Solar mini-grids seek govt support to stay afloat

Solar mini-grid owners have urged the authorities to keep power distribution companies from the country's off-grid areas where renewable energy firms have been supplying electricity for years.

"If grid extension continues, then pay us a 15% profit on our equity investment because of a business opportunity loss," said engineer DM Majibor Rahman, president of Solar Mini-Grid Association of Bangladesh (SMAB).

The association placed an eight-point demand on Wednesday at a press conference at the Dhaka Reporters' Unity in the capital.

It said they had earlier repeatedly written to the Power Division to press home their demands but to no avail. The solar power investors had even met with the top officials of the division several times and discussed the matter.

At the press conference, SMAB President Majibor said that 27 solar mini-grid facilities have been rolled out in the country's remote areas since 2010 where grid-connected electricity supply was not available.

Over the period, the association members have invested around Tk141 crore in these projects, he added.

Meanwhile, power distribution companies have been extending the national grid to those areas to meet the government's hundred percent electrification target.

As of now, the distribution line of the Rural Electrification Board (REB) has reached 13 mini-grid areas and the rest of the mini-grid areas will be covered by the REB and other distribution companies by the end of this year. 

"Therefore, mini-grid owners are facing losses as the REB and Power Development Board keep setting up grid electricity in our franchised areas," said Majibor Rahman.

At the same time, investors are failing to pay 8% interest on loans of the Infrastructure Development Company Limited (Idcol) as 90% of their electricity remains unsold," added the SMAB president.

He said in such a situation they applied to the Power Division to purchase electricity from the solar facilities so that their businesses remain afloat. 

However, distribution companies are refusing to purchase electricity from mini-grids as the rate is around five times higher than the conventional one. 

Sources at the Power Division said that the proposed tariff for solar power is five times higher than that of fossil fuel-based power plants, and six-time higher than that of the global average of solar power, thus it does not make any business sense.

Around the world, in just one decade, the average cost of per unit solar power dropped to Tk5.76 from a hefty Tk32 – thanks to a series of technological breakthroughs.

But for the country's 27 solar mini-grids, that can produce around five-megawatts of power, the cost was Tk32 for per unit solar electricity.

In response to a question, engineer Majibor said that the cost of solar mini-grid electricity is high as they get only 50% grand which is 80-90% in India.

"The generation cost would drop more if we had project grand by more than 50%," added Engineer Majibor Rahman.

Among others, SMAB Secretary Dr Mostaq Ahmmed and Exelon Bangladesh Ltd's Director Ranadev Dasgupta spoke at the event.