Harnessing energy efficiency

Bangladesh is an energy-starved country. The ever-increasing demand for energy is exerting pressure for effective steps to generate more power to meet the daily requirements. To face it, the government has already implemented many expensive quick rental power plants. Moreover, since natural gas reserve is dwindling and alternative energy sources are yet to be fully exploited on a large scale, the government, for long-term security, has no option but to implement coal-based power plants from our unexplored coal. However, investing in end-use energy efficiency (EE) improvement is often more cost-effective than increasing power supply to the service sector. Efficiency improvement has a positive effect on energy security and carbon emission abatement.
Making a balance between supply of and demand for power needs a long time and EE can play a significant role in this regard. There are many older and inefficient facilities in the country. Upgrading these facilities can deliver significant energy savings and emission reduction. However, lack of financial and technical resources and limitations in the ability of firms, particularly small and medium-sized enterprises, to access and absorb technological information are key barriers to harnessing of the full potential.
EE can offer a lot of benefits, such as,
l    Save valuable fuel;
l    Lower cost by utilising resources efficiently;
l    Improve business competitiveness;
l    Reduce greenhouse gas emissions and associated  impacts of climate change; and
l    Create new business area, for example, manufacturing and supply of energy-efficient technologies.
EE in industries can be attained in different ways, for example, co-generation, which produces two useful forms of energy, i.e., steam and electricity, from the same fuel source. Replacing inefficient electric motors as well as use of variable frequency drive is another strategy.
There are ways to reduce energy consumption and greenhouse gas emissions through EE, which is yet to be explored but there remains numerous problems in adoption of EE measures, for example, information barriers and market imperfection.
Lack of information is one of the major problems. It is, on the one hand, difficult to learn about the performance and costs of energy-efficient technologies and practices, and on the other, their benefits are not always visible in the short run. In addition, EE investments are often ignored because new and unfamiliar technologies are wrongly perceived to be unreliable.
Apart from these, EE investments are often considered optional maintenance projects which are usually given a lower priority to essential maintenance projects or strategic investments. By and large, top managements of industries do not consider energy-cost savings as a priority considering the low price level of energy in the country.
For a company to be energy-efficient, in other words, to reduce its energy costs, it needs to evaluate first how it uses energy, where it is being wasted and how production efficiency can be improved. In this regard, energy audit needs to be conducted. The audit identifies where and how much energy can be saved by installing energy-efficient technology and by reducing wastage during production. Converting these figures into a potential monthly/yearly saving, the best picture can be drawn on possible reduction in energy costs once the equipment is installed or measure is taken. It makes the top management comfortable to decide whether they would go for EE in their industry.
Investments in EE are often impeded due to the initial cost barrier and difficulties in raising capital. The absence of suitable financing mechanisms for EE projects in the country are also a challenge. Even if some might have access to capital, businesses may still be unwilling to accept this type of investment, given the uncertainty about actual energy cost savings. Even the refinancing scheme of the central bank, under which industries can receive refinance at 10 per cent per annum, has failed to attract both industries and financial institutions in the EE projects.
The government has formed the Sustainable and Renewable Energy Development Authority (SREDA), which is expected to be fully operational soon.  The policy to be developed by the SREDA along with financial incentives of the central bank and supports to be provided by the development partners is expected to bring the desired outcomes in EE.  
EE is not the panacea; yet it is one of the ways to reduce energy consumption which, in turn, would save money and reduce greenhouse gas emission. However, to make EE successful, concerted effort of all players of the sector is required.
The writer is an engineer of GIZ Bangladesh [email protected]