Bangladesh Energy Situation

Energy Situation

Energy situation

Energy Consumption

About 80% of the population of Bangladesh live in rural areas. The rural economy is characterized by slow growth, high unemployment, insufficient infrastructure and widespread poverty. Only one-third of the population has access to electricity; and access in the rural areas is lower (22%). The rural population depends mainly on biomass as a source of energy; over 70% of total primary energy consumption is covered by biomass, mainly agricultural waste and wood.
The government’s vision of electrifying the entire country by 2020 through grid expansion may not be realistic due to inaccessibility and low consumer density in many rural areas, as well as financial constraints. To reach the government’s vision of universal electrification, renewable energy sources, in particular solar energy will have to play a vital role for off-grid electrification.

Energy demand in the household sector
In most Bangladeshi households in rural areas (99%) as well as urban areas (66%), biomass such as wood, cow dung, jute sticks or other agricultural wastes is employed for cooking. Inefficient and poorly ventilated clay stoves produce fine particles, polycyclic aromatic hydrocarbons, carbon monoxide, dioxins and other carcinogens (ROUSE 2004). Housewives are exposed to high levels of these toxins between three and seven hours a day. Research revealed that this indoor air pollution (IAP) occurs not only in the kitchen but only slightly lower in the living area therewith affecting also other family members such as children. The World Health Organisation (WHO) has estimated that more than 46,000 women and children die each year as a direct result of exposure to indoor air pollution, while many more suffer from respiratory diseases, tuberculosis, asthma, cardiovascular disease, eye diseases, and lung cancer. Right behind unsafe water and inadequate sanitation, indoor air pollution is the second biggest environmental contributor to illness worldwide (WHO 2007).

Rural Household Consumption by Source

Due to inefficient burning of biomass for cooking purposes, biomass is becoming increasingly scarce and costly, putting pressure on the economic situation of biomass-purchasing households. Poor rural households have to spend a significant amount of time on biomass collection. Wastage of biomass is depriving the soil of nutrients, resulting in unsustainable low levels of organic matter in the soil.

The figure shows the distribution of the energy consumption of rural households. Nearly one half of the total consumption is for firewood.

Annual Household Energy Consumption: All Divisions (average per household)

		Heating
Energy Type	All Uses	Cooking	Parboiling	Other	Cooling	Lighting	Amusement
Biomass (kg)
Fuelwood	1,186.21	1,064.84	28.60	92.77	—	—	—
Tree leaves	501.51	470.67	29.99	0.85	—	—	—
Crop residue	708.18	538.86	164.41	2.72	—	—	—
Dung cake/stick	523.90	503.68	16.07	4.16	—	—	—
Sawdust	8.40	8.36	0.02	0.02	—	—	—
Non-biomass
Candle (piece)	15.86	—	—	—	—	15.86	—
Kerosene (liter)	28.98	1.76	—	0.07	—	27.16	—
Natural gas (Tk)	9.59	9.59	—	—	—	—	—
LPG/LNG (liter)	0.05	0.05	—	—	—	—	—
Grid electricity (kWh)	143.83	0.25	—	4.00	49.50	80.74	9.34
Solar PV (kWh)	0.53	—	—	—	0.04	0.48	0.01
Storage cell (kWh)	0.55	—	—	—	—	0.14	0.41
Dry-cell battery (piece)	15.01	—	—	—	—	—	—

Source: BIDS Survey 2004

Electricity

Electricity Consumption, Generation and installed Capacity of Bangladesh

Bangladesh is still reeling under 600 - 1200 MW of ‘load-shedding’. A situation which deteriorates during irrigation seasons, when the demand-supply gap reaches up to 1500 MW. Domestic and industrial sectors consume about 43% and 44% electrical energy respectively, i.e. a total of about 87% of power consumption occurs in these two sectors. Out of this, a large part of electrical energy is consumed for lighting. All power sector experts acknowledge that the maximum power gap occurs primarily during the evening. A way to manage the evening load is the introduction of energy efficient lights/lighting systems.

Access rate

Bangladesh is one of the world’s lowest energy producers. Electricity, critical to economic growth, has reached only about one-third of households, despite the country’s successful rural electrification program. With the exception of kerosene, commercial fuels are beyond reach for many. Bangladesh’s reliance on biomass for cooking will continue for several decades; Today only 40% of the Bangladesh population is connected to the electricity grid and in the rural areas, where 80% of the population lives, only 22% have electricity. A mere 6% of the entire population has access to natural gas, primarily in urban areas. Biomass fuels, collected mainly from the local environment only two decades ago, are fast becoming a marketed commodity as access to local biomass becomes ever more difficult. The stark reality is that many rural residents are dependent on such fuels as agricultural residues, dung, and even leaves and grass for cooking.

Key problems of the energy sector

Bangladesh is an energy-starved country:

• Only 40% of its 155 million people are connected to the electricity grid and, in the rural areas, where 80% of the population lives, only 22% have electricity
• A mere 6% of the entire population has access to natural gas, primarily in urban areas
• Electricity supply is not reliable and peak demand cannot be met
• Substantial amount of energy is used inefficiently
• Most people in the rural areas depend on kerosene lamps for light
• 80% of all Bangladeshis cook with biomass, such as rice straw, dried leaves, jute sticks, cow dung, or wood.

Dissemination of solar home systems (SHSs) is being promoted mainly by private sector companies and NGOs; presently, projects are mainly based on the direct-sale approach. This approach is successfully demonstrated by an IDA/GEF-supported project, which provides participating organizations (mostly NGOs) with refinancing funds for micro-financing of SHSs. The concept comprises a buy-down grant and an institutional development grant for the participating organizations to build capacities for promotion of SHSs in rural areas. The buy-down grant is on a sliding scale.
As financing of the project is coming to an end in August 2008, it is proposed to apply the experiences made to continue the route to commercialization of SHS dissemination. The existing financing structures provided by the Infrastructure Development Corporation Limited (IDCOL) will be used for provision and management of refinancing loans, and the micro-finance organizations (NGOs), which are already experienced in promoting and financing of SHSs, will be involved in promotion and selling of SHSs. Funds for refinancing will be provided by IDCOL, whereas the proposed partnership project will only provide the buy-down and the institutional development grants.

Policy framework, laws and regulations

Poverty Reduction Strategy

All mentioned problems related to inefficient biomass and indoor air pollution use are addressed in the Bangladesh Poverty Reduction Strategy Paper (PRSP), chapters 5.H.1 ‘Conservation of Nature’ and 5.H.2 ‘Combating Pollution’:

• "The relationship between the amount of the fire wood use and level of income is clearly positive and monotonic. This means that the poor has much less access to quality fuel for cooking. Income poverty thus translates into energy poverty." (p. 164)
• "Population pressure on land has been leading to conversion of forest land and land under tree cover into other uses. This at the same time further lowers the supply of biomass and fuel wood for cooking raising their market value including further deforestation and cutting down of trees. Smoke due to fuel wood burning also is a major cause of a significant rise in the level of indoor air pollution affecting adversely the health of women and children." (p.164)
• "Air pollution needs to address both the outdoor and indoor sources of pollution. […] Indoor air pollution is mainly caused by cooking fuels such as firewood and dried cow dung. Most of the poor families use these as fuel and women and children are the main victims of indoor air pollution. Due to air pollution the number of people suffering from respiratory diseases is on the rise." (p. 167)

The PRSP derives the following national strategies to address the mentioned problems:

• "For controlling indoor air pollution use of natural gas, biogas and LPG may be encouraged through various means including policy supports for their lower relative prices as well as more efficient and cost- effective cooking stoves." (p. 167)
• The introduction of energy efficient cook stoves was set one of the key targets to control air pollution in rural settings. "Building coalitions with NGOs for wider dissemination of fuel-efficient cooking stoves" and "Promote R&D to change building and construction standards and designs for pollution-free kitchens" were the respective planned actions on the policy agenda for the fiscal year 2005/06 (p. 301).

General Energy policy, Energy strategy

The Bangladeshi Energy Strategy of 1996 with its actualisation in 2002 is the main document of the promotion of RE It focusses on energy supply in rural areas. In December 2009 the "Renewable Energy Policy for Bangladesh was ratified. It was intended to integrate this policy paper into the New Energy Policy (NEP). The NEP was developed in 2006 by the "Renewable Energy and Energy Efficiency Programme" in cooperation with the UNDP.

The Renewable Energy Policy (Download PDF; 83 kB) contains the following parts:

• Overview of potentials of RE sources
• Institutional arrangements in the RE sector (above all the responsibilities of SEDA)
• Resource, technology and program development
• Investment and fiscal incentives
• Regulatory Policy

Institutional set up in the energy sector, activities of other donors

Please confine your explanation to areas relevant for the intended project activities

Governmental institutions

• MPEMR: The Ministry of Power, Energy, and Mineral Resources oversees sector management. 
  File:Bangladesh Power Sector-Current Structure.JPG

  Structure of Bangladesh´s Power Sector
• BERC: The Bangladesh Energy Regulatory Commission has authority over consumer protection, approval of tariffs and pricing, issuance of generation and distribution licenses, and promotion of competition.
• Power Cell: Within the MPEMR power division, the Power Cell oversees power-sector reform.
• REB: The Rural Electrification Board oversees operations of consumer-owned rural electric cooperatives (PBSs). It performs supervisory and regulatory duties to ensure that technical standards are met and performance is monitored.
• LGED: The Local Government Engineering Department
• SEDA: The Sustainable Energy Development Agency acts as a focal point for sustainable energy development and promotion, ‘sustainable energy’ comprising renewable energy and energy efficiency. (is not established yet)
• BPDB: The Bangladesh Power Development Board operates most publicly owned generators and some urban distributors; it acts as a single buyer, purchasing from public and private generators and selling to distributors.

Private sector (enterprises, NGOs)

• PGCB: The Power Grid Company of Bangladesh, a wholly owned subsidiary of the BPDB, operates the national transmission grid, schedules grid operations, and wheels energy to distributors.
• DESA: The Dhaka Electricity Supply Authority (not yet functional) distributes energy and conducts commercial operations in Dhaka and adjoining areas, except for Mirpur and Gulshan.
• DESCO: The Dhaka Electric Supply Company distributes energy and conducts commercial operations in the Mirpur and Gulshan jurisdictions of the Dhaka metropolitan area.
• WZPDC: The West Zone Power Distribution Company is responsible for regional distribution in Khulna.

Short explanation to what degree EnDev activities will be coordinated with other donor activities

The ADB as the mayor donor took the coordinating role and acts as the chief negotiator. All international donor activities in the energy sector are coordinated by the Local Consultative Group in the ADB.

Other important international actors in the energy sector are

• World Bank
• Japan
• USA
• Great Britain