Rapid Assessment Gap Analysis Bangladesh Published: 2012 Disclaimer: Government Validation Pending Sustainable Energy for All: Rapid Assessment and Gap Analysis

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Rapid Assessment Gap Analysis Bangladesh Published: 2012 Disclaimer: Government Validation Pending Sustainable Energy for All: Rapid Assessment and Gap Analysis Rapid Assessment Gap Analysis Bangladesh Published: 2012 Disclaimer: Government validation pending Sustainable Energy for All: Rapid Assessment and Gap Analysis Bangladesh DRAFT Prepared with support from Energy Sector Management Assistance Program, The World Bank June 2012 Sustainable Energy for All Rapid Assessment and Gap Analysis – Bangladesh TABLE OF CONTENTS EXECUTIVE SUMMARY .......................................................................................................................... 4 1.0 OBJECTIVES OF THE STUDY .................................................................................................. 6 2.0 COUNTRY OVERVIEW .............................................................................................................. 6 2.1 ENERGY SITUATION ....................................................................................................... 7 2.2 ENERGY SUPPLY ............................................................................................................ 8 2.3 ENERGY DEMAND ........................................................................................................ 10 2.4 ENERGY AND ECONOMIC DEVELOPMENT .................................................................... 11 2.5 ENERGY STRATEGY AND RENEWABLE TARGETS ......................................................... 12 3.0 ENERGY ACCESS ...................................................................................................................... 13 3.1 OVERVIEW AND ASSESSMENT ...................................................................................... 13 3.2 MODERN ENERGY FOR THERMAL APPLICATIONS ........................................................ 13 3.3 ACCESS TO ELECTRICITY ............................................................................................. 14 4.0 ENERGY EFFICIENCY ............................................................................................................. 15 4.1 OVERVIEW AND ASSESSMENT ...................................................................................... 15 4.2 ENERGY INTENSITY OF NATIONAL ECONOMY .............................................................. 17 5.0 RENEWABLE ENERGY ............................................................................................................ 17 5.1 OVERVIEW AND ASSESSMENT ...................................................................................... 17 5.2 ON-GRID AND OFF-GRID RENEWABLE ENERGY ........................................................... 18 5.3 USE OF RENEWABLE SOURCES FOR THERMAL APPLICATIONS ..................................... 19 5.4 USE OF RENEWABLES FOR PRODUCTIVE APPLICATIONS .............................................. 19 5.5 CONSOLIDATED SUMMARY .......................................................................................... 19 6.0 INSTITUTIONAL AND POLICY FRAMEWORK ................................................................. 19 6.1 ENERGY AND DEVELOPMENT ....................................................................................... 21 6.2 THERMAL ENERGY FOR HOUSEHOLDS ......................................................................... 21 6.3 POWER SECTOR ............................................................................................................ 21 6.4 MODERN ENERGY FOR PRODUCTIVE USES .................................................................. 22 6.5 NATIONAL MONITORING FRAMEWORK FOR SE4ALL .................................................. 22 7.0 PROGRAMS AND FINANCING ............................................................................................... 22 8.0 PRIVATE SECTOR INVESTMENTS AND ENABLING BUSINESS ENVIRONMENT ... 26 9.0 GAPS AND BARRIERS .............................................................................................................. 28 10.0 CONCLUSIONS…………………………………………………………………………………28 APPENDIX A: PROJECTS FOR COMPLETION AS OF 2011. ..................................................................... 30 APPENDIX B: 2 Sustainable Energy for All Rapid Assessment and Gap Analysis – Bangladesh TABLE OF FIGURES Figure 1: Map of Bangladesh .......................................................................................................... 6 Figure 2: Sectoral Use of Gas (2011) .............................................................................................. 7 Figure 3: Gas and Coal Fields in Bangladesh (2011) ...................................................................... 8 Figure 4: Installed Capacity as ff December 2011 ........................................................................ 10 Figure 5: Tariff Structure for Different Consumer Types ............................................................. 15 Figure 6: Status of Power Supply and Demand (2009 – 2015) ..................................................... 22 TABLE OF TABLES Table 1: Power Sector Generation: Current and Proposed ............................................................. 9 Table 2: Power Sector as of April 2010 ........................................................................................ 10 Table 3: Year-wise Estimated Power Demand and Supply* ......................................................... 11 Table 4: Key Transmission Projects .............................................................................................. 23 Table 5: List of Projects for Implementation in 2012 ................................................................... 24 KEY ABBREVIATIONS AND ACRONYMS BPDP Bangladesh Power and Development Board ERB Energy Regulatory Board GDP Gross Domestic Product GWh Giga-watt hour (1,000 MWh) IPP Independent Power Producer Km Kilometer KV Kilovolt KWh Kilo-watt hour (1,000 Wh) LHPC Lunsemfwa Hydro Power Company LPG Liquefied Petroleum Gas MPEMR Ministry of Power, Energy and Mineral Resources MW Mega-watt PBS Palli Bidyut Samiti RAPSS Remote Area Power Supply Systems REA Rural Electrification Authority REMP Rural Energy Master Plan SHS Solar Home System 3 Sustainable Energy for All Rapid Assessment and Gap Analysis – Bangladesh EXECUTIVE SUMMARY Bangladesh has witnessed improved economic growth in recent years. The country’s Gross Domestic Product (GDP) is estimated at 6.3% for FY12. The government of Bangladesh’s (GOB’s) target is to achieve 8% growth in National Income by 2013, and 10% by 2017. However, insufficient physical infrastructure facilities such as power and energy shortages are key impediments to achieving these as well as the government’s poverty reduction goals. The World Bank estimates (2010) monetary loss at nearly US$1 billion as a result of power shortages and unreliable supply. Bangladesh is one of the world’s lowest energy producers and suffers from a chronic shortage of electricity and gas. Electricity, critical to economic growth, reaches only about 47% of the entire population despite the country’s successful rural electrification program. The per capita power consumption at 220 kWh is among the lowest in the developing world. As of 2010, only about one-third of rural households had access to electricity with about 16 million households yet to be connected. The gap between installed and available capacity is growing, deterring new investments and expansion projects. Notwithstanding the above, in the context of addressing rural energy issues, Bangladesh has a better record than most other developing countries. The country’s award-winning rural energy program is based on rural electric distribution cooperatives where major focus has been the use of solar home systems (SHS) in the country’s off-grid regions. Nevertheless, in spite of the model rural electrification program most rural people in the country still have little access to quality energy services. For example, cooking with biomass in rudimentary stoves continues in majority of households in Bangladesh. To increase use of improved Cookstoves, GOB, in particular IDCOL, must take measures to facilitate a process that promotes variety, improved durability, better safety, and greater efficiency of improved stoves. Strengthening the current involvement of Gram Shakti, a leading NGO in Bangladesh will go a long way to achieving these objectives. Using commercial approaches will add to the viability of a program. To generate additional power, GOB has taken a number of steps, including further development of coalfields, intensifying new exploration of natural gas, and increased importation of Liquefied Natural Gas (LNG). Renewable energy sources will be harnessed more, and in a sustainable manner. Energy sector reforms will make it possible to have well-functioning energy markets, which can make energy reach the poor. GOB is also seeking increased private sector participation through greater incentives and favorable policies. A number of these interventions have shown positive outcomes during the last decade. GOB’s longer term energy strategy aims to explore the possibility of: (i) Coal-based power plants using domestic and imported coal; (ii) Use of Rooppur Nuclear Power Plant; (iii) Availability of new gas both offshore and onshore; (iv) Medium-term agreement with suppliers to import LNG; and (v) Significantly increase the use of renewables. It is of relevance to note that use of coal is constrained by long lag time, high costs and environmental and climate change issues. It will create an unacceptable time gap. For the near-term, GOB should consider maintaining and improving its existing power infrastructure; improving tariffs;
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