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Saturday, December 26, 2009
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THE Daily Star reported on December14, 2009 that a company has been tasked with setting up a 20-25kW solar power supply to Bangladesh Bank at a cost of Tk.1 Crore. I question the wisdom of this investment based on current energy costs in the market and the life expectancy of such a system.

Energy Bangla, (www.EnergyBangla.com) reports that the cost of electrical energy to the consumer is Tk.5.50 per kilowatt-hour. If we assume that banks operate 8 hrs/day, 5 days/week, 48 weeks/year, their annual electricity bill for 22.5 kilowatts comes to Tk. 2,37,600. Dividing Tk.1 Crore by this figure gives us the number of years it will take for it to pay for itself: 42 years. The payback will be even longer if maintenance and other operational costs are taken into account. The GreenEcon website (www.Greenecon.net) -- dedicated to understanding the economics of alternative energies -- is a good starting point for your readers to verify my claims.

A 2002 study by R. Khan et al of BUET found the daily sunlight hours in Bangladesh to range from 10 to 7 hours; they further reduced this by 54% (to 4.6 hours) to account for rainfall, cloud, fog and dust over the solar panels; in the US, located a further 20 degrees north of the equator, the peak sunlight hour is 3.5. 10% efficiency is further lost during the necessary DC to AC conversion, reducing the median 22.5kW capacity to 20kW.

Multiplying the 4.6 hours by 20kW, we see that this system will deliver 92kW hours/day or 33.5 MW hours/year. In its typical 20 year lifespan, the system will deliver 670MW hours of energy. Dividing 670MW hours by its cost of Tk 1 Crore, we get a cost of Tk. 15/kW hour. In comparison, energy costs are Tk.0.42/kW hour from coal; Tk.3.5/kW hour from oil and Tk.2.1/kW hour from gas.

About 93W/sq. ft of solar energy falls on the surface of the earth. Accounting for all the conversion losses, we get 10W/sq. ft. The reported 22.5kW system will thus occupy 2,250 sq. ft. or a spacious apartment. An office with a air conditioner, couple of light bulbs and a computer will easily consume 1.5kW. Tk.1 Crore will only serve 15 offices! The company representative boasted that up to 500MW can be produced by 2015; this will require 50 million sq. ft. or the equivalent of 430 football stadiums.

What about Bangladesh 's future energy and productivity needs? The per capita energy consumption is a reasonable indicator of a country's productivity. The International Energy Agency and World Bank data for 2005 shows this to be 1230kWhr for Bangladesh. Figures for India, Thailand, UK and the US are 3,860kWhr, 14,570kWhr, 48,650kWhr and 99,620kWhr, respectively. It is obvious then, in order to transition from a poor agrarian developing nation to an industrialised middle-income country, Bangladesh needs to build its energy capacity ten-to-twenty times. If the future needs were to be met by solar power alone, this would require 27,400 MW panel systems. These would need a thousand square miles of space. With a current population density of almost 4000/square mile in Bangladesh, they would displace 4 million people and cost Tk.1.2 million crores -- equivalent to US$174 trillion, or 15 times the current US national debt!

A typical solar power system cost breakdown is as follows: solar panels 63%; batteries 25%; DC to AC converters 9% and 3% for installation in Bangladesh. With advances in manufacturing, the solar panel production cost will drop, while with R&D in design and material science, low-cost cell efficiency will rise above 15%. These efforts require annual investments to the tune of billions of dollars. While the US and Europe are the biggest R&D contributors, China is taking manufacturing to the next level.

But why is Bangladesh investing in a technology that costs about 7 times more than conventional energy? Why is tax money being thrown at a product whose life expectancy is half (20 years) of the payback period (42 years)? Given Bangladesh's inability to manufacture solar panels, isn't this tantamount to wasting foreign exchange that could be better spent on upgrading the national grid transmission lines to build the much needed power distribution capacity? The local company also happens to be a supplier of the requisite batteries for which they provide a 2yr warranty; since batteries constitute 25% of cost, who will pay the additional Tk.12.5 Lakhs annually?

Current technology and economics of solar power make them unsuitable for one of the most densely populated and yet one of the poorest countries of the world like Bangladesh. It is better to focus on the labour-intensive components of the solar power system to build an exportable product instead of becoming an un-witty consumer.

Shabbir A. Bashar, PhD. in Electrical Engineering from King's College, University of London, has several patents to his name, and has been working in the UK and US photonics industry for over 15 years.

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First of all I would like to congratulate a fellow country man having a PhD from Kings College taking a close interest in this industry.

I did read the original article and noted that it was full of errors and also I would like to correct few points on this matter here if I may since I as a co owner of a UK and German registered firm have a working 1MW Solar Park at Falkstein in Germany and larger ones are in the pipeline for Italy and Bulgaria.

First of all, we use German solar panels with dual tracking systems meaning it follows the sun and the efficiency is 100% guaranteed for 20 years and then its 90% up to 30 years and its 80% up to and beyond 40 years. Since we receive generous subsidy from the EU so our break even is much less than what it is in Bangladesh. We are now working on solar parks that are 60MW or more with IRR of more than 20% in Germany and Italy and over 45% in Bulgaria hence there is a boom in the establishment of such industries in the European Economic Zone.

German panels are Rolls Royce of solar panels and as such are dearer then Chinese panels but if Bangladesh was to manufacture such panels then it would beat the Chinese imports and Bangladesh would enjoy German standards.

I however do not agree that we should have solar farms in Bangladesh simply because we need out land to grow food but we can install them on roofs of factories, houses, scools, Universities and Hospitals.

Right now solar electricity are three times more expensive than fossil derived electricity and twice more than solar thermal elecrcity.But the price of solar panels are coming down fast and over the last year it’s come down 40% and it will continue to go down as China, Germany USA and others retch up productions.

So I do believe that its possible that in few years Bangladesh can have large solar parks which will generate electricity that will be able to compete with other sources of electricity and its possible that there will be few vertically integrated solar panel manufacturers coming to Bangladesh to set up shop.

: Manzoor Ashraf

Thanks Dr. Bashar a lot for enlightening us with the nitty-gritty matters of solar energy. His calculation of cost-effect and life span of solar panel is really discouraging! If the life span is only 20 years, it loses the sustainable status that most of us claim of. Still I am hopeful of large-scale use of solar panels because of its free original source (sun; in this tropical country) and non-polluting character. So, I like to know if the only 20 years life span is of the battery and AC-DC converter or the solar panels themselves to decide if we are to wait for further production cost that Chinas work may reveal.

: MAS Molla

Comments

  • Shabbir A Bashar
    Saturday, December 26, 2009 12:14 PM GMT+06:00 (415 weeks ago)

    This is in response to Mr Molla: the 20 year life span is for the solar panels - in particular the semiconductor junction where light is converted to electricity. Battery lifetime is much shorter which is why the Bangladeshi supplier provides only a two year warranty. Thanks much for your comments.


 

 

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