No looking back: Energy Transition in SAARC nations Bangladesh, Bhutan, Nepal, Maldives and Sri Lanka
In many ways, this year was the tipping point for renewable energy. The world has woken up to the imperative of energy transition, and countries around the world have made progress on this front, albeit in different degrees. We take stock of their situation in this multi-part series.
Countries in SAARC have taken a multi-pronged approach to energy storage through policy intervention in key focus areas such as RE integration, improving reliability of rural micro-grids and efficiently meeting the energy needs of the people.
Bangladesh is poised to transform its energy sector by embracing renewables and energy storage solutions. A recent study outlines the potential for energy storage to address the country's growing energy demands. It aims at producing 40 percent of its energy from RE sources by 2041. The government recently issued the National Solar Energy Roadmap (SREDA) draft that targets about 40 GW of solar power, in which 40 per cent will be generated from rooftop installations.
The government of Bangladesh, through its Bangladesh Power Development Board (BPDB) has signed 20-year power purchase deals with four solar generation facilities, with a total generation capacity of 181 MW. One of the projects will include battery storage and diesel to supply power to an island.
The government also recently signed a $515 million financing agreement with the World Bank, to help nine million people get access to reliable electric supply while transitioning to clean energy.
According to a media release, the program will support solar metering connections for over 100 customers through the Bangladesh Rural Electrification Board (BREB), bringing 150 MW of new rooftop solar capacity onto the grid. It will improve and construct 31,000 km of distribution lines and deploy 200,000 advanced meters. In addition, the program will help strengthen Battery Energy Storage Systems (BESS) and distributed renewable energy through preparation of roadmaps for deployment. This will lead to an annual reduction of carbon emissions by 41,400 metric tons.
Studies conducted to explore energy storage potential in Bangladesh, highlight the possibility of enhancing the power sector. A single BESS in Mymensingh, for example, could significantly reduce load management costs.
Despite a successful solar home systems program, grid-connected renewable energy capacity remains limited in Bangladesh. Reports identify untapped potential in garment and textile industries and special economic zones for rapid scaling of rooftop solar projects. The government has initiated an international tender to lease rooftop spaces in state-owned jute mills for the installation of rooftop solar systems.
The Bangladesh Li-ion battery market is expected to grow from $256 million in 2023 to $373.89 million by 2028, driven by government incentives for renewables, electric vehicle legalization, and telecom operators' shift to Li-ion batteries.
The Gangchill Group has commenced marketing environmentally friendly Li-ion batteries in Bangladesh, aligning with the country's transition to cleaner energy solutions.
Bangladesh is determined to reduce its growing carbon emissions by 21.85 percent by 2030. Although its global CO2 contribution is relatively small, its rapid annual emission increase of 7.52 percent is a concern. To address this, the country is focusing on promoting electric vehicles.
While the all-electric vehicle market is nascent in Bangladesh, imports of hybrid EVs are increasing. Local manufacturers like the Walton Group are stepping up to the EV challenge, introducing electric buses and motorcycles. However, regulatory obstacles hinder the widespread adoption of battery-powered vehicles, as non-engine vehicles cannot be legally registered for road use.
The Bangladeshi government has set ambitious targets for EV penetration, aiming for 30 percent by 2030. It has formulated guidelines for EV registration and charging and introduced the Automobile Industry Development Policy 2021. E-3W have seen significant growth, but electric cars have yet to gain a substantial foothold.
Bangladesh Auto Industries Limited (BAIL) is establishing the nation's first electric car plant in Mirsarai Economic Zone, with plans to manufacture various vehicles, including two/ three-wheelers, sedans, hatchbacks, SUVs, and pickup trucks. Another player, Nitol Motors, is also setting up an EV assembly plant under the brand name Suvare.
A local startup, Palki Motors, is contributing to the change by launching its own locally assembled EV, a four-door and four-wheel battery-swappable vehicle currently undergoing testing at the Bangladesh Roads & Transportation Authority (BRTA) and Bangladesh University of Engineering Technology.
Bangladesh is also eyeing green hydrogen as a pathway to energy independence and the possibility of becoming an energy exporter. Building on its existing hydrogen expertise in the fertilizer industry, the country is keen on advancing in the hydrogen energy sector.
In partnership with the Japan International Cooperation Agency (JICA), Bangladesh is launching a pilot hydrogen energy project on the site of a former 1,200 MW coal-fired power plant, with electricity generation slated to commence in early 2024.
To further its hydrogen initiatives, Bangladesh has established its first hydrogen energy laboratory, complete with a small hydrogen production facility in Chittagong. The Bangladesh Council for Scientific and Industrial Research (BCSIR) inaugurated this facility in 2021, and concurrently launched a hydrogen workshop aimed at fostering hydrogen expertise and promoting hydrogen adoption.
This initiative aligns with the Ministry of Science and Technology's push to cultivate a hydrogen-based economy in Bangladesh, leveraging the country's abundant water and solar resources — essential ingredients for green hydrogen production.
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This small Himalayan country currently depends on hydropower for most of its electricity generation. But it is in the winter months, when water levels in reservoirs drop, that it becomes difficult to fulfil the demand for power. Last year, the generation reduced to 400 MW, down from the requirement of 450 MW.
To bridge this gap, Bhutan has been lately looking at diversifying its energy sources. Currently, the country's installed renewables capacity (excluding hydropower) is about 9 MW. In the next few years, the country plans to harness almost 300 MW of solar energy.
As a first of many such projects, a 180 kW solar photovoltaic (PV) plant was built at Rubesa village, in the western district of Wangduephodrang. It is the first ground-mounted solar power plant to be connected to Bhutan's national grid, which went online last year.
The project, with the capacity to generate about 269,000 kWh of energy per year, has been integrated with a 600 kW wind farm on the same site.
Supported by funding from the Asian Development Bank, the Bhutanese government is identifying other sites across the country to set up solar farms.
The Maldives, with its unique geographical location and lack of fossil fuel reserves, faces energy security challenges, and has to import fuel to meet its primary energy needs. This makes it vulnerable to external disruptions like the pandemic and rising global oil prices. Energy security, hence, becomes a priority for the island nation.
On the plus side, Maldives has abundant renewable energy sources like sun, wind and ocean that it could harness, with the potential to produce green hydrogen. Together with the natural renewable sources, storage can make a significant impact and help reduce the country's overall energy import costs.
To address the challenges, and transition towards sustainable energy, Maldives has received assistance from the World Bank through two projects:
1. The Accelerating Sustainable Private Investment in Renewable Energy (ASPIRE) project, which began in 2014, has helped the government in implementing solar projects that have gradually increased the renewable energy capacity from 1.5 MW to 17.5 MW.
2. The Accelerating Renewable Energy Integration and Sustainable Energy (ARISE) project, which was signed in 2021, will include battery energy storage systems, enabling energy produced from RE sources to be stored till required by the utilities.
These two projects will help the government mobilize projects to the scale of 50 megawatt-hours of battery energy storage systems by 2025.
Maldives recently signed an 11 MW solar project that will see private energy investments deployed in six population centers across the archipelago.
Looking ahead, ASPIRE and ARISE will explore the potential of offshore wind, tidal energy, green hydrogen fuel cells, and electric vehicles (EVs) as part of the nation's broader renewable energy goals. The projects have garnered support from co-financing partners like the Asian Infrastructure Investment Bank (AIIB), Sustainable Renewable Risk Mitigation Initiative (SRMI), International Solar Alliance (ISA), and the Energy Sector Management Assistance Program (ESMAP) for replicating renewable energy initiatives on different islands.
Maldives is also set to deploy BESS and energy management systems (EMS) across 18 islands through the Accelerating Sustainable System Development Using Renewable Energy (ASSURE) Project, with assistance from the Asian Development Bank (ADB).
This concerted effort comes after the World Bank approved a $107.4 million project to accelerate Maldives' transition to renewable energy and facilitate sustainable recovery. The project will involve staff training, exploring wind and hydrogen energy sources, and adopting new technologies such as EV charging stations and vehicle-to-grid technologies.
Maldives is preparing to build the world's largest floating solar power system, a 36 MW floating solar PV hybrid system, supported by the World Bank, to provide power to the greater Male region.
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Nepal faces a power deficit problem, in addition to installed capacity issues, that is intensified due to the seasonal nature of the hydroelectric power in the country. During the winter season, when the river flows dry up, the power output of the predominantly hydroelectric power system of Nepal falls, leading to seasonal load-shedding.
Storage has been playing a role in the hydroelectric sector, with close to 14 percent of the installed capacity in the power sector as 'dam-storage', which essentially allows for storage that can be used in later seasons when water dries up.
In the period till the end of June 2023, the country generated around 2.5 GW of electricity from hydropower projects, and 82 MW from alternative energy. As of February this year,, about 95 percent of the population has access to electricity.
The NMB Bank Limited in Nepal has secured a $15 million boost from the OPEC Fund for International Development, and is set to expand its lending for renewable energy projects to accelerate the energy transition in the country.
Nepal has the potential to harness 50,000 TWh of solar power per year, with support from pumped storage hydropower. According to the Global Pumped Hydro Atlas, Nepal has 2,800 good storage sites, which is 50 times more than required.
In an agreement earlier this year, the Nepalese government allowed India's National Hydroelectric Power Corp (NHPC) to study and develop the 750 MW West Seti Storage Hydropower Project and 450 MW Seti River-6 Hydropower Project in Sudurpaschim province. Both these are storage type projects, and will have the combined potential of generating 1,200 MW of energy.
Nepal's EV market has witnessed remarkable growth in recent years, as evidenced by the import of 3,870 EVs during 2022-23. This represents a significant 122 percent increase in value compared to the same period in 2021-22.
The transport sector is a major contributor, responsible for 36 percent of the annual total greenhouse gas (GHG) emissions from the energy sector in Nepal. Recognizing the urgency of reducing emissions, the Government of Nepal (GON) has prioritized the widespread adoption of WVs. The country's second enhanced Nationally Determined Contributions (NDCs) have set a target of having 20 percent of public transport vehicles running on electricity by 2025.
To achieve this goal and address the barriers hindering the electrification of the transport sector, the 'Nepal – Electric Transportation' project has been launched. This comprehensive project combines financial mechanisms and technical assistance, with a special focus on the minibus segment in the Kathmandu Valley and surrounding areas. It aims to assist public transport operators in securing financing and deploying 3,020 electric minibuses and charging stations across the nation.
The project seeks to promote and facilitate the widespread adoption of EVs by implementing reforms in policy, regulation, permitting processes, and capacity building. The anticipated outcome of this project is that 85 percent of all new minibuses purchased in Nepal will be electric by 2030. The project is expected to directly mobilize €299 million to support e-mobility initiatives.
In support of these efforts, the Nepal Electricity Authority (NEA) has committed to exclusively procuring EVs, and setting up charging stations throughout the country.
Nepal could be in an advantageous position for hydrogen production, on account of its abundant renewable energy resources in the form of hydropower. Reports from both public and private sources indicate that Nepal is set to have a minimum of 10,000 MW of hydropower capacity by 2030, while the demand is projected to be around 7,000 MW.
The total capacity is anticipated to reach 39,000 MW by 2040. This surplus hydropower capacity can be efficiently harnessed to produce green hydrogen at a competitive cost. It is expected that the cost of producing green hydrogen will fall below $1 per kilogram by 2050.
Nepal faces a persistent challenge in the form of a chronic shortage of chemical fertilizers, with demand outstripping supply by threefold. To address this pressing issue, Nepal should consider producing chemical fertilizers as a byproduct of green hydrogen in the near term. For instance, utilizing the surplus hydropower capacity of 3,000 MW, Nepal could potentially produce approximately 2.15 MTPA of green urea.
In the year 2021-22, Nepal imported 180,000 metric tons of ammonium-based chemical fertilizers, with urea accounting for 60 percent. Therefore, the immediate application of green hydrogen in the chemical industry could kickstart the long-awaited domestic production of chemical fertilizers, helping to alleviate the supply shortfall.
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With the economic and political crises that Sri Lanka is going through, a lot of development plans in the country have been affected. While the financial crisis is making it difficult for the country to pay for fuel imports and power generation, it has highlighted the inconsistent progress being made in fulfilling its RE targets. In a situation like this, it is imperative that the government secures it energy needs.
A 'Renewable Energy Generation Plan' was slated to be implemented in Sri Lanka last year, to increase RE power generation and improve its share in the country's energy mix.
Sri Lanka is also taking a relook at all the projects with India, which include key projects like the power grid connection between India and Sri Lanka, offshore wind energy, a solar power plant at Sampur in the eastern province and renewable energy projects on three islands of Jaffna in the north. Some details are:
- India signed an MoU with Sri Lanka to construct three wind turbine farms in the three small islets of Nainativu, Analaitivu and Delft in the Palk Strait. The region lies between the southern Indian coast and Sri Lanka.
- Recently, India's NTPC signed an agreement with the Ceylon Electricity Board (CEB) to develop a 50 MW solar power project in the Sampur area of Trincomalee. Last year India had extended a line of credit (LOC) to Sri Lanka for solar power projects.
- The Adani Group has signed an agreement with the Sri Lankan government to build two renewable power projects of 286 MW and 234 MW, with an investment of $500 million, in Mannar and Pooneryn in the country's Northern Province.
In a significant move towards renewable energy, WindForce, a prominent player in Sri Lanka's renewable energy sector, has joined forces with well-established Independent Power Producer (IPP) Lakdhanavi Ltd and Singapore-based renewable energy company, the Blue Circle Pte Ltd. Together, they are embarking on what is poised to become Sri Lanka's largest private-sector renewable energy initiative.
This project aims to revolutionize the nation's energy landscape with the development of a 100 MW solar power plant, complete with an integrated transmission facility. The ambitious solar project represents a combined investment of $152 million and is scheduled for completion by the end of 2025.
The project, awarded as a comprehensive package, encompasses a 100 MW solar power plant, a 12 MWh Battery Energy Storage System (BESS), a 2×63.5MVA, 132/33kV grid substation, and a 27km, 132/33kV transmission line, marking a significant step towards a cleaner and more sustainable energy future for Sri Lanka.
Sri Lanka heavily relies on road transport, which accounts for 94 percent of passenger-kilometers traveled annually. This contributes significantly to the country's energy consumption; unfortunately, it also plays a substantial role in CO2 emissions, responsible for 48 percent of such emissions.
To align with its Nationally Determined Contributions (NDCs) and reduce greenhouse gas emissions, Sri Lanka aims to cut 10 percent of emissions from various sectors, including transportation. While some initiatives, such as electrifying three-wheelers (3Ws), developing charging infrastructure, and transitioning to renewable energy sources have been undertaken, there is a pressing need for a comprehensive EV roadmap and policy framework to expedite the EV transition.
In response to the current fuel crisis and the associated use of fossil fuels, the Sri Lankan government has engaged with the United Nations Development Programme (UNDP) to explore the rapid introduction of e-3Ws and e-buses as an alternative. With over one million 3Ws in Sri Lanka, converting them to electric power could provide a practical solution to the fuel problem while promoting affordable public transportation.
As part of its e-mobility program, the UNDP plans to initiate a pilot project to convert around 300 3Ws into e-3Ws this year, with a budget allocation of $1 million. Additionally, there are intentions to launch e-bus services in the capital city, Colombo.
Collaborating closely with Sri Lanka's Ministry of Transport and Highways, Ministry of Power and Energy, the Department of Motor Traffic, and the National Transport Commission, the UNDP is working towards a larger initiative. Over the course of five years, it aims to mainstream e-mobility by converting 500,000 Tuk-Tuks into electric vehicles (e-Tuk-Tuks), contributing significantly to a more sustainable and eco-friendly transportation system.
Sri Lanka is taking a significant step towards a sustainable future with the introduction of its National Hydrogen Roadmap, developed in partnership with the Petroleum Development Authority of Sri Lanka (PADSL) and Greenstat Hydrogen India, a subsidiary of a Norwegian energy company focused on green hydrogen.
Beyond its domestic sustainability goals, Sri Lanka has the potential to play a vital role in global decarbonization efforts. The country has an abundance of surplus renewable energy sources, including solar, wind, and hydroelectric power, which can be harnessed to produce green hydrogen for both domestic consumption and export. The Sri Lankan president is spearheading initiatives that include a container terminal project and a 500 MW wind energy venture.
Gautam Adani has proposed a green hydrogen project through his conglomerate in Sri Lanka. Adani Green Energy is investing $500 million in two wind projects, totaling 234 MW in Pooneryn and 286 MW in Mannar, scheduled for completion by December 2024.
Sri Lanka's Hydrogen Targets for 2030:
- Achieving $500 million in export revenue from manufacturing green energy value chain components.
- Attracting $1 billion in investments for domestic production and use of green hydrogen and associated technologies.
- Securing $10 billion in Final Investment Decisions (FID) for offshore energy production and export.
- Installing 4 GW of offshore wind and hydrogen production infrastructure.
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