Sherpa Hossainy's Blog

British company eyes major investments in energy sector

Posted in Bangladesh, Business, Dhaka, Energy and power, Renewable energy by Sherpa Hossainy on November 15, 2011

Published in The Independent on November 15

Read the article on Independent website

Digital print version

A UK-based company is set to make its mark in Bangladesh’s energy and power sector by setting up diesel generator and solar panel manufacturing plants in a bid to expand its business in developing economies.

“We want to become a premier manufacturer and supplier of diesel generators, which will be manufactured in Bangladesh and sold to both local and global markets,” said Steve Bandey, managing director of T&R Generators.

The company has already laid bare its business plan for the next five years in Bangladesh. “We want to quickly gain market penetration within the first three years,” Bandey told The Independent in an exclusive interview.

“We have several sites suggested for a factory. In January 2012, upon my return to Dhaka, we will choose the most appropriate and continue bearing in mind the possibility of an office in Dhaka,” he said.

Bandey said T&R is also eyeing investments in renewable energy sector by setting up a solar panel manufacturing factory in Bangladesh and produce quality solar panels at cheaper rates using the country’s cheap workforce.

“We will introduce the design, manufacture and supply of renewable energy based products including solar-based photovoltaic and water heating systems and wind energy products,” he said.

T&R plans to commence its manufacture of diesel generators in Bangladesh early next year and is currently in the process of design, supply and manufacture its first generator, which  will be exhibited to businessmen in January 2012, Bandey said.

Steve Bandey, managing director of T&R Generators.

“As we already have the technology and know-how, we’ll start the diesel generator plant first. Solar panel construction and manufacturing will follow on, once appropriate engineers are chosen and trained accordingly, also taking into consideration that factories are ready for use,” he added.

Bandey said strong light from sun can be used to produce high efficiency electricity in Bangladesh and T&R recognises the environmental and economic benefits of that.

“We aim to install five solar PV arrays with capacity of 50 megawatts each and it would be possible within three years. However, this project is still at the development stages,” he said.

T&R Generators Ltd, established in 1975, has enjoyed success in design, manufacture and supply of high-performance diesel engine generator sets ranging from 4.3kva to 3300kva. The British power company has extensive experience with power and power generation systems from large-scale to smaller specialist projects and has huge presence in Middle East, Africa and Asia.

T&R is currently working in cooperation with local company Home Street Builders and Bandey believes that it is important to have local liaisons. “We are also in talks with other local energy companies to assist shape our business and move swiftly ahead,” he said.

Bandey also wants to include local talents and engineers and create employment opportunities in Bangladesh through T&R projects. “It is our objective to use highly trained and skilled engineers and managers, already present in Bangladesh with the necessary guidance and support from our own team in the UK,” he said.

Explaining T&R’s reason to expand its business in Bangladesh, Bandey said: “We believe electricity is a key ingredient for the social and economic development of a country, and with the government’s policy statement and initiative for power generation companies, Bangladesh was our choice.” T&R has actually been present in Bangladesh for over 11 years with a large variety of clientele, he added.

T&R also has plans for other renewable sources in Bangladesh such as wind power, especially in the coastal and higher areas of Bangladesh where it is windier, he said.

Bandey lauded the eagerness of key government officials from Power Division, Ministry of Establishment, Dhaka City Corporation, Planning Division, Bangladesh Energy Regulatory Commission, Power Development Board and members of parliament in T&R’s business here and said that the overwhelming support had assisted with the company’s decision to move its development plans forward.

T&R logo

Bandey stressed the need to switch over to renewable energy amid depleting gas and fossil fuel resources of Bangladesh and said that poverty and lack of access to energy are closely linked.

“Bangladesh desires to make electricity available to all by 2021. This will be achieved more easily by focusing on natural resources (solar/wind) rather than extending a failing grid network; however fossil fuels will still be very important in other areas.

“Renewable energy (solar/wind) will benefit people in more rural and isolated areas, as no infrastructure is available; whereas city areas will benefit from immediate improvements to the national grid and using solar power to support the grid on new structures,” Bandey said.

The T&R managing director said solar energy might seem expensive but in the long run it is cheaper than any other energy source. Present customers must understand that the initial outlay for a solar system is expensive, however after that maintenance is very minimal and other costs are zero, he said.

“When you produce surplus electricity from the power plant, you could sell it to others and make a return on your investment. It is assumed that within 5-7 years the system will payoff,” he added.

Steve Bandey said that solar electric energy demand has grown by an average 30 per cent annually over the past 20 years against a backdrop of rapidly declining costs and prices, and this decline has been driven by manufacturing scale, technology improvements and the increasing efficiency of solar cells.

“In developing countries like Bangladesh, markets have benefited from the steady decline in solar PV prices, but they have also been stimulated by continued multilateral and bilateral development aid. This has meant that solar has been an enabling technology for developmental programmes for education, clean water and healthcare etc,” Bandey said.

He said T&R is also planning to develop a customer-centric organisation based on cutting edge technology with the development of fuel cell technology in association with a UK university’s technical team.

However, the T&R chief did not want to disclose the total amount of investments the company is contemplating but said that it will be significant.

“It is difficult to estimate costing at this moment, however I can say the more success at each stage, the more investment will continue to be added,” Bandey said.

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New mark set for solar home system project

Posted in Bangladesh, Energy and power, Renewable energy by Sherpa Hossainy on October 3, 2011

Published in The Independent on 3 October 2011

Read the article on Independent website

Digital print version

The Infrastructure Development Company Ltd (IDCOL) has beefed up its target for installing solar home system (SHS) to 2.5 million units by 2014, company officials said.

The previous target was to set up 1 million SHSs by December 2012, which the non-bank financial institute achieved by June this year.

“If the current trend continues, we’ll be able to achieve the new target by mid-2014,” said Iqramul Hasan, programme officer (solar) of IDCOL.

According to IDCOL statistics, the solar programme has helped save more than 80,000 tonnes of kerosene in rural households, worth around $79.45 million and saved another $300 million in terms of costs of connection.

A man installs solar home system (SHS) on a roof in Bangladesh

“When we achieve the new target the combined capacity of the total project will be around 155 megawatts, providing electricity to more than 1 crore people,” said Hasan.

Currently the total installed capacity of the solar project is around 52MW, which serves around 50 lakh recipients.

The financier has already meted out around $172 million in loans and $34.28 million in grants for installation of SHS until June. IDCOL also plans to invest another $387 million in soft loans and $45 million in grants for the SHS programme.

Easy credit facilities and subsidies have made the programme, dubbed as the fastest growing renewable energy programme in the world, a success, said Hasan.

“We provide easy to avail financial support through our partner organisations and supply quality equipments to get solar power. For the rural people who have only seen kerosene lamps, this is a big incentive,” Hasan added.

IDCOL has installed 60,142 SHSs in Sunamganj till June, which is the highest coverage by the company in a district. With 58,836 and 39,483 SHSs, Patuakhali and Satkhira are the second and third most-covered districts, the statistics showed.

There are 30 the partner organisations that help implement the IDCOL SHS project. Among the 1 million installed systems, Grameen Shakti alone installed over .6 million and Rural Service Foundation has set up over .15 million around the country.

IDCOL had been promoting dissemination of solar home systems in the remote rural areas of Bangladesh with the financial support from the World Bank, Global Environment Facility, German Technical Corporation, Asian Development Bank and Islamic Development Bank.

It started the programme in January 2003 and its initial target was to finance 50,000 SHSs by the end of June 2008.

The target was achieved in September 2005, three years ahead of schedule and $2 million below estimated project cost.

IDCOL then revised its target and decided to finance 200,000 SHSs by the end of 2009. This was also achieved by May 2009.

You can hear the sound of a clock ticking

Posted in Bangladesh, Climate change, Dhaka, Environment, Interviews, Renewable energy by Sherpa Hossainy on July 30, 2011

My interview with UK govt Climate Envoy John Ashton

Published in The Independent (Op-ed page) on 29 July 2011

Read the article on The Independent website

Digital print version

The voice of urgency on climate change, despite being a globally burning issue, is yet to be widely heard in Bangladesh. The correlation of climate change with global economy, food and international security and human existence are appearing to be far more complex and steadily demanding action from a politically motivated force.

Unfortunately, few countries are so directly exposed than Bangladesh to some of the stresses that eventually everyone will be feeling as a result of climate change, if a successful response can’t be summoned. However, building a coalition of highly ambitious forces and putting political momentum into the issue is posing to be a great challenge for climate change diplomacy.

In a mission to build the much needed political response for a stronger cooperation, John Ashton, international climate politics expert and British Foreign Secretary William Hague’s Special Representative for Climate Change, came to Bangladesh recently.

“My goal is to work with like-minded people around the world to push up the level of ambition in the global response to climate change,” John Ashton told The Independent in an exclusive interview. Ashton lamented that in nearly 15 years of his involvement in this issue he can’t remember of a time when the available political momentum globally had been lower than it is now.

“You could even say that we have hardly begun to respond to this challenge at the scale we need to. It’s human nature to focus on the important at the expense of the urgent, and there are so many distractions that people regard as important,” he said.

John Ashton, William Hague’s Special Representative for Climate Change

Describing climate change as a “multiplier of stresses”, Ashton said that it’s a widely made mistake to regard climate change as a separate set of issues that are not intimately connected with other stresses society is dealing with.

Ashton said it would be interesting to see if the two main political parties in Bangladesh can transcend the deep and bitter political rivalry between them and focus on the mission.

“I think I’m fortunate to come from a country where there is a cross party consensus,” said Ashton, referring to his appointment by a Conservative Foreign Minister even after representing two previous Labour Party Foreign Secretaries in the UK. Although it is a very political role, it’s a non-party political role, he said.

Ashton said it’s imperative to pull a finely resilient carbon neutral global economy through effective politics based on a legally binding framework.

“When governments or politicians make voluntary promises it does not fill people with confidence that they will try to the limits to carry out that promise even if there are distractions. We need them to make promises that people can have faith in. That’s why this battle between legally binding and voluntary is so important,” the diplomat said.

Following the watershed at the climate talks in Copenhagen 2009, Ashton remained unconvinced about a fully fledged legally binding framework as an outcome of the United Nations Framework Convention on Climate Change (UNFCCC) in Durban, South Africa, in December this year.

“This is an extremely difficult political subject that would take years to construct. I hope we can come out with a higher degree of confidence that would lead to a legally binding project,” he said.

Responding to a question whether Bangladesh would be able sustain its growth in a low carbon economy Ashton said there is no contradiction between simultaneously wanting to have high growth and a carbon resilient growth.

“Both could be mutually reinforcing if we do it the right way. It is better to use the efficient form of energy which is low carbon rather than the inefficient energy,” he said.

Ashton cited example of the new Chinese five-year plan, which focused more on the quality of growth rather than the quantity after Chinese Premier Wen Jiabao termed the country’s economic model as “uncoordinated, unbalanced and unsustainable”.

“There’s a growing realisation that if you don’t pay attention to the quality of growth you may find that the price of having very rapid growth in a very short term is that your growth then collapses, because it contains the seeds of its own destruction,” he said.

John Ashton, UK Govt climate envoy

Voicing optimism about the prospect of renewable energy in Bangladesh, Ashton said that an enormous amount can be done with the available opportunities as they don’t require a huge capital, or technologies that are not yet invented.

“I’m a bit puzzled why there are no solar water heaters in Bangladesh. In China and South America nearly every house has them. They are extremely cheap and in warm countries they can provide all the hot waters needed.” Ashton said.

Advising on Bangladesh’s 2.5 billion tonnes of high quality coal resource in its northern districts, Ashton said it would be wrong to exclude coal although it sits right at the heart of the problem.

Coal is still a very important part of the power generation worldwide. In Germany 50 per cent of all electricity comes from coal, in UK it is about 30 per cent, in America and China it’s 50 and 83 per cent respectively.

Ashton pointed out power crisis as a “particular bottleneck” for Bangladesh and said there are two things to do about coal: one is to move away from coal to lower carbon gas or other renewable; and another is to use it but increasingly apply carbon capture storage (CCS) technology that will make coal carbon-neutral.

“If you have suitable geological conditions for CCS, you can ask the donors and international financial institutions to fund for coal-fired power stations with CCS to become a part of the first-wave of CCS in the world,” Ashton advised, asking to seek help from the climate financing fund of World Bank and Department for International Development (DFID).

“World Bank can pay for the additional costs so that building such a power station is no more costly than a conventional one. It is clearly not reasonable to expect Bangladesh to pay the additional costs of CCS,” he said.

Ashton rebutted the claim of CCS technology being unproven, terming it as “nonsense” and said, “This is not some over-the-horizon technology; this is something that has been on use for a long time in an industrial scale.”

Although Ashton said that he holds no ideological standpoint on whether grants or loans should be given to the vulnerable countries to deal with climate change, rather he opted to go for the suitable financing mechanism available.

“You need a mixture of grants and loans, and you need to make sure that you are using the balance which is suitable for particular circumstances,” he said.  The climate envoy said: “The development community in the industrialised countries needs to take this much more seriously that there is a significant component of adaptation funding that has to be grant based.”

The UK is trying to help in this regard from a moral imperative and climate change is about responding to a deep inequity, he added.

“Those countries which will suffer the most, the soonest, and have the least capacity to deal with the consequences tend to be the countries which have contributed the least to the problem. Unless it’s reflected in the responses we would not be able to gain trust in the international system,” Ashton said.

But he stressed on maintaining a very high degree of transparency so that people can see whether they can be sure to put the money in, and the money don’t get diverted elsewhere.

He said there are some more areas where there is far more sensible to use loan – because it’s easier to bring business-based approach, and private sector players who will give you more efficiency in the interventions.

Urging everyone to build a century of cooperation Ashton said: “We have to learn to define ourselves and our various national identities on the basis of what we all have in common, rather than on the basis what divides us.

Ashton said: “The key is to try and build a willingness to see these problems through each others eyes. If we try to do this just on the basis of a negotiation, where we send negotiators in a big resort in Bali, or in a conference centre in Durban, we don’t learn very much about the realities.”

Putting the onus of a carbon resilient economy on the developed nations, Ashton said, “It is incumbent upon the high carbon and particularly industrialised economies to take the lead in mapping the path for a low-carbon growth model.

John Ashton, William Hague’s Special Representative for Climate Change, in an interview with The Independent

“Everybody’s life is going to be touched very significantly by climate change. The only legitimate conversation to have is one in which everyone has a voice — a global conversation.”

Describing the global spike in grain prices in 2008, following a drought in large part of Australia, one of the world’s leading grain producers, as “a prequel of what to come”, Ashton said the existing double-digit food price inflation in Bangladesh could take a grave shape if the climatic extremes are not dealt urgently. Last year in Russia, heat wave and drought led the Russian government to ban the exports of wheat that saw an immediate surge in international prices of wheat.

On the flipside of the climate change issue, there is an “anti climate change” sect who claim that the issue is a “fairy tale” and the earth will take care of itself. Blasting those critiques, Ashton said: “There are people who still say that the earth is flat. For some there is more cynical motivation because they want to prevent certain actions being taken.

“If you just dismissively say I don’t care about it, it seems to me a deeply immoral position and unacceptable according to the political morality of every society that shares this.”

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