Following a surge in demand for electricity, the pressure on the national grid is growing at an accelerated rate. As a result, the peak load management has become a crucial issue in Bangladesh's energy sector. Besides, irregularities and inefficiencies cause transmission and distribution losses, depriving the electricity producers of potential revenue. The gap between demand and supply of electricity often leads to forced outages, hampering industrial outputs which, in turn, exert negative impacts on macroeconomic indicators.
A possible reason behind the electricity crisis is that, electricity generation has always been below the potential capacity due to acute shortages in energy inputs and aging power plants which go out of operation frequently. Enhancing electricity generation and mitigating the electricity deficit is one of the topmost agendas of the government. The government has announced to ensure electricity for all by 2021, but currently only 74 per cent of the total population has been brought under the national grid. The picture is even gloomier if we look at the rural electrification situation which, at present, hovers merely around 40 per cent.
A possible way of solving most of the problems associated with Bangladesh's electricity sector could be through the introduction of the Smart Grid Technology (SGT). This system has already made its way into the energy markets across the developed world. It is a cutting-edge tool through which electricity generation, transmission, distribution, regulation and its usage could be executed from remote areas via automation.
Compared with the conventional grid, which is characterised by a centralised mechanism, the smart grid is decentralised and distributive in nature involving a two-way communication. A smart grid's task is not just confined to providing electricity but it also has the capacity to receive and store electricity back from where it has supplied at the first place. Thus, smart grids allow consumers of electricity to also become electricity producers through which the surplus electricity produced can be added to the national grid. In lay man's terms, a smart grid is a small automated grid within the main grid. Thus, the relatively smaller smart grid tends to upend the larger traditional grid in a multidirectional manner. The SGT actually involves installation of micro- and nano-grids to work as small-scale electricity supply networks that are designed to manage electricity demand within a certain land area. Moreover, the excess off-grid electricity produced can also be added to the traditional national grid via those smaller grids.
The ultimate task of a smart grid is to make use of the internet in developing better electricity systems which would enhance electricity generation and relieve load pressures from the national grid, preventing grid failures and minimising forced and planned outages.
ECONOMIES OF SMART GRID TECHNOLOGY: In general, the economies of SGT are not limited to a particular group of people only. The list of beneficiaries includes the electricity-producing company and the consumers. More importantly, the benefits are generalised in the form of societal benefits as well. Thus, the introduction of SGT to the national energy policy framework would be a welcome move. But a pre-requisite for such a major structural change encompassing the energy sector is the development of the energy infrastructure.
Improvement in grid reliability, enhancement of electricity efficiency, energy resource diversification, environmental betterment and greater rural electrification are the major benefits that can be associated with the use of SGT.
A smart grid has the capability of ensuring grid reliability. A reliable grid is one that provides good quality electricity to consumers when they need it most. Following the surge in electricity demand, the peak load pressure on the national grid is high. The possibilities of grid failure and electricity outages are likely to become higher by the day. Smart grids can solve unplanned outage issues by locating outage site in real time. It can then automatically identify the root cause of the outage so that appropriate measures can be taken rather than snapping the entire system which is not a good idea.
A smart grid can ensure the overall grid reliability by also offering off-grid electricity whenever in-grid electricity supply is not available, thereby virtually eliminating extensive blackouts. This would relieve the burden off the shoulders of electricity-producing companies and save their revenues that would otherwise be exhausted in paying the bills associated with grid failures. Simultaneously, the residential and industrial consumers would no longer have to rely on private generators for costly generation purposes.
Smart grids can actively improve electricity efficiency by reducing the costs of electricity generation, delivery and consumption. Advanced metering systems can efficiently keep track of electricity usage and provide immediate feedbacks in case of any irregularity in the usage. Smart grids can detect and inform inefficient electricity usage. Moreover, smart appliances connected to the micro-grids inside buildings can also help conserve electricity and raise efficiency levels.
Improving efficiency levels can significantly minimise the transmission and distribution loss. Moreover, smart grids can be effective in reducing technical losses resulting from peak shifting or flattening purposes. For example, during peak load hours peak shifting becomes essential where smart grids can automatically transfer some energy by saving electricity use at peak hour to off-peak electricity use.
Recent studies have found that the monetary value of transmission and distribution losses in the country equals to almost 30 per cent of the total cost of producing electricity in the country. Smart grid can curb this loss. Simultaneously, the residential consumers can benefit from reduced electricity bills.
FUEL DIVERSIFICATION: A major constraint hampering the growth of electricity generation is the acute shortage of natural gas, the main input used in the country. Besides, the imported oils used as a supplement for natural gas create fiscal burdens. Thus, fuel diversification is essential in boosting electricity production for which SGT is an ideal platform.
Smart grids offer scopes for large renewable integration, especially in the form of solar and wind energy employment for electricity generation. It will, thus, facilitate the country's transition from non-renewable energy use to renewable energy use, contributing to the success of its SDG (Sustainable Development Goals) attainment drives.
Bangladesh is committed to reach a renewable target of 10 per cent installed electricity generation capacity by 2020. Thus, introduction of SGT can help the government attain this goal, especially by making greater use of solar energy. Bangladesh has the largest solar home system in the world and each solar system, if placed in a house, can generate 30 per cent more electricity than the total household demand, which can then be added to the national grid.
As far as the environment is concerned, the smart grid through greater integration of renewables can lead to the betterment of the environment by significantly limiting greenhouse gas emissions. Bangladesh emits approximately 170Mt of greenhouse gases which accounts up to 0.35 per cent of global greenhouse gas emissions. Although the per capita emission intensity is low, the amount of emission as a percentage of the national GDP is twice that of the global average. Employment of smart grids in the energy sector can significantly bring down these figures, making the nation less vulnerable to natural adversities.
Finally, about 40 million people living in the rural areas are yet to have regular access to electricity. Lack of access to electricity has been a main barrier hampering rural development. Ensuring electricity availability in the rural regions can open up new job opportunities leading to reduction of urban-rural wage differences. Hence, setting up solar-based micro smart grids for renewable-electricity generation can contribute in the form of off-grid electricity supply which can tackle the problem of low rural electrification rate.
Dr. Sakib Bin Amin is Assistant Professor, School of Business and Economics, NSU; Muntasir Murshed is Economics Graduate, School of Business and Economics, NSU.