Bid for renewable boost thru rooftop solar in jute mills

    Originally published in The Business Standard on 17 July 2023

    The government, in a bid to contribute towards its renewable energy goals and carbon reduction pledges, has floated an international tender to lease around 63 lakh square feet of rooftop spaces on factory and warehouse buildings at 13 state-owned jute mills to install solar systems.

    The Bangladesh Jute Mills Corporation (BJMC), a government agency that supervises all public jute factories, has called upon interested parties to submit their proposals by 25 July.

    According to the tender documents, the lease will be for a duration of 20 years, with the possibility of extension based on the satisfactory performance of the initial lease.

    After the completion of the tenure, ownership of the solar parks will be transferred to the BJMC.

    Usually, around 70,000 square feet of space is required to establish a 1MW solar rooftop facility, said Md Shahriar Ahmed Chowdhury, director of the Centre for Energy Research at the United International University and a prominent renewable energy expert in the country.

    Therefore, it is expected to harness around 90MW of solar electricity from available spaces in the 13 jute mills in Chattogram, Khulna, and Rajshahi regions

    BJMC Chairman Anis Mahmud said the country has set a target to generate 10% of its total electricity supply from renewable energy sources. However, it is facing challenges in finding the open spaces necessary for installing solar energy plants.

    “That is why the government is emphasising electricity generation by installing solar parks on the roofs of large buildings. As part of this approach, the decision has been made to lease the rooftops of the jute mills,” he told The Business Standard.

    Anis Mahmud said the solar parks will be connected to the national grid, contributing to the country’s economy.

    The initiative aims to ensure the productive utilisation of the vast spaces and assist the government.

    At present, Bangladesh is getting a total of 154MW electricity from 2,161 rooftop solar systems.

    Of that, 84.588 MW comes from rooftop net metering facilities – meaning the facility can supply electricity to the national grid when it produces more than it consumes.

    Rooftop facilities of 69.934 MW were established without net metering, according to official data from the Sustainable and Renewable Energy Development Authority.

    The government is now promoting rooftop solar projects in the industrial sector and commercial areas amid land limitations that have slowed the growth of renewable energy in the country.

    Factory and commercial building owners are also becoming attracted to the rooftop solar model as the system offers them cost-effective electricity against the backdrop of liquid fuel-based captive power and grid electricity.

    At present, the generation cost per unit of rooftop solar electricity is below Tk6, which is around Tk17 per unit for liquid fuel-based captive generation and around Tk8 per unit for grid connection.

    At present, renewable energy contributes around 4% of the total demand, according to the Power Division.

    On July 1 July 2020, the government shut down all the mills under the BJMC owing to heavy losses over the years.

    After the closure of the mills, the government has decided to resume the operation of 17 mills in the private sector.

    At present, only three jute mills have returned to operation under private management.

    Now, the BJMC plans to lease out rooftop spaces to the private sector to produce renewable energy.

    IDCOL offers financing for rooftop solar projects

    In order to boost renewable energy and ensure the best use of open spaces in industry and commercial buildings, Infrastructure Development Company Limited (IDCOL), a government-owned specialised non-bank financial institution that finances renewable infrastructure projects, is providing a term loan with 80% of the rooftop solar project costs.

    A term loan with a 10-year tenor charges 5–5.5% interest, said IDCOL officials.

    As of May, it had financed some projects amounting to around 50MW on different industrial rooftops.

    In March, Alamgir Morshed, executive director and CEO of IDCOL, told TBS that the country’s industrial rooftop spaces have around 3,000MW solar potential.

    However, as an immediate target, it has planned to establish around 100MW rooftop solar facilities by the current year amid the country’s primary energy (gas, coal, and oil) crisis that interrupts electricity production as per consumer demand.