The term "energy transition" first appeared as energiewende, a combination of two separate German words, amidst the anti-nuclear movement in Germany during the 1970s. After the oil crises of the 1970s, energy transition was popularised, according to the Carbon Brief, in a German book of 1980 titled "Energiewende: Wachstum und Wohlstand ohne Erdöl und Uran" (Energy Transition: Growth and Prosperity Without Oil and Uranium).
While "energy transition" is a relatively new term, we have experienced different forms of energy transition over the course of global development. Transition to oil, coal and gas are some examples.
Today, however, we talk about a very different and specific energy transition, which is underpinned by several core blocks including energy equity, energy security, environmental sensitiveness etc. Since countries craft energy policies based on their national circumstances and implement accordingly, the energy transition pathways of different countries diverge quite significantly.
A single energy transition path, which all countries could choose to follow, is, therefore, something difficult to chart. Yet, different indexes are prepared internationally to gauge the progress of different countries vis-à-vis energy transition. The positions of different countries on the indexes could help advance energy policy discussions in respective countries to analyse alternate energy trajectories and their respective advantages and disadvantages. One of such indexes is the energy transition index.
The recent edition of the energy transition index report, the 10th of its kind since the inception, reveals some fascinating but also challenging dimensions of the global energy transition, encapsulated from data of 115 countries. The last decade, as the report delineates, has seen quite an unprecedented success in energy transition, attributable to the penetration of both solar and wind energy, backed by policy instruments of different countries. The report, further, concludes with the need for rapid transition and increase in annual investment in the energy sector by a factor of six by 2050.
Bangladesh's position on the energy transition index?
Once crippled with persistent load-shedding and suffering from burgeoning pressure to ramp up installed electricity capacity, Bangladesh has made a remarkable turnaround in just over a decade. During this period, the installed electricity capacity has increased by approximately four-folds.
While around a third of the country's population had access to electricity in 2003, we are now approaching 100% electrification. Despite achieving near-universal access to electricity, Bangladesh currently holds the position of 97 among 115 countries included in the latest energy transition index, measured based upon energy system performance and transition readiness.
Of the South Asian countries, Bangladesh, with an overall score of 50 from the available 100, has only outperformed Pakistan. On systems performance, which is fundamentally an energy triangle, representing three connected parameters: energy security & access, economic development & growth and environmental sustainability, Bangladesh has done relatively better and scored 59.1 out of 100. The excellence in energy access and economic growth has, however, to some extent, been annulled by the growing reliance on imported fossil fuels and related environmental sustainability and energy security concerns.
On the other side of the coin, Bangladesh has received comparatively a low score of 41.8 on the "energy transition readiness", which focuses on the essential areas for the energy transition in a country but does not compromise on any parameters of the system performance. The low score on the "readiness" parameter is a reflection of energy security and environmental sustainability concerns and the need for improvement on energy transition readiness.
To recapitulate, the story of a decade ago was all about the desperate situation and the desperate efforts to deal with the challenges to keep the economy afloat. Hence, Bangladesh had to buoy on quick-fix strategies for the power sector. Nonetheless, Bangladesh is also the home of the largest solar home systems in the world.
Despite the current position, the improvement seems highly likely!
Bangladesh has been successful in maintaining outstanding economic growth, hovering around 7 to 8% over the last decade excluding this exceptional period of the pandemic, and has provided basic electricity services to its population and industries under difficult circumstances. The question is can Bangladesh turn the tide now under the favourable condition to spearhead the desired energy transition?
Looking ahead, the near-universal electricity access and the present surplus capacity provide the government with leverage to frontload efforts in three dimensions – ensuring energy security instead of power security, quality of electricity service and sustainable energy. The seeming challenges of available land to support large scale solar plants could be addressed by the abundant rooftops of industries and commercial buildings.
The ballpark estimates of different agencies demonstrate the possibility of installing solar rooftop systems with an aggregate capacity of several thousand megawatt-peak (MWp). Electricity tariffs of industrial and commercial entities make solar rooftop projects viable under net metering. And integration of several thousand MWp variable solar energy wouldn't destabilise the grid, which to date has a meagre 0.6% solar energy contribution [separate from off-grid systems] whereas a grid could absorb variable renewable energies of up to 15% of the installed capacity.
A significant part of the morning peak demand could thus be met by the grid-connected solar rooftop systems without the costly storage infrastructures. Once the demand for electricity rises substantially, the present surplus power capacity of the country could help satisfy the need during the evening peak. In addition, other possible avenues for renewable energies should also be carefully scrutinised.
Energy efficiency improvement, both on the demand and supply sides, would further allow Bangladesh to progress on the energy transition index. The study, for instance, supported by the Asian Development Bank during 2012-14, comprehensively covered six major industrial sectors of Bangladesh and substantiated 30% energy efficiency opportunities with an average payback period of 3 years and an IRR of 25%. Similarly, the energy efficiency and conservation master plan of Bangladesh illustrates the most economically feasible energy efficiency potential in major industries is around 21%.
In the last decade, Bangladesh has minimised the transmission & distribution loss at a rate nothing short of amazing but there is still room for improvement. It is necessary to plug the gaps that affect the uninterrupted supply of electricity in rural areas. Last but not the least, the internal dimension of energy supply shall be the prime concern to improve the energy security of the country.
Well, absolute energy security might never be possible to attain, but maximising renewable energy, using energy efficiently and judiciously and exploring our local energy resources would help attenuate the challenges of energy security. We can, thus, ensure a more balanced development of the energy sector and advance prominently on the energy transition index.
As mentioned at the outset, countries chart energy transition pathways as they find feasible, be it the use of technologies or timing of the transition. Likewise, Bangladesh could spearhead the transition now and build on its strengths. Developing a system value framework for such transition would ease the decision making, notably at the policy level, and garner agreement among people for the transition.
The system value framework, as designed by the World Economic Forum, could help understand, among other things, the value of air quality improvement, competitiveness, system improvement, productivity gain, positive economic impacts of job creation, energy security etc. And the work on detailing these benefits shall begin soon.
Shafiqul Alam is a Humboldt scholar and an environmental economist.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.