International development project 2014 final

International Development Project

An Exploration of the Feasibility of a Solar-biomass hybrid for the Energy Supply of Cold Storages in Un-electrified Rural Areas of Bangladesh Dhaka & Amsterdam 10 November 2014

Authors Sefa Casper Deitch Wesley Kuiper Berbel Pietersma MariĂŤlle Plasmeijer Max Slagt

BRAC Priyanka Chowdhury Allison Elgie Zainu Sadia Islam

This report is intended for: Researchers, professionals and policy makers with an interest in the current feasibility of renewable energy for the energy supply of cold storages in the un-electrified areas of Bangladesh.

Bangladesh.

This report should be cited as: BRAC & Sefa (2014) ‘International development project: An Exploration of the Feasibility of a Solar-biomass hybrid for the Energy Supply of Cold Storages in Un-electrified Rural Areas of Bangladesh, Dhaka.

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Acknowledgements The authors would like to thank the following organizations for the invaluable insights they provided for this paper: TERI India Thermax India NOGEPA Cofely BRAC Solar BRAC Cold Storage The Bangladesh Cold Storage Association IDCOL SOLARIC RAHIMAFROOZ Grameen Shakti And a big thank you to: Andrew Jenkins, Coordinator, IAU, Research and Evaluation Division, BRAC Sudhir Chandra Nath, Programme Head, Agriculture & Food Security Programme, BRAC Dr. Mahabub Hossain, Advisor to the Executive Director, BRAC Dr Mushtaque Chowdhury, Vice-Chairperson and Interim Executive Director, BRAC Benjaming van Roekel and Mitchell Weijerman of Knowledge2Share Foundation Raymond de Bois of Amsterdam University Fund Ben Pekelharing of AMARNA

For your support and for making this project possible!

Table of Contents List of Abbreviations ......................................................................................................................... 6 Abstract ............................................................................................................................................... 8 Executive Summary ........................................................................................................................... 8 Chapter 1: Introduction .................................................................................................................... 9 1.1 Statement of the Problem ....................................................................................................... 10 1.2 Energy Crisis in Bangladesh .................................................................................................. 11 1.3 Renewable energy in Bangladesh .......................................................................................... 12 1.4 The importance of potato storage ........................................................................................ 13 1.5 Objectives ............................................................................................................................... 13 Chapter 2: literature review............................................................................................................ 15 2.1 Potato production in Bangladesh .......................................................................................... 15 2.1.1 The importance of potato production ................................................................................. 15 2.1.2 Potato storage ..................................................................................................................... 16 2.2 Cold Storage solutions across the world ............................................................................... 17 2.2.1 Design of cold storage for potatoes .................................................................................... 18 2.3 Solar cooling ............................................................................................................................ 18 2.3.1 Technical feasibility of solar cooling ................................................................................. 19 2.3.2 Economic feasibility ........................................................................................................... 20 2.4 Biomass energy........................................................................................................................ 24 2.4.1 Overview of capabilities and traditional biomass sources in Bangladesh.......................... 24 2.4.2 Technical Feasibility: Gasification ..................................................................................... 27 2.4.3 Economic feasibility: Gasification ..................................................................................... 28 2.4.4 Variable Costs .................................................................................................................... 28 2.4.5 Investment Costs ................................................................................................................ 29 2.4.6 Biomass cold storage technical and economic analysis ..................................................... 33 2.6 Solar-biomass hybrid cold storage ........................................................................................ 33 2.6.1 Economical focus ............................................................................................................... 34 2.6.2 Technical focus................................................................................................................... 34 2.6.3 Environmental issues .......................................................................................................... 35 2.6.4 Social issues ....................................................................................................................... 36 Chapter 3: Methodology ................................................................................................................. 37 3.1 Study Area ............................................................................................................................... 37 3.1.1 Rangpur district ................................................................................................................. 37 3.2 National Solar and Biomass Company Visits....................................................................... 38 3.3 International Visits ................................................................................................................. 38 3.3.1 India .................................................................................................................................... 38 3.3.2 The Netherlands ................................................................................................................. 39 3.4 Sampling .................................................................................................................................. 39 3.5. Data Collection ..................................................................................................................... 39 3.5.1 Focus group discussions ..................................................................................................... 39 3.5.2 In-depth interviews ............................................................................................................. 39 3.5.3 Key informant interviews ................................................................................................... 40 3.6 Data collection ......................................................................................................................... 40 3.6.1 Data familiarization ............................................................................................................ 40 3.6.2 Data reduction .................................................................................................................... 41 3.6.3 Data display ........................................................................................................................ 41 4

3.7 Ethical considerations ............................................................................................................ 41 3.8 Methodology of economic feasibility calculations ................................................................ 41 Chapter 4: Findings of Objective 1 ................................................................................................ 42 4.1 Introduction............................................................................................................................. 43 4.2 Parameters for feasibility calculation ................................................................................... 44 4.2.1 Cost items ........................................................................................................................... 44 4.2.2 Revenue items .................................................................................................................... 45 4.2.3 Other input variables .......................................................................................................... 46 4.3 Solar model .............................................................................................................................. 46 4.3.1 General findings: ................................................................................................................ 46 4.3.2 Technological aspects (solar PV) ....................................................................................... 47 4.3.3 Economic aspects (solar PV) .............................................................................................. 48 4.4 Biomass model......................................................................................................................... 49 4.4.1 Technological findings ....................................................................................................... 51 4.4.2 Economic aspects ............................................................................................................... 51 4.4.3 Conclusion biomass model ................................................................................................. 53 4.5 Solar-biomass hybrid cold storage ........................................................................................ 54 4.5.1 Solar-biomass cold storage in the context of India ............................................................ 55 4.5.2 Solar-biomass hybrid cold storage in the context of Bangladesh ...................................... 60 4.5.4 Conclusion solar-biomass hybrid model ............................................................................ 60 4.6 Conclusion objective 1 ............................................................................................................ 61 Chapter 5: Findings of Objective 2 ................................................................................................ 62 5.1 Storage facility ........................................................................................................................ 63 5.1.1 Storage time ........................................................................................................................ 64 5.1.1 Home storage ...................................................................................................................... 64 5.1.2 Rental costs......................................................................................................................... 65 5.1.3 Waste .................................................................................................................................. 67 5.1.4 Transportation to and location of the cold storage ............................................................. 67 5.1.5 Labour at the cold storage .................................................................................................. 67 5.1.7 Capacity and land requirements ......................................................................................... 68 5.1.8 Cold storage temperature and procedures .......................................................................... 69 5.2 Other related issues during pre-harvest and post-harvest stages of potato production .. 70 5.2.1 Seeds ................................................................................................................................... 70 5.2.2 Fertilizers ............................................................................................................................ 71 5.2.3 Electricity and Irrigation .................................................................................................... 71 5.3 Conclusion ............................................................................................................................... 71 Chapter 6: Conclusion ..................................................................................................................... 74 Chapter 7: Limitations and Recommendations ............................................................................ 76 Bibliography ..................................................................................................................................... 77 Appendix I: Biomass component costs ........................................................................................... 83 Appendix II: Economic Analysis of Solar and Biomass cold storage.......................................... 84

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List of Tables Table 1: Estimates of production of potatoes in Bangladesh (2012-2014) ___________________13 Table 2: Price indication of solar PV modules_________________________________________18 Table 3: Price indication of solar thermal collectors____________________________________19 Table 4: Price indication of the other components of solar thermal cooling__________________20 Table 5: Interviews conducted at a glance____________________________________________36 Table 6: Assumed technical specifications of the cold storage____________________________38 Table 7: Component costs of a solar PV cooling system with vapour-compression cooling______42 Table 8: Key technological findings from the ‘Thakurgaon’ project________________________45 Table 9: Tentative project cost of the ‘Thakurgaon’ system ______________________________46

List of Figures Figure 1: Composition of revenues from by-products___________________________________47 Figure 2: Graphical model of the solar-biomass hybrid cold storage system (TERI) __________49

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List of Abbreviations BARC: Bangladesh Agricultural Research Council CFL: Compact Fluorescent Lamp COP: Coefficient of Performance CSP: Concentrated Solar CSAB: Cold Storage Association Bangladesh DPPL: Dreams Power Private Limited EJ: Exajoule (10^18 joule) IDCOL: Infrastructure Development Company Limited IDI: In Depth Interview HHV: Higher Heating Value IRR: Internal Rate of Return KII: Key Informant Interview LCOE: Levelized Cost of Electricity LDC: Least Developed Country MT: Metric Tons NO: Nitrogen Oxides NPV: Net Present Value REB: Rural Electrification Board Solar PV: Solar Photovoltaic TERI: The Energy and Resources Institute

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Abstract This report investigates the economic and technical feasibility of three types of non-grid connected cold storages, in the context of rural off-grid Bangladesh, to prevent the loss of potatoes at the farmer level. The findings of BRAC & Sefa (2013) are used as a reference point, from which this research is conducted. The report starts with addressing the economic and technical feasibility of solar, biomass and solar-biomass hybrid cold storages. The study continues with addressing the potential scope for implementation of a cold storage in rural off-grid areas. The study was mostly qualitative in nature using standard data collection techniques, such as In Depth Interviews (IDIs), Key Informant Interviews (KIIs), Focus Group Discussions (FGDs) and direct observations for the triangulation of information. The research concludes that the implementation of all three of the evaluated renewable energy models for cold storage are feasible, though their investment costs are high, and that the models can empower local villagers and increase acceptance of the use of cold storages. Furthermore, it was found that there are not enough cold storages available in rural areas of Bangladesh, such as Rangpur. The demand for more cold storages is enhanced by the fact that farmers are often not able to sell their crops immediately after harvesting. The installation of cold storages in rural areas is only feasible for the regions where there will be no grid connection installed in the nearby area of the cold storage in the upcoming 15 years. Finally, the implementation of cold storages in rural off-grid areas does not only mitigate the problem of food loss, but it also creates (long term) economic benefits for the local communities and thus for Bangladesh as a developing country.

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Executive Summary A collaboration between the Bangladeshi NGO BRAC and the student association Sefa of the University of Amsterdam investigated the cause of perishable food loss and suggested a solar energy based cold storage solution in 2013. Following the recommendations of this project, a second phase of research was initiated with the aim of investigating the economic and technical feasibility of a solar-biomass hybrid cold storage to prevent the loss of potatoes at the farmer level.

This research has two main objectives: to determine whether the hybrid-cooling model is technically and economically feasible, and to address the potential scope for its implementation in rural off-grid areas (where no grid connection is expected within the upcoming 15 years). The study area is diverse and is comprised of various geographic locations in Bangladesh, India and the Netherlands. The study was mostly qualitative in nature with some quantitative calculations and utilized standard data collection techniques: In Depth Interviews (IDIs), Key Informant Interviews (KIIs), Focus Group Discussions (FGDs) and direct observations. The report starts with a review of relevant literature on the importance of potato storage, cold storage techniques and the various renewable energy based cooling technologies investigated in this project. The economic and technical feasibility is discussed of solar cooling, biomass-based cooling and of the solar-biomass hybrid cold storage, to get a broader sense of the feasibility parameters. The report continues with a methodology section in which both the qualitative and quantitative methods are set out. The findings section gives an account of the outcomes of our research with regards to both objectives.

The findings of this research suggest that the implementation of all three of the evaluated renewable energy based cold storage models is feasible in Bangladesh, when appropriate use is made of potential revenue streams from by-products such as silica from ash and excess electricity for village electrification. However, all three models have high investment and operational costs, resulting in high per unit electricity production costs. Therefore such a project may require subsidies, which are justifiable from a food security viewpoint, an agricultural empowerment viewpoint, an environmental viewpoint and the viewpoint of long-term economic development for local communities in Bangladesh. Also, a number of issues need consideration beforehand: the appropriate location and technology need to be chosen and expert opinion is needed during the design and implementation phase.

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Chapter 1: Introduction 1.1 Statement of the Problem It is estimated that roughly one third of all food produced for human consumption is lost or wasted, accounting for about 1.3 billion metric tons of food per annum (Da Silva & Steiner, 2013). It is also assessed that post-harvest losses were between 24% and 40% on average in developing countries, and between 2% and 20% in developed countries (APO, 2006).

The percentage of post-harvest losses is considerably higher when proper storage and cooling facilities are not present (BRAC & Sefa 2013). Therefore an urgent need exists to extend the period of availability. It has been found that the post-harvest loss of fruits and vegetables in Bangladesh ranges from 23.6% to 43.5% with a monetary value of BDT 34420 million ($ 445 million) (Hassan et al., 2010). A lack of appropriate storage facilities is seen as a particular factor inducing loss of both fruits and vegetables (Hassan et al., 2010). For vegetables, it is estimated that the loss is 2540% as a result of rough pre-packaging and improper post-harvest handling, transportation, and storage practices (Singh & Chadha, 1990).

Appropriate cold storage possibilities can be a viable solution to elude this loss of products. To be able to store perishable products in rural areas where scarcity of electricity prevails, renewable energy based low cost cooling technologies can be an option and should be considered further.

In Bangladesh there are already some innovative cold storages available for storing potatoes. The project is funded by USAID horticulture and led by CIP and the World Vegetable Center (AVRDC). BRAC is working as one of the implementing partners. It is expected that implementing these storages will increase the income and food security of the smallholder farmers in Southern Bangladesh (BRAC, 2013). One of the storages includes solar energy as one of its power sources ('coolbot' type storage in Jessore, Dhaka, Bangladesh) (BRAC &Sefa, 2013). Since solar energy of itself doesn’t provide enough power to run the huge storage, it is essential to have a backup in the form of a generator or grid connection. However, this is not always an option, since about 60% of rural Bangladesh is not connected to the national grid and installing a generator will increase the total cost (WB, 2013). Considering this situation, a storage powered by a hybrid of solar and biomass energy can be an interesting matter to look into, since biomass is a widely available source of renewable energy for electricity generation. In the field of solar energy, electricity generation is getting cheaper day-by-day.

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Previous studies on this innovative solution have been done both in India and Spain. This can be an interesting matter to look into, if we consider the diverse socio-economic backgrounds of the stakeholders involved in the agricultural process and the diversity of geographic areas within Bangladesh (Ottlakan, 2013; Biomass Magazine, 2013).

The International Development Project 2013 by BRAC and SEFA investigated the causes of postharvest food losses in Bangladesh, along the agricultural supply chain of perishable vegetables and the potential effect of a cold storage solution. Solar panel powered cold storage was investigated as a particular potential energy solution for cold storage. However, solar power for agricultural commercial practices was not found to be economically and technically feasible yet for smallholder practices at the time (BRAC & SEFA, 2013). As a follow up to this research the economic and technical feasibility of the use of solar-biomass hybrid energy for cold storage, along the agricultural supply chain in Bangladesh, will be explored.

If such a model is found to be feasible and locally acceptable to the farmers and other stakeholders, then we can further plan the implementation, i.e. incorporating this model with the existing models of USAID Horticulture Project in Bangladesh, funded by USAID and implemented jointly by International Potato Center (CIP) and BRAC.

1.2 Energy Crisis in Bangladesh Energy consumption in Bangladesh comprises 0.1% of global energy consumption. With a land area of 147,570 square kilometres and a population of over 160 million people in 2014, Bangladesh is among the world’s most densely populated nations. Examined from the perspective of energy use, Bangladesh is one of the least developed countries in the world. Like the rest of the countries of the world, the demand for power is increasing day by day. Rapid growth in the demand for commercial energy in Bangladesh poses serious development constraints in recent years. Per capita energy consumption of Bangladesh is one of the lowest in the world (Munim, 2010). In Bangladesh, only 43% (BER, 2007) of the total population has access to electricity facility. Although natural gas provides two-thirds of the nation’s commercial fossil fuel supply, only 4% of the households have access to natural gas networks. Biomass fuels are estimated to account for about 73% of the country’s primary energy supply. More than 80% rural households depend on traditional energy sources such as firewood, cow dung, and agricultural residues for their energy needs. The excessive use of firewood threatens the remaining forest coverage, which is only 10% of the total land area.

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The domestic primary energy consumption doubled every decade, since the independence of Bangladesh. Natural gas has so far fuelled more than 90% of the power plants of the country.

Hydro-electricity contributes 3% of the total energy supply in Bangladesh and more than 90% of the oil and petroleum products are imported. The overall energy intensity approximately doubled from 1980 to 2005 (Munim et. al, 2010). The demand for electricity in 2011 was 6000 MW, whereas the available generation equals 4.000-4.600 MW. In the worst-case scenario, the demand is predicted to rise to 15.000 MW in 2015, resulting in an enormous supply shortage (Ahmed, Amin, Hasanuzzaman & Saidur, 2013). The consumption of energy is only 170 kWh per capita, per annum. This is far below the minimum required to ensure quality of life. The government wants to raise this to 500 kWh by 2021 (Bala, Alam & Debnath, 2014).

The increased use of petroleum products and electricity in the agricultural sector indicates the development of farming processes. The use of commercial energy, especially of electricity, has developed a work-culture among the people, and their efficiency has also been raised. There is a great necessity to realize optimum usage of the available energy sources to ensure security for sustainable human development. In Bangladesh, the security of energy supply is threatened due to a number of reasons, including lack of domestic energy resources, high dependence on imported transportation fuels and poor energy infrastructure (Uddin and Taplin, 2006).

1.3 Renewable energy in Bangladesh Almost three-quarters (73%) of the people in Bangladesh live in rural areas. In December 2010 electricity is only available for 35% of the people living in rural Bangladesh (Rahman, Paatero, Poudyal & Lahdelma, 2013). One of the steps towards becoming a developed country is to overcome the problem of the current power crisis. Renewable energy could help to minimize the existing power shortage. According to Munim et. al (2010), renewable energy will largely mitigate the direct energy crisis in rural areas of Bangladesh. Luckily, Bangladesh has sufficient renewable energy sources available. Where there is almost no feasibility in implementing wind energy and hydropower, solar and biomass energy have great potential (Rahman et al., 2013). The energy supply shortage can easily be filled if renewable energy is used effectively (Ahmed et. al, 2013).

Recently, different renewable energy technologies have been introduced on a small scale in the rural areas. These technologies had a positive effect on the daily life of the villagers. Over 400,000 Solar Home Systems (SHSs) have been installed by 2010, benefiting over 4 million people living in rural areas (Ahmed et al., 2013). The sustainable energy development of a nation largely depends on the utilization of her strategic inputs. According to Munim et. al (2010), incentives should be included in the Renewable Energy Policy to investors for rapid development of clean energy.

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In addition, the Government and the Private sector should work hand in hand to put a bigger emphasize on renewable energy sources.

1.4 The importance of potato storage This feasibility study will focus on the cold storage of potatoes in Bangladesh since it is currently a crucial source of nutrition in Bangladeshi diets, and the potatoes are needed to meet the needs of a growing population. In Bangladesh potatoes are the most consumed type of vegetable. In 2010, 7.9 million metric tons were consumed, compared to 1.4 million metric tons of other fresh vegetables (Eggers, n.d). Bangladesh has achieved a surplus in potato production (Chowdhury & Hassain 2013), but there is a need for both short term and long term potato storage in Bangladesh since a lot of production is wasted (Hossain & Miah 2009). Although the post-harvest loss of potatoes in Bangladesh lacks empirical research, research by Katalyst (2011) confirms that the loss is significant.

Cold storage offers a very important solution for the problem of food loss in Bangladesh. As potatoes have a central role in the diet of the Bangladeshi people and need to be kept at the right temperature to prevent waste (Egger, n.d.). This study investigates the cold storage of potatoes.

Additionally this study will focus on the rural areas in Bangladesh where no electricity is expected to be available in the upcoming 15 years, which makes renewable energy a viable solution to run cold storages. The focus of this study is on the technical and economic feasibility as well as the social and environmental aspects of this subject. The literature review will describe three energy models for running a cold storage; biomass energy, solar energy, and solar-biomass hybrid energy.

The few available cold storages in Bangladesh are currently connected to the grid. However grid electricity is not a viable solution for the future due to the lack of grid connections in large parts of rural Bangladesh (WB, 2013) and the extensive use of fossil fuels (Huda, Mekhilef, & Ashan, 2014).

1.5 Objectives The conditions in Bangladesh are very suitable for solar and biomass energy. These two renewable energy models are described in the literature review. Finally, a hybrid between solar and biomass is considered because solar energy on its own can’t provide energy full time so it needs a back up (BRAC & Sefa, 2013; WB, 2013).

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This study will focus on a 20 MT cold storage. A similar model based on a hybrid between solar and biomass energy has already been tested successfully in India. This model will be used as an example, with possible adjustments made to fit it in the context of Bangladesh.

Objective 1: To analyse the economic and technical feasibility of the existing models and propose a new model for Bangladesh, if feasible.

Objective 2: To identify the potential scope for implementing solar-biomass hybrid cold storage in rural Bangladesh.

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Chapter 2: literature review 2.1 Potato production in Bangladesh 2.1.1 The importance of potato production While potatoes may be low in caloric value, they provide an excellent source of high quality protein, vitamin C and other important minerals (Azimuddin, Alam, & Baset, 2009). Azimuddin, Alam, & Baset, (2009) argued that the nutritionally diverse benefits and versatility of potatoes make them a well-suited candidate to address food security issues in Bangladesh, and to reduce the pressure and shortages of rice production in the country. The government has recently begun to encourage increased potato consumption to realize this (Hossain & Miah 2009).

Bangladesh has achieved a surplus in potato production (Chowdury & Hassain 2013) with growing production reported by the Bangladesh Bureau of Statistics Agricultural Census of 2014 (BBS, 2014) (see table 1), but there is a need for both short term and long term potato storage in Bangladesh as currently much of the potato production is going to waste (Hossain & Miah 2009). In Bangladesh, the extent of post-harvest loss of potato production is lacking empirical research.

Table 1: Estimates of production of potatoes in Bangladesh (2012-2014) 2012-2013

2013-2014

Percentage

Total production

Total Production

changes over

(M. Ton)

(M. Ton)

previous year

Local Potato

812,120

835.316

(+) 2,86%

High Yielding Variety

7.791,000

8.114.708

(+) 4,15%

Total potato

8.603.120

8.950.024

(+) 4,03%

Variety

Chowdury and Hassain (2010) indicated the prevalence of late blight in Bangladesh potato production. Late blight occurs in conditions of high humidity, low temperature and foggy weather, and can reduce total production yield by 25% (Chowdury & Hassain 2010). Prevention and control of late blight comes from measures such as using quality, disease-free seed, early planting and early 15

harvest sorting during storage (November 15 to February 15), proper irrigation, treatment and application management of fields (Chowdury and Hassain 2010).

Uddin et al. (2010) collected primary data in several upazillas in Bangladesh, including the Pirgani upazila of the Rangpur district. Based on 2008-2009 data, the study reported an average selling price of 11.56 taka per kilogram and a cost of production 8.73 taka per kilogram (Uddin et al.

2010). This equates to a profit of 2.83 taka per kilogram and a BCR of 1.32, on average (Uddin et al. 2010).

It is evident from Hajong et al. (2010) that price variations of the market price for potatoes over the course of a year can vary significantly. Potato prices are 29 percent higher than the average yearly price in December, while they are 25 percent lower than the average price in March (Hajong et al.

2010).

Potato farmers experience many problems in potato production, not limited to the lack of cold storage in Bangladesh. In fact, many problems occur during the pre-harvest stage of potato production (Uddin et al, 2010). All of the problems affect the economic viability of agricultural operation, and therefore they affect whether farmers can afford to store their potatoes, or are forced to sell them at the time of harvest. Uddin et al. (2010) concluded that the cost of production was high and was not complemented by a reasonable selling price for the production, so that farmers are losing in the value chain.

2.1.2 Potato storage Rashid (2008 cited in Chowdury & Hassain 2013) indicated that in the year 2008 only 27.5% of the total potato production (including seeds) in Bangladesh was kept in cold storage.

The selling price of potatoes at the time of harvesting has significant implications on the profitability of potato production as 62% of all potatoes produced are sold immediately. Of the 23% of total production that is stored, 85.5% is stored in cold storage while 14.5% of the potatoes are stored in home storage (Hossain & Miah 2009). It is evident that while a high percentage of stored potatoes end up in cold storage, the amount of stored potatoes is still relatively low. This indicates that farmers are subject to market prices at the time of harvesting, as there are little storage options. Also, it appears that those who can afford to store potatoes chose to store in cold storage (Hossain & Miah, 2009).

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The loss of potatoes can be reduced by use of a cold storage, but access to a cold storage is often limited for farmers in Bangladesh for many reasons, including the lack of cold storage facility, the liquidity constraints of farmers, high charges associated with cold storage, uncertainty of the future market price, financial insolvency, bad communication, inadequate transportation facilities and the inability to receive compensation in the event that products are damaged in the cold storage facility (Hajong, Moniruzzaman, Mia, Rahman, 2014). In Bangladesh, as identified in a previous study by BRAC and Sefa (2013), as well as supported by evidence in Hajong et al. (2014), farmers must sell the majority of their production immediately after harvesting, because they need cash and lack access to storage facilities. When potatoes are sold in a ‘distress sale’ immediately after production, farmers receive a poor price for their production due to oversupply on the market (Hajong et al.

2014).

Proper cold storage can assist in maintaining a tolerable range of prices throughout the year (Hajong et al. 2014); cold storage is needed in the months when the price is lowest due to excess market supply (February to April), after which it can be sold during periods of supply shortage and higher prices. Farmers sell the majority of their production during harvest time, when prices are low due to the excess supply in the market. The prices consequently rise before the planting period when there is an increase in potato seeds demand. (Hajong et al. 2014).

Farmers cannot always store potatoes in cold storage due to high charges for storage, uncertainty of future market prices of potatoes, poor financial situation, poor communication, inadequate transportation and an inability to get compensation from cold storage owners in the event of damage to potato production (Hajong et al., 2010).

2.2 Cold Storage solutions across the world There are many techniques and technologies to store products in cooled conditions. Some of these methods are expensive and complex to integrate, whereas other options are relatively cheap and simple. A technique commonly used in Least Developed Countries (LDC) is evaporative cooling, which can be a zero energy solution. Evaporative cooling decreases the temperature of fresh produce by evaporating water to 2-3 degrees Celsius above the dew point. This technique is very suitable for bulk storage of tropical and sub-tropical crops. However, in order to operate efficiently it requires conditions with low humidity (Kitinoja 2013). Kitinoja and Thompson (2010) describe several designs of evaporative cooling currently available in Southeast Asia, India and Africa, mostly constructed out of locally available, low cost material.

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In Bangladesh, several cold storages run on grid electricity and collectively they have approximately 9700 tons of storage capacity, which is considered to be a lot (Hajong et al. 2014). In addition to the traditional cold storages, BRAC is also involved in the development of innovative cold storages called ‘Coolbots’. These cold storages make use of renewable energy technologies but have a small storage capacity, approximately 8-10 MT. These storages operate on grid electricity, backed up by solar power and a generator. These types of cold storages still face several technological challenges according to BRAC AFSP.

2.2.1 Design of cold storage for potatoes Considering the energy constraints, it is necessary to investigate a storage solution, which will be energy efficient. Anam & Bustam (2011) indicated that Bangladesh has potential for utilizing solar power. Ghosh et al. (2012) found that the daily hours of sunlight in Bangladesh range from 7 to 10 hours. When adjusted for seasonality, the average is 4.6 hours/day, which is still considered to be enough (Fahim et al. 2010; Ghosh et al., 2012). In addition to solar energy, biomass energy could be a potential source of power. This energy is generated through energy conversions of biological matter (Slade et al. 2011). This biomass energy can be used in combination with solar energy to run a cold storage that is much cleaner since there is no requirement for energy storage in the form of batteries.

This literature review focuses on a combination of the two different renewable energy sources for cold storage solution in the context of rural off-grid Bangladesh.

2.3 Solar cooling In Bangladesh, approximately 80% of the energy consumption comes from fossil fuels, which are non-renewable resources (Chowdhury et al. 2011). This is the reason why legislative initiatives, as well research activities aim at the utilization of solar power systems, which lead to an increase in energy savings and the use of renewable energy (Desideri et al. 2009). A rational use of solar energy brings both economic and environmental benefits, by reducing consumption of fossil fuels, electricity and pollutant emissions (Desideri et al. 2009).

For many countries, the demand for refrigeration for both commercial and residential purposes during the hot season is ever increasing. There is a lack of electrical energy and storage in developing countries like Bangladesh to accommodate high-energy consumptive systems such as 18

refrigeration and cooling (Ullah et al. 2013). Solar energy can provide cheap and clean energy for cooling and refrigeration applications all over the world. It can play a very significant role where electricity is unavailable (Ullah et al. 2013).

To achieve cooling, two basic methods can be utilized: solar electric cooling and solar thermal cooling. In solar electric cooling, PV (Photovoltaic) solar panels convert solar energy into electrical energy, and use it for conventional methods of refrigeration. In solar thermal cooling solar heat is collected by solar collectors to provide the thermal energy to power a thermal cooling system (Ullah et al. 2013). In such a system thermochemical or thermo physical processes transform thermal energy into useful cooling and heating energy (Whang et al. 2007).

2.3.1 Technical feasibility of solar cooling Technical feasibility of solar electrical cooling systems According to Desai et al (2013), there are two types of cooling systems in solar electric cooling.

The vapour compression cooling system and the Peltier cooling system. Riffat, Omer and Ma (2001) stated that generally, a Peltier cooling system is less common and less efficient than a vapour-compression system. Considering this we will focus solely on the vapour-compression system.

The technical feasibility of solar electrical cooling systems depends on various parameters.

According to Hwang et al (2008), the dominant factor is the efficiency of the PV cells.

Commercially available solar cells have efficiency of about 15% under the mid-day sun on a clear day (Kim & Ferreira 2008). Kim and Ferreira (2008) also state that, for the purposes of refrigeration, PV cell efficiencies of 15% lead to high overall efficiency of the cooling system, when combined with a conventional vapour compression system. Other parameters are those that affect the temperature of the cells, such as solar radiation, the ambient temperature and the wind speed (Mokhtar et al. 2010). Also the required temperature for cooling, the amount of cooling required, the type of the cooling system used, the coefficient of performance (COP) of the cooling system, and the type and the performance of the energy storage system used may influence the feasibility of the system are crucial variables (Hwang et al. 2008). Energy storage is important for solar cooling systems as it allows the system to work overnight and accommodates variations in cooling supply (Mokhtar et al. 2010). Mokhtar et al (2010) identify thermal storage of chilled water as a feasible option for PV cooling systems. In addition, the performance of inverters also plays an important role in determining the feasibility of a solar cooling system (Otanicar et al. 2012).

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Technical feasibility of solar thermal cooling systems The various solar thermal methods are compared based on their coefficient of performance (COP), specific cooling power, cooling capacity and minimum and maximum working temperatures.

Different working fluids of solar absorption cooling systems and adsorption cooling systems provide various advantages and limitations. The COP of absorption cooling systems is better than that of adsorption systems, but the adsorption system can handle higher temperatures better (Ullah 2013). Based on the thermal COP of each cycle, the absorption cycle is preferred to the adsorption cycle, and the liquid desiccant system is preferred to the solid desiccant system (Whang et al. 2007).

Mokhtar et al (2010) have developed a set of equations relating the COP to the ambient temperature.

2.3.2 Economic feasibility General Economic Comparison

Otanicar et al (2012) compared solar PV cooling systems to solar thermal cooling systems, on the basis of upfront investment costs. This is because they assume operational costs to be negligible.

For the short term they conclude that solar thermal cooling systems, especially those that have ammonia absorption and those that are desiccant-based, have more cost-efficient than solar electric systems, which use high performance vapour-compression. However, with electric cooling, the PV system cost has a large impact on the total system cost, and therefore there is a large cost reduction potential for solar electric cooling systems, while this is not the case for solar thermal systems.

Therefore, in the long run, solar electric cooling will cost less than solar thermal. According to cost projections in 2012 by Otanicar et al (2012), this point will be reached by 2030.

Upfront costs Table 2 provides an overview of various price estimates of solar PV panels, provided by the literature. Green et al (2011) provide an overview of solar PV materials and their conversion efficiencies from which it can be concluded that silicon solar PV panels generally have a higher conversion efficiency than those made of thin film. Based on this observation and on the price estimates in table 2, it would seem that silicon PV panels offer better value for money.

20

Table 2: Price indication of solar PV modules Source

Unit

$* per unit BDT* per unit

Wp-DC

1.65

127.88

Wp-DC

1.00

77.50

Wp-DC

1.50

116.25

not mentioned

Wp

3.54

274.00***

not mentioned

Wp

3.39

263.68

Silicon

W

†1.05–4.05 81.46–314.19

Silicon

W

†4.15–4.50 321.94–348.64

Silicon (solar panel)

m²

879.40

Type Thin film

Reichelstein & Yorston (2013)

(BoS price)** Silicon

Reichelstein & Yorston (2013)

(System price)**

Reichelstein & Yorston (2013) Silicon (BoS price)** Arup Kumar Biswas et al (2013) Eicker et al (2014) Otanicar et al (2012) (literature) Otanicar et al (2012) (estimate) Lazzarin (2014a)

68,237.42

* All currency conversions were made on www.xe.com on 16-7-2014 ** The system price represents the overnight cost of installing the system. The balance of system (BoS) price includes all other costs such as wiring, racking, inverter, labour, land and permitting; the estimates from Reichelstein and Yorston (2013) are based on an admittedly optimistic scenario. *** This is the only estimate found in the literature that originates from Bangladesh and is quoted in the original source in BDT. †

The original price range was made up of prices sometimes including the inverter and sometimes excluding the inverter (Otanicar et

al, 2012). For the sake of comparison we have subtracted the inverter price range (Otanicar et al, 2012) from this estimate.

When looking at the price estimates given in the tables above, it must be kept in mind that many local factors such as tax costs, labour and transport can influence prices. In order to get an estimate of the upfront costs of a solar cooling installation, specific to the setting of rural Bangladesh, research should be done in Bangladesh on both the available component prices and the factors necessary to calculate the BoS price.

The factors mentioned by Reichelstein and Yorston (2013) are the derate factor (represents the loss of power from converting electricity from DC to AC current), wiring, racking, the cost of the 21

inverter, labour, land, permitting, the capacity factor (a measure of how much of the maximum theoretical power, the system could actually generate in a year) and possible tax credits. Otanicar et al (2012) include the following factors in their calculations for the price of PV modules: conversion efficiency of the solar panel, COP of the vapour-compression unit, efficiency of the inverter, battery storage efficiency, cooling demand, solar irradiance, required size of the solar collector (and the inverter) the peak solar flux (strength of radiation) and the peak cooling load.

The upfront costs of the battery storage unit are 150 $/kWh in the oversight provided by Otanicar et al (2012), and the costs of the complete vapour-compression cooling unit are 3501 $ for a unit with a COP of 3 and 10503 $ (three times as much) for a unit with a COP of 6.

For solar thermal cooling, cost estimates were found in the literature for solar thermal collectors and for the other system components, and these are summarized in table 3 and table 4 respectively.

Table 3: Price indication of solar thermal collectors Type

Source

Unit

$ per unit

BDT* per unit

CPC

Eicker et al (2014)

m²

541.70

42,046.42

FPC

Eicker et al (2014)

m²

379.18

29,432.21

ETC

Eicker et al (2014)

m²

473.99

36,790.28

FPC & ETC

Otanicar et al (2012)

m²

2.17– 3.17

168.43 – 246.05

FPC & ETC

Otanicar et al (2012)

Wth**

0.83 – 0.84

64.41 – 65.18

* All currency conversions were made on www.xe.com on 16-7-2014 ** This estimate is expressed in dollars per thermal watt ($/Wth). Thermal watts provide less power than regular watts, thus these prices cannot be directly compared to the prices estimated for their solar electric counterparts.

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Table 4: Price indication of the other components of solar thermal cooling Component (type)

Unit**

$ per unit*

BDT per unit*

kWh

21-135

1628.28–10467.47

kWhth

25.15-129.23

1955.28-10052.34

Otanicar et al (2012)

Wth

1.14

88.69

Otanicar et al (2012)

Wth

0.28

21.69

Otanicar et al (2012)

Wth

1.42

109.98

Otanicar et al (2012)

Wth

1.14

88.69

Source Otanicar et al (2012):

Storage unit

from literature Otanicar et al (2012):

Storage unit*** Cooling system

own estimate

(LiBr absorption) Cooling system (NH3 absorption) Cooling system (Desiccant) Cooling system (Adsorption) * All currency conversions were made on www.xe.com on 16-7-2014 ** These estimates are expressed in dollars per kWh ($/kWh) or dollars per thermal kWh ($/kWhth). Thermal watts provide less power than regular watts, thus these prices cannot be directly compared to the prices estimated for their solar electric counterparts. *** The great difference between the floor and ceiling values of the thermal storage unit is mainly due to the use of different storage media, which greatly influence the amount of energy that can be stored.

The variables used by Otanicar et al (2012) for the estimation of the solar collector price are the type of solar array component used, the temperatures needed to run the thermal AC system, solar radiation and the geometry of the solar collector. For the storage component they consider the type of storage medium, the required storage temperature and the storage efficiency. For the prices estimates of the cooling unit, the main determinants are its COP and the effectiveness of the heat exchanger component (Otanicar et al, 2012).

Operational and maintenance costs of solar cooling Otanicar et al (2012) state that operational and maintenance costs for solar cooling systems are relatively low, such that they are not relevant for economic feasibility. Mokhtar et al (2010) do include maintenance costs in their model for comparing the economics of various cooling technologies, but they do not specify these costs. Reichelstein and Yorston (2013) estimate that 23

fixed operational and maintenance costs of a PV-installation are 0.023 $/Wp-DC per year for silicon and 0.030 $/Wp-DC per year for thin film.

The internal rate of return (IRR), net present value (NPV) and levelized cost of electricity (LCOE).

Arup Kumar Biswas et al (2013) provide a general economic model for computing the IRR and NPV of a solar powered electricity plant. Reichelstein and Yorston (2013) estimate the levelized cost of electricity (LCOE). This is the lifecycle cost of the generated electricity per kilowatt hour (kWh) and it represents the minimum price per kWh which the generating plant would have to obtain in order to break-even on the initial investment over its economic lifetime. Reichelstein and Yorston (2013) provide a model for the computation of the LCOE for a solar PV power plant. An important observation from this model is that the LCOE decreases, as the scale of the plant increases (Reichelstein and Yorston, 2013).

2.4 Biomass energy Biomass energy represents 10% of the total global energy supply, and can be further divided into traditional bioenergy sources and modern bioenergy sources (Slade et al. 2011). The conversion of biomass energy into different energy sources depends on the type of biomass production that is available, the quality and characteristics of the biomass and the technological and economic capabilities to engage in energy conversion. Capabilities of biomass production are dependent on the climate, temperature, soil conditions, and the amount of available surplus land (Huda, Mekhilef, & Ahsan 2014); in addition, the economic and social choices made by agriculturalists, politicians and government officials impact biomass production choices. Biomass energy is divided into two distinct categories: traditional uses and modern uses. Traditional biomass energy sources account for an estimated 8% of global energy use, which equates to around 40 EJ (Slade et al. 2011). An example of this energy is using wood or animal dung for cooking fuel. Modern bioenergy currently only accounts for around 2% of all global energy demand around 11 EJ (Slade et al. 2011).

2.4.1 Overview of capabilities and traditional biomass sources in Bangladesh Biomass currently accounts for 70-73% of the total energy consumed in Bangladesh (Islam, Islam, & Rahman, 2006 cited in Huda, Mekhilef, & Ahsan 2014; Islam & Mondal, 2013). This energy is consumed mostly through direct combustion of traditional biomass resource (such as agriculture residues, dung and wood) in the rural areas.

The composition of traditional biomass energy use in Bangladesh, in order of prevalence, is rice husks 23.2%, cattle dung 20.4%, twigs and leaves 12.5%, rice straw 11.6%, other wastes 11.1%, 24

firewood 10.4%, jute stick 7.5%, and bagasse 3.2% (Islam & Mondal, 2013). In rural Bangladesh, direct combustion is mostly used for cooking purposes (Siddiqui & Ellery, 2001). Cooking with direct combustions stoves is grossly inefficient ranging from 11-14% for dung and agricultural residues, respectively (Huda, Mekhilef, & Ahsan 2014).

In comparison, biogas stoves are much more efficient for cooking, at 57% overall (Huda, Mekhilef, & Ahsan 2014). Bangladesh has been identified in several academic journals and by its own government as having significant bio-energy potential, particularly in light of large electrification needs of rural Bangladesh citizens (Huda, Mekhilef, & Ahsan 2014; Ministry of Power, Energy and Mineral Resources n.d.).

It is worth noting that, while Bangladesh’s traditional biomass energy use is high, present bioenergy electricity capabilities in Bangladesh are negligible at less than 2 MW. The government has a set target of 90 MW of bio-energy electricity generation (45 MW biomass, 45 MW biogas) by 2015 (Ahamad & Tanin, 2013 cited in Huda, Mekhilef, & Ahsan 2014).

Rice straw and bran tend to be used as livestock and fish feed, while husks are currently being used to produce electricity on a small scale in Bangladesh (Huda, Mekhilef, & Ahsan 2014). Lim et al.

(2012) indicated a consensus is lacking on the ratio of residue of straw and husks to ton of rice produced. Rice straw has been found to have a 0.4-1.53 ratio, while husks have a 0.2-0.33 ratio to one ton of rice (Lim et al. 2012).

Rice straw has a substantially larger energy fraction than husks, but is associated with logistical problems of collection, as straw is generally left in the field post harvest (Das & Hoque, 2014).

Similarly, Das and Hoque (2014) indicated that rice straw is generally a 50 percent fraction of the total rice production, while husks are around 20 percent (also, Schaffer & Associates, 2005). Rice field residues have potential as a biomass resource but present logistical challenges that are absent from the rice husk resource. Field residues must be collected from the field, while husks are concentrated at the milling location. Therefore, the utilization of rice husks from processing mills to generate electricity has become fairly well-developed (Lim et al. 2012), and is not exclusive to Bangladesh, as it is currently being used in China, India and other countries.

In terms of energy equivalence, three kilograms of rice husks roughly equates to 1 kg of fuel oil or 1.5 kg of coal (cited in Das & Hoque, 2014). The energy content of the rice husks is determined by the moisture content of the husks, as well as the fraction of bran that is mixed in with the husks 25

(Das & Hoque, 2014). Husks are usually around 8-10% moisture (Das & Hoque, 2014). Rice husks have a higher heating value (HHV) of 15-17 MJ/Kg. Das and Hoque (2014) calculated that Bangladesh’s potential for power generation from rice husks could be 1010 MWe, based on the assumption that 50 percent of rice husks are available for gasification purposes, which is significant.

In 2011, the production of rice husks in Bangladesh was 10.12 million tons (FAO Statistics, 2011, cited in Das and Hoque).

Overall, Bangladesh has very limited forestry resources (Das & Hoque, 2014). Forest residues are used in traditional ways, such as a fuel source for cooking. Growing demand for energy has resulted in forests being depleted at an alarming rate with current diminution of 3.3% per annum (Huda, Mekhilef, & Ahsan 2014). Forest residues (twigs, bark and roots) could be more efficiently utilized for biomass energy, therefore more efficient utilization, rather than further deforestation is desired in utilizing biomass as an energy resource (Huda, Mekhilef, & Ahsan 2014). Regardless, forestry resources are not a substantial source of energy, and should not be the focus of this study.

In Bangladesh, cattle, goats, buffalo and sheep are the main livestock and sources of manure. Total manure production depends on the age, breed, feeding habits of the animal, as well as seasonality as there is more grass in the rainy season, resulting in the production of more manure (Huda, Mekhilef, & Ahsan 2014). There is a potential to create three billion mÂł of biogas from an estimated 24 million cattle and 75 million poultry (Islam, Islam, & Rahman, 2006). Animal manure can be decomposed aerobically or anaerobically producing carbon dioxide and organic materials (aerobic conditions) or methane, carbon dioxide gas and organic matter (anaerobic conditions).

Biomass energy can be generated from hazardous waste, such as human excrement, city waste and industrial waste. Waste heat recovery incinerator technology is currently being used to convert municipal solid waste (MSW), a heterogeneous, unprocessed fuel source, into energy. It is estimated that the generation of MSW is 0.4 kg/capita/day in urban and 0.15 kg/capita/day in rural areas (Huda, Mekhilef, & Ahsan 2014). Furthermore, it is estimated that waste is 70% recoverable (Alamgir & Ahsan, 2007).

Total biomass generation in Bangladesh is estimated to be 182.22 million tons per year, and 108.208 million tons per year of this generation comes from recoverable biomass (Huda, Mekhilef, & Ahsan 2014). Recoverable biomass in Bangladesh is composed of the following: 66.64% agricultural residues (both field and processing), 17.53% animal and poultry waste, 7.64% municipal solid waste and 8.19% forest residues (Huda, Mekhilef, & Ahsan 2014). This amounts to 26

an estimated 1,434.14 petajoules (PJ) of energy being available (Huda, Mekhilef, & Ahsan 2014). Further estimations should be investigated, as Slade et al. (2011) have indicated that there are varying methodologies and assumptions that can significantly impact the overall estimations of total biomass resources.

Technology for the production of heat and electrical energy from rice husks has been wellestablished in many regions where rice is produced (Lim et al. 2012). Wibulswas, Panyawee, and Terdyothin (1994) indicated that electricity generation by direct ignition at a rice processing mill in Malaysia was feasible but less economically promising than gasification of the rice husks. The feasibility of rice husk energy conversions in Vietnam has also been investigated. This lead to the discovery that the size of the rice mill, the price of electricity, the price of ash based on silica content, which is a potential revenue source, and the costs associated with rice husks all have an impact of the feasibility of the operation (Bergqvist et al. 2008). Therefore, it is important that all costs are considered, and that information regarding the feasibility of biomass energy conversion operations is context-specific and temporally specific. Unfortunately, literature on the direct combustion of rice husks, specific to Bangladesh, is scarce. Even though there is ample literature on the merits of gasification technology in general.

2.4.2 Technical Feasibility: Gasification In Bangladesh, gasification of biomass resources is an alternative to conventional fuel (Alamgir & Ahsan, 2007) for both cooking as well electricity generation. Zhou et al. (2012) indicated that China has experienced success in implementing small and medium sized scale biomass gasification plants with unit capacities ranging from 2kW to 2MW, achieving an efficiency range of 10-20%.

Literature on the gasification potential in Bangladesh almost exclusively focuses on the use of rice husks as the primary resource. Firstly, as research on gasification is relatively new to Bangladesh, rice husk represent one of the most significant opportunities, as the resource is commonly available (Huda, Mekhilef, & Ahsan 2014). Secondly, rice husk is a processing residue that has a high recovery rate (Huda, Mekhilef, & Ahsan 2014) and minimal transportation costs.

Authors vary in electricity potential estimations, which are based on limiting one of the following variables: either the biomass resources itself or the current capacity of processing facilities in Bangladesh. Huda, Mekhilef, and Ahsan (2014) calculated the electricity potential to be 171 MW, based on the limitations of the processing mills. Likewise, Islam and Mondal (2013) estimated that 200 MW could be generated based on four clusters of rice mills. Bhowmilk (2012) estimated a 27

much higher electricity generation potential of 400 MW, based on the assumption of supply side (rice husk) limitations, not limitations of the current processing facilities.

The literature lacks consensus on the number of rice mills in Bangladesh. Gasification is in its relative infancy in Bangladesh, though there are some recent prototypes investigating and building support for the technology. In 2007, the first gasification plant in Bangladesh was built by Dreams Power Private Limited (DPPL). DPPL built a small-scale rice husk gasifier plant in a village called Gaspur, in the Kapasia of Gazipur district (Huda, Mekhilef, & Ahsan 2014). The plant has a capacity of 250 kW with two units of 125 kW capacity each (Huda, Mekhilef, & Ahsan 2014).

Theoretically, the plant is able to generate enough electricity to power to at least 200 households and 100 commercial outlets through a mini-grid system (Hassan, Mustafi, & Hashem 2009). The plant however is currently not operating at capacity, and is serving the needs of only 50 households (Islam & Mondal, 2013). In 2009, Hassan, Mustafi and Hashem (2009) reported that the plant was operating only one of the two units for 6 hours per day at 56 KW per hour generating in totality 336 kWh per day. In a gasification power plant, it has been found that rice husk consumption is around 1.86 kg per kWh of electricity (Singh 2007, cited in Das & Hoque 2014).

2.4.3 Economic feasibility: Gasification Determining the costs associated with biomass electricity production is contextually specific, dependent on many factors including (but not exhaustively) the type, form and moisture content of the biomass, the level of electricity supply desired and the time for which it is needed, the capital costs associated with technology and materials of the gasifier, and the useful life of the investment, operation and maintenance costs and location of the biomass from the plant and the resultant transportation and processing costs. The costs of a biomass gasification system include three parts: the gasification and cleaning system, the power generation device and the civil work associated with it (Wu et al. 2002). All of these costs will vary depending on the manufacturer, the type of technology, and the technical maturity of the technology.

2.4.4 Variable Costs In a gasification power plant, it has been found that rice husk consumption is around 1.86 kg per kWh of electricity (Singh 2007, cited in Das & Hoque 2014). Chawdhury and Mahkamov (2011) provide an overview of the prototyping and testing of a small-capacity (6-7kW) downdraft gasifier that was designed for use in developing nations. In this case, the gasifier was tested with two types of fuel: wood chips and wood pellets. On wood chips, the gasifier required 2.9 kilograms per hour of wood or 3.1 kilograms per hour of wood pellets (Chawdhury & Mahkamov 2011).

28

Ease of handling, transportability and storability of rice husks is greatly improved through a densification process. Prior to processing, rice husks have a low density of 117.0 kg/m3 (Ahiduzzaman, 2007). After densification, the density is raised significantly to 825.4 kg/m3. Ahiduzzaman (2007) indicated that the process of densifying rice husks through briquetting consumes about 175 kWh to produce one metric ton or 4,200 kWh of rice husk briquettes; in theoretic, laboratory conditions lower energy consumption of 116 kWh per metric ton has been achieved, indicating that improving efficiency in the production process is possible. In totality, Ahiduzzaman (2007) estimates that Bangladesh has a total of 1.0462 million metric tons of rice husks that are available for densification. In 2004, 0.942 million metric tons of rice husk briquetting took place in Bangladesh (BBS, 2004 cited in Ahiduzzman 2007). The cost associated with the densification of rice husks is still unknown.

Ahiduzzaman (2009) calculated that rice mills produce around 187 kilograms per ton of paddy, and consumption of the husks ranges from 32% to 100%, with average consumption being approximately 70%. The remaining 30% of the husks are used for other purposes (Ahiduzzman 2007) Kapur et al (1996, cited in Das & Hoque, 2014) as well as Abe et al (cited in Das & Hoque, 2014) indicated that the financial viability of rice husk gasification for electricity generation is greatly impacted by the location, and therefore, biomass availability of the generation plant.

2.4.5 Investment Costs Nouni, Mullick, and Kandpalb (2007) provided capital costs of the both dual fuel (diesel) and 100% producer gas gasifiers specific to installation in India. From the data provided, it is evident that economies of scale exist with an increase of rated capacity level of the gasifier in both dual fuel and 100% producer gas engines; economies of scale were also evident in the case of China (Wu et al.

2002). To compare two manufacturers’ prices for a 40kW rated capacity engine of both dual and 100% producer gas is provided at the capital costs; duties, taxes and installation costs are excluded.

Bergqvist et al. (2008) found that there was significant manufacturer price differences between gasification plants, ranging from an investment cost as high as 5000 € per kW (529,708 BDT) to as low as 400 € per kW (42,377 BDT). In their analysis, Bergqvist et al. (2008) used investment costs ranging from 660 € per kW (63,565 BDT) to 1,440 € per kW (152,556 BDT). To compare to the costs provided by Nouni, Mullick, and Kandpalb (2007) for a 40kW plant, this per kW cost would 29

result in a total initial investment of 2,542,600 to 6,102,240 BDT. Specific to Bangladesh, the DPPL project in Gazipur required an initial investment of 25 million BDT, which included the installation of the power generation, gasifier, dual fuel engine, generator, distribution costs and end-use costs (like lighting, flour mill etc.) (Huda, Mekhilef, & Ahsan 2014; Hassan, Mustafi, & Hashem 2009). Investment in the gasification plant was funded 20% through grants and concessionary loans, 60% from World Bank funding and 20% from the company (Hassan, Mustafi, & Hashem 2009). It is evident that this prototype’s cost either includes additional costs that are not included in the cited literature’s estimations or there is a difference in methodological calculations.

Das and Hoque (2014) suggested that a downdraft gasifier system was most suitable in the context of Bangladesh based on the cost competitiveness and simplicity of design, as well as the suitability for small scale operations and minimal labour and maintenance requirements. Chawdhury and Mahkamov (2011) indicated that a downdraft gasifier has many advantages, like being able to produce tar free gas suitable for use in an engine, the ability to adapt gas production to the load, in a more environmentally friendly way and with a higher fuel conversion rate. The downdraft gasifier does however have difficulties in operating on unprocessed energy sources that are fluffy or lack density (Chawdhury & Mahkamov, 2011). Jain (2006, cited in Ahiduzzaman, 2007) indicated that rice husk fired gasifiers performed well, achieving efficiencies of 65% in capacities ranging from 3 - 30 MW. The amount of biomass consumed per kilowatt of electricity varies widely as it is dependent on the type of biomass, moisture content, caloric value, operating load and diesel replacement factor (Nouni, Mullick, & Kandpalb 2007). Nouni, Mullick, and Kandpalb (2007) summarized several studies of woody biomass from India, finding that there is a reported range of 0.822 – 1.4 kg/kWh depending on the study. In the case of rice husk biomass gasification in China, Wu et al. (2002) found that 1.55 kg/kWh was required. Wu et al. (2002) also indicated that due to the difficulty of achieving over 20% efficiency with a biomass engine, biomass consumption is typically at a minimum 1.1 kg (dry)/kwH. In the case of rice husk gasification in Vietnam, Bergqvist et al (2008) estimated that rice husks have a mean value of 4.6€ (487 BDT) per tonne, with a range of 1.52€ 7.59€ (161-804 BDT) per tonne. This cost calculation does not consider the transportation costs of the resource (Bergqvist et al. 2008). In China, biomass gasification was found economically infeasible when the price of rice husks exceeded 2512 BDT (200 Yuan RMB) per ton[4] causing the price of electricity to exceed 6.28 BDT (0.5 Yuan RMB)1 per kW. 30

There are costs associated with gas cleaning as tar and ash must be removed to ensure the longevity of the gas engines (Wu et al. 2002). There are environmental problems associated with water scrubbing as it produces tar contaminated water and is also impacts overall system efficiency (Wu et al. 2002). Gas cleaning has been identified by Wu et al. (2002) as the most problematic step in the gasification process, and should be the subject of further research.

In the case of Bangladesh, the DPPL at full capacity has monthly costs of around 600,000 BDT. Operating and maintenance costs are variable with capacity utilization. Currently, costs are around 90,000 BDT per month (Hassan, Mustafi, & Hashem 2009) because only one of the gasifier units is in operation.

Transportation and pre-treatment costs of the biomass can also be a significant impediment to the economic viability of the gasification plant due to the geographical dispersion and need to increase the density of the biomass prior to transportation (Wu et al. 2002). Additionally, exceeding over 50 km of transportation rendered that electricity generated from gasification of rice husks in China is considered to be economically uncompetitive to other electricity sources (Wu et al. 2002). In the absence of a specific analysis of Bangladesh, those gasification plants would be more feasible when placed geographically close to a large source of biomass, such as a rice mill or timber plant. In the case of the DPPL plant, management indicated that the economic viability of the plant would greatly improve if the operation was located adjacent to a rice mill (Hassan, Mustafi, & Hashem 2009).

The income generated from the sale of electricity is dependent on either access to the national grid, or the development of a micro grid for rural, remote electrification. The former is not available in most of rural Bangladesh. The latter is a viable alternative, as long as the micro grid has an adequate utilization factor. The price charged for biomass electricity depends on the current national rates and any supplementary subsidies provided by the government of Bangladesh.

Ash production is estimated to be around 20% of the total husk fuel gasified, but the selling price is dependent of the quality (Bergqvist et al. 2008). Ash is considered to be more valuable based on a higher silica content, with an estimated range of prices from 40â‚Ź (4,238 BDT) per tonne to 160â‚Ź (16,951 BDT) per tonne (Bergqvist et al. 2008). A market for ash sales is an obvious prerequisite for gaining income from this by-product. In addition to ash sales, the sale of heat may also be a worthwhile income to investigate (Bergqvist et al. 2008).

31

There have been mixed conclusions in the literature on whether biomass gasification is an economically viable venture. To reiterate, the economic drivers are contextually specific and must be investigated based on the economic conditions specific to a specific region of Bangladesh.

Therefore, while economic literature pertaining to rice husk gasification provides a useful a bench mark, primary research needs to supplement to draw concrete conclusions on the economic feasibility.

Nouni, Mullick, and Kandpalb (2007) indicate that the LCOE of biomass driven electricity is currently not competitive to diesel generation. This conclusion was primarily driven by higher capital costs associated with the gasifier due to the low demand and the pricing strategy of the manufacturers. This financial competitiveness is expected to improve with the increase in fossil fuel costs or the decline in technology costs associated with biomass electricity. In contrast, Bergqvist et al. (2008) found that rice husk gasification could meet the power and heat needs of the rice milling industry of Vietnam in an economically viable manner. In Vietnam, several scenarios were investigated. A small-scale operation (less than 300 kW) using biomass resources from a scattered group of mills was not economically viable. When rice mills were clustered, the economics of the scenario improved as the capacity of the plant supported could be larger (3 MW, medium size). It is worth noting that in both scenarios, the sale of ash or revenue generation from carbon-offsets was necessary to ensure the financial viability (Bergqvist et al. 2008).

Wu et al. (2002) provided estimations of capital cost investments of a rice-mill gasification plant in China in comparison to those of coal-fired power stations. The literature supports a positive review for the feasibility of biomass gasification plants. Notably, a prominent driver is the lack of transportation and storage costs associated with locating the plant within close proximity to the rice mill (Wu et al. 2002). Additionally, it is evident that economies of scale exist, as coal-fired plants are more economical than gasification plants of 60kW or less (Wu et al. 2002).

In the case of the DPPL plant in Bangladesh, Islam and Mondal (2013) and Hassan, Mustafi, and Hashem (2009) indicated that the plant is currently not generating a profit, as the monthly costs are greater than the income brought in from electricity sales. This economic loss is primarily due to the plant operating at partial capacity. Also, Islam and Mondal (2013), and Hassan, Mustafi, and Hashem (2009) suggested that the feasibility of biomass plants could be improved by establishing a plant closer to a rice mill cluster and by selling the ash generated from gasification. It is evident that, like in China (Zhou et al. 2012) and Vietnam (Bergqvist et al. 2008), full utilization of the ash production would greatly benefit the feasibility of biomass gasification.

32

2.4.6 Biomass cold storage technical and economic analysis India provides a great case to understand the economic and technical feasibility of biomass cold storage in the context of improving food loss in Bangladesh. In India, researchers prototyped a biomass powered vapour absorption system. Anbazhaghan, Saravanan, and Renganarayanan (2005) found that a typical vapour compression system used in refrigeration and air conditioning is less economically feasible than a vapour absorption system using biomass gasification. This conclusion is based on the estimation of biomass costs being Rs 0.75/kg (0.98 BDT/kg) and electricity costs at Rs 4.5/kWh (5.9 BDT/kWh) in India. The prototype tested by Anbazhaghan et al. (2005) demonstrated the rural cold storage systems are probable using biomass gasification and environmentally friendly working fluids. The operating cost of the biomass-based system is lower than cost structures presently available from more conventional compression based cooling systems (Anbazhaghan et al., 2005).

The Cool Village Power project in India is prototyping a biomass cooling system in villages in Uttar Pradesh State in India (Vorrath, 2013). The trial system uses the gasification of woody biomass (such as fast growing weeds) to generate electrical energy to power refrigeration (ibid, 2013). This project is being conducted under the lens of combating food waste, as well as electrification for other purposes. In India, it has been recognized by the partners that a cold storage would be beneficial for farmers in order to avoid having to rely on a middleman to access the refrigeration facilities. In a podcast, research team leader Dr. Subbu Sethuvenkatraman indicated that the current prototype system can generate around 50 KW of power at a consumption rate of 60 kilograms of biomass (CSIRO, 2013). Whether the project will be successful in demonstrating the applicability of biomass cold storage will depend on the ability to deliver a cold storage system that is robust and easy to maintain (Vorrath, 2013). The financial viability and technical viability have not yet been concluded and published, but if the results are promising, it could be replicated quite easily according to the views of the researchers on the project (CSIRO, 2013).

2.6 Solar-biomass hybrid cold storage Nixon, Dey and Davies (2012) investigate the feasibility of a hybrid solar-biomass plant in India for several uses, such as electricity generation and heat processing. From their analysis, Nixon, Dey and Davies (2012) conclude that the levelized energy costs for hybrid solar-biomass power plants are low and able to compete with other systems for renewable energy in India. However, they do expect that the unit energy cost for the considered scenarios will be two to four times higher than commercial concentrated solar power and coal based power plants (Nixon, Dey & Davies 2012).

For establishing feasibility of a project four components should be addressed.

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These are 1) Economic, 2) Technical, 3) Environmental and 4) Social. All these points are explained below for the hybrid cold storage

2.6.1 Economical focus A common concern for the hybridization of solar thermal energy with biomass is the dispersed availability of biomass resources. This might lead to inefficiency in both economic and operational aspects (Kaushika et al., 2007). The model described by Kaushika, Mishra and Chakravarty (2007) identifies the solar collector array as the costliest component of the solar heat-generation unit.

Nixon, Dey and Davies (2012) performed a research on hybrid plants in which they consider several case studies in their research. The first case study is based on a hybrid plant to be implemented in Vapi, India. This plant will provide electricity to the grid, and ice to the nearby fisheries and chemical plants. Results point out that this model, as well as the other four models considered, is competitive with other systems using renewable energy. Especially on a small scale, the hybrids seem to perform better due to relatively lower electricity and energy cost. The levelized electricity cost for all cases considered were also lower than extending the national grid. On a larger scale, the cost per unit of energy is about two to four times the amount of the cost for a commercial CSP and coal fired power station in India (Nixon et al., 2012).

Compared to a biomass system, the main drawbacks are of a financial nature. The cost per energy loss increased from 8.3 to 24.8 $/GJ/a and the levelized energy cost increased from 1.8 to 5.2 ¢/kWh. A more important drawback is the payback period for the hybrid plant, which is longer than for a solar- or biomass-only plant. The cases considered have a payback period of 18 years at minimum (Nixon et al., 20120) A third financial drawback is the increase in price of the biomass used. The price of rice husk, used in the model of Nixon, Day and Davies (2012) increased in the past decade, which could be a result of the increased demand for rice husks for biomass energy.

However, hybridization also reduces the use of biomass energy sources and land since a part of the energy supply comes from solar input. Nixon, Dey and Davies conclude their research, stating that an off-grid hybrid tri-generation plant will be most feasible, although larger subsidies are required for an electricity plant less than 10MW.

2.6.2 Technical focus For the technical feasibility, a project started in Barcelona, Spain, presents a good overview of the technical aspects of a hybrid power plant running on solar and biomass energy (A. Cot et al., 2010).

The project uses concentrated solar power (CSP) in combination with biomass and some natural 34

gas. CSP produces electricity by creating heat out of solar energy by using mirrors. This heat goes through a turbine of a conventional generator system to produce electricity (A. Cot et al., 2010).

Depending on the weather conditions, biomass or natural gas can be used as fuel. If there is a short period without sun (passage of clouds), natural gas can be used as fuel for the boilers. If there is a long period without sun (at night or completely cloudy days) biomass can be used as fuel. In this way an own developed control system of producing energy is created. This way, energy can be produced every moment, irrespective of the weather. At night or during cloudy days the power of the boilers is 36 MWt. The technical feasibility will focus on the different components of a solar-biomass hybrid cold storage. These components include a solar radiation collector, receiver, VAM, biomass gasifier and engine, hot water pump and additional components in order to increase the efficiency of the model.

Amongst the factors considered will be the efficiency, implementation possibilities and ease of operating the plant.

2.6.3 Environmental issues There are some environmental issues regarding the manufacturing of PVs (Union of Concerned Scientists, 2013a; Tsoutsos et al., 2005). Hazardous chemicals are used for cleaning the semiconductor surface of a PV system. The use of these chemicals depends on the amount of cleaning needed, the type of cell, and the size of the silicon wafer. Moreover, workers are at risk because of the chance of inhaling silicon dust (Union of Concerned Scientists, 2013a). The production of PVs is also very energy intensive which impacts the environment (Tsoutsos et al., 2005). There is little experience with the environmental issues concerning solar thermal energy.

However it is known that, as with PV, there are some environmental issues regarding the manufacturing process. Issues concern energy use and gas emissions. Besides this, solar thermal energy usage impacts the landscape, local ecosystems and habitants, noise, and there is a temporally pollutant emission due to the transportation of workers. The impact on the local ecosystem is mainly concerning birds and insects. Thermal energy usage can also have a negative impact on water resources by putting a significant strain on them. Also some pollution may occur in these water resources (Tsoutsos et al., 2005).

As is the case with fossil fuels, biomass can have a negative impact on water resources. Biomass plants require the same amount of water cooling as coal power plants for example. If water is used 35

for cooling it always is much warmer after cooling than it is when it is withdrawn. This warmer water can have a negative impact on plant and animal life. Water is not only needed for cooling purposes but also to produce biomass feedstock. The burning of biomass to produce electricity can have a negative impact on air quality as well. Nitrogen oxides (Nox), sulphur dioxide (SO2) and carbon monoxide are the most common pollutants of biomass electricity. However the air emissions coming from these pollutants depend on the feedstock used. NO emissions cause ground-level ozone, also known as smog. Smog can have an impact on public health. It causes diseases such as asthma, bronchitis, and other chronic respiratory diseases. NO also causes acid rains. Harmful air emissions caused by the burning of biomass to produce electricity also contribute to global warming (Union of Concerned Scientists, 2013b).

The impact of biomass on land use depends on the type of feedstock used. The replacement of food production by the production of energy crops has a negative impact. Additional lands may be needed for the food production, resulting in habitat destruction and increasing food prices.

However, it is possible to improve agricultural efficiency and reduce the land required for food production. This frees up land for the planting of energy crops and diminishes the negative impact of these energy crops on land use (Union of Concerned Scientists, 2013b). In addition, if only biomass is used for running cold storages, as opposed to the solar-biomass hybrid solution, demand for biomass will be greater and more pressure will be put on land usage. The land usage of the hybrid model is 14% - 29% lower than that of biomass-only plants (Nixon et al., 2012).

2.6.4 Social issues In this study we will mainly focus on the cold storage opportunities for potatoes in rural areas of Bangladesh. From the anthropological point of view, there interlinked transactions in the potato market among farmers, traders and cold storage owners, who are widely dispersed. Cold storage owners have traditionally dominated the market by extending advanced money to traders and farmers (Lewis, 1991; Crow and Murshid, 1994). As these studies indicate, agrarian markets in Bangladesh have often been exploited by the dominance of those with abundant capital resources and resulting inequitable distribution of benefit. The social benefits of using renewable energy on its own are improved health, greater self-reliance, work opportunities and technological advances (Akella, 2012). The challenge is to make people aware of the benefits of the renewable energy cold storages provided. Given the target audience, which are the farmers in rural areas, and given the socio-economic implications of a solar-biomass hybrid system, initial subsidy or loans at easy terms, coupled with cooperatively run models, can lead to sustainable systems. Government subsidy is available under different schemes (Kumar, 2012).

36

Chapter 3: Methodology 3.1 Study Area A qualitative study was conducted from June 2014 to August 2014 with some quantitative calculations from primary and secondary sources. In order to fulfil the objectives of the feasibility study, field and company visits were undertaken in Bangladesh, India and the Netherlands.

Research was conducted in India due to its geographical proximity and the presence of current solar-biomass hybrid projects with two companies namely TERI and Thermax. Research in the Netherlands was conducted due to the proximity of some researchers, and the need for capacity building and knowledge generation amongst the research team. Field visits were conducted in the northern region of Bangladesh in the Rangpur district for qualitative data gathering from potato farmers, traders and cold storage company staff. Rangpur district is the largest producer of potatoes in terms of total production and hence has been chosen as our main study area for the current study (Uddin et al. 2010). Also, solar and biomass company visits were carried out in Dhaka in order to understand the potential of implementing this innovative cold storage along with the technical and economic challenges/prospects.

3.1.1 Rangpur district Rangpur is a district (zila) in the northern Rangpur Division of Bangladesh. The district is composed of eight upazillas or sub-districts, namely Badargani, Mithapukur, Gangachara, Kaunia, Rangpur Sadar, Pirgachha, Pirganj and Taraganj.

The Rangpur district was selected as a location for primary data collection due to the district’s large amount of potato production. According to the Bangladesh Bureau of Statistics 2011 Agricultural Census (BBS 2011), in 2009-2010 and 2010-2011, Rangpur was the highest producer of potatoes out of the 63 districts in Bangladesh. Additionally, potato production in the Rangpur area grew by 8.45% from 2009-2010 to 2010-2011 (BBS 2011). Uddin et al. (2010) found that the Rangpur district had 53,740 hectares of potato cultivation in 2008-2009, second to only the district of Bogra.

BARC (n.d) has published data indicating land suitability for potatoes by district and upazilla.

According to this data, Rangpur district has an average of 52% of land that is classified as ‘very suitable’ or ‘suitable’ for potato production (BARC n.d.). Hence Rangpur is a suitable district for understanding the needs and current conditions of potato farmers. The upazila of Pirgaccha was used as a study area for this research. Unfortunately, potato production data at the 37

upazilla level has not been found.

In addition, about 36% of the total households of the Rangpur district were electrified (BBS 2011).

If a large scale is considered for the solar-biomass hybrid cold storage system, it can supply excess electricity (after fulfilling the requirement of the cold storage) for rural electrification. It has been proven that, electrification of households is beneficial for consumers to extend their productive activities past sun set, and it can give them access to mass media (Khadker et al. 2009). This provides additional justification for this project from the social/economic development point of view. This rationale also additionally justifies the selection of the Rangpur district for this research.

3.2 National Solar and Biomass Company Visits In Bangladesh, the respondents interviewed were from Grameen Shakti, BRAC Solar, BRAC Cold storage, Solaric, RahimAfrooz, IDCOL and the Cold Storage Association. These companies were selected on their level of solar and biomass energy oriented expertise. Overall 9 expert interviews (KIIs) were undertaken from these companies, which have expertise in solar and biomass practical experience, and from a cold storage owner in Rangpur.

3.3 International Visits 3.3.1 India Field visits were conducted in Delhi and its neighbouring suburb Gurgaon at the following company’s campuses and test sites: TERI, Thermax and NISE. These companies were selected on the basis of their current work in testing and prototyping solar-biomass hybrid cold storage technology.

The above three companies are working in partnership on a pilot project, which runs a cold storage for potatoes and is powered by a hybrid of solar and biomass energy. The cold storage system comprises a 15 kW (~5 TR) Vapour Absorption Machine (VAM) coupled with a 50kWe Biomass Gasifier system and a field of solar concentrating collectors. The waste heat from the biomass gasifier is used to complement the heat input of the solar collectors for cooling, while the electricity produced by the gasifier is used for village electrification. Hence this particular project in India was of interest to explore, particularly on account of its socio-economic focus.

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3.3.2 The Netherlands A company visit to Cofely GDF-Suez was conducted prior to the field visit in India and Bangladesh to get a sense of the working mechanisms of cold storages. This company was selected on the basis of their expertise on cooling technology.

3.4 Sampling In Bangladesh purposive sampling was applied among potato farmers and traders for the FGDs; participants, particularly men, were selected according to the predetermined criterion that they are at least 20 years old. The sample includes resident farmers and traders, in order to get a comprehensive and insightful perspective of the current extent of potato loss, and the existence of cold storage facilities. The use of BRAC local field staff ensured a representative group of local people. They included the participants using a ‘snowball sampling technique’, which entails that a suitable farmer will help to get another suitable farmer. For the in-depth interviews (IDIs), farmers residing in the Pirgacha area were identified by BRAC staff of the corresponding locality. For the KIIs, institutional heads, program coordinators and project managers were interviewed in India.

3.5. Data Collection Key informant interviews, in-depth interviews and focus group discussions were used to gather information on the technical and economic specifications of the solar-biomass hybrid model, as well as the feasibility from a social and environmental context. The following sources were interviewed: solar and biomass companies (national and international), cold storage companies (national and international), cold storage facilities (Rangpur district), and potato farmers (Rangpur district).

3.5.1 Focus group discussions Focus groups were selected as a methodology to gain the opinions of many stakeholders in the upazilla of Piragaccha (Rangpur district) within the given time constraints. Two FGDs were conducted in Pirgacha, Rangpur. The first focus group was with potato farmers of the upazila. The second focus group was with a group of seed and potato traders.

3.5.2 In-depth interviews As many as possible IDIs were conducted until data saturation occurred. A total of 7 IDIs were conducted among farmers in Pirgacha, Rangpur. Topics covered in the IDIs included the current extent of perishable food loss, especially potato loss, and cold storage facilities. This study additionally focused on identifying the current availability of cooling storage facilities and the future possibility of introducing solar and biomass hybrid cold storage facilities.

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3.5.3 Key informant interviews Key informant interviews (KIIs) were conducted both in Bangladesh and in the Netherlands in order to capture the expert opinions on the various players operating at various points in the supply chain.

Therefore, a total of 14 KIIs were conducted in both countries. Out of these, a total of eight KIIs were undertaken among various stakeholders in Bangladesh, such as BRAC Cold Storage, BRAC Solar, IDCOL, Solaric, RahimAfrooz, Cold Storage Association, Grameen Shakti and the Cold storage in Rangpur. Four KIIs were conducted in India, with TERI, NISE and Thermax. One KII was conducted in the Netherlands, with Cofely.

Table 5: Interviews conducted at a glance

Location

Interviews Conducted

Total

Dhaka, Bangladesh

KIIs

9

Rangpur, Bangladesh

IDIs

7

FGDs

2

IDIs

2

KIIs

4

IDI

1

Delhi

Netherlands

3.6 Data collection The data collection process consisted of the following steps; data familiarization, data reduction and data display.

3.6.1 Data familiarization All the researchers have contributed to the process of transcription and this leads to a certain degree of familiarization with the factors considered. Transcripts were made using recorded sound files and notes taken during fieldwork. Other researchers checked the transcripts to increase the validity as well as to further the familiarization of data. Translated transcripts were compiled, read and discussed.

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3.6.2 Data reduction Priori codes, inductive codes and sub-codes were generated, identified, and defined in a broader group. The definition includes code abbreviations, colour coding, full descriptions, when to use, when not to use and examples from transcripts. The current research used the sub-code for existing storage facilities and for the future potential of introducing solar panel storage facilities. The researchers compared the coding strategies to check the inter-reliability.

3.6.3 Data display Sample checklists were created for methods such as FGDs, IDIs and KIIs to facilitate further data analysis. Triangulation of IDIs and FGDs along with KII findings was done to identify recurrent themes and for cross checking.

3.7 Ethical considerations Questionnaires were read and comprehensively explained in front of potential participants, and they voluntarily accepted to participate in the study. They were then asked to sign or put a thumbprint on the written consent paper. Participants were assured of confidentiality regarding the information they provided. Participants were also assured that neither their name nor any other identifiers will be used in performing data analysis and in sharing the results of the study. The study was approved by the BRAC Research and Evaluation Division (RED) as per existing rules.

3.8 Methodology of economic feasibility calculations In order to determine the economic feasibility of the different models, Net Pesent Value (NPV) and Levelized Cost of Electricity (LCOE) calculations are made. The NPV and LCOE were computed with the following formulas: !

đ?‘ đ?‘ƒđ?‘‰ = !!!

đ??żđ??śđ?‘‚đ??¸ =

đ??ź+

đ??śđ??š!

1+đ?‘&#x;

!

đ??ś! − đ?‘…! Ă—đ??´ đ??ż! Ă—â„Ž! Ă—đ?‘‡

Where T is the economic lifetime of the project in years, CFt is the total cash flow of the project at time t, r is the discount rate, I is the total initial investment, Ci is the ith annual cost of the project, Ri is the ith annual revenue of the project, A is the discount factor (based on T and r), Lf is the full load capacity in kW and hf is the project's annual full load equivalent operating hours. For both key metrics, two scenarios are developed. The first scenario is without potential additional 41

commercialization of the model, whereas the second scenario includes additional potential revenues. However, both scenarios include revenues from cold storage rent, as this is the key revenue source for all models. Model-specific assumptions are discussed in the corresponding sections of chapter 4: Findings of objective 1.

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Chapter 4: Findings of Objective 1 Objective 1: To analyse the economic and technical feasibility of the existing models and propose a new model for Bangladesh (if feasible).

4.1 Introduction In Bangladesh most of the cold storages are powered by national or rural grid electricity and backed up by a generator. However, in a country like Bangladesh grid electricity is not widely available.

That’s why it is already difficult to construct traditional cold storages based on the needs of the community. To mitigate this fact, cold storages could be installed which operate on renewable energy rather than conventional grid electricity. Thus the first objective of this research is to analyse three renewable energy based cold storage models and compare them in terms of technical and economic feasibility.

The three models taken into account are: 1) solar model; 2) biomass model, and 3) solar-biomass hybrid model. All three will abide by the specifications stated in the table below, which will ease our calculation for the solar and biomass model individually as well as our recommendations on the solar-biomass hybrid model. It has to be noted that, our aim is to take as much energy input as possible from the renewable energy source to ensure greener technology. This will also reduce pressure from the conventional electricity and thus promote renewable energy in a cold storage solution. The results found on the several types of cold storages, even though these might be on a different scale, are related to the 20MT cold storage set up considered for the case of Bangladesh.

The specifications for this model can be found in the table below.

It is assumed that the length, width and height of this 20 MT equivalent to 8.3 m3 (1 m3 = 2.41 MT) cold storage is approximately about 8 m, 5 m and 3 m, respectively, which are the same specifications as the solar-biomass hybrid cold storage model in India. For a 20 MT storage capacity the cold storage should be about 12 m3 (equivalent to 28 MT) (Khan & Iqbal 2014) as 40% of the total space of the cold storage will be used for racks, passages and service delivery.

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Table 6: Assumed technical specifications of the cold storage

Items

Specifications

Mass

20 MT

Length

8m

Width

5m

Height

3m

Generator requirement

15 KW

Maximum load requirement

15 KW

Steady state load requirement

9.5 KW

Land requirement of the system

200 m2

4.2 Parameters for feasibility calculation 4.2.1 Cost items Investment cost: The investment cost consists of the cost for acquiring the necessary machinery and land to install the different models, which will be discussed further on in this section, as well as the civil construction cost to install the machines. The civil construction costs are estimated to be 10% of the total equipment cost. This estimation is based on the calculations of Berqvist et al.

(2008). For the biomass model the investment costs are specified separately for the power generation unit and the cooling unit. A derivation of the costs of these units is provided in the Appendix I. Operation and Maintenance cost: The Operation and Maintenance costs (O&M) are driven by the costs of labour. Because such labour has, to our knowledge, not yet been contracted in Bangladesh, we utilize the total monthly labour costs of TERI’s solar-biomass hybrid project and convert them to BDT. This gives us monthly labour costs of BDT 3,800 (BDT 45,600 annually). The solar model does not require a significant amount of labour for operation and maintenance, see the solar section of the literature review.

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Fuel costs: The fuel costs include the costs of biomass fuel (rice husk) as well as the costs of fuel for the generator (diesel). The average price per tonne of rice husk is 1,750 BDT. This price was derived from the IDIs with IDCOL: they state a price range of 1.5 to 2 BDT per kg, of which we have taken the average. The consumption rate of rice husks for the biomass model is 1.86 kg per kWh, based on an estimate by Singh (2007), which is also cited in Das & Hoque (2014), see the biomass section of the literature review. In this report we assume a 10 kW generator. The IDI with the cold storage staff in Rangpur revealed that such a generator requires BDT 70 worth of diesel fuel per hour. The solar model only requires fuel for the generator. According to the IDI with the cold storage owners in Rangpur, this generator works for four hours a day on average, at times when the sunlight is absent, resulting in a total of approximately 1,460 hours annually. We assume that the generator of the biomass model is required to run for the same amount of hours per day as the generator of the solar model. This is a conservative assumption, because, theoretically, the biomass model can run autonomously for 24 hours a day as it isn’t dependent on sunlight.

4.2.2 Revenue items Cold storage rent for potatoes: The rent per sack is based on IDI’s with farmers from Rangpur.

From these IDI’s it was concluded that rent per sack is variable but with a minimum of 300 BDT per sack, and that 210 sacks can be stored in 20 MT cold storage. The potatoes can be stored from February till the 31st of December. The month January is used for maintenance and preparation for the new crops. Based on this information, we make the conservative assumption that 210 sacks are stored annually at a rate of 300 BDT per sack.

Total ash sales benefit: The estimated price of ash ranges from 4,238 BDT per tonne to 16961 BDT per tonne (Bergqvist et al. 2008), depending on the quality. Since the market for ash is uncertain, a safe estimate of 4200 BDT per tonne is used. As mentioned in the biomass section of the literature review, the rate of ash production is about 20% of total rice husk consumption (Berqvist, 2008).

Electricity sales: The village considered as target for electricity sales consists of 120 households and its peak load requirement is 7.5 kW. As we assume that the power supply to the cold storage operates for 4 equivalent full load hours, we estimate the collective village demand for electricity to be 26 kWh. This is based on the information retrieved from IDI’s with TERI and NISE about their hybrid model with village electrification. The cost per unit electricity from the TERI and NISE model is 19 BDT per unit of electricity. This was used as the sales price of electricity to the villagers.

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4.2.3 Other input variables We standardize various technical specifications across all models to facilitate the comparison between them. The capacity of all models is standardized to 15 kW, which corresponds to a cold storage capacity of 20 MT. This is discussed in more detail further on in this section. We assume 1460 full load equivalent operating hours per year (4 per day). This piece of information is from the KII with Teri, who mentioned that their cold storage (also 20 MT capacity) runs from 4-6 hours per day. However, as our calculation requires full load operating hours, which require more input than regular operating hours, we use the lower bound of this range, which is 4. Because the operating hours are determined by the needs of the cold storage, they are independent of the power generation system and therefore they apply to all models. The determinants of the annuity factor, which are the economic lifetime and the discount rate, are standardized at 15 years and 10%, respectively.

According to Bergqvist et al (2008) these are appropriate parameters for similar renewable energy projects.

4.3 Solar model 4.3.1 General findings: As discussed earlier, there are two main types of solar energy suitable for powering a cold storage: i) Solar photovoltaic (PV) and ii) Solar thermal. Solar thermal is more energy efficient compared to solar PV. With solar thermal energy, the sunlight is concentrated to produce heat, which can be used to generate electricity or to generate cooling in a thermochemical process. Excess heat can be stored during the daytime for night time use. In contrast, solar PV is a direct electricity generation process, active when sunlight is present. Storing this electricity requires a battery, which poses a drawback for the environmental aspect of this model.

In Bangladesh Solar PV technology is employed by various organizations, and is successfully generating electricity. The daily hours of sunlight in Bangladesh range from 7 to 10 hours (Ghosh et. al, 2012). When adjusted for seasonality, the average is 4.6 hours/day (Fahim et al. 2010; Ghosh et al., 2012). So, this available energy can be used to run cold storages in Bangladesh. This sunlight can be concentrated for use as a thermal energy source, but the relevant parameters need to be taken into account. For example, “The collector area of a solar thermal power generation system for running a 20MT cold storage is

about 280 square meter. This area requirement could be a big issue if solar thermal technology is considered.�

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-An expert from TERI during KII As was mentioned in the literature review, solar PV panels have a large impact on the total system cost, and there is a large cost reduction potential for these panels, which is not the case for solar thermal systems (Otanicar et.al, 2012). This was also confirmed during one of the interviews: “Photovoltaic technology has become cheaper over time and is a good competitor over the other two

technologies, namely solar thermal technology and biomass gasifier.�

-An expert from TERI during KII Using solar energy brings both economic and environmental benefits, by reducing the consumption of fossil fuels, electricity and pollutant emissions (Desideri et al. 2009). In contrast, solar thermal energy has not been given that much attention in Bangladesh. The majority of solar installations are solar electric and used mainly for small-scale applications such as solar home systems. Hence, the specific knowledge of and components for solar electric cooling are more widely available than they are for solar thermal technology in Bangladesh. Another concern for the use of solar thermal installations is the efficiency of heat conversion from irradiation. A specific angle is required to achieve optimal heat conversion efficiency, which highly varies according to geographic location, as discussed during the KII with TERI. Considering the above-mentioned facts, it was concluded that the focus should be on solar PV for the cold storage application based on solar energy only, since this would seem more feasible in Bangladesh.

4.3.2 Technological aspects (solar PV) - Assumptions and calculations are based on the model from TERI (India), the Khan & Iqbal (2014) model and primary data from Rangpur: Load & Generator requirement: Khan & Iqbal (2014) mentioned that, for 1000 m3 the maximum cooling load requirement is about 24 kW and the steady state load requirement is about 15 kW. So, the steady state load requirement is 37.5% less than the maximum load requirement (approximately). The 20MT cold storage model operated by TERI has a maximum load requirement of about 15 kW. Based on the above calculation the steady state load requirement will be about 9.5 kW in the proposed model. Therefore, 12 kWp solar panels will be sufficient to run the compressor under steady state condition. A 10 kW diesel generator will be capable of supplying the energy 47

when the compressor is required to run under full load or during night time, when the solar panels are not powered by sunlight. For supporting 12 kWp solar PV two 6kW compressors and two sets of inverters will suffice.

Panel requirement: According to Khan & Iqbal (2014), for an area of 14m*14m (196m2) the total solar PV energy will be 20 kWp i.e. about 117 m2 area will be required to accommodate PV panels with a capacity of 12 kWp; approximately, the length and width of the storage need to be 11m each.

Thus the length and width of the existing biomass-solar thermal hybrid cold storage in India would have to be extended, in order to use solar PV energy to power the cold storage. The lifetime cost of the PV panels differ among the type of panels used. For this model, an average lifetime of 15 years is used.

4.3.3 Economic aspects (solar PV) Table 7: Component costs of a solar PV cooling system with vapour-compression cooling Item 12

Cost (BDT) KWp

of

solar

PV

installation

with

1,152,000

Two 6 KW compressor

360,000

Two sets of inverters

50,000

Land price*

1,250,000

One 10 KW diesel generator

300,000

Other costs

1,000,000

Overhead costs

50,000

Total Capital investment

4,112,000

* Land price will vary significantly depending on the area. The land value in Rangpur is approximately BDT 250000 per 40,46 square meter (1 decimal). Assuming about 5 decimal of land is required for establishing this cold storage in the rural setting the total land value is about BDT 1,250,000.

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Operational cost: Lets assume the diesel generator needs to work approximately 4 hours / day in absence of sunlight i.e. when the PV is not working during night time and rainy/foggy/cloudy season. This data was retrieved from the cold storage owners in Rangpur. The diesel price is 70 TK/hour. So per day operational costs for the generator will be about BDT 560. This cost will vary significantly with seasonality. Further operational costs are assumed to be near zero due to the low amount of maintenance required for these relatively small cold storages, as stated by TERI and Reichelstein & Yorston (2013).

Economical feasibility The NPV for the solar model without a revenue stream, so without electricity sales to villagers or any other stream of revenues, is equal to BDT -4,383,053.02 with a LCOE of 18.34 BDT per kWh (Appendix II). Adding the possibilities of village electrification increases the NPV of the model to BDT -3,136,146.91 and a LCOE of 13.13 BDT per kWh. In both cases the LCOE is above the peak rate of grid electricity in Bangladesh, which is 11.58 BDT per kWh. Since village electrification is the only revenue source of this mode besides the income from rent, improvements in the NPV and the LCOE should mainly come from further reduction in the cost of solar panels. This is considered to be a real option since the solar PV panels are still relatively high priced and expected to decrease in price in the near future.

Conclusion solar model: In the context of Bangladesh a cold storage based on solar PV technology is more feasible than a cold storage based on solar thermal technology due to the greater efficiency and availability of the PV technology. When considering to install a solar cold storage, efficiency of the solar panels is an important factor to consider. The relatively low efficiency of the solar panels results in a very strong downward pressure on the NPV. The project, which has a substantially negative NPV and limited options for revenue growth, is therefore very reliant on government or NGO subsidies. However, if either the cost of the panels would decrease or the efficiency of the panels would increase, there would be a strong positive impact on the economic feasibility of the solar PV cold storage. This could eventually lead to an LCOE that lies closer to the grid price of electricity.

4.4 Biomass model There are currently no biomass-powered cold storages in operation in Bangladesh. However, useful information was retrieved from in depth interviews (IDIs) with key informants at the Infrastructure Development Company Limited (IDCOL). IDCOL focuses on the economic development of Bangladesh and aims to improve the standard of living of the people through sustainable and 49

environment-friendly investments. They currently run two biomass projects, the ‘Kapasia’ and the ‘Thakurgaon’.

The biomass project ‘Kapasia’ is a 250 kW power generation system with rice husk as biomass.

Unfortunately, this project doesn’t seem to be viable at the moment. The project was initiated in 2008, but it is currently not in operation. Though the system is technically viable, it struggles with large operational costs. The IDIs revealed that the reason for the failure of the Kapasia plant was the unavailability of nearby biomass (rice husk) resources. If there are no rice mills around, the transportation costs of rice husk from the rice mills to the system are high. This emphasizes the importance of choosing the appropriate location for a biomass based energy station.

“Rice husk is very light in weight and frequent transportation of rice husk is needed in order to

generate the required amount of husk to produce electricity. The location of the biomass based system is very important issue to consider and those areas should be selected which can reduce the transport cost of biomass.”

-An expert of IDCOL during IDI The greatest technological challenge was the decrease in electricity demand over time. A respondent of IDCOL stated the following, “Initially, the demand for electricity was about 250 KW in the project area and this demand was

based on incandescent lights which were used in that period which consumes huge amount of electricity (KW) compared to CFL. However, after 2-3 years of project operation, the energy saving lights CFL were available in the market. In addition, the respective persons from this project was selling CFL lights to the beneficiaries. Due to this, the load requirement of that particular area went down dramatically by almost 40%.”

The maximum load requirement of the plant was 100 kWp. However, it needs to maintain a steady load to operate at maximum revenue. As the electrical load demand went down, due to the introduction of energy saving lights, the operational cost of the system increased significantly.

According to one of the IDCOL respondents, “If this condition could have been assumed in advance and accordingly if the project could have

been designed for 100 kW then this would have been a profitable successful business model.”

The ‘Thakurgaon’ is a 400 kW power generation station, also with rice husk as its biomass source.

Unfortunately, this project faced large unforeseen costs during civil construction. Because the main 50

machines were imported from abroad, sudden changes in the exchange rate added costs of BDT 5,000,000 for the procurement of components. For this reason, the project is not yet in operation.

However, according the respondents, this problem will be dealt with, and the system will be in operation soon. According to IDCOL, a financial analysis had been conducted for both the projects to determine their viability, and these analyses had been approved by the projects’ donors.

4.4.1 Technological findings For the Kapasia system it was found that rice husk provides 70% of the fuel and the remainder is provided by diesel fuel. For this dual fuel type power generation system approximately 1.5 Kg of biomass and 0.1 liter of diesel is required to produce about 1 KW of electrical power in 1 hour. The key technological findings from the ‘Thakurgaon’ project are shown in table 8 below.

Table 8: Key technological findings from the ‘Thakurgaon’ project Location

Thakurgaon

Land Area

100 Decimals

Equipment Supplier

Orbit India Pvt. Limited

Generator Supplier

Cummins India Ltd.

Rice Husk Consumption

12.80 Tons per day

Electricity Generation

400 KW

Silica Production

2 Tons per day

Calcium Carbonate Production

8 Tons per day

4.4.2 Economic aspects Biomass fuel costs about BDT 2 per kg and diesel fuel costs about BDT 70 per litre. Thus the operational cost of the Kapasia system is about BDT 9 per kWh. The per unit electricity production cost is greater than BDT 2 on the consumer side. Thus a subsidy might have been provided to the consumers to match this per unit cost with the grid tariff, to prevent social disputes regarding the tariff.

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The key economic findings from the ‘Thakurgaon’ project are shown in table 9 below.

Table 9: Tentative project cost of the ‘Thakurgaon’ system Component

Revised Cost

Percentage (%)

Land and Land Development

3,800,000

3

Building and Civil construction

15,000,000

13

Plant and Machineries

76,000,000

68

Others

17,000,000

15

Total

111,800,000

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IDCOL mentioned that about BDT 150 was required to carry 40 kg of husk to the ‘Thakurgaon’ plant. Unfortunately this price increased after a while. When there are only a few rice mills nearby, the price of the rice husk will increase as a result of the increased demand. This affects the economic viability of the project. Thus the location of such a system is also important in terms of the level of competition between rice husk suppliers.

Furthermore, the price of rice husk in Bangladesh varies greatly depending on the location. IDCOL provided the following estimate: for one unit of electricity, an amount of 1.5 kg of rice husk fuel is required at a price of BDT 5, and an amount of diesel fuel costing between BDT 2 - 2.50. For procuring electricity from the biomass system only 7 taka was charged per unit, at the customer end, which is very cheap according to Md. Enamul Karim Pavel, Head of Renewable Energy at IDCOL, who mentioned, “Compared to micro grid the system is very cheap as in micro grid per unit electricity costs around

30 taka whereas from biomass it is only 7 taka. Also if you compare this with grid you see this is really cheap.”

According to IDCOL, the sustainability of these biomass based power generation systems highly depends on the sale of by-products: saleable electricity, silica and calcium carbonate. Ash is the main by-product of the gasification of rice husks, and it can be converted into silica and calcium carbonate. There are significant markets for both and they generate revenues that contribute greatly to the feasibility of the project. It was mentioned that approximately 60% of the total revenue comes from the sale of silica, 30% from calcium carbonate and only about 10% from the sale of electricity.

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The expected generation per year of by-products is approximately 1,254,000 kWh of saleable electricity, 621 tons of precipitated silica and 2400 tons of calcium carbonate (see figure 1 below).

Figure 1: Composition of revenues from by-products

To determine the component cost for the biomass model, an average of the component cost was taken from several papers and from the ‘Thakurgoan project. The total rice husk consumption and ash production is based on information from Bergqvist et al. (2008).

The NPV for the biomass model without a revenue stream is equal to BDT -3,266,956.04 (Appendix II). Adding the possibilities of village electrification and ash sales, the NPV increases to BDT – 1,830,774.39. The LCOEs for the model without and with revenue streams are respectively BDT 13.67 per kWh and BDT 7.66 per kWh. This project thus still has a negative NPV. However, with possible government subsidies and investments from BRAC, this model could be economically viable.

4.4.3 Conclusion biomass model In the context of Bangladesh, biomass accounts for approximately 70-73% of the total energy consumed through direct combustion of traditional biomass resources in the rural areas (Islam, Islam, & Rahman, 2006 cited in Huda, Mekhilef, & Ahsan 2014; Islam & Mondal, 2013). If biomass based power generation system can be developed here then it will have a significant role in development of the nation.

However, a large scale rice husk based power generation system (established near rice mills) will be able to produce enough electricity for the 20 MT cold storage, so that the rest of the electricity could be used for village electrification. It might have an impact on air pollution, caused by the 53

burning of biomass to produce electricity (Union of Concerned Scientists, 2013b). Additionally, the initial investment costs will be high and so will the operational cost. This is because, constant supply of rice husks has to be ensured for successful operation. The larger the biomass plant, the larger the supply of biomass is required. Awareness should be raised for efficient and limited use of biomass resources. There could be a challenge in achieving this (source: field work, 2014).

The electricity produced by the power generation system will be used for other income generating activities of the villagers (e.g. it can be used by the owners of the rice mills). This, in turn will enhance the economic development of the villagers (e.g. using electric sewing machine, irrigation etc.). This has been emphasized by several sources of primary data (field visit, July 2014). A similar case has been established by Akella (2012), which mentions that the social benefits of renewable energy are: improved health, greater self-reliance, work opportunities and technological advances.

Another issue for villagers is that it makes more sense to have light and/or fans in their house and to have the opportunity for irrigation through an electric pump, rather than having a cold storage facility. Since not all of the villagers will have the need for cold storage, a modern cold storage in an unelectrified village might create a problem. From the villagers' point of view, they may rather have extra electricity than a cold storage. Thus, providing communities with a cold storage for those who need it as well as providing all villagers with electrification would be a fair, inclusive way of increasing the per capita power consumption (kWh) and boosting rural development.

In conclusion, it can be said that a biomass based power generation system will add significant value in reducing the loss of produce, empower farmers, and overall ensure rural development.

However, for both large and small scale investment, the social and environmental issues need to be addressed and thought should be given to calculating the electricity production in kWh, which corresponds to the need of the community and the availability of biomass resources. In addition, as the revenue of this biomass based power generation system depends more on Silica and Calcium Carbonate sales than electricity production, large scale projects could be considered with a greater focus on selling by-products. Also, the size of the system needs to be considered as this is one of the most important parameters for determining feasibility.

4.5 Solar-biomass hybrid cold storage There is a significant gap in existing research on solar-biomass hybrid cold storages, especially in the case of Bangladesh. However we have gathered some information on the solar- biomass hybrid project that is currently under operation in India by a joint partnership of TERI, THERMAX and 54

NISE. We have also done further research for the prospect of solar- biomass hybrid cold storage in the context of Bangladesh by visiting various organizations dealing with solar and biomass. There are some interesting observations that will be shared in this section. Section 4.5.1 will display information from the context of India and section 4.5.2 will display information from the context of Bangladesh.

4.5.1 Solar-biomass cold storage in the context of India This section elaborates more on the components of such a hybrid system. The most relevant solarbiomass hybrid cold storage is located in India and is owned by TERI. This system is depicted in figure 2.

Figure 2: Graphical model of the solar-biomass hybrid cold storage system (TERI)

TERI currently has a working hybrid cold storage plant. Five people are needed to keep the plant running. The project was initiated in two phases to develop the technology and see what the social impact would be. The project is running for two years now and all information is being gathered along the way. In order to assess the social impact of installing a cold storage, TERI installed the plant in the centre of a rural area. Farmers go to a particular area to sell their produce to a middleman. The middleman will go to the hub and sell the produce on a large market to retailers; eventually the consumer buys the produce. This whole process is a bit unorganised. In fact it was found that a large portion of the loss occurs in this unorganised cycle. The loss is not only for the farmer, but there is also an economic loss for the government and the consumer.

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Teri initiated the project in two phases, discussed below; Phase 1 (Pilot phase): Cold storage model without village electrification This model was based on biomass coupled with vapour compression cooling technology. The model didn’t work as planned. It was not economically efficient and other villagers didn’t receive any benefit from the installed cold storage. This resulted in the cold storage not being efficiently used and maintained. Solar panels were stolen from the site. For this reason the second phase aimed at creating a business model for the cold storage where villagers would benefit from the installed systems.

Phase 2: Business model with Village electrification (2 villages in India) Model based on solar & biomass hybrid with thermal (absorption) cooling technology. By electrifying the village, a sustainable model was created in which villagers maintain the installed site. By-products of the installation are used to reduce the energy waste. This contributes to the economic feasibility of the model. Hence the second phase aimed at creating a business model from which villagers could also benefit. This second stage of the project is still under process.

4.5.1.1 Technical focus The model is based on a solar-biomass hybrid energy source and utilizes thermal vapour absorption technology for cooling. However, the first stage of the project used electrical vapour compression cooling. Figure 2 shows a graphical representation of the system. The system uses ammonia water as cooling fluid instead of lithium bromide. This results in 80-90 degrees centigrade water. The cooling water in the system can go down in temperature to 0 °C, so that cooling temperature can be about 8 °C. The biomass gasifier needs to be supplemented with solar scheffler dishes. The installed collector area has a size of 288 m2 and consists of parabolic troughs. The solar field delivers heat that fuels the cooling system.

Scheffler dishes produce steam as a by-product, which can be used for cooking applications for e.g. temples and religious events. There are some drawbacks. Energy losses from scheffler disks occur at peak time (12:00 noon) because of their specific design. Also the entire system takes up a lot of space, and lastly there are complexities with operating the system. An advantage is that the use of scheffler disks removes a lot of the complexities associated with other types of solar panels. In Bangladesh solar thermal technology is not as common as solar PV technology, which might make it harder to set up and maintain a system based on solar thermal energy.

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The biomass gasifier is used to generate producer gas by burning woody biomass. TERI has a dual fire, two-state, down-drop gasifier. At full capacity it burns around 1.2-1.3 kg of woody biomass per kWh. The efficiency of this gasifier is around 23%. The optimal combination of solar and biomass depends upon local conditions like sunlight and biomass availability. If loose/dense biomass (rice husks) is used, the quality of gas cannot be guaranteed. The capacity of the gasifier itself is 200 kW. In the case of TERI and NISE, engine exhaust heat and jacket heat are recovered at a rate of 50 kW at 82.5 째C. The producer gas delivers another 50kW of power to the gas engine.

The scheffler dishes provide solar thermal energy to the system. There are four scheffler dishes of 16 m2 each and they are designed to supply hot water at around 135 째C. The heat recovery unit (HRU) is the central point in the system that collects all the heat that is produced. Besides the heat produced by the solar and biomass components, also the waste heat of the gas engine is collected here. When all heat is bundled, it is sent through.

All heat collected by the HRU is sent to the vapour absorption machine. This machine uses the heat to create air conditioning for the cold storage. Vapour absorption technologies are already mature and available in India. However, this technology is mostly used for room cooling and not for storages. The vapour absorption machine is based on the triple effect vapour absorption model. In triple effect vapour absorption solutions flow from an absorber to the first and second generator connected in parallel. Solutions from the first generator flow back to the absorber and solutions from the second generator flow to the third generator. Next the refrigerant vapour from each generator is condensed in the condenser. The heat from the third condenser is shared with the second and in turn the second condenser shares heat with the first generator. The COP for the solar thermal air conditioning system is 1.75 and it produces a total of 100kW and 30TR. Temperature fluctuations in the cold storage affect the produce being stored. For example, TERI found that potatoes started sprouting due to the temperature fluctuation, while the cold storage itself was working fine. Electricity usage should be equal to the electricity produced by the hybrid in order to prevent energy waste and inefficiency.

The cold storage is the end product of the system. All energy not used for rural electrification is used to cool the storage containing perishable food. The peak power requirement of the cold storage is 2.69 kW. The energy production depends on the load, which is extremely variable. The in house plant load is 10 kW whereas the household load is 7.5 kW. The sanction load/connected household load is 21 kW. 57

The gas engine is used for providing electricity to the local villages. It receives gas from the biomass gasifier and turns this into electricity for rural electrification. The exhaust gas from the engine comes at a temperature of approximately 450 °C. Besides contributing to the electrification in Bangladesh, the electricity provision helps to mitigate the mistrust farmers have towards the cold storage. If the system provides electricity in their homes, besides cooling their potatoes, they will have a more positive attitude towards this new system.

4.5.1.2 Economic focus Since the existing solar-biomass hybrid cold storages are not comparable to a similar system in the context of Bangladesh, it is hard to determine the exact cost of implementing such system. The costs of the system designed by TERI and Thermax are confidential and at the same time not representative for a model that would be implemented in Bangladesh due to the high R&D cost, as explained by TERI. Once commercialized, the costs for a hybrid cold storage are likely to drop to a more competitive level. However, it is reasonable to expect that the investment cost for installing a hybrid cold storage is significantly larger than for either a solar or a biomass cold storage on itself, since the hybrid combines all the components of a biomass cooling model and those of a solar thermal model.

As mentioned before, the cold storage installed by TERI is operated by five villagers who are trained and skilled enough to keep the cold storage running. The labour cost for the five employees equals the cost of two full time employees, which amounts to BDT 3800 per month. The data on costing factors were not disclosed by TERI due to high confidentiality and their research purpose.

However a respondent during KII mentioned, “Maintenance is relatively simple and the cost are low. Further operation costs is mainly related to the input of biomass.�

Since TERI and Thermax are still testing and adjusting the system, it can be improved in terms of efficiency. This could result in decreased generation cost of per unit of electricity. At the time of research the cost per unit of electricity was valued at INR 18, which is about BDT 23, whereas the price of grid electricity in India is about INR 2-3 per unit (BDT 2.5-3.75 approximately). Hence, the electricity generated is significantly more expensive than grid electricity. It was mentioned during KII that,

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“In order to sell electricity to the villagers and generate additional revenue, the relatively high priced electricity should provide the villagers with sufficient economical benefits, which it does I believe.”

So, it can be assumed that, if the beneficiaries can earn more for their livelihood by using this high cost electricity, only then it will be meaningful for them to accept this high charge. Moreover, benefits in the form of higher productivity due to having access to electricity at night (e.g. using sewing machine or other income generating activities) might generate “want” despite expensive cost of electricity compared to grid. Also it has to be ensured that, the low cost grid electricity does not aim to cover that region very soon.

As mentioned by TERI, the electricity generated from the hybrid model is three times more expensive than electricity generated with a diesel engine. It is USD 3 per unit of fuel wood for the hybrid engine and USD 1 per unit using diesel fuel. Feasibility also depends on local factors and size of the of the plant. For small plants people are hired to chop fuel wood manually, but for larger plants it is more efficient and cost effective to have machines. Considering all the factors, operating costs for the biomass plant would be INR 10 per kg at least. Operating cost for just the fuel wood is very high, about 4 INR per kg if bought from the market. However, if the fuel wood is bought directly from the source then the cost will be reduced to 2 INR per kg.

A hybrid cold storage model with renewable energy has the advantage of mitigating the individual disadvantages of both the solar cold storage model and the biomass cold storage model. Although the initial investment is high, this system is cost-efficient in the long run and it can benefit the farmers and the other stakeholders involved in the process. For example a respondent from TERI stated, “During harvest time the selling price is usually low which is not profitable for the farmers. This situation can be improved if products are sold later when demand is high. So the general economic theory will be to wait for the consumer demand to increase at a time when supply is low. That’s how cold storage can be useful to help to improve economic condition of the farmers through better market integration.”

Information on revenue generation was also confidential. However they mentioned that, if essentially the hybrid model functions like a tri-generation system, it can generate more revenues.

Tri-generation refers to combining cooling, heat and power for simultaneous generation of electricity and useful heating and cooling from the combustion of a fuel or a solar heat collector.

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From this tri-generation system the cooling will be used for the cold storage, the power will be used for village electrification and the heat will be used for heating requirements in the surrounding villages. If these three sources are utilized efficiently then it will be possible to generate revenues and make the hybrid model a success.

4.5.2 Solar-biomass hybrid cold storage in the context of Bangladesh In context of Bangladesh this solar-biomass hybrid cold storage could add a new dimension towards the cold storage solution. This hybrid cold storage will be able to mitigate each individual technology's (solar technology and biomass technology) disadvantages and the energy sources will complement each other. During the foggy/rainy season when sunlight will not be enough, biomass will be able to keep the system running and vice versa.

However, there need to be enough biomass resources to ensure smooth operation of the system. For this, the hybrid plant needs to be implemented nearby the biomass resources. Also the biomass has to be rice husk rather than woody biomass, despite the fact that the latter has a higher conversation efficiency. The literature review, along with data collected in primary field visits suggests that there are alternative uses of woody biomass in cooking applications and for other purposes. Also, rice is the staple food for Bangladeshi and there are a significant number of rice mills in Bangladesh that produce rice husks. Although rice husk also has other uses in poultry feed, the rice mill owners would have to be made aware of the hybrid project. The electricity produced from rice husks can be used for self consumption (captive consumption) and the rest could be used to power the cold storage and for village electrification.

For solar PV use in electricity generation in rural Bangladesh for cold storage purpose, it is always a good idea to select those specific areas that have the highest sunlight irradiation. Solar thermal energy could play a role similar to solar PV but there is not much research on this in Bangladesh.

Which technology will be more suitable in the future is a matter of further research.

From the findings it can be assumed that, for a small scale (20 MT cold storage) either of the three models can be chosen. However, for large scale investment, a primary survey would be required to estimate community demand and accordingly make investments.

4.5.4 Conclusion solar-biomass hybrid model TERI and Thermax demonstrated that a cold storage based on solar and biomass energy can be implemented and operated in a village setting in India. The system utilizes a combination of woody biomass and solar thermal energy in order to provide the electricity required to run the cold storage 60

and to provide electricity to the villagers.

Woody biomass is a source of energy that is less common in Bangladesh. However, biomass in the form of rice husk is more widely available. Although the efficiency of rice husk is lower, it can still be economically feasible to use this as an input when the cost of transport can be kept at a minimum.

In a hybrid model of solar and biomass energy, solar thermal energy is preferred to solar electric energy. This is due to the fact that heat from solar thermal energy can complement the heat generated by biomass gasification, to power the thermal cooling system. This optimizes the total efficiency of the system.

The technical components required for the system consist of the combined components from the solar thermal and biomass cold storages with the addition of a heat recovery unit, in which the heat from both energy sources is collected to power the thermal cooling system. Since solar thermal energy is not used very broadly in Bangladesh, components and knowledge might have to be imported. The combination of components is likely to result in higher investment costs than those of each separate model. However, the constant supply of electricity, and thus reliability of the cold storage, could justify the increase in investment cost.

Village electrification is a crucial part of the hybrid model, since this will lead to the economic empowerment of the local villagers and add substantial value to the use of a hybrid model. The cost per unit of electricity is higher than the price paid for grid electricity. However, when the villagers can benefit substantially from electricity and the national grid is not accessible, they will be willing to pay for it. A hybrid cold storage in Bangladesh can be economically feasible once the model is further commercialized and subsidies can be used to implement the cold storages.

4.6 Conclusion objective 1 To analyse the economic and technical feasibility of the existing models and propose a new model for Bangladesh (if feasible).

From this research it can be concluded that all three models are technically feasible in the context of Bangladesh.

The solar based cold storage model is most efficient when based on PV technology. Compared with the biomass based model, the solar based model is easier to implement and operate, since the input 61

does not have to be treated as is the case with the rice husk used for the biomass model. The biomass model also requires more maintenance since the gasifier should be cleaned on a regular base. The hybrid model is more complicated from a technical point of view, since it combines input from two different sources. Also the utilization of solar thermal instead of solar PV technology adds to the complexity of the model as a whole. However, with the appropriate expertise, the model is still regarded as technically feasible in the context of Bangladesh.

The solar based cold storage is economically less feasible than the biomass model. This is mainly due to the fact that the components for the solar based cold storage are more expensive than the components from the biomass model. In addition, the biomass model has an extra line of revenue due to possible ash sales. This results in a lower LCOE for the biomass model for both scenarios: with and without additional revenues.

All three models are expected to have a significantly negative NPV, mainly due to the large investment costs. This implies that the economic feasibility will strongly rely on subsidies from governments or other organizations. Given the fact that a vast amount of cold storages based on solar or biomass energy are already in operation throughout South Asia, it is assumed that this is possible. The hybrid model will require a larger investment outlay due to the additional components, but there are significant cost reduction opportunities once the model is standardized and commercialized Findings from India revealed that, electricity consumption allocated per household was about 150 kWh, which indicates a great demand for electrification from villagers. However, due to increasing use of energy saving lights the kW requirement of villages is decreasing. This will lower the investment cost of the total system in the future and will further lower the per unit electricity cost at the consumer side. This may help to inspire farmers to make use of the cold storage.

The findings show that village electrification is of utmost importance. It can empower villagers through electrification, create long term economic benefits for farmers as well as the rest of the local community. Furthermore it is crucial to use as much of the system's energy in- and outputs as possible to maximize the yield of the system. The (long term) economic benefits for the farmers and local community are hard to value, but are very relevant for the justification of the subsidies, which would make the project feasible.

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Chapter 5: Findings of Objective 2 Objective 2: To identify the potential scope for implementing solar-biomass hybrid cold storage in rural Bangladesh To identify the potential scope for implementing a solar-biomass hybrid cold storage in rural Bangladesh, information was collected through a focus group with farmers, a focus group with traders, and seven in-depth interviews with seven different farmers. A traditional cold storage with a storage capacity of 15000 MT was visited in Rangpur, about 750 times bigger than the capacity of the potential solar-biomass hybrid cold storage for which we identify the potential scope. Interviews with different stakeholders of the cold storage were also conducted. The farmers, traders, and cold storage owners are all from Rangpur. In addition, a KII was conducted with the Bangladesh Cold Storage Association (BCSA) who is responsible for coordination with all the cold storage owners.

The findings presented below include findings from the IDCOL, which is currently running some biomass based renewable energy projects.

5.1 Storage facility According to The Energy and Resources Institute (TERI) cold storages present in India are used for storing potatoes, which is a problem on itself. Because farmers face financial constraints and are in need of direct cash, they may not even store their potatoes when potato prices are low. Farmers in Bangladesh seem to be especially interested in storing potato seeds. Nowadays they mostly buy the seeds because they cannot store their own seeds effectively, but if they had the ability to store their own seeds, the farmers could reduce the investment of their potato production.

In Bangladesh there are over 400 large cold storages. Most of the owners of these cold storages are members of the Bangladesh Cold Storage Association. Most store potatoes but some are specialized in storing mango pulp, pineapple pulp, carrot, sweet pumpkin, watermelon, fresh fruits, sweets and also dried fish. For fruit there are specialized cold storages.

Owners that are not members of the Cold Storage Association Bangladesh are confronted with certain problems, such as not being able to pay the dues of banks or they might have some problems with the partners etc. However according to the trade regulation committee it is mandatory to be a member of the Cold Storage Association. The reason is as follows: if an emergency condition occurs (e.g. the potatoes rot) and the company is not covered by an insurance, many people will suffer significant losses. The condition of each of the cold storages is checked by the technical 63

personnel of this association on a monthly basis for quality control (the freshness of the potatoes, whether the potato sacks are being rearranged (‘palti)’ for proper air circulation, electricity availability, temperature, humidity of the cold storage, etc.)

The focus group interviews indicated that the Region of North Bengal, including Rangpur is lacking proper cold storage facilities. Currently, only seed potatoes are kept in storage. The cold storage in the upazilla of ‘Nobdiganj’ was established in the year 2009 and gradually has expanded from the initial one chamber to a total of five chambers at the present time.

The users of the cold storage are both farmers and traders. The distribution is as follows: 40% are farmers and 60% are traders.

5.1.1 Storage time All stakeholder groups indicated that typically farmers and traders would store their potato seeds for nine to ten months of the year; this time can vary, however, depending on the farmer or trader’s needs. In the focus group, the farmers indicated that typically potatoes are harvested from the beginning of November until the end of December.

The cold storage manager indicated that potatoes may be stored in a cold storage facility from February until December 31st. After December 31st, any remaining potatoes will be removed in order to allow for maintenance of the machinery and chamber preparation for the new crop. While the farmers in the focus group indicated that harvesting took place in November and December, the cold storage manager indicated that new crops storage did not occur until February due to maintenance. In the absence of cold storage, it was indicated by one in-depth interview that potatoes can only be stored in home for a maximum of 90 days in a cooler season, but as little as 60 days during a hot summer season.

5.1.1 Home storage Very often, the farmers can not sell their potatoes immediately because the traders are not able to buy all the potatoes at once. The reason for this is that often there is too much production. The farmers store the rest of the potatoes at their own place as long as they can keep it before it is wasted. But due to a lack of electricity, there are often no proper possibilities for the farmers to store potatoes at their own place. If the potatoes are kept for more than 2-3 months by the farmer himself, the potatoes will soon get wasted. The result of this is that the farmers will often sell the potatoes as soon as possible, no matter what the price is. The farmers suggested that the rental price should be 25% less than the current price set by cold storage companies. This way more farmers 64

would have the possibility to store their potatoes in a cold storage, causing less potatoes to be wasted.

5.1.2 Rental costs Data regarding the rental costs paid by farmers and traders was collected from both the focus groups, as well as in the in-depth interviews with the farmers and manager of the cold storage. It was evident that farmers are disadvantaged compared to the traders, as all stakeholder groups indicated that farmers pay a higher rental rate than traders for the exact same level of service.

Regardless of the chosen length of storage time, rent for the entire nine month period must be paid at the completion of the storage period when the produce is removed. Whether potatoes are stored for three months or six months, the same cost is incurred. Additionally, it is worth mentioning that rent is paid on a ‘per sack’-basis, so regardless if the sack is 85 kilograms or 40 kilograms, the same rental cost was paid.

In the focus group, farmers indicated that they sometimes hear of cold storage rent of 240 to 250 taka per sack. However when they go to store their products, they find the rate to be as high as 300 to 350 taka due to a high demand and low level of storage capacity. It was evident that supply and demand conditions were not favourable to the farmer, and that they resulted in storage managers setting a high price ceiling for the farmers. According to the farmers in the focus group, currently there are no rents below Tk 300 available to farmers, but traders are able to rent the same facilities at a rental price of 220 to 250 taka per sack. Sometimes the farmers directly store their products in the cold storage while at other times they store their products through traders. In terms of earning an adequate wage, the farmers indicated that 250 taka or less rent was needed to earn a profit on their production; ideally, around 200 taka would represent that best situation for the farmers. Rental fees are paid to the owner of the storage facility at the end of the duration of the storage period.

The Cold Storage Association Bangladesh also had a rental rate of 360 taka per sack (80 kg potatoes). This is a standard rate, irrespective of the location of the cold storage and the geographical context. However the actual rent charged varies depending on the location of the cold storage. For example, if a cold storage is located just inside the field, the rental price will be high, whereas if the storage location is far from the field, the rental price is lower. This slight source of variation is considered acceptable among farmers.

Findings from the interview with the cold storage manager indicated that a discrepancy exists between what they were charging the farmers and what the farmers indicated that they were paying 65

in the focus group. The rent, which needed to be paid to the cold storage company for one sack (85 kg) was within 270-320 taka for traders and about 360 taka for farmers. There is no indication why traders received a slightly better rate than farmers, but it is speculated that this may have to do with the number of sacks that farmers and traders are storing, as traders may be capable of storing more sacks. Moreover, the cold storage manager in Rangpur indicated that economies of scale will increase with the number of sacks as average costs per sack are decreasing in the total number of stored sacks, according to simple economic theory.

Furthermore varying rates may also be negotiated based on the number of sacks being stored. For instance, some owners may store 200 sacks while others have 5000 sacks.

He mentioned that: “The rate will vary and for those who keep more than a certain level will benefit from a reduced rent of about Tk 220/ sack or a little more�

Another reason for price discrepancy is the intention to cut down the operational costs by the cold storage companies. One interesting finding from the cold storage association is that owners of cold storages sell the storage space in advance to traders, in order to pay the monthly expenditure of the cold storage including the monthly electricity bill, office staff salary, etc. Rent is generally lowered for traders because normally they store large amounts by occupying greater space and keep it for a longer duration in the cold storage, while farmers are uncertain about the amount they keep and the duration for storage. In this scenario, the cold storage owner(s) might lower the rent per sack (by about 100 taka) for the traders. This is an informal arrangement between the owner(s) and the traders. Lowering the rent by 100 taka is worthwhile to the owners as they can get some hard cash in advance for paying the dues of the banks and for running the operational cost. The Cold Storage Association doesn’t have a price monitoring body so if the set regulation is not followed by the owners there are no steps taken by the association.

An in-depth interview with a farmer also confirmed that the rental rate paid last year was 360 taka per sack. This farmer indicated a selling price of 650 taka per sack of potatoes and based on this, selling potatoes was not a profitable venture. Regardless of the rental price paid, it is evident that farmers are systematically disadvantaged within the value chain of the current cold storage rental system.

Additionally, farmers in the focus group indicated that cold storage owners benefit from significant margins on their rental fees. Farmers perceive that the rental facility incurs a cost of 60 to 70 taka per sack of potato, yet charges a rate of more than 300 taka per sack as the rental fee. This equates to a significant profit on the part of the cold storage owner, and squeezes the margins of the 66

farmer. The farmers perceive that they are at a disadvantage due to the high rental costs of cold storage and the low capacity of the existing facilities.

5.1.3 Waste During the storage of potatoes waste is caused by different factors. Important issues are electricity power outs and viruses and diseases in the cold storage. In the focus group, many farmers indicated that local cold storage facilities are of low quality, leading to the propagation of viruses within the storage. The farmers indicated that they do everything they can to protect their seeds prior to entering

the

storage,

but

they

lack

the

technical

knowledge

needed

for

adequate

prevention. Additionally, the farmers have found that when cold storage facilities are over capacitated, this will result in sacks of potatoes being stacked on the stairs and in conditions that are not ideal. This results in more potatoes and seeds being wasted.

5.1.4 Transportation to and location of the cold storage Because of the transport costs, the location of the cold storage is very important. Transport is an important issue for various reasons. One in depth interviewee indicated that his potatoes had to be transported to the cold storage using a van, truck or trolley. Roughly, the estimated cost of the transportation is 25-30 taka per bag of potatoes. When there are not enough potato farmers in the neighbourhood, the transport costs will increase for the traders.

Another source of transport costs, for cold storages that run (partly) on biomass, is the transport of biomass fuel. The Head of Renewable Energy at IDCOL also mentioned that the transport costs of biomass need to be considered. There need to be enough rice mills nearby the plant. Especially because rice husk is a very light product in weight so frequent transportation of rice husk will be needed in order to generate the required amount of husk to produce electricity.

5.1.5 Labour at the cold storage In the interview with the manager of the cold storage facility, it was indicated that between 200 and 250 employees were needed in total. This includes extra staff that is always kept on hand in the case of an emergency. Additionally, there are usually some staff who are on leave. The total number of staff included eight people for the machinery, eight people in the store group, 20 people as office staff, and six employees acting as night guards. When the potatoes are being shipped, a labour cost of 8 taka per sack for carrying the sacks from the cold storage to the car is incurred. This generally results in each labourer being paid a daily wage of 400 taka. A total cost of labour for the facility was not indicated, but it is obvious that labour costs are an important factor to take into account.

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The interview indicated that the electricity costs are approximately 4 to 4.5 million taka per month.

However, it was mentioned that if the cold storage could run constantly on grid electricity for a full month, without having to make use of its generators for load-shedding, the electricity bill would be 1.5 million taka per month.

At the cold storage facility, two generators are used in the case of load shedding and/or grid failure.

The generators run on ammonia gas and diesel. The total capacity of the generators is 5 kilowatts. Based on the perception of the storage manager, the generator runs for approximately seven to eight hours per day. At a maximum output, the generators have the capacity to run for 12 hours per day. The larger of the two generators consumes 85 litres of diesel for every hour that it is running. The storage manager indicated that the diesel generator costs approximately 40 to 45 million taka for nine months of operations, or an average of five million taka per month. The cold storage facility is generally at full capacity, with a per month electricity bill of around TK 4-4.5 million, for a load of 5 kW. In total, the electricity costs for the facility are around 4.7 million taka for one calendar year.

In the interview with the Cold Storage Association Bangladesh it was emphasized that, agro based industries are not getting enough attention from the government compared to other industries. It was mentioned by the interviewee that “The electricity tariff for the cold storage is very expensive and this is not at all profitable when potatoes are kept in these storages. About 85% of the cold storages are not at all viable at this point of time in terms of paying the dues of the loan taken from the bank along with paying the due electricity bill. The food security problem of Bangladesh can be mitigated to a great extent if and only if potato is included greatly. If this can be ensured we might not need to import from other countries.�

5.1.7 Capacity and land requirements According the storage facility manager, the cold storage has five chambers, each of which can store 35,000 sacks of potatoes, which would imply a total capacity of 175,000 sacks. However, the manager reported that the actual capacity of the facility was 147,000 sacks, which presents conflicting information. The total capacity in the cold storage is 3 million sacks. Each sack weighs approximately 85 kilograms each. The entire facility requires 3.25 acres of land to operate. 1100 boxes are kept in front and back shade (35 F is true shade, 15-25 F is true PC). The sacks of potatoes are stacked, one on top of the other, inside the storage (along the stairway leading to the top floor).

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5.1.8 Cold storage temperature and procedures The sacks of potatoes are initially kept on the ground floor of the cold storage at a lower temperature of about -10°C to - 3°C and after being kept for about 24 hours they are taken to the main freezer which has a temperature of 1.6°C. This process is called the ‘curing’ process, and allows for suberization and wound healing as well as a reduction in respiration of the potato (Voss, 2004). Voss (2004) also indicated that prior to long-term cooling, potatoes should be cured in a high humidity (80-100%) environment with a temperature of around 20°C. Literature indicates that once cured, the temperature of the storage facility should be slowly reduced by 1 to 2oC per day until the ideal temperature and humidity is reached (Voss 2004). Hassain and Miah (2009) indicated that the ideal temperature for potato storage was 2-4 C with anything above o

risking potato deterioration. Particularly, potatoes used for seeds must be stored to maintain the dormancy of the living entity prior to being planted in the following season (Hassain & Miah 2009), as sprouting accelerates at temperatures of greater than 4 to 5 °C (Voss 2004). The cold storage manager indicated that the target cooling temperature is 1.6°C, and this temperature takes about two months to reach. At the ideal temperature, the machines need to run around seven to eight hours per day in order to maintain the temperature.

In the interview with the Cold Storage Association Bangladesh it was mentioned that, recently a new fogging technology has been introduced in Bangladesh which the respondent believes to be excellent. In addition, he mentioned that, “the chemical which is required for creating the fog in the cold storage chamber is brought from India through an illegal channel and this is not yet a registered product in Bangladesh.” This chemical was first used by ‘ABC group’ which owns a number of cold storages in Bangladesh and it had terrific results. The name of the chemical is Chlorophenyl Iso-Propyl Carbonate (CIPC). In India it is named as ‘Orza’. A very well-known multinational company produces this chemical and the respondent mentioned that it is in the process of getting registered.

In the Bangladesh Agricultural Research Council (BARC) this product is being tested currently and lots of issues are being tested to see the effect of using this product on potatoes. For applying this chemical the potatoes are to be kept for about 10 C whereas the general potatoes need to be kept in 0

1.7 C. Through the entire lifetime of the storage period of maximum three times these chemical 0

could be sprayed he mentioned. Once sprayed the effect remains for about three months.

The respondent mentioned, “Whenever this chemical is applied to the storage chamber of the potatoes sprouting will never occur in those potatoes and as a result the skin of the potatoes remains tight and potatoes do not lose weight at all”. Besides, applying this chemical reduces the sugar content of the potatoes compared to the normal potatoes, which is very useful for the potato 69

food processing companies. In addition, because a temperature of 100C is good enough for potatoes, when this chemical is used it also saves lot of energy (electricity) since the cooler you want to make a room the more energy is required.

The potato sacks are rotated four times within the nine months of storage time. The vapour compression has 3 tasks: 1) to work 2) to disturb 3) to size. They are reshuffled within their own column stack and each stack of sacks are also shifted 7 hands to the side.

5.2 Other related issues during pre-harvest and post-harvest stages of potato production During the interviews with farmers and traders not only information about cold storages was collected, but also information regarding issues relating to the pre-harvest and post-harvest stages of the production of potatoes. These findings are shown below because it may not be relevant to identify the potential scope for implementing solar-biomass hybrid cold storage in rural Bangladesh but it is definitely relevant for the whole process of producing potatoes until selling the potatoes to the customer. Keeping potatoes in cold storage is part of this process and so is affected by the things that happen during pre-harvest and post-harvest.

5.2.1 Seeds Issues with seeds are mainly caused by the fact that some suppliers sell seeds of bad quality. There are different suppliers of seeds (e.g. BATC, AMAN, Foyez). Poor quality of the seeds is the reason that farmers suffer from huge losses. Some farmers use seeds several times. In case of bad quality of the seeds this means that the farmers are suffering huge losses more than once. As a consequence farmers have difficulties repaying the loan of the land to the owners. Sometimes farmers even have to sell their assets so they can repay the loan, in some cases this meant that farmers even had to sell their house. The fact that farmers has to sell their assets is one of the reasons that farming is a very insecure job.

BRAC is also offering seeds. The quality of these seeds is good. BRAC seeds can be used once a year, three years in a row. Seeds of other suppliers can be used 2-3 times a year. It’s just recently that the BRAC seeds are available in the market. Previously BRAC seeds were also available but of less quality because the farmers could only use them twice instead of three times because after the second time the seeds got rotten. At this moment, the farmers there are still not enough high quality seeds on the market. If they could get more BRAC seeds, it would help them secure a better harvest.

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The farmers believe that the government should also do something about the bad seeds by better facilitation of farming in general. Moreover, education of the farmers about the use of seeds would be an improvement, for example about how many times the farmers can use the same seeds. This could prevent losses during harvesting.

5.2.2 Fertilizers Farmers are suffering from a lack of knowledge about fertilizers. This lack of knowledge make them use fertilizers in the wrong way and in uneven proportions. They use 30-40 kg of fertilizers to cultivate their land. However they indicated that they feel this is not the appropriate amount. Bad harvest is sometimes caused by the wrong use of fertilizers. Moreover, land gets ruined because of the wrong use of fertilizers.

Farmers get incorrect information about the use of fertilizers and about how much they need to use.

This is what causes the lack of knowledge. The farmers indicated that more research on fertilizers and testing of land is necessary to bridge the existing knowledge gap.

At this moment the farmers use the fertilizers advertised to them by the fertilizers companies and use them in the way that the companies suggest to them. However, the companies selling the fertilizers are only trying to sell as much as possible regardless of the farmers' needs.

There are different types of fertilizers. In the interviews the following fertilizers were named the most: Uria, Phosphate (TSP), Potash (MOP), Zinc Sulphate, cow dung.

5.2.3 Electricity and Irrigation The lack of electricity is the main problem for farmers. Especially irrigation is difficult because of the lack of electricity. Because many villages lack electricity, it is difficult to perform farming activities such as irrigation and harvesting. The farmers are very disappointed in the government because it was promised that the villages would receive electricity but this has not yet been done.

5.3 Conclusion From the focus groups and IDIs it became clear that there are not enough cold storages available in Rangpur. The farmers and traders indicated that they would prefer to have more availability of cold storages (if it is not too expensive). Currently, only seed potatoes are kept in storage. From these findings, it can be concluded that there is clearly a market to implement a cold storage in Rangpur.

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The demand for more cold storages is enhanced by the fact that farmers are often not able to sell their potatoes to traders immediately after harvesting. The reason for this is that there is often too much production of potatoes at one time. Therefore, farmers often have to store potatoes at their own place for a while. But due to a lack of electricity, there are often no proper possibilities for the farmers to store potatoes at their own place. If the potatoes are kept for more than 2-3 months by the farmer himself, the potatoes will soon get wasted. The result of this is that the farmers will often sell the potatoes as soon as possible, no matter what the price is.

Additionally, according to our findings. there is a gap between the harvesting period of the potatoes and the opening of the cold storage; the potatoes are harvested in December but the cold storage owner stated that the first potatoes are stored in February.

Regarding the quality of the potatoes, it is important for the farmers to be able to use seeds of good quality. The quality of seeds influence the quality of the potatoes before they go into the cold storage. If a bad quality of seeds is used, it is more likely that the potatoes will go to waste. Another way to prevent waste is the use of the right fertilizers. Fertilizers influence the quality of potatoes before they are ready for storage. To store potatoes of good quality, it is important for the farmers to know which fertilizers to use and how to use them. The farmers indicated that they often need more knowledge about this. A project regarding the fertilizers and educating farmers about them could therefore be interesting in the future.

Another important factor to take into account is the quality of the cold storage. The farmers mentioned that the quality of a potential new cold storage needs to be higher than the existing ones.

In the current storages viruses and diseases are common. That is one of the reasons why potatoes often get wasted in this area. Thus, when implementing a new cold storage, one has to guarantee a good quality of cold storage and prevent viruses and diseases as much as possible.

Electricity power outs in a cold storage are another cause of potato loss. It is important that the supply of electricity happens continuously so no power outs can occur. At the current storages, backup generators are used. When implementing a cold storage, it is important to guarantee a continuous power supply. Therefore, one must take into account backup generators when implementing a cold storage.

Chlorophenyl Iso-Propyl Carbonate (CIPC) can be a good solution for Bangladesh because it increases the temperature that is needed for storing potatoes so less electricity for cooling is required.

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Another factor that is important to take into consideration when implementing a cold storage is the rental price. The current price of 350 taka per sack of potatoes is way too high for farmers and often also for traders. Lowering the rental prices would benefit both these groups of stakeholders. The price should not only be lower than it is now, it should also be the same for traders and farmers.

Because traders often use cold storages on a larger scale than farmers, the traders usually pay a smaller price for the rent of a cold storage per sack. It can thus be concluded that small farmers are currently disadvantaged compared to the big traders.

Because of the transport costs, the location of the potential cold storage is very important. Transport is an important issue for various reasons. When there are not enough potato farmers in the neighbourhood, the transport costs will increase for the traders. Another source of transport costs, when biomass is used as fuel for the cold storage, is the type of biomass source used. For example, when rice husk is used, there need to be enough rice mills nearby the plant. Especially because rice husk is a very light product in weight, so frequent transportation of rice husk will be needed in order to generate the required amount of husk to produce electricity.

One of the biggest challenges lies in making people aware of the benefits of cold storages powered by renewable energy. The acceptance of using cold storages in general is a very slow process, due to a general conservative mind-set. A lot of farmers first have very low confidence in the effective use of cold storages. The process of convincing farmers of the effectiveness of the use of cold storages might take a couple of years. Someone has to set the example, and subsequently the rest will follow. This way, the amount of farmers who will make use of the storages will grow year by year. Eventually there might even be a social pressure to make use of the cold storages. This also applies to the form of electricity, which is used in the cold storages. It takes time for farmers to see and believe that renewable energy is more reliable than the grid and that the service is equal or even better than storages, which run on the usual nano-grid. Therefore, the community must be very well informed about the benefits and trained to see how it works, before working with cold storages.

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Chapter 6: Conclusion From the literature review it became clear that cold storages are needed in Bangladesh in order to reduce food waste and to increase the economic situation of (potato) farmers in rural areas. In unelectrified rural areas, there are various possibilities for running cold a storage on renewable energy. This study aims to find the best possible renewable energy solution for running a cold storage in rural unelectrified areas in Bangladesh and to identify the potential scope for implementing this cold storage in rural Bangladesh.

The economic and technical feasibility of the existing renewable energy models and the potential feasibility for Bangladesh It was indicated that Bangladesh has good potential for utilizing solar power, due to the high amount of daily sunlight (Anam & Bustam, 2011). In addition to solar energy, biomass energy could be a potential source of energy for a cold storage. This biomass energy can be used in combination with solar energy to run a cold storage.

All three models are considered to be technically feasible in the context of Bangladesh. The solar PV based cold storage has highest feasibility from the technological point of view. However, since it solely relies on sunlight as input, this model is not as reliable as the biomass model or the hybrid model. The biomass and hybrid model are technically more complicated, but still feasible as observed during this research.

The economic feasibility of the solar cold storage turns out to be lower than the feasibility of the biomass model. This results from higher investment costs, less possibilities for revenue generation and a higher generator cost depending on the availability of sunlight. The latter can be resolved by implementing the solar biomass hybrid cold storage, providing a constant supply of energy from either sunlight or biomass. However, this will lead to increased investment costs due to the combination of both systems. All models have strongly negative NPVs, implying that the projects are very reliant on subsidies to build the cold storages. Since there already are numerous types of cold storages operating throughout South Asia, this is considered to be plausible. The economic benefits for farmers and the local community, created by installing a cold storage and electrifying the village, are important justifications for these subsidies.

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The potential scope for implementing solar-biomass hybrid cold storage in rural Bangladesh From the focus groups and IDI’s it became clear that there are not enough cold storages available in Rangpur. The farmers and traders indicated that they would prefer to have more availability of cold storages (if it is not too expensive). Currently, only seed potatoes are kept in storage. From these findings, it can be concluded that there is clearly a market to implement a cold storage in Rangpur.

However, one of the biggest challenges lies in making people aware of the benefits of cold storages powered by renewable energy. It takes time for farmers to see and believe that renewable energy is reliable. Therefore, the community must be very well informed about the benefits and trained to see how it works, before working with cold storages.

Concluding, it can be said that installing a cold storage is much more than just building and operating it. The view of the farmers needs to be taken into account to ensure that they will actually use the cold storage. Additionally the dynamics of the village as a whole are also important when building a sustainable business model for the operation of the cold storage. Not only the farmers could benefit from the implementation of (hybrid) cold storages, but also the entire community is benefited in the case of village electrification. This could lead to long term economic growth in rural off-grid areas, which is why subsidies are very important to realize the construction of off-grid cold storages.

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Chapter 7: Limitations and Recommendations No research is completed without limitations and this research is not an exception. The first limitation is that the feasibility of the hybrid system wasn’t tested in a real life situation in Bangladesh. The findings of this model are mainly based on the system installed in India. Although India is very similar to Bangladesh, future research could test the model in practice in Bangladesh to make the findings more reliable. The language barrier was also a matter of concern for this research. Both researchers and respondents were from diverse backgrounds and spoke different languages. This study was mostly qualitative with some quantitative data analysis. However, more quantitative research is needed. Furthermore, this study focused specifically on the Rangpur Division of Bangladesh as a potential scope for hybrid cold storage implementation. Future research could include rural areas in other divisions as well. Moreover, the focus was only on potatoes.

Future research is needed on other types of produce. The fact that in-depth interviews and focusgroups were used for interviewing the beneficiaries make some of the findings somewhat subjective. Further recommendations are that there should be more research about food chemicals and the optimal way in which farmers can make use of these chemicals. Also, more education and awareness for the farmers is needed.

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Appendix I: Biomass component costs Biomass power plant BDT / kW

Average

Source

42,377 – 529,708

286,042.50

Literature review: Bergqvist 2008

63,565 – 152,556

108,060.50

Literature review: Bergqvist 2008

63,565 – 152,556

108,060.50

Literature review: Nouni et al 2007

100,000

100,000

Literature review: Huda et al 2014, Hassan et al 2009

242,000

242,000

Findings objective 1: Thukargaon project IDCOL

Overall average

168,832.70

Solar thermal NH3 (ammonia) absorption cooling unit BDT / kW

Average 21,690

Total average investment cost for the biomass cooling system

21,690

Source Literature review: Otanicar et al 2012

190,522.70

83

Appendix II: Economic Analysis of Solar and Biomass cold storage

Cost

unit

Investment cost

BDT

Solar system

Biomass system

4,523,200

2,514,899.64

-Civil construction cost

BDT

411,200

228.627.24

-Total component costs

BDT

4,112,000

2,286,272.40

0

45,600

102,200

102,200

O&M costs

BDT/year

Fuel costs generator

BDT litre/year

Total costs of rice husk consumption

BDT /year

0

57,027.60

- Price of rice husks

BDT/tonne

0

1,750

- Total consumption of rice husks

tonne/year

0

32.5872

- Consumption of rice husks

tonne/kWh

0

0.00186

Revenue Cold storage rent

BDT/year

63,000

63,000

Total ash sales benefit

BDT/year

0

27,373.25

- Ash value

BDT/tonne

0

4,200

- Saleable ash to husk fuel ratio

percent

0

20.00%

BDT/year

180,310

180,310

- Demand 120 households

kWh/year

9,490

9,490

- Price of electricity sold

BDT/kWh

19

19

Maximum possible load/ Capacity Equivalent full power load operating hours per year

kW

12

12

1,460

1,460

Economic lifetime

years

15

15

Discount rate

percent

10.00%

10.00%

7,61

7,61

Electricity sales

Technical, lifetime & other specifications

hours/year

Annuity factor NPV-I

BDT

€4,383,053.02-

€3,266,956.04-

NPV-II (incl. revenue stream)

BDT

€3,136,146.91-

€1,830,774.39-

LCOE-I

BDT/kWh

18.34611232

13.67447352

LCOE-II (incl. revenue stream)

BDT/kWh

13.12749665

7. 66360862

84