Solar mini-grids in Bangladesh – Opportunities & Challenges

Experience from 100 kW Solar Mini-grid in Sandwip

Presented at the Stakeholder Consultation on Decentralized Energy Options for Off-grid areas in Bangladesh

26 August 2015

Smart Villages Initiative and Practical Action Bangladesh

Asma HuqueManaging Director

Prokaushali Sangsad Ltd.psldhaka2@gmail.com

Objectives of the Sandwip project

Increasing access to electricity for commercial and productive use in an off-grid area

Demonstration of use of Solar energy for grid quality electricity

Geographical LocationRemote Island of Sandwip, Chittagong

Brief description of the Project

100 kW Solar Mini Grid in Sandwip

Project Area : 0.6 AcreProject Cost : BDT 56.780 Million Financed By : IDCOL Loan 30%KfW- Grant 50%Sponsors’ Equity 20%Length of Distribution Line : 4 kilometersTechnical Assistance : Prokaushali Sangsad Limited (PSL)

Dhaka, Bangladesh, www.psldhaka.netTechnology Supplier : Asantys Systems (Germany), Installed by: : Energy Systems (Bangladesh),

System Design for 100 kW Solar Mini Grid

Grid Tie Inverters and batteries

Project Site at Sandwip in March,2010

Transportation of Hardware

Consumer Type Nos.

Commercial Shops 198

Financial institutions/ Bank/ Govt. office 15

School 2

Mosques 5

Hospital/Pathological Lab 8

Households 50

TOTAL 278

No. of connections as of Feb.- 2015: Energy consumption categories

Type of consumer Nos.Avg.

consumption (kwh)/month

Avg. BillTk./month

Large Consumer 11 (4%) 205 7,008Medium Consumer 41 (14.70%) 59 2,102

Small Consumer 226 (81.3%) 12.23 531

0

50

100

150

200

250

300Total nos. of connection up to Feb.’15

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000Energy Consumption (kWh) up to Feb.’ 15

Daily Load Profile

0

5

10

15

20

25

30

35

40

45

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Time of the Day

kW lo

adActual profile on a sunny summer day

Actual profile on a sunny winter day

Monthly Production: 12110.64 kWhMonthly Power (max.): 90.29 kWMonthly CO2 Reduction: 8477.45 kg

Solar mini-grids in Bangladesh – Opportunities & Challenges

Advantages of solar mini-grids for the locality

Suitable for off-grid and remote areasCan be used for lighting and productive use

Increased access to better education and healthcare facilities

Environmental friendly, reduced level of fossil fuel induced pollution and noise pollution

High positive spillover effects on the local economy

computer training center

A restaurant in the marketClothing and gifts store

Photocopy center

Opportunity for the local investor

Technology is proven and available, can be installed in a short timeLow operational and maintenance cost

Less dependence on fuel price fluctuation (depending on solar percent)Revenue collection using prepaid meters can ensure timely cost recovery

Present level of technology

Grid quality electricity at remote off-grid locationsState-of the Art technology using international standardsModular systems: possibility of expansion with increased demand

Storage is possible for cloudy days and night time loadTrouble free service is possible in the hands of capable service providers

Financing OpportunitiesGovernment’s program executed by IDCOL has dedicated funds and set procedure for mini-grid project developmentAffordable for local investors. At the moment 20% owner’s equity, 30% soft loan, and 50% grant is available from IDCOL.Low capital expenditure compared to grid extension for the governmentEasier quality control by concerned monitors because of standard procedures

Some pictures of connected consumers

Crockeries and plastic wares

Lotto new showroom

Sandwip Central Clinic

Challenges

Remoteness and low ability to pay for service

The remote location of sites : matching load, ability to pay, and project viability is difficultLow income of households, have to combine with other higher users for profitabilityfeasible for areas with concentrated load distribution, e.g. markets or densely distributed rural homes

Operational Challenges

Continuous support is required for smooth running of plantLack of technical and administrative human resource available in rural areasConsumer education required for optimum useDemand Side Management is required for long term reliable operation

Financial ChallengesSite selection difficult due to risk of arrival of grid within short time of project installationHigh startup cost- Solar is still an expensive technologyRequires low cost funding with long tenure, in contrast with commercial banksHigh operating cost in bad weather (Gen. set operation)

Finance• Low or no interest loans• Incentives for supplying electricity• Total Tax/VAT exemption

Legal• Preferential area for operation• Clear policy regarding status of operators

Policy issues for scaling up

Technical Assistance

• Adequate training opportunities for private sector• Government support for incubating technology• Dedicated Technical entity for coordinating

technology transfer

Govt. support•Supportive environment for growth, not that of competitor

Thank you