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PV Demand Analysis of the Belt and Road Initiative: Bangladesh of Southern Asia

Basic Information of Bangladesh

Bangladesh, with a total population of 164 million, is a country with cultural diversity. Its major religons are Islam and Hinduism. The nation is at the take-off stage of economic growth. Starting in 2011, the annual GDP growth rate has remained over 6%, and it has reached a new high at 7.284% in 2017.

Moody and S&P, the world renowned credit rating agencies, also assigned positive Ba3 rating and BB- rating to Bangladesh respectively, reflecting a stable outlook for future. Despite the nation's infrastructure is still under construction, Bangladesh has a bright outlook for future development.

Bangladesh has abundant sunlight, with an annual sunshine duration of 2,500 hours. The average daily solar radiation is 4-.6.5kWh/m2. So far, the accumulative solar PV installation capacity has reached 325.82MW.

Renewable Energy Development in Bangladesh 

The Bangladesh government aims to achieve 3,168MW of renewable energy installation by 2021 (Vision 2021), expecting to fulfil 10% of the domestic power generation. The nation will focus on PV and wind power, with a goal of 1.74GW and 1.37GW, respectively.

Bengal PV Installation Target

Bangladesh’s energy demand mainly relies on coal burning. Among all renewable energies, PV is the only one that witnesses significant growth. This is because PV is the core project of renewable energy development and global PV technology is becoming more mature. However, other projects experienced limited growth or are not even growing at all.

2011-2018 Bengal Cumulative Installation

Bangladesh's PV Policy

The PV industry in Bangladesh is just about to take off. In the past, in order to solve the problem of power shortage in remote rural areas, the government came up with policies specifically for off-grid projects. Now, in order to cater to the economic growth trend to fulfil large energy demand in the future, the government has started to promote on-grid projects, and thus policies related to on-grid projects have been released recently.

1. Net-Metering Scheme

There are three types of targets that are applicable to the Net-Metering Scheme: domestic (local residency), commercial, and industrial consumers. The Ministry of Energy will set different capacity standard for each of the three. The maximum capacity cannot surpass 3MW according to the regulation.

2. PPA

Bangladesh came up with PPA policy for utility-scale projects. The policy was created because the Bangladesh government planned to promote utility-scale projects in 2017-2018: PV plant developers can participate in the bid on their own. The purchase price and period of PPA will be determined after project authority and developers come to an agreement.

3. Solar Home System (SHS)

Solar Home System was introduced in 2003, targeting on off-grid projects. The purpose was to deliver clean energy to remote rural areas and indirectly help the local PV development.

The agency that implemented the policy is the Infrastructure Development Company Limited, IDCL, established by the Bangladesh government.

NGO and other organizations purchase solar panels through the loans provided by IDCL. They can sell solar panels and provide related installation and after-sales services to residents living in remote areas. Residents can pay in monthly instalment.

Bangladesh's PV Development Status

Bangladesh’s total PV installation reached 325.82MW, of which, the annual demand of off-grid projects experienced steady growth. The annual newly-added off-grid installation reached 35MW in 2011-2018, with a cumulative installation reaching 286.72MW, taking up 88% of Bangladesh’s total PV installation. The amount of grid-connected PV installation reached 39.1MW, representing 12% of the total installation.

Bengal Cumulative Installation

The development of utility-scale projects is limited because it’s difficult to obtain land due to the government’s restrictions on the acquisition of agricultural land. On the other hand, compared to India that’s also located in Southern Asian region, Bangladesh lacks the support and promotion of large local companies. As a result, PV technology R&D and labor quality improvement are slower and still need to rely on the help of overseas experts.

Analysis of Bangladesh Module Imports and Exports

1. Bangladesh's Export Analysis

According to PV InfoLink’s customs data, China’s module export to Bangladesh only reached 71MW in 2017. The total module export to Bangladesh was 64MW from January to October 2018, up 52% from the same period last year. Although the market demand in 2018 is relatively higher from 2017, Chinese module supplies cannot fulfil the 471MW annual demand in Bangladesh.

China module shipment

2. Bangladesh's Proportion of Mono & Multi Module Shipment

Bangladesh has high demand for multi modules, taking up 94% of China’s total shipment to Bangladesh. Mono module shipment represented 4% of the total shipment, while other types of modules accounted for 2% of the total shipment.

Benga Module Type of  China shipment

Conclusion

Bangladesh’s PV industry is still at the initial stage, with the market demand yet to be developed. Currently, the government has shifted its focus from off-grid to grid-connected projects to meet the needs of future economic development. Bangladesh aims to install 1.7GW of PV capacity by 2021, which means there will an average annual demand of 470MW. However, the current level of module import is insufficient if Bangladesh wants to achieve the target. The policy results and efficiency are not optimistic at this stage. With this progress, it will be difficult for Bangladesh to achieve the goal.

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