Why the energy and power master plan must be reviewed
The Integrated Energy and Power Master Plan (IEPMP) of Bangladesh, aiming to outline a strategy for the country's energy and power sector up to 2050, was approved in 2023. In addition to the overall supply and demand scenario in the sector, this document outlines the role of renewable energy and clean energy in the electricity mix for the planning period. This forecast of the electricity mix has updated the Power System Master Plan of 2016, where the role of renewable energy was kept at a minimum. Projecting that renewable energy and other modern clean energy sources will play a bigger role in the country's power mix, the IEPMP outlines three different scenarios: reference scenario (REF), advanced technology scenario (ATS), and net-zero scenario (NZS). The plan forecasts that in the ATS and NZS, contributions from solar and wind technologies will be substantial, there will be an expansion of nuclear capacity, coal-fired power plants will be converted to ammonia co-firing, gas will be replaced by hydrogen, carbon capture and storage (CCS) technology will be incorporated, and oil and captive power will be minimised.
However, the projections of introduction of future technologies and their prices have been challenged by various research. The assumptions about the costs and feasibilities of renewables and their prices relative to fossil fuels are based on past trends, which may not continue into the future. The development of renewable energy is still in the early stages in Bangladesh, but it is gaining momentum exponentially. The estimates of the costs and prices of renewable energy technologies in the IEPMP do not reflect actual current values for Bangladesh. Moreover, the forecasts of fossil fuel generation shares are based on the price forecast of fossil fuels up to 2041 by the International Energy Agency (IEA). IEA forecasts have been proven wrong in the past; the current prices of fossil fuels like gas and coal can rise to several orders of magnitude greater than the forecasted prices due to the global changes in energy markets and international political developments, like wars. The IEA projections of the growth and costs of solar PV and wind energy have also been grossly underestimated. The impact of fossil fuel price increases on foreign exchange reserves and inflation and the consequent impact on macroeconomic variables have not been anticipated, but recent developments in the Bangladesh economy have revealed that these are crucial considerations.
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According to the IEPMP, the share of fossil fuels is to decrease to at least 60 percent by 2041 and at least 45 percent by 2050 in the Advanced Technology Scenario, and clean energy is supposed to make up the balance. However, per the plan, clean energy includes not only solar and wind, but also nuclear, hydrogen, ammonia co-firing with coal, and CCS technology incorporated into fossil fuel power plants. For example, it is projected that towards 2050, the ratio of wind power and hydrogen-fired thermal power in the power mix will increase, amounting to 15 percent and 16 percent, respectively. This type of projection implies a role for fossil fuels to remain in use in the future, with provisions to mitigate their polluting effect through still technologically or commercially unproven technologies like ammonia co-firing and CCS. It has been mentioned that CCS, nuclear and hydro will be the chief sources of clean energy, as there are limited wind and solar resources in the country and limited land for developing solar power plants. The share of solar and wind are projected to remain below 20 percent even in 2050.
The IEPMP plans an energy mix with yet unproven technologies, like liquid hydrogen and ammonia. And yet, the share of variable renewable energy in the final energy mix is projected to be small (less than 20 percent). Hydrogen ends up having a significant share in electricity production installed capacity (around 22.4 percent by 2050 of PP2041 scenario). This is unexpected, as hydrogen is a much less mature technology for electricity production and is currently not applied globally on a commercial scale, whereas solar and wind constitute significant shares of electricity generation in many countries. The IEPMP projects that ammonia co-firing at coal-fired thermal plants will start from 2035 and will reach significant levels in the electricity mix by 2040. However, if this plan is to be realised, Bangladesh will have to become a pioneer in using ammonia co-firing in the power sector to such a large extent, as the plan to incorporate ammonia into the electricity generation mix is perhaps unprecedented in other countries (REN21, 2022). At present, the ammonia co-firing technology remains at the research level and is limited to demonstration projects (IRENA, 2022).
Although it is mentioned that solar and wind have limited scope for expansion due to the variable nature of the power as well as the scarcity of land in Bangladesh, there is no discussion to prove how hydrogen can be obtained at such a high quantity to comprise more than a fifth of the total installed capacity of electricity generation. Some research has been done on the potential to incorporate more wind and solar in Bangladesh, but no such studies have been done about hydrogen. The potential to make more land available for solar projects has been extensively discussed in policy documents such as the climate prosperity plan, the draft National Solar Energy Roadmap 2021-2041 (SREDA), and also in some academic research. Here, rooftop solar, solar irrigation and various land reclamation strategies are discussed, in order to allocate more land for solar projects. Furthermore, strategies to accommodate variable renewables are also discussed, including storage capacity installation, sector coupling, transmission networks and demand response management. Storage and demand response management are already proven technologies and are commercially viable (REN21, 2022). Yet, such promising and emerging technologies are conspicuously absent in the IEPMP. There is only a brief proposal to perform a feasibility study for pumped storage in Bandarban, where the capacity is insignificant in comparison to Bangladesh's needs, and there is no discussion of using grid-tied battery storage.
The IEPMP goals do not reflect the targets of Bangladesh's Nationally Determined Contribution (NDC), nor the SDG 7 on clean energy access. The pace and direction of energy technology is changing fast, and new disruptive technologies like artificial intelligence and smart grid are evolving. The future may, therefore, bring many new opportunities and threats, which will involve the power and energy sector of a country. Hence, a power sector master plan like the IEPMP should be forward-thinking, dynamic and adaptive and should also follow the world trends.
The power sector has been undergoing a review in Bangladesh with a view to eliminating financial and technological inefficiencies. The interim government recently said it was revising the IEPMP and reevaluating the renewable energy policy. This is indeed a step in the right direction. The revision must reflect the new financial and technological realities and chart a realistic pathway for the country's power and energy sector.
Shahriar Ahmed Chowdhury is director of the Centre for Energy Research at United International University (UIU).
Dr Shakila Aziz is assistant professor in the School of Business and Economics at United International University (UIU).
Views expressed in this article are the authors' own.
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