The economic case for renewable energy

Originally posted in The Daily Star on 06 March, 2023

It is time to reduce our dependence on fossil fuels altogether

Energy security is a pressing issue of our time. Without energy security, we can forget economic growth and prosperity. The power outages that Bangladesh has experienced in recent months may have resulted from the volatility in the global energy market, but they did give a glimpse of what may come if Bangladesh does not act now to secure its energy supply.

While we suffered our own power outages, other countries in Asia were hit equally badly. Some parts of China suffered power shortages due to the worst heat waves in six decades, which forced manufacturers to close factories that produce all kinds of intermediary goods, such as aircraft parts, electronics, semiconductors, solar panels, and batteries. Meanwhile, electricity shortages tied to extreme heat in Pakistan led to the authorities imposing load-shedding blackouts, which left factories and people without electricity for as long as 16 hours a day.

Even the Global North is not immune from the economic impacts of energy security. In the US, California had to ask consumers and businesses to conserve energy or face rolling blackouts. This was due to record-breaking heat.

Energy security has a different slant in Europe. The continent’s dependence on fossil fuels has been ruthlessly exposed by Russia. Electricity prices in the UK have been up to five times higher than that from the previous year due to its reliance on power fuelled by coal and gas from Russia.

It is safe to assume that the world’s energy problems will become more dire in the coming years. Keeping this in mind, surely we need to take major steps now to secure our energy supply, both for environmental reasons and to keep the wheels of our economy turning.

I came across an interesting piece of information recently: a few years ago, a nuclear engineering professor calculated that just 1.2 percent of the Sahara Desert would be sufficient to accommodate all the solar panels to meet the energy needs of the entire world with solar energy. The professor worked out that the cost of the project would be about $5 trillion, a one-time cost.

No one is saying such a project would happen. However, it does show how tantalisingly within reach energy security is, and this is in large part due to the rapid development in solar power technology.

European Union President Ursula von der Leyen recently made a speech on Russia’s influence on the global fossil fuel markets. She said this was a huge problem, but just part of the problem of an outdated energy market. Her words are worth quoting as they are just as relevant to Bangladesh as they are to the European Union (Bangladesh’s largest export market). She said, “The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design. It was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose.”

And this is our situation domestically. We are working with an electricity infrastructure that is no longer fit for purpose – which was created for a different time and alternate conditions.

It was only last year that Bangladesh achieved 100 percent electricity coverage. Therefore, a return to a state of nationwide load-shedding was bitterly disappointing, although regulators can be forgiven for being caught off guard by the unprecedented nature of global events.

We must take this juncture to reduce our heavy dependence on external fossil fuels such as LNG, coal and oil. In fact, it is time to reduce our dependence on fossil fuels altogether. On this front, it was disappointing last year to see that Bangladesh actually ramped up its use of coal-fired power generation to boost the share of coal in its energy mix. Fair enough, this may have been a stop-gap solution to navigate through the challenging circumstances, but it cannot be our future.

Solar power is our most realistic option in terms of providing uninterrupted energy supply nationwide and providing the economic stability that reducing our dependence on energy imports brings.

I accept that land scarcity will always be a barrier to the large-scale adoption of solar power. However, rooftops of different industries could allow several thousand megawatts of solar power; examples abound of industrial solar rooftop projects in different cities.

There is no reason why all our industries cannot harness cheap solar power to meet a significant and growing percentage of their overall electricity demand and contribute to national energy security. Remember, renewable energy such as solar is in its relative infancy compared to fossil fuels. We have barely scratched the surface of the opportunities its widespread adoption may bring.

Mostafiz Uddin is the managing director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).