#Title

Only good governance can ensure long-term energy security
FROM PAGE 11
As a result, the country suffered a severe power shortage. The idea of oil-based rental power by the outgoing government was taken up by the caretaker government and 10 contracts were awarded through competitive bidding. These contracts comprised a capacity payment and fuel cost, a model borrowed from the international rental business. The oil-based generation units are small and meant to serve the peak load but an 80 percent take or pay condition was agreed upon. This was a big mistake. A machine meant for a short run cannot be used 80 percent of the time. The highest plant load factor for these rental plants was 60 percent which is very high for a peak load operation. The average was 40 percent and some diesel plants were less than 10 percent. Instead of capacity payment, the contracts should have been on an energy payment basis. Even with a higher tariff, it would be cheaper in the long run. Enough homework and examination of these contracts were not done mainly due to a scarcity of experienced energy contract lawyers or hurried decision-making.
The first set of rental power plants did not improve the load-shedding situation significantly. After one year of indecision, the newly elected government had to embrace the idea of expanding the oil-based short-term contracts following the previous model. Because of the urgency of the situation the government enacted the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 allowing unsolicited offers for all areas of energy and power. It gave indemnity to all involved in the contract award process. Initially, the act was used to award quick contracts for the oil-based rental plants on a war footing which was perhaps justified but by 2012, the load shedding situation improved significantly. In a true sense, the original purpose of the Act was served and should have been scrapped but it was extended several times and is still active. A project that needs to be finished in six months may avoid the tender process in a warlike situation, but on the other hand, avoiding the tender process for a three to five-year long project cannot be justified. Every project awarded under this act without tender after 2014 has raised the energy governance issue.
Without fair, transparent, accountable energy governance and input from knowledgeable technical leadership, long-term sustainable solutions to energy problems in this critical transition period are not possible. A pure political agenda may sometimes create counterintuitive effects. The great Solar Home System success story of Bangladesh was essentially killed when 99 percent of the population was brought under grid coverage. The future of Bangladesh’s renewable power trajectory may lie in a distributed off-grid system making some part of the grid redundant.
We are marred with short-term firefighting all the time but sustainable security requires mid- and long-term parallel preparation. A good fuel mix from diverse sources protects a country from both price and supply shock. The current high energy price is more an exception than the norm which will pass away. The existing coal, gas, and nuclear mix will have a lifespan of 20 to 30 years. All completed and in progress coal projects and the nuclear plants comprise 12 GW of baseload power. We have approximately 8 GW of relatively new gas plants that can be used to serve the intermediate load and some peak load. We may need some oil-fired power plants for the peak load but the majority of oil plants must be terminated and the remaining ones need to be contracted on an energy purchase basis.
The missing elements are renewable energy and energy efficiency along with demand-side management. The 600 MW daytime solar can be easily tripled by 2030. The current load curve and the grid readiness can perhaps accommodate 3 GW daytime solar which will save a considerable amount of fossil fuel. By 2030, solar with battery storage will be the cheapest power option but large-scale worldwide deployment may cause a material crunch. The development of hydrogen and ammonia is still in the early stage and its use is limited. A thorough and careful study considering cost, technology, finance, manpower, etc. must be carried out for future energy transition.
Not a single net-zero scenario is without emphasis on energy efficiency. Most of them attribute 20-25 percent emission reduction to efficiency improvement. Bangladesh must take every initiative to increase energy efficiency, especially for fans, air conditioners, appliances, and lighting in the domestic sector along with industry and power generation. Separate summer and winter office time, staggered holidays, limited shopping hours, time of the day metering, and other demand side management measures will help conserve energy and also shift the evening load to daytime. Last but not least, the demand projection for Bangladesh must be reviewed and revised. Sixty GW peak demand requirement in 2041 is based on lofty ambition and numerous uncertainties. The country cannot afford an overcapacity based on a wrong demand projection.
Without good energy governance, sustainable development cannot be achieved. Cronyism and political lobbying will always distort the market discouraging investment. Any policy must be developed through proper consultation with the stakeholders without any political or business influence. The International Chamber of Commerce identified “stable regulatory frameworks to attract energy investment and manage the long-term transition to secure and sustainable global energy systems.” Bangladesh must also be in tune with international energy governance taking the right direction.
Without fair, transparent, accountable energy governance and input from knowledgeable technical leadership, long-term sustainable solutions to energy problems in this critical transition period are not possible. A pure political agenda may sometimes create counterintuitive effects. The great Solar Home System success story of Bangladesh was essentially killed when 99 percent of the population was brought under grid coverage. The future of Bangladesh’s renewable power trajectory may lie in a distributed off-grid system making some part of the grid redundant. We are marred with short-term firefighting all the time but sustainable security requires mid- and long-term parallel preparation.