The power of thinking small and solar

Is it the time to think big, again? Can only mega projects catch the country’s attention and lead Bangladesh to becoming a middle income country? On the road to 2021, the Government of Bangladesh has declared, among many other goals, to reach universal electrification (currently somewhere between 62-75 percent, and a matter of heated debates) and a 10 percent share of renewables in the energy mix (currently less than 3 percent).

So does this mean the days of ‘small is beautiful’ are over? It certainly should not be the case!

It is important to note here that Bangladesh has been a global role model, showing how an energy transformation is brought about through household-based solar infrastructure initiated in its rural areas. Selling solar home systems through microcredit in the late 90s made Bangladesh an early adopter on a global scale, stepping into unfamiliar territory while electrifying its rural areas. But this first mover behaviour clearly paid off. Today, we count close to 4.2 million installed systems or solar systems in every fifth household in rural areas. At its peak, Bangladesh’s solar home system programme sold 2,500 solar systems per day.

However, these days are over. Two major interventions have turned the market inside out. First, the Rural Electrification Board (REB) has started to massively electrify rural areas through the national grid, powered by fossil fuels. Second, the TR Kabhika project was diversified to solar through which these systems are now being distributed for free. Both continue to have severe adverse effects on the sustainability of the globally recognised solar home system programme. Nonetheless, last month, the REB made headlines with its plan for two mega rural electrification projects in Bangladesh in order to cover the entire countryside at a cost of Tk. 143.55 billion. The plan was put in front of the Planning Commission which, in turn, raised concerns over the high cost of the two projects and REB’s implementation capacity.

But should this be the sole focus of our attention? Is it really the time to only think big? Interestingly enough, given the 10 percent or 2,000 MW energy capacity target from renewable sources, despite the rhetoric, approvals, and signed PPAs for mega solar parks, as of today the country only has 167MW in solar PV capacity, out of which 90 percent stems from these small solar home systems! Let us understand these systems better as laid out in the following points.

First, a recent study conducted in rural Bangladesh has in fact shown that that on average, these solar home systems perform significantly better than the national grid in these areas. The better performance is measured through the performance of the electricity service quality, measure along several attributes such as capacity, duration, quality, safety etc. It is time to recognise the role solar home systems have played and will play for this country’s development and to stop undervaluing the level of energy access they bring. Recent implementations have shown that we can even interconnect those systems to form microgrids with a greater power supply, as a way to provide electricity both affordable and clean, while also supplying the villagers with an extra source of income. Those and other on-site solar options are the most expedient among the technical possibilities that fit the bill in meeting the universal access imperative.

Second, the International Energy Agency estimated that approximately 70 percent of the one billion people worldwide lacking access to electricity should have electricity through decentralised systems and only 30 percent through grid extension. Similarly, the Poor People’s Energy Outlook 2017, which was released this week at the Vienna Energy Forum 2017, performed a scenario analysis for Bangladesh. In its findings, the report states that only 34 percent of those households still un- or under-electrified should most economically be electrified using the national grid (2.4 million households). Grid expansion for the remaining 4.8 million would be uneconomical, and they would be best served with distributed solutions, almost all through stand-alone solutions (4.4 million) and only 5 percent through mini-grids. Current planning targets the complete opposite, going against economic acumen.

Finally, in my opinion the Planning Commission was right to return the REB offer; however, it should not only have done it on the grounds of costs and institutional capacity but also on the grounds of lack of more integrated planning. Attention should now be on how to avoid such external shocks to the solar home system sector, as well as on how we can target affordable and flexible electrification where people’s actual needs are at the centre of our focus. In detail, this requires re-evaluating the role that these allegedly “small” solar home systems can play as a sustainable complimentary option to the national grid. This will enable us to use the existing resources in the best interest of the country and its Vision 2021. Imagine the combined power of more than four million individual solar PV systems put together!

Therefore, I urge the stakeholders to get together and re-evaluate what universal electrification actually means for us (and it is certainly not that everyone has access to a national grid) as well as the means by which to achieve universal electrification by 2021 for Bangladesh.

Originally this article was published on May 11, 2017 at Daily Star. The author Dr. Sebastian Groh is an Assistant Professor at the School of Business and Economics in North South University, and Managing Director of ME SOLshare Ltd.