Industries invest big time in solar to combat energy crunch

Amid a power supply crunch triggered by severe energy shortages and a fear that power tariff may go further up in coming days, industries in Bangladesh are increasingly turning to solar plants to meet a part of their electricity needs.

Some entrepreneurs are also installing sophisticated energy-efficient equipment to reduce power consumption. They are trying to cope with the situation by installing boilers that work even at low gas pressure.

Entrepreneurs have told The Business Standard that they do not see a long-term solution to the energy and power crisis.

Electricity bills will keep increasing steadily, coming close to the cost of self-managed power generation, they mentioned, adding that global buyers of Bangladeshi apparels are also asking Bangladeshi suppliers for a long-term plan on green energy as there is a pressure on them to reduce the use of electricity generated using fossil fuels such as gas and coal in the production process in the supply chain.

On the other hand, reliance on diesel has increased for the time being to tackle the current crisis, which is driving up the cost of production.

Factories in some areas of the country including Narayanganj, a hub of knit fabric production, are forced to run diesel generators due to severe gas shortages. Although they have to pay the gas bill, they are forced to spend crores of taka every month for using diesel also.

This is the backdrop against which some industries are switching to solar plants opting to generate part of their electricity needs, entrepreneurs told TBS.

Rising Group, one of the largest garment and textile mills in the country, has recently installed rooftop solar power plants on its two factories in Manikganj and Gazipur with an investment of $2 million. The plant in Manikganj has a capacity to produce 3MW electricity while that in Gazipur has a daily production capacity of 1MW.

Mahmud Hasan Khan Babu, managing director of Rising Group, said, "We think the crisis of gas-based electricity will remain in the long run. Fuel prices are also uncertain. From the experience of the past few years, we may assume that power tariffs will continue to rise."

So, the Riging Group factories are trying to meet some of their electricity needs through solar panels as what Mahmud said "part of long-term preparations".

"This is also a part of the Sustainable Green Energy Initiative," he added.

The group's two solar plants having a lifespan of 25 years will produce 5,282MW of electricity annually, he told TBS, adding this will reduce carbon dioxide (CO²) emissions by 63,751 tonnes and save an estimated 4,71,759 barrels of crude oil.

Rising Group has also taken up a new initiative to expand its existing solar power generation capacity by installing a 3.6MW plant in its factory in Manikganj, which will reduce CO² emissions by around 55,000 tonnes and save over 4 lakh barrels of crude oil in its lifetime.

At least four industry owners have told TBS that they have plans to install solar plants as part of long-term preparations to tackle possible future energy crises.

Zaber & Zubair Fabrics Ltd, a sister concern of Noman Group, one of the top textile manufacturers in Bangladesh, already has a 400KW solar plant. A new solar plant with 1MW capacity is under construction. Many other companies of Noman Group are following suit.

Fakir Fashions Ltd of Narayanganj has started the installation of a 2MW solar plant.

Gazipur-based Mosharaf Composite Textile Mills Limited is checking the feasibility of installing a solar plant, its Managing Director Md Mosharaf Hossain told TBS.

Some entrepreneurs in the knitwear sector also are said to be treading this path.

On the other hand, some industries are trying to deal with the current situation by installing new machinery that is more energy efficient, consumes less electricity or can keep the factory running even with low gas pressure.

Nonetheless, renewable energy sources, even more so solar power, still accounts for less than 1% of the total electricity generation in the country.

Alamgir Morshed, executive director and CEO of Infrastructure Development Company Limited (Idcol), recently said in a discussion that the country has the potential to generate more than 4,000MW of electricity with rooftop solar plants.

Industrialists, however, have said renewables may be of some benefit to factories that require relatively less gas or electricity, but they cannot substitute gas.

Use of energy-efficient machines on rise

Fazlee Shamim Ehsan, managing director of Fatullah Fashion Ltd, told TBS that the permissible gas pressure in his factory is 10 pounds per square inch (psi), but it often drops below 2 psi.

The factory has four boilers. Recently, they have replaced one of the boilers and the new one can operate at 2 psi pressure.

Ehsan said he is going to replace the remaining three old boilers as well.

Other factory owners are also trying to change their machineries in this way, he added.

Little Star Spinning Mills Limited in Savar also has replaced some of its old machinery with new ones, resulting in a reduction in power consumption by 18-20%.

Md Khorshed Alam, chairman of the company, told TBS that since they have achieved success by setting up new technology machinery on an experimental basis, they are now mulling installation of such equipment on a larger scale.

Challenges are there

Entrepreneurs have, however, told TBS that there are some challenges in installing solar plants on their own initiatives or using new technology and machinery to reduce power consumption.

A hefty amount of initial investment is required for the installation of a solar plant and the maintenance cost is high as well, which is difficult for many entrepreneurs to afford. Again, this requires a lot of open space, which is not possible for all factories.

Moreover, the amount of electricity obtained from such plants is not much because they depend only on sunlight.

Apart from this, while the cost per unit of gas-based power generation is Tk5-6, the production cost of one unit of solar power is around Tk9, industry insiders said.

On the other hand, it is not an easy solution for everyone in the current situation, because it takes at least six months to complete a solar plant project.

Increased diesel use raises cost burden

The government's rationing of gas and electricity as part of austerity measures has led to a reduced supply of these utilities in the industrial areas of the country. Amid frequent power outages and reduced gas pressure, the cost of using diesel as an alternative system for power generation has increased for entrepreneurs.

Industrialists said currently there is a severe shortage of gas in Narayanganj. Besides, some areas of Savar, Gazipur, and Manikganj are also experiencing reduced gas supply.

Fazlul Hoque, managing director of Plummy Fashions Limited, a Narayanganj-based knit garment factory, told TBS, the company is having to bear an additional expenditure of Tk25-30 lakh on diesel every month.

The additional cost of Fatullah Dyeing is about Tk2.25 crore per month.

Other factory owners also have reported a similar rise in expenses for the same reason.

A knitwear factory owner told TBS that the additional expenditure on diesel alone is raising the production cost of a T-shirt by $0.4.

If this continues for long, factories will face financial losses, making it difficult for them to repay bank loans, he feared.