The electricity sector in Bang-ladesh is facing several irregularities and inefficiencies resul-ting in huge amou-nts of transmission and distribution losses, depriving the electricity producers of potential revenue. The gap between demand and supply of electricity in the country often leads to forced outages, hampering industrial outputs in particular, which in turn exert negative impacts on its macroeconomic indicators. A possible reason behind the electricity crisis could be the fact that the electricity generation in Bangladesh has always been below the potential capacity following acute shortages in energy inputs and due to the electricity generation plants often remaining out of operation because of aging.
Enhancing electricity generation and mitigating the electricity deficit is one of the topmost agendas of the government. Although the government has announced to ensure electricity for all by 2021, at present only 74% of the total population has been brought under the national grid. The picture is even gloomier if we look at the rural electrification scenario, which, at present, hovers merely around 40%. These are ominous signs for the government as there is so much to cover within such short time period. However, the government is determined to tap all possible options available at its disposal for boosting electricity generation and in order to do so it is ready to bring about changes that are necessary for development of its energy sector.
A possible way of resolving most of the aforementioned problems associated with Bangladesh's electricity sector could be through introduction of the Smart Grid Technology (SGT) that has already made its way into the energy markets across the world. It is an innovative tool through which electricity generation, transmission, distribution, regulation and its usage could be executed from remote areas via automation. Compared to the conventional grid, which is characterized by a centralized mechanism, the smart grid is decentralized and distributed in nature involving a two-way communication.
A smart grid's task is not just confined in providing electricity but it also has the capacity to receive and store electricity back from where it has supplied at the first place. Thus, smart grids allow consumers of electricity to also become electricity producers through which the surplus electricity produced can also be added to the national grid. In lay man's terms, a smart grid is a small automated grid within the main grid. Thus, the relatively smaller smart grid tends to upend the larger traditional grid in a multidirectional manner. The SGT actually involves installation of micro and nano grids those work as small-scale electricity supply networks that are designed to manage electricity demand within a certain land area. Moreover, the excess off-grid electricity produced can also be added to the traditional national grid via those smaller grids.
In general, the economies of implementing SGT are not limited to a particular group of people only. Rather, the list of beneficiaries includes the electricity producing company, the consumers and more importantly the benefits are generalized in the form of societal benefits as well. Thus, the feasibility of employing the SGT in Bangladesh's national energy policy framework should not be questioned, provided the nation manages to develop the energy infrastructure which is a pre-requisite for such major structural change encompassing the energy sector. Amongst the several advantages, improvement in grid reliability, enhancement of electricity efficiency, energy resource diversification, environmental betterment and greater rural electrification are the major things that can be associated with the use of SGT.
A major constraint hampering the growth of electricity generation in Bangladesh is acute shortage of natural gas, the main input used in Bangladesh. Besides, the imported oils used as a supplement to natural gas create fiscal burdens too. Thus, fuel diversification is essential in boosting electricity production for which SGT is an ideal platform. This is because smart grids offer scopes for large renewable integration, especially in the form of solar and wind energy employment for electricity generation. It therefore facilitates the country's transition from non-renewable energy use to renewable energy use, attributing to the success of its SDG attainment drives.
Bangladesh has committed to a renewable target of 10% installed electricity generation capacity by 2020. Thus, implementation of the SGT can help the government attain this goal especially by making greater use of solar energy in the country. Bangladesh is the largest solar home system in the world and each solar system, if placed in a house, can generate 30% more electricity than the total household demand, which can then be added to the national grid. This would further provided incentives for the consumers to become 'prosumers' who not only would consume electricity but would also produce surplus amounts to be supplied for societal uses. As far as the environment is concerned, the smart grid through greater integration of renewables can lead to betterment of the environment by significantly limiting greenhouse gaseous emissions.
Environmental safety is of key importance for Bangladesh due to the country being extremely vulnerable to natural calamities following climate changes. Moreover, reduced carbon emissions following adoption of renewable energy use in smart grids can also improve health standard making the economy better off. Bangladesh, approximately, emits 170Mt of greenhouse gases which accounts up to 0.35% of global greenhouse gas emissions. Although the per capita emission intensity is low, the amount of emission as a percentage of the national GDP is twice that of the global average. Thus, employment of smart grids in the energy sector can significantly bring down these figures making the nation less vulnerable to natural adversities.
Finally, introduction of SGT in the remote areas can be exemplary in countering the poor rural electrification rate in Bangladesh. Currently, about 40 million people living in the rural areas in Bangladesh are yet to have regular access to electricity. As a result, the disparity between urban and rural standard of living is expressively high which is pretty much against the inclusive development strategies of any developing nation.
Lack of access to electricity has been a main barrier hampering rural development in the nation. Ensuring electricity availability in the rural regions can open up new job opportunities which can also reduce the urban-rural wage differences. Hence, setting up solar-based micro smart grids for renewable-electricity generation can contribute in the form of off-grid electricity supply which can commendably tackle the problem of low rural electrification rate. It is estimated that smart grids having a capacity of 10kW can easily illuminate as many as 140 rural households whereby rural electricity demand in the country can be met to some extent. Provided the government is successful in keeping its commitment to ensure electricity for all by 2020, immediate steps to implement SGT can certainly be a stepping stone towards attainment of that goal.
Considering the immense benefits and potential of SGT, it is a recommended tool for Bangladesh's energy sector development. However, adoption of this technology can be a challenging task ahead of the government. Firstly, adoption of this cutting edge electricity generation technology is subject to costs and requires hefty investments. On average, the cost of setting up the smart grid system could equal the cost required to produce 3.1% of the total electricity produced in the nation. This is not a small amount and as a result, decision to invest in such expensive projects often gives potential investors a second thought. In addition, electricity prices artificially fixed by the government also contributes to the avid reluctance of investors in investing money in the associated sector. On the other hand, investment in smart grids seems justified from the sense that the monetary value of the losses incurred due to transmission and distribution losses, in comparison to the cost of using SGT, are even higher. Apart from the cost issues, Bangladesh's weak energy infrastructure is also an issue that can hamper the success of the smart grids projects.
It is quite evident that incorporating SGT into the national energy policy of Bangladesh is a colloquial task, but for the greater benefits in the future such task is worth being undertaken through a trade-off between current costs and future profits. Bangladesh is a nation that has immense prospects in embracing socioeconomic development in the near future. Thus, the opportunity cost of not having electricity is unimaginably high which furthermore advocates in favor of adopting smart grid systems all across the national boundary.
According to a report by the World Bank, prolonged unscheduled electricity outages in Bangladesh account of a 5.5% fall in output levels of Small and Medium Enterprises (SMEs) which is not a good phenomenon with regards to the nation's growth rate of GDP. In terms of the overall vision behind smart gridding the electricity sector, smart grids are intelligent in the sense that peak loads can be identified in real time whereby system failure can be avoided. Smart grids are also efficient in managing electricity demand better than the conventional national grid. In addition, the capability of smart grids in accommodating any type of fuel, especially renewables, makes it a technology of choice for developing countries like Bangladesh.
Moreover, it invites greater participation from the beneficiaries as the benefits are inclusive in nature leading to social welfare. Most importantly, SGT is one of the important tools for the nation to raise its overall electrification rate through renewable-based off-grid electrification. It is crucial for all developing nations to boost their rural electrification rates since in the pursuit of rapid urbanization, the rural sector is often neglected which in turn holds back their development drives.
It is recommended that the government does invest in R&D programs directed at development of skills and infrastructures associated with the energy sector of the nation and leave no stones unturned in transforming the concept of a smart energy sector into reality.Dr. Sakib Bin Amin is an Assistant Professor and Muntasir Murshed, an Economics Graduate of School of Business and Economics at North South University
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