

Asian Development Bank (ADB): The ADB as the major donor took the coordinating role and acts as the chief negotiator with the Government of Bangladesh. All international donor activities in the energy sector are coordinated by the Local Consultative Group led by ADB. It is providing funds to the Bangladesh Rural Electrification and Renewable Energy Development RERED program implemented by IDCOL.

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The World Bank (WB): The WB is providing funds to the Government of Bangladesh to increase the electricity generation, transmission and distribution capacity. The WB initiated the SHS RERED program. It recently announced that it will scale up its support for the solar home system (SHS) program by adding US$78.4 million in IDA credits to the RERED II. This funding shall help install an additional 480,000 solar home systems in areas without grid access to electricity. In 2015 the World Bank signed a $15 million grant agreement with Bangladesh to increase access to clean energy for targeted rural areas through output-based aid (OBA) subsidies. 1.1 million people shall benefit from the program. The program is used to reduce the cost of 225,000 solar home systems and 2,500 mini-grid connections. In addition, investments in solar-powered irrigation to 6,600 farmers will be supported as well as clean cooking solutions for over 9,850 households through biogas plants. IDCOL will implement the program in partnership with microfinance institutions, non-governmental organizations and private sponsors.

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Japan International Cooperation Agency (JICA): JICA is helping Bangladesh in the generation of electricity. Currently, JICA is also providing funds to REREDP program.

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Global Environment Facility (GEF): GEF has supported REREDP from the very beginning and plans to undertake projects in the areas energy efficiency and improved brick kilns.

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SNV: SNV is active in the field of biogas technology dissemination and is showing interest in improved cook stoves.

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Urban Partnership for Poverty Reduction (UPPR): Under UNDP initiated UPPR is collaborating with SED in the cook stove sector and is also open for cooperation in biogas plants in urban settings.

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U.S. Agency for International Development (USAID): USAID has been supporting rural electrification program of Bangladesh for the last 35 years. Currently, USAID has approved a 50 million USD program for energy. 35 million are foreseen for energy efficiency measures and 15 million for improved cook stoves.

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Practical Action (PA): PA is mostly active in infrastructure and livelihood improvement in poor urban areas. As part of their efforts to provide energy access to the poor, they are interested to cooperate with SED in the promotion of improved cook stove as well as related monitoring and evaluation activities.

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Swedish International Development Agency (SIDA): SIDA is planning to start improved cook stove activities in Bangladesh. It is not yet decided wheter this will happen in cooperation with GIZ.

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UK Department for International Development (DFID): DFID has made tremendous funds available for electrification projects. They have indicated strong interest in SHS/SSHS, PicoPV as well as improved cook stove activities. Also they will be active in the field of political advisory, e.g. they are working on the topic of reallocation of subsidies for energy services and fuels.

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Kreditanstalt für Wiederaufbau (KfW): Besides their efforts in rehabilitation of old power plants and grid efficiency, KfW has been a strong promoter and supporter of the SHS and SSHS dissemination under IDCOL. Further cooperation can be envisaged also for Pico PV. Source: The table is adopted from Energypedia 2015

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