No move yet to develop alternative energies
Enayet Rasul | Thursday, 26 June 2008
IN paper there is policy in Bangladesh to raise power output by 10 per cent using renewable or alternative sources. This policy of the power ministry has been the outcome of its failure to set up new conventional power generation facilities and from the shortage of natural gas that is used largely in Bangladesh to generate power. But the move to produce power from renewables remains restricted to a statement only. No supporting moves are noted to make it happen.
The severe crisis in increasing conventional power production is taking a big toll on the country's economy. According to one estimate, 300 new industrial enterprises could not go into production from power shortage in Chittagong. Many older industries are suffering in varying degrees for the same reason. Not only in Chittagong, the lack of power is hitting hard industries and commercial activities all over the country. Against an effective demand for some 5,000 mw of power, only about 3,700 mw is being produced. Loadshedding is, therefore, making the going tough for industrial operators and life miserable for the household users of power. In this backdrop, it is understandable that the power ministry should be targeting greater production of power from non-conventional sources to take off pressure from the national power grid and reduce the woes of various categories of users of power. But the target is no good as long as it remains just a target without being acted upon to fulfill it.
For example, the most promising of the alternative power sources is solar energy. It was estimated that Bangladesh, with the abundance of sunshine it gets round the year, can produce up to 11,000 mw of solar power by extensively using solar panels. This is not an idle thought but a very practical possibility, according to experts, if a truly supporting policy environment to that end can be maintained. But that environment is simply not there.
Proposals were made by existing and potential entrepreneurs in the solar energy field before the recent presentation of the national budget, that it should provide proper fiscal incentives for this sector. They suggested that there should be preferably waiver of value added tax (VAT) and duties on imported solar panels and equipment. If not complete waiver, then at least substantial reduction of the tax and duty, was requested. But the pleading appears to have gone in vain. There has been no mention of such waiver or cuts in taxes and duty for the solar energy in the adviser's budget speech. But there is still time to take note of the recommendations for such cuts and waiver and take positive actions as the budget has not yet been approved and revisions of budgetary measures are possible.
What the entrepreneurs in the solar energy field have been demanding, are very justified and acceptable. Government has been liberal in exercise of its fiscal policies in relation with other emerging sectors. So, why should it not do the same in the case of the solar energy sector? In fact, any concessions given to this sector is likely to produce a much more beneficial result for the economy as a whole by improving the supply of power which is noted to be the single biggest economic problem of the country at the moment. Exemption from taxes and duties or their deep cuts, can lead to very rapid development of supplies of solar power and its extensive use throughout the country by all types of users in rural as well as urban areas. But they are currently restrained by the costs of the installation of the imported solar panels and equipment. But from a drop in installation costs after helpful fiscal measures, the solar energy sector is expected to boom and make a major impact by increasing power supply, albeit unconventionally.
If the government of Bangladesh has to go on buying fuel oil at its current international market price at over $130 per barrel, then it has to pay a crushing subsidy of some Taka 160 billion a year. This would be unbearable for the government. Even our giant next door neighbour, India, has gone far in this situation to produce biofuel to hedge its economy from the shooting up price of fuel oil. Jatrofa, a plant that grows easily and without care in any type of land, has come to the rescue of the Indian economy. The seeds of the jatrofa plants can be crushed and the oil, obtained from the process converted into a liquid with all the properties of diesel which is used to run different types of transport. This diesel from jatrofa plants is called biodiesel. It is helping import substitution of normal diesel significantly in the Indian economy. Biodiesel is now being produced in 21 countries with India, Indonesia and Germany in the leading positions.
Biodiesel production in Bangladesh can be similarly very feasible and useful. The jatrofa plant is already a native to Bangladesh. It is called 'verenda' in the rural areas and rural people have known the fuel-oil like properties of the juicies of its seeds for a long time. They use it for lighting lamps. Jatrofa plants grow well in areas that get rainfall. Therefore, Bangladesh is ideal for its planned cultivation. It can be grown in abundance on the sides of national highways, on the demarcation strips of cultivable lands, on fallow lands, in the hilly areas, etc. A jatrofa plant survives for 50 years. From 1,000 kg of the seeds of jatrofa plants about 250 kgs of diesel can be obtained. With planned cultivation of the plant in different areas of the country, biodiesel can be produced to take care of the entire need of diesel in Bangladesh.
A plan was adopted under the last party-led government to start up biodiesel production. A government committee was formed to acquire 2.8 million hectares of non-cultivable lands for the purpose. But there has been no progress in this plan since the change of government.
Thus, the moot question is whether Bangladesh can afford to be so lackadaisical in pursuing plans to produce energy from the non-conventional sources when the rest of the world is moving fast in this area to protect their economies from soaring fuel oil prices. The economy of Bangladesh is already reeling from the weight of the unusually inflated prices of imported energy. Its local production of conventional energy is far from satisfactory. Under the circumstances, it is imperative for it to go far large scale harnessing of energy from non-conventional sources. The work in this area must start immediately in right earnest. The same will also be cost-efficient. For example, a litre of biodiesel will be substantially cheaper to produce and market, in contrast with the same amount of locally refined or imported diesel.
The severe crisis in increasing conventional power production is taking a big toll on the country's economy. According to one estimate, 300 new industrial enterprises could not go into production from power shortage in Chittagong. Many older industries are suffering in varying degrees for the same reason. Not only in Chittagong, the lack of power is hitting hard industries and commercial activities all over the country. Against an effective demand for some 5,000 mw of power, only about 3,700 mw is being produced. Loadshedding is, therefore, making the going tough for industrial operators and life miserable for the household users of power. In this backdrop, it is understandable that the power ministry should be targeting greater production of power from non-conventional sources to take off pressure from the national power grid and reduce the woes of various categories of users of power. But the target is no good as long as it remains just a target without being acted upon to fulfill it.
For example, the most promising of the alternative power sources is solar energy. It was estimated that Bangladesh, with the abundance of sunshine it gets round the year, can produce up to 11,000 mw of solar power by extensively using solar panels. This is not an idle thought but a very practical possibility, according to experts, if a truly supporting policy environment to that end can be maintained. But that environment is simply not there.
Proposals were made by existing and potential entrepreneurs in the solar energy field before the recent presentation of the national budget, that it should provide proper fiscal incentives for this sector. They suggested that there should be preferably waiver of value added tax (VAT) and duties on imported solar panels and equipment. If not complete waiver, then at least substantial reduction of the tax and duty, was requested. But the pleading appears to have gone in vain. There has been no mention of such waiver or cuts in taxes and duty for the solar energy in the adviser's budget speech. But there is still time to take note of the recommendations for such cuts and waiver and take positive actions as the budget has not yet been approved and revisions of budgetary measures are possible.
What the entrepreneurs in the solar energy field have been demanding, are very justified and acceptable. Government has been liberal in exercise of its fiscal policies in relation with other emerging sectors. So, why should it not do the same in the case of the solar energy sector? In fact, any concessions given to this sector is likely to produce a much more beneficial result for the economy as a whole by improving the supply of power which is noted to be the single biggest economic problem of the country at the moment. Exemption from taxes and duties or their deep cuts, can lead to very rapid development of supplies of solar power and its extensive use throughout the country by all types of users in rural as well as urban areas. But they are currently restrained by the costs of the installation of the imported solar panels and equipment. But from a drop in installation costs after helpful fiscal measures, the solar energy sector is expected to boom and make a major impact by increasing power supply, albeit unconventionally.
If the government of Bangladesh has to go on buying fuel oil at its current international market price at over $130 per barrel, then it has to pay a crushing subsidy of some Taka 160 billion a year. This would be unbearable for the government. Even our giant next door neighbour, India, has gone far in this situation to produce biofuel to hedge its economy from the shooting up price of fuel oil. Jatrofa, a plant that grows easily and without care in any type of land, has come to the rescue of the Indian economy. The seeds of the jatrofa plants can be crushed and the oil, obtained from the process converted into a liquid with all the properties of diesel which is used to run different types of transport. This diesel from jatrofa plants is called biodiesel. It is helping import substitution of normal diesel significantly in the Indian economy. Biodiesel is now being produced in 21 countries with India, Indonesia and Germany in the leading positions.
Biodiesel production in Bangladesh can be similarly very feasible and useful. The jatrofa plant is already a native to Bangladesh. It is called 'verenda' in the rural areas and rural people have known the fuel-oil like properties of the juicies of its seeds for a long time. They use it for lighting lamps. Jatrofa plants grow well in areas that get rainfall. Therefore, Bangladesh is ideal for its planned cultivation. It can be grown in abundance on the sides of national highways, on the demarcation strips of cultivable lands, on fallow lands, in the hilly areas, etc. A jatrofa plant survives for 50 years. From 1,000 kg of the seeds of jatrofa plants about 250 kgs of diesel can be obtained. With planned cultivation of the plant in different areas of the country, biodiesel can be produced to take care of the entire need of diesel in Bangladesh.
A plan was adopted under the last party-led government to start up biodiesel production. A government committee was formed to acquire 2.8 million hectares of non-cultivable lands for the purpose. But there has been no progress in this plan since the change of government.
Thus, the moot question is whether Bangladesh can afford to be so lackadaisical in pursuing plans to produce energy from the non-conventional sources when the rest of the world is moving fast in this area to protect their economies from soaring fuel oil prices. The economy of Bangladesh is already reeling from the weight of the unusually inflated prices of imported energy. Its local production of conventional energy is far from satisfactory. Under the circumstances, it is imperative for it to go far large scale harnessing of energy from non-conventional sources. The work in this area must start immediately in right earnest. The same will also be cost-efficient. For example, a litre of biodiesel will be substantially cheaper to produce and market, in contrast with the same amount of locally refined or imported diesel.