Ban Pfs Solar Wind Diesel Hybrid

Draft Final Report
PROMOTION OF RENEWABLE ENERGY,

ENERGY EFFICIENCY AND GREENHOUSE GAS
ABATEMENT (PREGA)
Bangladesh
Solar-Wind- Diesel Hybrid

For Power Generation in Small
Towns and Villages
A Pre-Feasibility Study Report1
April 2005
1
Prepared by the PREGA National Technical Experts from Bangladesh Centre for Advanced
Studies.
i
TABLE OF CONTENTS
Page No.
Abbreviations v-vi
1. EXECUTIVE SUMMARY 1-8

1.1 Introduction 1
1.2 Energy Situation and Government Policy 2
1.3 The Status of PV in Bangladesh 3
1.4 Potential of Solar, Wind & Bio-mass Energy for Power Generation in 3
Small Towns & Villages in Bangladesh
1.5 Choice of Technology - a Solar-Wind-Diesel Hybrid System 4
1.6 Project Description 5
1.7 Project Cost and Emission Reduction 6
2. INTRODUCTION 9-10
2.1 Background of the Project 9
3.1 Justification of the Project 10
3. ENERGY SITUATION & GOVERNMENT POLICY 11-16

3.1 Sector Description 11
3.2 Present & Forecasted Energy Situation 11
3.3 Constraints and Issues 12
3.4 Government Policy & Strategy 14
3.5 Government Policy on Renewable Energy 15
3.6 Market for Electricity 16
4. AVAILABILITY OF SOLAR & WIND ENERGY IN BANGLADESH 16-19

4.1 Availability of Solar and Wind Energy for Power Generation in Bangladesh 16
4.2 Critical Aspects of Availability of Economic Wind Speeds in Bangladesh 18
4.3 Critical Aspects of Availability of Solar Energy in Bangladesh 19
5. TECHNOLOGY OPTIONS, CHOICE OF TECHNOLOGY FOR

POWER SUPPLY TO SMALL TOWNS AND VILLAGES 19-23
5.1 Technology Screening 19
5.2 Potential of Solar, Wind & Bio-mass Energy for Power Generation in 20
Small Towns & Villages in Bangladesh
5.3 Choice of Technology - Wind-PV-Diesel Hybrid System 20
5.4 The System Reliability of REHPPs 23
6. PROJECT DESCRIPTION 23-28

6.1 Project Goal 23
6.2 Project Objectives 23
6.3 Poverty Reduction through the Project 24
ii
6.4 Technology Transfer 24
6.5 Project Location 24
6.6 Project Partners 24
6.7 Project Outputs 25
6.8 Possible Institutional Ways to Cover Project Risks 25
6.9 Likely Fiscal Incentives for the Project 26
6.10 Possible Financing Arrangements of the Project 26
6.11 Facilitating Agencies of the Project 26
6.12 Likely Basis of Tariff Structure Determination 27
6.13 Possible Ways to Selection of Firm in the Project 27
7. EMISSION REDUCTION, MONITORING & VERIFICATION PLAN 28-40

7.1 Baseline of Electricity Generation in Bangladesh 28
7.2 Baseline of GHG emission connected with the project 30
7.3 The Proposed Project 32
7.4 Factors impacting the Baseline 35
7.5 Crediting Period 36
7.6 Project Boundaries & System Boundaries 36
7.7 Project Additionality 36
7.8 Indirect Emission Effects 36
7.9 Additional Environment & Social Benefits 36
7.10 Monitoring & Verification Plan- Monitoring of Project Performance 38
8. FINANCIAL ANALYSIS OF THE PROJECT 40-42

8.1 Project Cost (Estimated) 40
8.2 Financial Analysis. 41
9. ECONOMIC ANALYSIS 42
10. STAKEHOLDERS’ MEETING 43
11. MAJOR FINDINGS AND RECOMMENDATIONS 44-45
REFERENCES 46
List of Tables
Table 1: List of Power Plant installed since 1997 11

Table 2: Gross Peak Growth Forecast 12
Table 3: Installed, Actual Production and Firm Production Capacity, 13
Peak Demand and Shortfall
Table 4: System Loss of Electricity Organizations 13
Table 5: Accounts Receivable of BPDB and DESA (in billion Tk) 14
Table 6: Progress of installed capacity of power plant in Bangladesh 28
over the period 1991/92 – 2002/03
iii
Table 7: Projection of total power generation and that based on oil up to 2020 29
Table 8: Yearly and cumulative production of CO2 in the absence 31
of the project activity
Table 9: Cumulative production of CO2 in the presence of the project activity 32
Table 10: Cumulative reduction of CO2 in the presence 33
of the project activity
Table 11: Project Benefits 37
List of Figures
Figure 1: Progress of power plant installation in Bangladesh over 91/92-2001/02 29
and projection up to 2019
Figure 2: Projection of total power generation (series 1) and 30
that based on oil (series 2)
Figure 3: Cumulative production of CO2 in the absence (series 1) and 31
in the presence (series 2) of the project activity
Figure 4: Cumulative reduction of CO2 over the project period in the 33
presence of the project activity
List of Flowchart
Flowchart – 1: Flowchart with Calculation for Yearly GHG (CO2) Release 34
Attendant on Production of 476 MWh of Electricity Based on diesel Oil
(without Project Activity)
Flowchart – 2: Flowchart with Calculation for Yearly GHG (CO2) Release 35
Attendant on Production of 476 MWh with 30% backup from diesel oil
(with the Project Activity)
List of Drawing
Drawing 1: Showing the elevation of the conceptual solar-wind-Diesel-hybrid Plant 22
List of Map
Map 1: Showing the proposed location of the plant 47
List of Press Cutting

Press Cutting – 1 48
Exchange Rate:
A CONSTANT EXCHANGE RATE OF 58.5 TAKA = 1US $ (FOR 2004) HAS BEEN
USED FOR CORRECT VALUATION AT A LATER DATE.
iv
Abbreviations
ARMCO - Associated Resources Management Co.
ADB - Asian Development Bank
Bbl - Barrel
BAEC - Bangladesh Atomic Energy Commission
BCAS - Bangladesh Centre for Advanced Studies
BOO - Built-Owned-Operated
BOOT - Built-Owned-Operated and Transferred
BPDB - Bangladesh Power Development Board
BREMADCO Bangladesh Renewable Energy Development & Management Co.
CDM - Clean Development Mechanism
CF - Conversion Factor
DESCO - Dhaka Electric Supply Company
DESA - Dhaka Electric Supply Authority
DP - Development Partner
EPA - Bangladesh Environmental Protection Act of 1995
FBT - Fast Bangladesh Technologies
FIRR - Financial Internal Rate of Returns
GEF - Global Environment Facility
GOB - Government of Bangladesh
GS - Grameen Shakti
GTZ - German Technical Cooperation
GWh - Gigawatt hour
IDCOL - Infrastructure Development Co. Ltd.
IFI - International Financing Institution
IPP - Independent Power Producer
kg - Kilogram
KVA - Killovolt Amp
kWh - Kilowatt Hour
LGED - Local Government Engineering Department
LRMC - Long Run Marginal Cost
m3 - Cubic Metre
MMCFD - Million cubit feet per day
MOEF - Ministry of Environment and Forest
MPEMR - Ministry of Power, Energy and Mineral Resources
MW - Megawatt
NEP - National Energy Policy
NG - Natural Gas
NGO - Non-Government Organization
NLDC - National Load Dispatch Centre
ODA - Overseas Development Assistance
O&M - Operation & Maintenance
PBS - Palli Bidyut Samiti
PGCB - Power Grid Company of Bangladesh
v
PPA - Power Purchase Agreement
PSC - Production Sharing Contract
PSMP - Power System Master Plan
PSRB - Power Sector Reforms in Bangladesh
RAPS - Remote area power system
REB - Rural Electrification Board
R&D - Research and Development
REHPP - Renewable Energy Hybrid Power Plants
RET - Renewable energy technology
RFP - Request for Proposal
RPC - Rural Power Company
SBU - Strategic Business Unit
SERF - Shadow Exchange Rate Factor
TCF - Trillion cubit feet
TJ - Terajoule
Tk. - Taka (Bangladesh)
TWh - Terawatthour
USA - United States of America
US$ - United States Dollar
VAT - Value Added Tax
WB - World Bank
WEST - Wind energy study project
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1. Executive Summary
1.1 Introduction
The country is blessed with substantial quantities of relatively clean fossil fuel - natural gas (NG)
as its primary energy. Its total proven and possible reserves being estimated at about 16.3 trillion
cubic feet (TCF) (Country Study Report), although as estimated by the US Geological Survey
(USGS), could be much higher (32 TCF and above). With a continuous increase of the demand
for NG, which currently stands at about 1.4 billion cubic feet per day, the NG reserves are being
consumed fast and unless new gas reserves are discovered through continuous national
exploration activities, the currently proven gas reserves of the country may face a total depletion
in about next 20 years time. Although close to about 90% of Bangladesh’s indigenous NG is
used for producing electric power, about 30% of its population has gained access to electricity.
Bangladesh, at the same time, is a sun-rich country with long sunshine hours, being situated in
the tropics. The estimates are indicative of a total availability of solar energy of about
1 x 1021J per year (Country Study Report). Even a fraction of this energy is more than the total
energy currently used in Bangladesh. As regards the availability of wind energy, preliminary
wind measurement studies, sponsored by international agencies, like GTZ and ODA have
indicated the positive potentiality of setting up wind turbines in the coastal belts and the offshore
islands.
Unfortunately, except a few low-profile and uncoordinated national efforts by the Rural
Electrification Board (REB), Bangladesh Power Development Board (BPDB), NGOs, like
Grameen Shakti, BRAC and some risk-taking private companies (Rahimafrooz, Micro
Electronics, First Bangladesh Technologies Ltd. and others) the country yet lacks a proactive
program with concerted efforts and a high degree of seriousness at Government levels to
diversify its sources for “clean and sustainable energy sources of tomorrow” - the Renewable
Energy Technologies (RETs), to produce and supply electricity.
Being encouraged by a French Government funded 62 kW Solar PV Pilot project, set up and
commissioned in 1995/96, which provided PV electricity service to about 800 consumers in 4
river islands of Narsingdi, the local NGOs and the private sector gained confidence in the
technical feasibility and social acceptability of renewable energy projects under the field
conditions of Bangladesh. Today, NGOs like Grameen Shakti alone have disseminated about
14,000 Solar Home Systems (SHS), being supported by a ‘capital buy-down’ support fund,
provided by IDA/GEF through Infrastructure Development Company Limited (IDCOL) of
Bangladesh, under a 50,000 SHS Programme. The REB is also launching a program to
implement a 16,000 SHS Programme, funded by the World Bank.
In the wind energy sector and also in the area of combining the advantages of diversified
sources, like wind, solar, fossil fuel/bio-mass to make a more reliable and also a cost-effective
RE-Hybrid System, almost no work has been done so far in Bangladesh, excepting a few small-
scale (non-commercial) trials with a few PV panels and less wind turbine of less than 400 W
(Battery charging-type) capacity.
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This pre-feasibility study on “Solar-Wind-Diesel Hybrid System for Power Generation for Small
Towns and Villages” has been conducted, based on a selection out of ten initially identified
projects through screening of relevant criteria (Country Study Report) by the Asian Development
Bank under its programme for “Promotion of Renewable Energy, Energy Efficiency and GHG
Abatement Project (PREGA) Operating Procedures”.
1.2 Energy Situation and Government Policy
Bangladesh had a total power generation capacity of 4005 MW in 200/01. Of this, 3,320 MW
was in public and 685 MW was in the private sector. The available capacity, however, was
restricted to 2,900 – 3,100 MW due to lack of adequate maintenance and rehabilitation
programme. Routine closedown, reduction of generation capacity due to prolonged use beyond
economic life, were the other contributing factors for low levels of capacity. As a result of such
shortfall of generating capacity, compared to the demand, load-shedding became inevitable
throughout the country during peak hours. The load-shedding problem was somewhat eased
during the last few years due to commencement of some new power plants.
Country’s Power System Master Plan (PSMP) formulated in 1995 estimates the peak power
demand for 2005 and 2007 at 5,200 MW and 6,100 MW respectively.
Although power generation is being continuously increased every year, it is nevertheless trailed
behind the growing demand. Some ramifications of the slow growth in electricity generation and
consumption are illustrated by the following hard facts:
Only 30% of the population has access to electricity
Per capita electricity consumption is only 129 kWh per annum which is one of the
lowest in the world
System firm capacity was 2,900 – 3,100 out of an installed capacity of 4005 MW in
2000/01 which constitutes 72 – 77%
Peak demand is expected to increase to 5,200 MW by the year 2005. Present
generation position indicates a power outage not less than 40% by the year 2005.
Ministry of Power, Energy and Mineral Resources (MPEMR), Government of
Bangladesh (GOB) regulates the tariff, which does not reflect the cost of production.
Government Policy on Renewable Energy
Bangladesh’s fossil energy resources consist primarily of NG and domestic oil supply is
considered negligible. Several small deposits of Peat exist in the southwestern region of the
country. However Bangladesh is blessed with substantial reserves (a total estimated in-situ
reserve of about 3 billion tonnes) of bituminous coal in the northern regions of the country.
Mining of these strata of coal lying at great depths is expensive. Coal-burning technology emits
high carbon emissions and creates other environmental problems as coal is regarded as dirty fuel.
Only around 30% of the total population of Bangladesh, has access to electricity. The vast
majority of the rural populations are deprived of the benefits of this modern input of civilization.
Larger electricity supplies with greater efficiency of electricity use are thus of paramount
importance to meet the basic needs of a growing population.
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1.3 The Status of PV in Bangladesh
The application of RETs has been started in Bangladesh on any mentionable scale only in the
recent past. The field take-off of renewable energy begun in 1995/96 with a 62 kW Pilot
Photovoltaic Project of REB implemented to provide PV electricity services to 4 isolated river
islands at Narsingdi. Funded by the French Government Grant, this project was successfully
commissioned and was operated over a period of about 4 years to serve about 800 consumers of
the 4 islands, following which the grid power reached in the area. Since then, many of the
systems have been relocated by REB to other priority areas of the country, although a number
consumers have opted to retain the systems, considering that grid power is quite unreliable due to
frequent load-shedding.
NGOs and also some innovative and private sector entrepreneurs have been slowly putting up
efforts even earlier than the Narsingdi Project. Being a Pilot or a ‘Flagship Project’ the Narsingdi
Solar PV project field-tested a number of systems to choose amongst a number of PV technology
options, such as Solar Lanterns, Central Battery Charging and Stand-alone PV Systems, i.e.
independent PV Panels at consumers’ premises. The consumers’ response and satisfaction were,
in general, were quite good, who in a vast majority evaluated the Stand-alone PV Systems as the
best choice. This response has later been used all over Bangladesh to design and size all future
Solar PV projects by REB, NGOs and the private sectors. This ‘Flagship’ RE project in
Bangladesh has proved the technical feasibility and also the social acceptability for renewable
energy in the country. Being inspired by the project, local NGOs, like Grameen Shakti, BRAC,
TMSS, Coast and others intensified their micro-credit supported PV dissemination program in
remote rural areas of Bangladesh.
1.4 Potential of Solar, Wind & Biomass Energy for Power Generation in Small Towns
& Villages of Bangladesh
While the potential for solar PV-based electricity has now been established beyond any doubt, a
lot still needs to be done in the area of other potential RE-Systems. Other than solar, the two
other most appropriate RE-sources for Bangladesh for power generation are wind and biomass /
biogas and also to a limited extent, the mini and micro hydropower.
In the wind energy sector however, much less work has been done. Following a study by the
Bangladesh Atomic Energy Commission (BAEC), other studies were soon initiated by
Gesellscahft for Technische Zusammenarbeit (GTZ) and later conducted in much detail by
WEST (Wind Energy Study, BCAS), the latter being supported by ODA. Its coastal districts and
offshore islands have fairly workable wind energy potentials, which reach peaks during the
monsoons (June – August). Local Government Engineering Department (LGED), Grameen
Shakti and FBT have tested small wind turbines and wind pumps in the coastal belts. Their
findings led to partial availability of wind and the necessity of using wind power as a component
of a reliable total Hybrid System, such as Wind-PV and/or Wind-PV-Diesel. FBT has reported
testing a small (Battery charging type) Wind-PV System in the St. Martin Island. A small (400
W) battery charging type, wind turbine supplied by FBT is operating since last few years in the
Chittagong Hill Tracts and is being used by the Bangladesh Army
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1.5 Choice of Technology - a Solar-Wind-Diesel Hybrid System
A Solar-Wind-Diesel-Hybrid System combines the inputs of three proven Systems - Solar PV,
the Wind Power Generation and also another very proven technology - the diesel (either through
a micro-processor operated total electricity Bus-bar or manual)
Solar PV Component
Bangladesh has by now gained enough field experience in stand-alone solar PV systems,
especially in providing rural households with electricity, as already mentioned. Any developing
country with a good degree of solar insolation may immediately go for solar home systems
(SHS) and other solar technologies. As evident from Bangladesh experience discussed above,
the Solar PV as an individual system (i.e. not in Hybrid) is already a quite proven technology.
However, the same D.C. PV electricity can be converted into ‘grid-quality’ Alternating Current
(A.C.), using D.C-A.C inverters and supplied to a low tension mini-grid and excess electricity
(when available) will be supplied to the national grid available at Charfasson Upazilla HQ.
In this Solar-Wind-Diesel Hybrid System, as proven technology, using inverters is proposed to

supply 220 V. A.C. (grid-quality) electricity, which can be combined with the wind turbine
generated electricity, the wind turbines being designed to directly produce 220 Volt alternating
current electricity.
Wind Power Component
Producing electricity using wind turbines, in fact, has already become one of the most cost-
effective and proven RETs all over the world, especially in Europe (Germany, the Scandinavian
countries), USA and also India, the latter having developed itself as the third largest wind power
based market in the world, with its over 2000 MW of Wind Generation Capacity.
The first wind speed studies conducted by BAEC, the Study sponsored by GTZ and the more
comprehensive ODA funded WEST Study by Bangladesh Centre for Advanced Studies (BCAS)
has established the potential of setting up wind turbines in the coastal districts and off-shore
islands, with good wind speeds with high probabilities in the range of 4 - 7 meters and above.
The critical months (lower wind velocities), as has been analyzed through these studies are the
winter months (November - February). Good wind speeds (4m to 7m/s) are available during the
summer and especially the monsoons, when the solar energy insolation remains low. According
to the WEST project, a 50 kW wind turbine can provide on the average 143 MWh annually.
The Hybrid Power Plant (REHPP)
Based on above technical considerations, wind systems ideally should feed electricity to the grid
or, in the smaller range of capacities, can be used as battery charging stand-alone systems, which
can and should, in areas of good solar insolation like Bangladesh, be combined with Solar PV (+
Charge Controller / Battery Chargers and also Inverters).
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Diesel Engine-Gensets provide a good backup for system reliability. In case of a micro-processor
operated Solar-Wind-Diesel Hybrid System, the electricity availability from each source,
including the storage battery bank are sensed and controlled/fed to a common busbar, thus
providing an optimum mix of electricity from each individual source in the grid, the diesel being
given the last priority, for obvious reasons of operating costs and environmental consideration.
1.6 Project Description
1.6.1 Project Objectives

The project has twin development objectives: (i) generation of electricity from a RE-Hybrid
Source for sustainable development in small towns and villages of Bangladesh and (ii) reduction
of GHGs.
1.6.2 Project Location

Although Solar PV can be set up anywhere in Bangladesh, given by the availability of global
radiation it receives everyday at intensities of about 5 kWh / day, except for a short monsoon period,
the wind energy sites need to be well selected, based on proven data measured throughout winter,
monsoon and summer months, preferably over a period of 3 years.
The proposed REHPP project, in fact, can be set up in any town and village of the coastal belt
and offshore islands. Based on available wind data of GTZ and WEST (Wind Energy Studies),
Charfasson is proposed as project location. Replication of this plant at other places is expected to
take place on successful completion and operation of this plant and also on demand thus created.
1.6.3 Project Outputs

The project is likely to produce 476,000 kWh or 0.476 GWh (Gross) of Electricity annually. The
net reduction of CO2 is expected to be 404 tonnes (CO2 Saving).
1.6.4 Project Implementation Plan

Implementation of the project can begin in July 2006 and be completed within one year.
1.6.5 Likely Fiscal Incentives for the Project

Different fiscal incentives currently permissible to IPPs / Foreign Investors in accordance with
the country’s industrial policy and also foreign investment policy would be available to the
sponsors for the proposed project. The following incentives are generally expected for the project
(Country Study Report):
Guaranteed rate of return on equity
Reduction/waiver of customs duty on import of machinery
Tax Holiday
Guarantee for payment for power purchased by utility
Guarantee of foreign exchange remittance
Guarantee of convertibility of foreign exchange
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1.7 Project Cost and Emission Reduction
1.7.1 Baseline Scenario
The baseline is the most probable future development in absence of the proposed project. Any
amount of electricity sold to the grid is equivalent to the same amount of electricity produced. In
the absence of the project, therefore, the carbon dioxide emission for generation of 476,000 kWh
of electricity has been calculated as 577 tonnes/Year. This assumes a 100% diesel generation,
without contribution of any renewable energy.
The CO2 Savings
The 30% diesel contribution to the REHPP works out to emit a CO2 equivalent of about 173
tonnes per year. The difference from the baseline, therefore, is found to be 404 tonnes/Year
1.7.2 Project Cost and Revenue
1.7.2.1 Project Cost (Estimated)
A 476 MWh/ year solar-wind-diesel system will be set up at Charfasson, a coastal sub-district where
both wind and sunshine are available. During Monsoon when sunshine is less, wind is available in
plenty. Two 50 kW wind turbines, 25 kWp PV panels, two 20 kW diesel gensets and the required
accessories will be procured. Costs are provided by the suppliers.
A. Investment Cost (million Taka)

i) Two 25 KVA gensets including 4 times overhaul .................................... 0.946
ii) Two 50 kW wind turbine sets .................................................................... 5.85
iii) 25 kWp PV panels....................................................................................... 4.387
iv) Land and site development ......................................................................... 1.90
iii) Building ...................................................................................................... 0.46
iv) Battery, inverter etc including one-time replacement ................................ 3.12
v) Physical contingency (5%) ....................................................................... 0.833
--------------------------------------------------------------------------------------------------
Total investment Cost ............................................................................. 17.496
B. Operation and Maintenance Cost

i) Diesel cost for 53,000 litres (@ Tk. 20 /litre) ........................................... 1.06
ii) Manpower cost ........................................................................................... 0.29
iii) Repair and maintenance cost @ Tk 0.25 ml./GWh ................................... 0.12
iv) Lubricants ................................................................................................... 0.06
--------------------------------------------------------------------------------------------------
Total operation & maintenance cost .......................................................... 1.53
C. Revenue
i) Gross generation of electricity 0.476 GWh
ii) Electricity sale (95%) 0.452 GWh
ii) Revenue (@ 8.00 million Tk./GWh) 3.616 million Tk.
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D. Gross profit per year
Revenue – Total operation and maintenance cost
= 3.616 – 1.53 = 2.086 million Tk.
1.7.2.2 Financial Analysis.
In the analysis of costs and benefits, a constant exchange rate of 58.5 Taka = 1 US$ (for 2004)
has been used for correct valuation at a later date. A fourteen-year financial life has been used
though actual life could be higher than 14 years. The loan term is also assumed 14 years
excluding the construction period with 10% nominal rate of interest. Working capital is equity
financed. Among the tangible output of the project, electricity is the only saleable product. diesel
oil is the major input.
Financial results show that the FIRR is 6.47%, NPV is –0.83 million Taka and B/C ratio is 0.82
(Annex 3a) The project is therefore not viable in the base case with Tk.8.00/kWh as tariff. Fuel
cost for gas turbine (oil fired) is Tk. 7.57 (BPDB, 2002-03).
Results of sensitivity tests are:
(1) For a decrease in revenue by 15%, FIRR reduces to -32.53%, NPV (@ 10% interest) to –
4.46 million Taka and B/C to 0.01 (Annex 3b).
(2) For an increase in project cost by 15%, FIRR reduces to -3.07%, NPV to –3.87 million
Taka and B/C to 0.41 (Annex 3c).
Financial analysis was recast incorporating carbon dioxide credit price. With CO2 credit price of
US$ 10.00 i.e. Tk. 585.00 per tonne of CO2, IRR, NPV and B/C are as under (Annex 4a):
IRR = 12.97%
NPV = 0.75 million Taka
B/C = 1.17
Break even CO2 credit price = US$ 5.25
Results of sensitivity analysis are shown below:
(i) IRR drops to 4.67%, NPV to –2.89 million Taka and B/C to 0.36 for a 15% fall in
revenue (Annex 4b)
(ii) IRR becomes 4.40, NPV –1.48 million Taka and B/C 0.72 for a 15% increase in
investment cost (Annex 4c).
The project therefore turns viable if the CO2 credit price of US$ 10.00 per tonne is incorporated.
But a possible 15% fall in revenue or 15% increase in investment cost makes the project
unviable.
Economic results show that EIRR is 7.54%, NPV is –0.65 million Tk. and B/C ratio is). 87
(Annex 5a) and as such the economic analysis does not show any significant improvement when
7
compared with the financial analysis. Sensitivity analysis has been given in Annex-5b and
Annex-5c:
(1) EIRR drops to -20.81%, NPV to –4.26 million Tk. and B/C to 0.06 for a decline in
project revenue by 15% (Annex 5b).
(2) EIRR drops to 0.01%, NPV to –2.65 million Tk. and B/C to 0.53 for an increase in
project cost by 15% (Annex 5c).
In view of the results above, the proposed project could be established if this could be combined
with clean development mechanism (CDM) project as per the provisions of the “Kyoto
Protocol”.
A Stakeholders meeting was held as 26 July 2004 in Dhaka at the LGED Bhaban. The following
recommendations regarding this project were adopted unanimously in the meeting.
1. Because of low insolation and high wind speed in Monsoon, a solar-wind-hybrid backed
up by a diesel generator is a necessity for the sake of uninterrupted supply.
2. A solar-wind-diesel hybrid will be installed at Charfasson, a coastal sub-district where
wind velocity was found to be reasonably high.
3. A study will be undertaken to find out the present status of SHS.
4. Five Representatives from Charfasson present in the meeting have welcomed the project
as the supply of electricity from the project will be uninterrupted.
1.7.3 Additional Environment and Social Benefits
The additional environment and social benefits have been identified as:
Improvement of the air quality in the area due to less diesel use;
Improvement of the socio-economic condition of the people at project location;
Increased capacity building;
Transfer of technology; and
Indirect employment generation, through enhanced facilitation by electric power.
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2. Introduction
2.1 Background of the Project
Bangladesh is a developing country, as in the case of many other developing countries of the
world, is relatively rich in a number of resources
The country is blessed with substantial quantities of natural gas as its primary energy, the total
proven and possible reserves being about 16.3 TCF (Country Study Report), although the total
proven, possible and probable gas reserves, as estimated by the US Geological Survey, could be
much higher (32 TCF and above).
Unfortunately, only less than 2% of Bangladesh’s 140 million population has access to natural
gas, the only indigenous source of commercial primary energy. In terms of providing electricity
access the situation is equally grim. In spite of the Government giving hope to reach “Electricity
to All” by 2020, i.e. in another 15 years time, only about 30% of the population has access to
Electricity.
The key sources of primary energy in rural areas of Bangladesh are the traditional sources, i.e.
rice husk, hulls, jute stick, cow dung, tree residues and fuel wood.
The import based petroleum fuel - kerosene is still used for lighting in most of the rural areas where
electricity has not reached yet, especially in coastal areas, offshore islands and other remote/isolated
locations. Out of over 22 million rural households, only about 4.5 million have been connected with
the rural electricity grid of Rural Electrification Board (REB). Although REB, since its founding
about three decades back is doing a good job connecting, on the average about 300,000 rural
consumers per year, it would take over half a century to reach electricity to all by the conventional
method.
Natural gas reserves, given by an increasing pace of industrialization and other development
activities of the country are, on the other hand, depleting fast. Unless newer reserves of gas are
continuously discovered through further exploration works, gas - the only primary hydrocarbon
resource may get exhausted in the next 20 years, the present consumption having already
reached, on the average about 1,400 million cubic feet per day (MMCFD).
Currently close to 90% of Bangladesh’s electricity is generated from natural gas as the primary
source of energy, the other uses being for producing Urea Fertilizer and as a fuel in the
industrial, commercial, household and recently as Compressed Natural Gas (CNG) in the
transportation sector.
Dissemination of Renewable Energy Technologies
Bangladesh yet lacks the vision to make the optimum use of its available energy resources, especially
the renewable energy sources like solar, wind, biomass (including ‘new bio-mass technologies),
hydro, mini/micro hydro and others, including hybrid power system, which combine the various
available renewable energy technologies with each other (Solar-Wind-Fossil-Biomass etc.) in an
optimum manner to make a reliable energy/electricity supply system.
The ‘take-off’ in the Renewable Energy sector
Bangladesh being a sun-rich country is blessed with long hours of sunshine with good intensities
9
- the consideration, which led to a number of programs launched initially by REB and a number
of private sector companies and later by NGOs. Following a French Government Grant funded
project, set up in 4 river islands at Narsingdi, in which 800 rural consumers were served by solar
PV electricity, the confidence of NGOs and private sector grew to a large extent. As of date
NGOs like Grameen Shakti, BRAC and others have successfully disseminated the solar PV
technology having already marketed over 14,000 SHS. A 50,000 SHS Programme is being
supported by IDA/GEF through Infrastructure Development Company Limited (IDCOL). The
REB is also proceeding, to launch a 16,000 SHS programme, being funded by the World Bank.
All logical estimates, supported by wind speed studies conducted so far indicated that it is worth
while to set up wind turbines in the coastal districts and also in the off-shore islands of
Bangladesh, where the relative frequencies of availability wind speeds over 4 - 5 m/s are good.
However, like in the solar PV sector power generation efforts on any reasonable scale by using
wind turbines have not been attempted as a semi-commercial/commercial project. The relatively
less availability (max. 30 - 40% of the required energy) of suitable wind velocities has been a
major reason for this. However, logical considerations and best engineering judgment, based on
wind data available so far, lead to the conclusion that wind turbines in the coastal areas can be
operated as a hybrid system with solar PV, which has almost year-round availability at good
intensities.
2.2 Justification of the Project
The proposed Wind-PV-Diesel Hybrid Power plant (abbreviated as REHPP) would diversify the
source of electricity generation and lead to energy security and sustainable energy supply.
Although initially designed as a small scale (476 MWh/yr) ‘Flagship’ Project, its future potential
is large. The REHPP is justified on the following grounds:
The small towns and villages located in the coastal belts and offshore islands of
Bangladesh (a proposed specific site being Charfasson) will be benefited most in terms of
having low emission and reliable power supply.
Presently mostly diesel generators are used in such areas. The implementation of the
project will minimize the GHG Emission, resulting in a net reduction of the GHGs, thus
bringing a local as well as a global carbon benefit.
The successful implementation and operation of the project will lead to further future
dissemination and also scale-up of the project to larger capacities, thus displacing more
conventional grid power to increasing number of small towns and villages, where old
diesel units are being used presently to produce unreliable and high emission.
The project will enhance the quality of life and contribute to socio-economic
development of the inhabitants of the project area.
It will promote to capacity building and also contribute to the technology transfer in
installation and operational know how of Renewable Energy - Fossil Hybrid Power
Plants low emission, which are also more cost effective than 100% fossil fuel based
plants.
10
3. Energy Situation and Government Policy
3.1 Sector Description
Bangladesh has a total installed power generation capacity of 4005 MW in 2000/01. Of this,
3,320 MW was in public and 685 MW was in private sector. Available capacity was however,
restricted to 2,900 – 3100 MW due to lack of adequate maintenance and rehabilitation program.
Routine close down, reduction of generation capacity due to prolonged use beyond economic life
etc. were other contributing factors for low available capacity. Due to shortfall in generating
capacity compared to demand, load shedding became inevitable throughout the country during
peak hours. The load shedding problem was somewhat eased during the last few years due to
commencement of new power plants as described in Table 1.
Table 1: List of Power Plants installed since 1997
Plant Capacity (MW) Commencement of Generation

Public Sector
1. Rauzan Steam Plant (2nd unit) 210 September 1997
2. Ghorasal Steam Plant (6th unit) 210 January 1999
3. Shahjibazar Gas Turbine (1st unit) 35 March 2000
4. Shahjibazar Gas Turbine (sub unit) 35 October 2000
5. Baghabari Gas Turbine 100 February 2002
Sub Total 590
Private Sector
6. Haripur Barge Mounted 110 June 1999
7. Khulna Barge Mounted 110 October 1998
8. Baghabari Barge Mounted 90 June 1999
9. AES-Haripur 125 February 2002
Sub Total 435
Public–Private Sector
10. Mymensingh Gas Turbine (1st phase) 70 November 1999
11. Mymensingh Gas Turbine (2nd phase) 70 December 2000
Sub Total 140
Source: Ministry of Finance and Planning (2002).
3.2 Present and Forecasted Energy Situation
The gross electricity generation in 2000/01 was 17,023 GWh, out of which gas based generation
constituted 87%, hydro generation 6 % and liquid fuel based generation 7%. During 2001/02, a
total of 18,656 GWh was consumed under the overall management of Power Development
Board, Dhaka Electric Supply Authority, Dhaka Electric Supply Company and Rural
Electrification Board. Of the total energy consumption, residential sector, industry, commercial
sector, agriculture and others, accounted for 41%, 44%, 8%and 7% respectively. 13.49% of
electricity has been purchased from the private sector. Per capita consumption was 99 kWh in
1996/97 that stood at 106 kWh in 1997/98, 120 kWh in 1999/00 and 129 kWh in 2000/01.
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Country’s Power System Master Plan (PSMP, 1995) formulated in 1995 estimates peak power
demand for 2005 and 2007 at 5,200 MW and 6,100 MW respectively.
Table 2: Gross Peak Growth Forecast
Fiscal Year Gross Peak Growth, MW

1995/96 2200
1999/00 3150
2005/06 5,200
2007/08 6,100
Source: PSMP, 1995
Although power generation is increasing every year, it has nevertheless trailed behind growing
demand. Few ramifications of the slow growth in electricity generation and consumption are
illustrated by the following hard facts:
• About 30% of the population has now access to electricity.
• Per capita consumption of electricity is only 129 kWh per annum, which is one of the lowest
in the world.
• System firm capacity was 2900-3100 MW out of an installed capacity of 4005 MW in
2000/01.
• Forecasted peak demand in FY 2002 was around 4000 MW, showing a power or outages of
25%.
• Peak demand is expected to increase to 5,200 MW by the year 2005. Present generation
position indicates a power outage not less than 40% by the year 2005.
3.3 Constraints and Issues
Power shortage is the result of accumulated problems of many years. Some of the reasons that
are responsible for the present situations are discussed below:
• Inefficiency of the parastatal management of the sector and a tariff structure unfavorable to
efficient usage of power. Economic and Financial Indicators of the electricity utilities are
shown in Annex 1
• Reserve margin defined as actual production capacity minus maximum demand served has
been continuously declining since 1989/90 to reach zero margins in 1993/94. Power
generation and power supply became precarious due to lack of reserve margin. Added are the
problems of accounts receivables of the electricity utilities (Annex 2).
• As shown in Table 3, load shedding during the period 1990/01 – 2001/02 varied from 340
MW to 774 MW.
• Investment by Government in power generation plants and transmission and distribution has
not been sufficient in the past years due to resource constraints
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Table 3: Installed, Actual Production and Firm Production Capacity,
Peak Demand and Shortfall
Year Installed Generation Demand Demand Load Reserve

Capacity Capacity Forecast Served Shedding Margin
(MW) (MW) (MW) (MW) (MW)
1990/91 2350 1719 - 1640 340 5
1991/92 2398 1724 - 1672 550 3
1992/93 2608 1918 - 1823 480 5
1993/94 2608 1560 - 1875 540 -
1994/95 2908 2133 2038 1970 537 8
1995/96 2908 2105 2220 2087 545 1
1996/97 2908 2148 2419 2114 674 2
1997/98 3118 2320 2638 2136 711 9
1998/99 3611 2850 2882 2449 774 16
1999/00 3716 2665 3149 2665 536 -
2000/01 4005 3033 3394 3033 663 -
2001/02 4230 4055 - - - -
Source: BPDB (2001/2002)
• Power sector has always been dependent on foreign aid/loan. However, there has been no
foreign lending from donors including World Bank, Asian Development Bank (ADB) in this
sector during 1990/91 – 1995/96. As a result, no major investment work could be undertaken
for power generation, transmission and distribution system. BPDB/DESA were unable to
meet World Bank and ADB requirements/conditionalities on system loss, accounts
receivable etc.
Table 4: System Loss of Electricity Organizations
Year BPDB DESA REB DESCO Combined

(% of Net (% of (% of (% of %
Generation) Import) Import) import)
1995/96 17.0 29.5 15.2 31.3
1996/97 16.00 27.3 15.8 30.3
1997/98 16.5 27.8 16.8 31.3
1998/99 16.8 24.9 18.6 30.9
1999/00 15.5 - 20.1 32.73 37.1
2000/01 14.6 26.03 17.9 30.55 -
Source: Ministry of Finance and Planning (MOEF, 2002).
• Power transmission system became inadequate because of lack of investments in

construction of transmission network for the last few years.
• Power generation is far below the installed capacity due to inadequate supply of gas-to- gas
based generation plants.
• Power generation declined due to derating of many power plants
13
Table 5: Accounts Receivable of BPDB and DESA (in billion Tk)
Fiscal year BPDB DESA

1997/98 17.29 9.98
1998/99 24.64 12.44
2000/01 27.89 13.96
2001/02 33.99 14.8
Source: Ministry of Finance and Planning (MOEF, 2002)
3.4 Government Policy and Strategy
In 1994, the GOB adopted Power Sector Reforms in Bangladesh (PSRB), which was formulated
in consultation with the major development partners (DPs) in the power sector. The PSRB
outlined the reform process proposed to be followed by the GOB to gradually remove the
constraints in the sector through improvements in sector and corporate governance, introduction
of competition, and public-private partnerships. Reforms of the external environment were to be
done through targeted interventions in the power sector.
In accordance with the PSRB, the power sector in Bangladesh has gradually been undergoing
structural changes through technical assistance for planning and institutional strengthening as well as
capital for system expansion, in line with the principle of reforms-linked assistance. ADB has
focused on the greater Dhaka area, given its commercial and political importance to Bangladesh.
As a direct result of assistance by ADB and KfW, three new companies have been established–
PGCB, DESCO and Rural Power Company (RPC). While RPC was a new start-up generation
company, PGCB took over assets and liabilities of the existing transmission operations of BPDB,
and DESCO, the Mirpur (later expanded to cover the erstwhile Gulshan circle also) distribution
operations of DESA. Although both companies have improved their operations and have broken
even on current operations, their past liabilities create an accumulated problem which prevents
their transformation into profitable companies.
In line with the reform measures, a number of activities have already been undertaken for the
desired development of power sector.
GOB has approved, “Private Sector Power Generation Policy of Bangladesh” in October 1996 to
promote private sector investment in power generation. Under this policy, the private power
companies (domestic, foreign or joint ventures) would be exempted from corporate income tax
for a period of 15 years and will be allowed to import plants and equipment without payment of
custom duty and VAT.
In the public sector, a wide range of reforms and programs for the generation, transmission and
distribution system of the power sectors has been undertaken. In this respect, RPC has set up
initially a 60-MW power plant at Mymensingh, which would supply power exclusively to the
rural areas.
14
“Power Grid Company of Bangladesh (PGCB)” has been created to separate the distribution
system. The company at the initial stage has started implementing its program for construction of
transmission lines and national load dispatch center for transmission of power that would be
generated from Meghnaghat power plant. PGCB will eventually, acquire the entire power
transmission network of the country and be responsible for its management, maintenance and
expansion.
The area under DESA has been rationalized and re-demarketed in order to increase the efficiency
of the management of the power distribution and improve the quality of the services. In order to
reduce the system loss and give quality of service, a company named Dhaka Electric Supply
Company (DESCO), as stated above, has been created to manage the power distribution system
of Mirpur of Dhaka Metropolitan City since September 1998. This will eventually take over the
entire distribution responsibility of DESA.
Captive Power generation is being encouraged through reduction of import duty. As a result,
generation capacity has increased significantly. This has contributed to meeting demand during
peak period.
BPDB has created 8 new distribution zones for bringing about distribution efficiency. In line
with modern management concept, distribution areas have been established as Strategic Business
Units (SBU) with greater autonomy.
Power Cell has been created within Power Division in the MPEMR for purpose of carrying
forward various reforms in a coordinated and concerted manner. Among the important activities
currently pursued by the Power Cell include formulation of Power Act, establishment of an
independent Power Regulatory Authority, Vision and Policy Statement of Government, etc.
Ashuganj Power plant has been transformed into a Public Company and Haripur Power plant has
been transformed into a cost /profit center. Creation of a West Region Integrated Power
Distribution Company is in its final stage.
3.5 Government Policy on Renewable Energy
Bangladesh’s fossil energy resources consist primarily of natural gas. Domestic oil supply is
considered negligible. Several small deposits of peat exist in the southwestern region of the
country. However, Bangladesh has substantial bituminous coal deposits in the northwestern
region, but mining of all of them is quite expensive because of their depth (see Country Study
Report).
Around 30% of the total population has access to electricity. Vast majority of the rural
population that comprises 76% of the total population is deprived of energy resources. Larger
energy supplies and greater efficiency of energy use are thus of paramount importance to meet
the basic needs of a growing population
It is therefore considered necessary to exploit all sources of renewable energy and to use these in
an efficient form for the benefit of the people. Government has accordingly formulated a
renewable energy policy for the country. The policy mentions necessity of taking up renewable
15
energy development programs in the areas where potential renewable energy resources are
available, considering economical and technical performance with minimum environmental
effects. Plant site, size and design are to be considered on the basis of available energy resources
of the area and efficient conversion of energy will be given preference. Policy envisages
accomplishment of its objectives by mobilizing a concerted national effort with the continued co-
operation and commitment of GOB, international organizations, bilateral and multilateral
funding institutions, non-government organizations, the private sector, research organizations
and universities, etc. Policy also realizes that innovative new financing opportunities including
micro-financing will be needed to attract private capital to supplement the energy deficiencies in
the rural areas and thus to fulfill the aspiration of the poor people. In case of renewable energy,
technology is advancing fast and many governments have formulated innovative policy
formulations for renewable energy development.
3.6 Market for Electricity
Given that about 30 percent of households in Bangladesh are connected to the electricity system,
there is a huge potential demand for electricity compared to the current amount that is now being
served. Also among the connected consumers, there are unserved demands. The market cannot
be served now because of generation and infrastructure constraints. BPDB has limited capacity
of financing new generation or transmission lines. Complicating the supply side even further is
the availability of foreign exchange to pay for electricity supplied by present and future IPPs,
PSCs and other energy related capital investments. Examination of the existing committed and
planned generation plants reveals that generation would lag behind potential demand. The United
Nations Commissions on Human Settlements forecast that the population of Dhaka would
increase by almost 50 percent to become the sixth largest city in the world by 2010. With this
increase, power generation would be insufficient to meet the demand.
4. Availability of Solar & Wind Energy in Bangladesh
4.1 Availability of Solar and Wind Energy for Power Generation in Bangladesh
Bangladesh, being a sun-rich tropical country is quite fortunate to have been blessed with almost
year-round strong sunshine, except during about 10 - 12 weeks of monsoon period, when
overcast and dark skies are faced.
In terms of availability of wind energy, on the other hand the country based on wind data
measurements and preliminary pilot tests conducted till date (GTZ and ODA funded WEST
Study by BCAS 1998), appears to be less fortunate. Of course, a whole range of more long
duration (> 5 year) continuous wind data measurements and tests with small to large-sized pilot
wind turbines / wind farms need to be conducted before a firm conclusion is reached.
Availability of Solar Energy - Macro (National) Scenario
Bangladesh being situated between 20.34o and 26.38o latitude north is in a very favorable
position in respect of the availability of solar energy. The total potential is estimated at 20 x 1013
16
kWh per year for the entire country. Only a fraction of this (theoretical) potential is more than
the total energy used in Bangladesh at present.
Only the monsoon months in Bangladesh (April/May – July/August) pose some problems in
terms of availability of direct solar irradiation, due to heavily overcast / dark skies during rains
and also Cyclones/Hurricanes/Nor’wester storms, which frequently occur in Bangladesh over a
critical period of about 10 weeks (see Section 4.3 of this Report – “Critical Aspects of
Availability of Solar Energy”).
All over Bangladesh, including coastal areas and offshore islands of the country, solar energy is
available at good intensities (range 4 - 6 kWh/m2-day, avg. 5 kWh/m2-day), the total average
sunshine availability being close to about 2000 h per year.
Micro (Site specific) Scenario on Availability of Solar Energy
This project proposes Charfasson – a sub district situated on the coast of the Bay of Bengal as a
potential site to implement the Wind-Solar PV-Diesel Hybrid Power Plant.
The solar radiation in this area is available year-round and in the same range of intensities as in
the rest of Bangladesh, excepting during the Monsoons (June - August), when, due to the
rainfall, overcast and dark skies are encountered. Incidentally, it is during these monsoon months
when good wind speeds are also available, the latter thus compensating for the less availability of
the solar irradiation during this period.
Availability of Wind Energy - ‘Macro’ (National) Scenario
As already mentioned, in terms of availability of wind energy, Bangladesh appears to be not as

fortunate as in case of solar energy, although much work in terms of long term data collections
and tests with pilot turbines, needs to be done in the coastal (southern) districts and off-shore
areas. Nationally speaking, the entire southern coastal region of Bangladesh has relatively better
Wind speeds. The frequency of wind speed distributions measured at several coastal sites has
shown that the percentage of frequency distribution of wind speeds exceeding 4 m per second is
42% at Patenga, 33% for Noakhali, 66% for Kuakata, 45% Charfasson, 39% at Cox’s Bazar,
36% at Teknaf and 49% at Kutubdia off-shore island.
Availability of Wind Energy - ‘Micro’ (Site) Scenario
When compared to solar energy, the availability of appropriate wind speeds is more site-specific
and specific wind data need to be continuously measured at site. In the framework of the WEST
Wind speed Study (BCAS, 1998), wind measurements at Charfasson over a 1-year long period
has yielded interesting results shown in the table below.
17
Monthly Average Wind Speed (m/sec) in the Coastal Region of Bangladesh
(July 1996 - September 1997)
Coastal Location Average Wind Speed (m/sec) during

April - August September – March
Patenga 5.06 3.24
Cox’s Bazar 4.33 2.73
Kutubdia 5.08 3.58
Teknaf 3.86 2.32
Noakhali 4.11 2.09
Kuakata 6.35 3.24
Charfassion 4.94 3.17
Source: BCAS (1998).
It has been shown that the percentage of frequency of wind speeds exceeding 4 m per sec and 5
m/s at Charfasson are 49% and 32% respectively, measured at 25 m height.
The findings of the ODA funded WEST Study supports setting up of wind generators for
producing electricity at the following locations: (i) Kuakata, (ii) Kutubdia, (iii) Patenga, and (iv)
Charfasson.
It is estimated from the wind availability data that in terms of continuous days in a year at least
120 - 140 full day equivalent of wind speeds (4 - 5 m/s) will be available at Charfasson for
power generation from wind. According WEST Study, one 50 kW wind turbine can produce on
the average 143 MWh annually.
4.2 Critical Aspects of the Availability of Economic Wind Speed in Bangladesh
As mentioned earlier, wind data measurements at the most potential sites for high wind speeds in
Bangladesh, i.e. in the coastal belt and the off-shore islands, as discussed has demonstrated that
the following critical aspects:
(i) Economic wind speeds are available only at very specific coastal and offshore island sites
(e.g. Kuakata, Kutubdia, Hatia, Swandip, Charfasson etc., close to the sea). In other parts
of Bangladesh, i.e. Chittagong Hills Tracts, Panchagar etc., however, there may also be
‘pockets’ of wind speeds, depending on formation of ‘thermals’, ‘tunnel-effects’. Further
work in this direction is being continued.
However, the general observation on the critical factor of good wind speed availability is
that, the ‘roughage factor’ in the frontal zone of a wind turbine or wind farm site must be
minimum to avoid frictional deceleration of wind speeds. On this consideration, one
should go as close to the sea as possible. In fact, this is the reason why even off-shore
wind generation is also becoming a popular as a ‘State-of-the-art Technology in the Wind
sector (e.g. in North Sea, Europe)
(ii) Seasonal availability (minimum wind speeds in the winter months of November -
February.
18
4.3 Critical Aspects of the Availability of Solar Energy in Bangladesh
In respect of the availability of solar energy, the situation is reverse, when compared to wind.
The critical periods for availability of solar energy, as already mentioned are the monsoon
months, primarily June - August, when one has mostly rains and overcast and dark skies.
However, with a bright-diffused sky even 60 - 65% of the radiation energy is available. Although
not sufficient, slow battery charging is effected even under diffused radiation conditions.
Interestingly enough in a Wind-PV Hybrid System, it is during the monsoon period, when higher
wind speeds (> 5-7 m/sec) are actually available, which compensates for the low solar radiation.
It has been now been established through the sufficient operational experience gained from the
SHSs, installed by REB, NGOs (Grameen Shakti, BRAC etc)) and also private sector
(Rahimafrooz, ARMCO, First Bangladesh Technologies (FBT) and others), that about 2 - 3
months (June, July August) is the critical period.
The wind turbine and the partly also diesel generator proposed in the hybrid will take care during
this critical period of relatively low solar insolation, in case of a Hybrid System,
5. Technology Options, Choice of Technology for Power Supply to Small

Towns and Villages
5.1 Technology Screening
The choice of appropriate technology for generation and supply of electricity for small towns and
villages of Bangladesh, based on local needs and operational experience of Rural Electrification
Board (REB) and also Bangladesh Power Development Board (BPDB) - the key operators in this
sector should consider, in general the following specific country aspects:
The technology or a combination of several technologies must be proven in terms of its/their
operational functionability.
The consumers in these areas in Bangladesh have less than 20% of the electricity demands
(‘low load - low consumption’) when compared to consumers in large cities and towns (REB
experience).
The technology/system should be so chosen as to make the electricity tariff (which depends
on the cost of generation, transmission and distribution) well be within the reach of the
average consumers in small towns and rural areas.
It should provide a reliable power supply to gain consumer confidence.
Amongst a whole range of RETs, currently, wind and solar photovoltaics (PV) are absolutely
proven technologies. No less interesting in the context of Bangladesh are also other renewable
energy sources, like biomass, micro and mini-hydro based small (decentralized) power
generation.
Most of the small townships and remote areas of Bangladesh - the coastal district towns, off-shore
Island small towns and homesteads, where natural gas has not yet reached through transmission
and distribution pipe lines, are currently being served by petroleum fuel-based power generation.
For large grid supplies, which primarily serve large cities and towns, it is based on furnace oil-fired
central plants (e.g. Khulna and the neighboring areas including other district towns in the west
zone). For small district towns, isolated coastal districts and offshore islands, the power supply is
19
still based on diesel (High speed diesel oil or HSD) Engine-Generator Plants and small grids,
operated by BPDB, REB and also the private sector.
The reliability of power supply also constitutes a key consideration in selection of a complete
system, be it a Hybrid or an individually proven technology
5.2 Potential of Solar, Wind, & Bio-mass Energy for Power Generation in Small Towns
and Villages in Bangladesh
RETs like solar, wind and biomass Energy are ideal candidates for providing power to electricity
consumers living in small towns and villages, especially in remote/isolated areas such as the
coastal districts and offshore islands. The reasons for their high potential are very simple and
may be summarized as follows:
High transmission and distribution costs to small towns and villages, especially in
remote/isolated areas
Relatively low electrical loads of the small clusters of consumers
High operating costs (Maintenance and Repairs) of larger fossil fuel based stand alone
power (e.g. diesel based) generation plants in these areas
The experience of REB has shown that the cost of distribution lines to rural ‘thin-load’ area
consumers presently cost in the range of US$ 10,000 per mile. In areas with an average of 20
consumers this means an investment cost of about US$ 500 per mile, which is more than the
present cost of a SHS, which can improve the quality of life of rural people with their low load
requirements (e.g. 2- 3 lights, a Fan and a TV).
The BPDB experience with power supply to Small towns and villages is even worse in coastal
areas and offshore islands. With 100% diesel operation a large transportation cost for the diesel
is involved, and repair and maintenance cost of the diesel engines is very high. These factors
combined together make electricity supply cost much above they can charge from the consumers
(in some places over Tk.10 - 12/- per kWh electricity supplied), apart from the emission aspects
and a large unreliability with the already depreciated diesel plants.
5.3 Choice of Technology - Wind PV-Diesel Hybrid System

A Wind-PV-Hybrid System combines the inputs of three proven systems - solar PV, the wind
power generation and also another very proven technology - the diesel (either through a micro-
processor operated total electricity bus-bar or manual)
As evident from above, the solar PV as an individual system (i.e. not in Hybrid) is already a
quite proven technology. It includes solar PV panels connected to an Electronic Charge
Controller, which charges a storage battery bank, from which the steady supply of electricity, is
drawn, both during day and night. The design of SHS used in Bangladesh presently stand-alone
direct current (D.C.) systems.
However, the same D.C. PV electricity can be converted into ‘grid-quality’ alternating current
(A.C.), using D.C-A.C Inverters and supplied to a local low tension ‘Mini-Grid’. This system is
being very successfully operated in Sagar Islands, India, to supply rural communities with 220 Volt
‘grid-quality electricity, with a diesel backup for system reliability. Starting with an initial capacity of
25 kW, this solar PV-Diesel Mini-Grid has now been expanded to about 125 kW.
20
In this Wind-PV-Diesel Hybrid System, as similar proven technology, using inverters is
proposed to supply 220 V. A.C. (grid-quality) electricity, which can be combined with the wind
turbine generated electricity, the wind turbines being designed to directly produce 220 Volt
alternating current electricity.
The Renewable Energy (Wind-PV-Diesel) Hybrid Power Plant (REHPP)

Wind systems ideally should feed electricity to the grid or, in the smaller range of capacities, can
be used as battery charging stand-alone systems, which can and should, in areas of good solar
insolation like Bangladesh, be combined with Solar PV (+ charge controller / battery chargers
and also inverters).
Diesel engine-gensets provide a good backup for system reliability. In case of a micro-processor
operated Wind-PV-Diesel Hybrid System, the electricity availability from each source, including the
storage battery bank are sensed and controlled/fed to a common Busbar, thus providing an optimum
mix of electricity from each individual source in the grid, the diesel, being given the last priority, on
obvious reasons of operating costs and environmental consideration.
As already mentioned, Wind-PV-Diesel Hybrids, commonly abbreviated as REHPP (Renewable
Energy Hybrid Power Plants) are globally quite proven systems. In fact, an initial ‘Flagship
Project operation with a diesel Engine in the Hybrid can easily be replaced by a Biomass Gas
Engine, through replacement of the diesel Engine.
21
WIND TURBINE
SOLAR PV PANELS
ARRAY ON BOTH SIDES
OF ROOF
BATTERY STORAGE, INVERTERS
SYNCHRONUS CONDENSER
SYSTEM & CONTROLS
ASIAN DEVELOPMENT BANK

PREGA PROJECT
CONCEPTUAL LAYOUT
PROPOSED
WIND-PV-DIESEL HYBRID
POWER PLANT (REHPP)
DESIGN CONCEPT BY :
Dr. Engr. K. Islam, Energy Consultant
DIESEL FUELLED DRW. No.

ENGINE-GENERATOR DATE : 01.06.04 REHPP-01-GEN
22
The enclosed Drawing (conceptual Design Lay-out with one wind turbine) shows a
typical General Lay-out of the proposed REHPP, showing the 50 kW wind turbine, the solar
PV panels on the station roof and the battery banks, controls inverters, bus-bar (common
electricity Input Terminal) and electricity metering equipment being housed inside the
REHPP Station.
5.4 The System Reliability of REHPPs
REHPPs with diesel / bio-mass gas engine-generator sets in the system are very reliable
systems in terms of providing the consumers with almost an uninterrupted supply of
electricity, which is important, specially in ‘technology-shy’ developing countries like
Bangladesh to give a customer confidence, in rural areas and small towns of the country.
The Indian Sagar Islands project (implemented by West Bengal Renewable Energy
Development Agency or WBREDA) have proven the above reliability, where eight (8) nos of
Mini-Grid Solar PV Stations are in hybrid operation with diesel engine-gensets in the 15 - 20
kVA range.
While providing an optimum mix of power from renewable and fossil sources, obviously
most from the RE-source, in case of any emergency, long durations of non-availability of
system trouble-shooting, the diesel backup jumps over.
6. Project Description
6.1 Project Goal
The Project has the goal of self-sustained development in the electricity sector, improved
quality and increased coverage. It is expected that the project would contribute to
improvement of the living standard of the people of Bangladesh through provision of a vital
energy source at affordable prices.
6.2 Project Objectives
Project has twin development objectives of generating electricity from two renewable sources
- solar and wind energy, backed up by diesel for reliability and reduction of GHGs.
Electricity generation is considered very important in the context of Bangladesh, given the
level of energy use and available source of fossil energy.
The reduction of GHG will call forth investment benefits under CDM. Saving of the nearest
fuel - diesel oil, which is import based will allow savings in foreign exchange, apart from
abatement of GHGs from environmental considerations. Although the first Hybrid System
proposed is small, its size is typical and ideal for small, decentralized power generation.
Hence, the project, once successfully implemented to demonstrate the functionability of a
REHPP, has an enormous potential for replication all over Bangladesh for supplying power to
coastal and off-shore island areas, where both solar and wind energy are available as
renewable sources. Once such a dissemination of similar REHPPs is achieved on a wide
scale, the ‘Carbon’ benefits and the associated socioeconomic and other benefits will
multiply many folds.
23
6.3 Poverty Reduction through the Project
In Bangladesh, poverty is acute and widespread by any indicator of measurement and the role
of electricity in addressing the challenge of poverty reduction is crucial. The constitution of
Bangladesh stipulates electrification as one of the obligations of the state, to which its citizen
has a right. With this constitutional mandate in mind, successive governments with assistance
and support from the donors have placed electrification high on the agenda of reforms.
6.4 Technology Transfer

Although electricity is being generated in the country since the later half of the nineteenth
century, this has always been from the conventional sources, being either from solid, liquid
and/or gaseous hydrocarbons. Only since less than a decade (1995/96) electricity production
on any mentionable scale was initiated through Solar PV projects of REB, NGOs and the
private sector. The total generation of electricity in Bangladesh from Solar PV is, still less
than 2 Megawatts. The least has been done in generating and supplying electricity from Wind
energy, using turbines, excepting some isolated field research by a handful of NGOs, private
sector and in one instance also by a Government department - LGED.
Almost no work has yet been done in the area of RE-fossil Hybrid Power Plants. Therefore
the proposed project is expected to contribute to technology transfer in this new area.
6.5 Project Location
The project has the potential to be located at any one of the following Wind energy rich sites
in the coastal belt and the following offshore islands of Bangladesh: (i) Charfasson, (ii)
Kutubdia, (iii) Kuakata, (iv) Hatia, and (v) Swandip.
Energy generation data (obtained in kWh), using Nordex N29/250 Wind Turbine over a one-year
period has indicated that Kuakata and Charfasson have the best Wind energy availability.
Recently, Charfasson has been connected to Bhola HSD based power station with an overall
efficiency of 22.85%. Supply is intermittent and irregular with frequent fluctuation of voltage.
Charfasson is proposed as the site for the REHPP. Replication of this plant at other coastal
places is expected to take place on successful completion and operation of this plant and also
on demand of similar/higher capacity plants.
6.6 Project Partners

The “Private Sector Power Generation Policy” of Bangladesh allow independent power
producers (IPPs) to produce and sell electric power to the grid, although through a transparent
competitive bidding procedure. However, as per the “Small Power Generation Policy” (SPG)
of Bangladesh, which a supplementary policy later incorporated to promote generation of small
decentralized power to encourage private entrepreneurs set up small scale decentralized power
plants, using which they can sell electricity to any consumer excepting to the GOB. Later, the
decision to permit the ‘free capacity’ has been extended to up to 20 MW.
However, since the project will use a part of the existing BPDB (Diesel powered) Grid
system, after its proper isolation from the existing generation system and the interconnection
with the proposed REHPP, BPDB’s involvement and a bidding process will be required.
Given that this proposed system is first of its kind in Bangladesh and involves an Investment
below about Tk. 20 million, the project could be established in BOO or BOOT system as in
case of IPPs. Moreover, the combination of CDM in the project is likely to encourage foreign
24
investment as per the provisions of the “Kyoto Protocol”. Financial commitment is likely to be
finalized at the time of soliciting the bids from interested parties. The total Investment Cost of
the project, including a working capital of Tk 0.42 million is estimated at 17.93 million Taka.
6.7 Project Outputs

The project is likely to produce 476 kWh (Gross) electricity annually. Given by the design of
the RE (2 Wind 50 kW + Solar 25 kW), diesel (20 kW) unit plus a Battery Bank (200 kWh
capacity) and the microprocessor-operated logical control system to draw optimum power
from each source - Wind, PV, diesel and Storage Battery Bank. When max wind is available,
the system will draw peak power from the wind turbine, reducing the power draw from SPV.
In case of very low wind (below cut-in speed), it will draw more from SPV and the battery
and only in case of very low availability of both REs the diesel Engine-Genset will be
switched on through a control-operated relay switch.
6.8 Possible Institutional Ways to Cover Project Risks
For covering risk, the developer might arrange guarantees from an Export Credit Agency or
International Financing Institutions or arrange partial risk guarantee from an international
agency. In order to qualify for either export credit financing, or any other form of IFI
financing, following conditions would need to be satisfied.
• Internal rate of return should be at least 14% or greater;
• Long-term (at least 15 years) diesel supply contract with pricing formulas that guarantee
that the spread between electricity and diesel will remain essentially unchanged
• Long term electricity purchase agreements with settlements in US Dollars or in a
currency which is guaranteed convertible at a specified dollar yield;
• At least 30% of the capital requirement in cash equity
• Political risk insurance
• Firm fixed price competitively bid engineering. Procurement and construction contracts.
Also risks may be shared as follows:
Owner/Operator
• Construction and operation cost overruns
• Delay in completion -- and so penalty
• Performance guarantees -- fuel utilization (efficiency), capacity availability
• Statutory regulations -- environmental limits
Utility
• Force Majure due to Utility/ Government
• Inflation
• Market down trend
• Foreign exchange risk
Government
• Foreign exchange remittance
• Convertibility of foreign exchange
• Utility obligation
• Tax incentives
• Damage for non-performance
25
6.9 Likely Fiscal Incentives for the Project
Different fiscal incentives currently allowable to foreign investors in accordance with the
country’s industrial policy and foreign investment policy would also be available to the
sponsors for the proposed project. The private investors would generally expect the following
incentives (see Country Study report):
• Guaranteed rate of return on equity
• Reduction/waiver of customs duty on import of machinery
• Tax holiday
• Guarantee of payment for power purchased by utility
• Guarantee of foreign exchange remittance
• Guarantee of convertibility of foreign exchange
6.10 Possible Financing Arrangements of the Project
This hybrid plant, being primarily a renewable project, is likely to receive following
assistance:
GOB is a signatory to the Climate Change Convention. GOB may establish a Global
Environmental Facility (GEF) grant fund to support renewable energy projects in
Bangladesh
GOB may allocate fund to few local banks for project as well as micro financing part
of the capital cost of Renewable Energy Project.
GOB may facilitate the creation and encouragement of corporate debt securities
market for local financing of renewable energy project development.
If CDM-able, funds may be arranged through CERs.
6.11 Facilitating Agencies of the Project

Power Cell of the MPEMR is assigned the responsibility of articulating, co-ordination,
promoting renewable energy projects. In this connection, the responsibility of the Power Cell
include:
• Financial and technical analysis of Project.
• Identifying and assessing the potential of establishment of renewable energy projects
which could make a significant contribution to Bangladesh’s energy needs both in
near term and long term.
• Recommending financing and delivery mechanisms to increase the affordability of
renewable energy systems for the rural poor.
• Promoting NGO and private sectors in development of renewable energy and
suggesting strengthening the institutional requirements for successful implementation
of projects.
• Recommending research and development and required training facilities for
technology transfer needed to support commercialization of renewable Energy
technology.
• Representing GOB in international institutions and implementing all policy and
recommending measures to be adopted.
• Identifying the type and extent of support needed from international sources.
26
• Considering existing network and planned infrastructure of different utilities before
issuance of consents/licensees for establishment of renewable Energy projects.
• Resolving issues pertaining to the jurisdiction of geographical area of different
utilities should there arise any, upon approval of the MPEMR.
6.12 Likely Basis of Tariff Structure Determination
In line with other Private Sector Power Projects (like IPPs), the tariff structure for the Project
in line with similar electricity generating units would consist of the following:
Debt service, return on equity, fixed and variable operation and maintenance cost,
insurance costs, money escalation costs, exchange fluctuations etc.
Payment will be linked to a certain level of availability of power which will be made
available at the time of PPA signing
Tariff payment will be made in local currency, but PPA may be made in US
cents/kWh
Renewable energy private sponsors will provide year-wise tariff profile over the
contract period in a manner that will match their annual debt service requirements
Usually, two-part tariff is proposed, comprising of a capacity charge, which is
designed to recover the capital or fixed costs of the plant and an energy charge, which
would vary with the net amount of energy in kWh actually delivered by the power
producer to the purchasing utility.
At present, MPEMR, GOB regulates the tariff and it does not reflect the cost of production.
6.13 Possible Ways to Selection of Firm in the Project
Current Government policy on selection of firms allows two approaches - Unsolicited

Proposals and Solicited Proposals. Under Unsolicited Proposals, Developers approach
Government/ Utility with a proposal to build a power plant and proposes the location, size,
fuel types etc. Under Solicited Proposals, Government/Utility calls for competitive bid for
specific technology, size, location and fuel for plant. Both the options have advantages and
disadvantages. The main advantage of the option of unsolicited proposals would typically be
quicker bidding process while the disadvantages would be more complicated evaluation
process and validity. Also seriousness of bids could be more often difficult to determine. The
main advantages of solicited bids would be the possibility of least cost supply which is
essential to ensure that scarce and costly capital that are raised through private sources are
utilized in an optimal manner. Solicited proposals can be obtained by calling for competitive
bids for development of projects for specific and proven technology, size and location. The
structured Requests for Proposals (RFPs) should contain the following:
• Invitations of applicants
• Information for applicants
• Instruction to applicants
• Security/package and financial structure
• Tariff structure
• Applicants’ proposals and supportive data
• Performance specifications and drawings
• Draft Implementation Agreement
27
• Draft Power Purchase Agreement (PPA)
• Draft Fuel Supply Agreement
• Draft Land Conveyance Agreement
• Site soils investigation data
Project structures whether BOO or BOOT or its variations would affect Power Purchase
Agreement (PPA). PPA would also depend on technical aspects like system load demand
pattern, project type, project efficiency, transmission arrangements and environmental
aspects. Finally, PPA would depend on financing aspects including type and quantum of
financing to be attracted, creditworthiness of the country and the sector.
7. Emission Reduction, Monitoring & Verification Plan

7.1 Baseline of Electricity Generation in Bangladesh
The baseline is the most probable future development in the absence of the project activity.
Bangladesh consumes considerable amount of oil for power generation. The proposed project
comprises replacement of oil-based plants/installation with new plants based on solar-wind-
Diesel hybrid system. The progress of power plant installation in Bangladesh by BPDB and IPP
from 1991-92 to 2002-2003 is given in Table 6 and the trend up to 2019 shown in Figure 1. The
average yearly increase over the period is 7.6% (based on 2400 MW in 1991-92). This the
baseline of electricity generation, Of the projected generation, only 300 MW (Barapukuria) will
be based on coal and the rest on natural gas i.e. during the project period only 11.7% will come
from non-natural gas and the rest (88.3%) from natural gas. In the year 2000-01, 84% of
generation was based on natural gas. Baseline for power with BPDB and IPP is therefore natural
gas with small contribution from coal and oil if proliferation of oil-based power plants can be
checked (see Figure 2, Page 29)
Table 6: Progress of installed capacity of power plant in Bangladesh

over the period 1991/92 – 2001/02
Year Installed Capacity (MW)

1991-92 2398
1992-93 2608
1993-94 2608
1994-95 2908
1995-96 2908
1996-97 2908
1997-98 3091
1998-99 3611
1999-00 3716
2000-01 4005
2001-02 4230
2002-03 4680
Source: PDB Annual Report, 2003
28
Figure 1: Progress of power plant installation in Bangladesh
over 91/92-2001/02 and projection up to 2019
8000
y = 178.74x + 2108.6
7000 R2 = 0.9366
6000
5000
Megawatt
Series1
4000 Linear (Series1)
Linear (Series1)
3000
2000
1000
0
19 -92
19 -93
19 -94
19 -95
19 -96
19 -97
19 -98
99 99
20 -01
20 -02
20 -03
20 -04
20 -05
20 -06
20 -07
20 -08
20 -09
20 -10
20 -11
20 -12
20 -13
20 -14
20 -15
20 -16
20 -17
20 -18
9
20 00
-1
19 98-
0
91
92
93
94
95
96
97
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
-2
19
Year
It is to be noted that Table 6 and Figure 1 show the trend of power generation as done by
BPDB and IPP. In addition to BPDB and IPP generation, there are captive generators of 2480
MVA capacity in industries, commercial concerns and private sectors which produced 2000
GWh of electricity based on oil in 2001-02. According to T.A. Chowdhury (Chowdhury
2004), since GOB permission for the import of captive generators in 1997, there has been a
booming business in the installation of captive generators and consequently, capacity of oil-
based generation increased from 500 MW of BPDB in 1996 to 2500 MW in 2002. Projection
of oil-based generation is shown in Table 7 and Figure 2 (NEP, 1996).
Table 7: Projection of total power generation and that based on oil up to 2020
Year Total power generation (TWh) Power generation based on oil (TWh)
1990 8.207 0.122
1995 12.28 0.98
2000 18.971 1.941
2005 28.06 10.06
2010 39.75 21.45
2015 59.858 41.558
2020 92.402 74.102
Source: NEP, 1996
29
Figure 2: Projection of total power generation (series 1) and that based on oil (series 2).
100
90
80
70
Power generation(TWh)
60
Series1
50
Series2
40
30
20
10
0
1990 1995 2000 2005 2010 2015 2020
Year
7.2 Baseline of GHG emission connected with the project

The proposed project envisages setting up a renewable energy hybrid power plant (REHPP),
comprising of utilization of renewable energy sources - wind and solar PV, with a minimum
power input from a standard diesel-based generator set.
As detailed under Chapters 5 and 6, the better availability of wind in the coastal districts of
Bangladesh, e.g. at Charfasson and in off-shore islands, like Kutubdia, Hatia, Swandip, St.
Martins Island, qualify them as most potential sites to set up the proposed REHPP. Presently,
these locations, which are off-grid areas, are being powered by isolated diesel (subsidized)
Generating sets. As stated before, Charfasson Upazilla HQ has been connected to Bhola HSD
based- power station.
7.2.1 CO2 Emission from 100% Diesel Based Plant of Proposed ( 476 MWh/yr) Capacity
The calculation of the baseline CO2 Emission has, therefore, been done for a 0.476 GWh
(subsidized diesel fuel based) operation.
• Solar PV 25 kW, 2000 hrs. = 50 MWh
• Two 50 kW wind turbine = 286 MWh (@ 143 MWh /turbine)
• 20 kW diesel genset = 140 MWh (maximum 7000 hrs operation)
Total yearly generation = 476 MWh = 0.476 GWh
476,000 kWh/Yr. Or 0.476 GWh/Yr., which is equal to 1.714 TJ/Year

With 22% efficiency of diesel generators energy consumed with diesel is equal to
1.714/0.22 = 7.79 TJ/yr
At 74.06 tonne CO2 emission per TJ (for diesel), this equates to a CO2 Emission of:
7.79 TJ/Yr. x 74.06 t CO2 / TJ = 576.93 tonnes CO2 /Year
Cumulative production of CO2 over the 14-year period in the absence of the project activity is
shown in Table 8 and Figure 3 (upper curve)
30
Table 8: Yearly and cumulative production of CO2
in the absence of the project activity
Yearly production Cumulative production
Year (tonnes) (tonnes)
2007 577 577
2008 577 1154
2009 577 1731
2010 577 2308
2011 577 2885
2012 577 3462
2013 577 4039
2014 577 4616
2015 577 5193
2016 577 5770
2017 577 6347
2018 577 6924
2019 577 7501
2020 577 8078
Figure 3: Cumulative production of CO2 in the absence (series 1)

and in the presence of the project activity
9000
8000
7000
6000
CO2(tonnes)
5000
Series1
Series2
4000
3000
2000
1000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Financial year
7.2.2 CO2 Emission in Case of the Project (RE+Diesel) Operation

The CO2 Emission in case of the proposed REHPP project has been calculated on the basis of
the average mix of Wind-PV-Diesel operation 60%: 10%: 30%, (see above for details).
The REHPP Project operation with the average (30%) input from diesel would mean that
only 30% of the above base-line emission would be made in case of the project:
GHG Emission in case of REHPP = 0.3 x 577 tonnes of CO2 = 173 t CO2 / Year
31
Cumulative production of CO2 over the project period in the presence of the project activity
is shown in Table 9 and Figure 3 (lower curve)
Table 9: Cumulative production of CO2 in the presence of the project activity
Year Yearly production (tonnes) Cumulative production (tonnes)

2007 173 173
2008 173 346
2009 173 519
2010 173 692
2011 173 865
2012 173 1038
2013 173 1211
2014 173 1384
2015 173 1557
2016 173 1730
2017 173 1903
2018 173 2076
2019 173 2249
2020 173 2422
7.3 The Proposed Project
As mentioned earlier, in Chapters 5 and 6, the proposed project comprises of a Renewable

Energy + diesel Hybrid Power Plant (REHPP), which will derive a total average of about
70% of its energy from the renewable sources. The expected split of the renewable and fossil
(Diesel-based) electrical energy generations, on an annual average basis, is expected to be as
follows:
Wind : average 60% / Year
Solar PV : average 10% / Year
Diesel : average 30% / Year
A Deep Cycle Storage Battery Bank (200 kWh Capacity) will also be a part of the total
REHPP system which, along with the wind, PV and diesel generated energy, will ensure a
steady and reliable electricity supply to consumers and will cover gaps of availability of
wind and solar energies, i.e. even in total absence of wind and PV inputs.
A good optimization between availability of wind velocities and availability of solar energy
in Bangladesh can be reached, if wind and solar PV Generators are coupled with a diesel
Generator to make a RE-Hybrid System. As proposed such hybrid systems, by experience of
other countries (e.g. India), have demonstrated a high degree of system reliability and
hence better customer satisfaction and confidence on renewable energy technologies.
The REHPP has been designed to provide continuous power supply to a Rural ‘Mini-Grid’,
with a Capacity to deliver a minimum of 20 kWh per hour with no contribution from wind
and PV. With an average typical rural load of about 100 W / household, this would mean 200
Nos. of connected rural consumers.
32
As presented under Section 7.1.4 the proposed REHPP will save about (577 – 173) = 404 t
CO2 per Year, with only 30% diesel input. Cumulative reduction of CO2 over the project
period is shown in Table 10 and Figure 4.
Table 10: Cumulative reduction of CO2

in the presence of the project activity
Year Yearly reduction (tonnes) Cumulative reduction (tonnes)

2007 404 404
2008 404 808
2009 404 1212
2010 404 1616
2011 404 2020
2012 404 2424
2013 404 2828
2014 404 3232
2015 404 3636
2016 404 4040
2017 404 4444
2018 404 4848
2019 404 5252
2020 404 5656
Figure 4: Cumulative reduction of CO2 over the project period

in the presence of the project activity
6000
5000
4000
CO2(tonnes)
3000
Series1
2000
1000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Financial year
33
Flowchart – 1
Flowchart with Calculation for Yearly GHG (CO2) Release Attendant on

Production of 476 MWh of Electricity Based on diesel Oil (without Project
Activity)
476 MWh based on diesel oil
Energy consumed for production of 476 MWh by burning diesel oil

with conversion efficiency of 22%
= 476 × 106 Wh × 3600 sec/hr ×0.22
1
…. = 7.79 TJ
CO2 production attendant on consumption of 7.79 TJ of diesel oil

@ 74.06 tonnes of CO2 / TJ
= 74.06 tonnes/TJ × 7.79 TJ = 577 tonnes
34
Flowchart – 2
Flowchart with Calculation for Yearly GHG (CO2) Release Attendant on

Production of 476 MWh with 30% backup from diesel oil (with the Project
Activity)
Electricity from diesel in the hybrid plant = 476÷ 3.33 = 142.8 MWh
142.8 MWh based on diesel oil
Energy consumed for production of 142.8 MWh by burning diesel

oil with conversion efficiency of 22%
= 142.8 × 106 Wh × 3600 sec/hr ×0.22
1
.. = 2.33 TJ
CO2 production attendant on consumption of 2.33 TJ of diesel oil

@ 74.06 tonnes of CO2 / TJ
= 74.06 tonnes/TJ × 2.33 TJ = 173 tonnes
7.4 Factors Impacting the Baseline

Factors impacting the baseline emissions are national program of BPDB and also the recent
recommendations of the of the Infrastructure Investment Facilitation Centre (IIFC, funded by
the World Bank and also by the Economic Relations Divisions, ERD, Government of
Bangladesh) to lease-out the Electricity Generation and Distribution operation to the private
sector (under Remote Area Power System or ‘RAPS’ Project).
IIFC, BPDB and REB have programs, which are considering bringing small towns and
remote areas - both on-grid and off-grid areas, under a RAPS programme, which may
gradually be leased out to IPPs.
Two on-grid remote area Grids - Hatibanda (Lalmonirhat) and Satkhira-Asasuni (south-west
zone) are being seriously considered for privatization. A Pre-qualification of the potential
Grid / Power Generation operators in these areas have been made. The next program could be
a number of off-grid remote areas.
35
The baseline scenario may change if and when these plans are materialized. This pre-
feasibility, however, will help institutions like IIFC, BPDB, REB and also future IPPs select
systems, based on optimum mix of energy sources for RAPS, as eventually the IPPs, after
they have been leased out a remote area for electricity supply, will be allowed a free choice
by the Government to decide on their electricity generation sources, Tariffs and Investments
to improve the RAPS Distribution Systems, which will be leased out to them.
7.5 Crediting Period

The project is opting for a crediting period of 14 years (two 7-Year terms), considering the
replacement of the wind turbines generator sets, diesel sets and storage batteries. It may be
mentioned that in a Wind-PV-Diesel Hybrid System, where the major load is covered by the
wind source, PV and also diesel, the life of the Deep Cycle Batteries, which virtually bridge
small gaps, is expected to be much higher. However, cost of one-time replacement has been
included in the financial and economic analyses.
7.6 Project Boundaries & System Boundaries

The project boundaries are limited to the geographic boundaries of the remote locations in
coastal and offshore Island small towns and villages (rural homesteads), where the proposed
REHPP will be set up. The following project activities and emissions are within the project
boundaries:
1. Power generation by wind turbine close to the REHPP Building (Shed)
2. Power generation using solar photovoltaic on the rooftop of the power plant building itself
3. Charging of the storage battery bank inside the REHPP
4. Operation of the diesel engine-genset, as and when necessary
System Boundaries include national grid (PDB and/or REB and also IPPs), since emission
reduction comes through displacement of grid electricity.
7.7 Project Additionality

A project is considered environmentally additional if it reduced emissions against the
baseline. Emission additionality is shown in Flowcharts - 1, 2 and 3.
7.8 Indirect Emission Effects

Indirect emissions are those, which are caused by the project outside the baseline and project
boundaries. In case of the proposed REHPP system no such leakages are identified.
Emissions occurring during construction period are insignificant. The REHPP station’s own
electricity consumption and the connected emission have been considered within the total
CO2 emission from the project. The station lighting will also take care of the emissions
during maintenance works and has been considered in the calculations.
7.9 Additional Environment & Social Benefits

As per requirement of the “Kyoto Protocol” a CDM Project must contribute to the sustainable
development of the host country, Necessary arrangements will, therefore, be made to
maximize local benefits, based on the general concept of environment projects to “think
globally and act locally”.
36
The project will contribute to a sustainable development of Bangladesh through a multitude
of socio-economic and institutional improvement benefits as shown in Table 11.
Table 11: Project Benefits
Benefit Aspects Details - How achieved

01. Local Environmental - Local Air Quality improvement (larger scale diesel Plant operation
Benefits will be reduced proportionate to the contribution of renewable
energy used. (Wind + Solar + Storage Battery System). A diesel
contribution (30%) will reduce the present full-scale diesel operation
and related ‘Carbon’ Emissions.
- A number of Households currently meeting their lighting needs
with kerosene will switch over to electricity, which will also
contribute to air quality improvements and reduce fire-hazards.
02. Socio-economic Benefits - The project will improve the overall quality of life of people
living in the project area who will enjoy reliable electricity supply
and related other socio-economic benefits, like longer study hours
getting connected to TV and other media/communications with
the outside areas, including global exposures.
- Being Central Small Rural Power Plant, the direct employment
generation will be limited only to a few plant operators and
maintenance personnel, including a Plant In-Charge. However,
due to the enhancement of quality of life and facilitation of
economic activities, the indirect employment generation (increase
of small rural incomes through Handicrafts, Weaving and other
production activities will be much larger)
03. Capacity Building - This will be the first Renewable-Fossil Hybrid Power Plant in
Bangladesh (an REHPP ‘Flagship’ project), which not only
qualifies as a CDM Project, but will also help in capacity building
related to such projects in future. In fact, the success of this
relatively smaller capacity ‘Flag-ship Project’ in the proposed
location - Charfasson will lead to its scale-up with associated
design change and further dissemination and will lead to
gradual replacement of typical BPDB operated full-scale diesel
Power Plants in Small Towns/Rural Areas/Off-shore Islands.
04. Technology Transfer - The REHPP will be a combination of 3 independent and globally
proven and also regionally and locally tested Technologies (PV
and diesel), combined as a Hybrid to strike a good balance
between environmental benefits and also operational costs. Its
success, as mentioned, will lead to its scale-up and dissemination
and hence effect a transfer of technology on a larger scale in
Bangladesh, where decentralized power plants (50 kW - 10 MW
range) are considered to be ideal, being ‘Fast Track’ Plants with a
high degree of reliability for continuous electricity supply, minus
the current negative experience with huge Grid “System Losses”
and slow implementation of large Central Plants.
05. Host Country Criteria - GoB is still in the process of defining requirements of CDM projects
06. Government Priority - Being an energy and especially renewable energy project this
Project is in the priority list of the Government (under MOEF).
07. EIA - EIA for the project will be carried out as per Environmental
Legislation of the country.
37
7.10 Monitoring & Verification Plan - Monitoring of Project Performance
It is a requirement of the CDM Projects that emission reductions are proved through the
development and implementation of a monitoring plan that proves the objective evidence that
emissions have been avoided. It is equally important that emission reductions are
demonstrated in a transparent, complete, consistent, comparable and accurate manner. It is
the responsibility of the project participant to maintain appropriate records and documents to
generate relevant and sufficient data/information required for calculation of GHG emission
reductions. Given the baseline emission, the expected reductions of GHGs through the
REHPP will depend on the share (contributions) of renewable energies - wind and solar PV +
storage battery bank to the total system generation, with minimum inputs from the diesel
generator.
The hybrid system will be provided with Electronic (Microprocessor-based) Controls, which
will sense, control/optimize and feed the usable alternating current (A.C.) electricity (after
D.C - AC Inverters from the battery storage), available from each energy source (i.e. from
wind, solar PV, storage battery bank and diesel plant) through individual Energy (Watt)-
metering (measurements) of the Inputs from such individual sources, i.e. from wind, solar
PV, storage battery.
A final Grid Supply (Watt) Meter will be used to measure the Net Generation of Electricity
(Gross minus the REHPP Station Use, i.e. for controls, lighting, fans etc.).
Monitoring of Project Performance
Verification is the periodic review and ex-post determination of the monitored GHG
emissions reductions that have occurred as a result of the CDM project. The designated
operational entity (DoE) verifies the data collected by the project developer according to the
monitoring plan. The verification process confirms the total number of CERs (Certified
Emission Reductions) resulting from the project during a specific period of time. The
frequency of verification may be every year or every two years as agreed upon by the project
participants and the DoE. Based on verification, the DoE will issue CERs that during the
specified period the project has achieved the reduction of GHG emissions, in compliance
with all relevant criteria. The DoE at the outset of the project will validate the project design
document and the key document for the project. The validation process confirms that all the
information furnished as assumptions made in the project design document (PDD) are
accurate and reasonable. The validation of the project design document would lead to its
acceptance by CDM Executive Board, which is a precondition for CERs.
Data to be Monitored
In order to measure the quantity of GHG reduction through the project and assess the impact
in terms of sustainable socio-economic development of the country, a set of variables /
indicators will be regularly monitored, recorded and documented by the project participant.
The monitored data/information will be verified by DoE, contracted by the project
participant. The DoE would issue CERs based on thorough scrutiny of the relevant
data/information maintained by the participant.
It is suggested that the project operator will collect the following data / indicators for
monitoring emission reductions under the project:
38
Sl Data type Data Measured Recording Proportion of How Data How long will
# Unit Or Frequency Data to be will be the arc- chive
calculated monitored archived be kept
01. Wind Velocity m/sec. Measured Continuous 100% Electronic Two years
Measurement (Day & (Day & N) Spreadsheet after project
Night) completion
02. Solar Irrad. W/m2 Measured Continuous 100% Summer Electronic Two years
Measurement (Day & Monsoon, Spr. Sheet after project
Night) Winter completion
- all Seasons
03. Diesel Fuel input litres / Measured Only when 100% of all ,, Two years
day Genset fuel after project
springs to consumption completion
action data
04. Electricity KWh Measured Continuous 100% of data ,, ,,
produced from +
Solar PV Unit Cumulative
produced from +
wind Genset Cumulative
produced from +
diesel Cumulative
07. Diesel Genset Hours Measured Continuous 100% of data ,, ,,
Hours of Oper. +
Cumulative
08. Battery Bank KWh Measured Continuous 100% of data ,, ,,
Electricity Input +
Cumulative
09. Gross Electricity KWh Measured Continuous 100% of data ,, ,,
produced from total +
REHPP Cumulative
10. Net Electricity KWh Measured Continuous 100% of data ,, ,,
supplied to Busbar +
(after Station Use) Cumulative
Quality Assurance / Quality Control
The monitoring system will ensure strict quality standards and quality control of data to be
generated and monitored. The measurement equipment to be used like oil, diesel-running timer,
electric meters and other apparatus will be regularly calibrated as per international standards.
Project Approval by Designated National Authority (DNA)
It is a requirement that the relevant authority in the host country approves CDM project
document. In Bangladesh, the Designated National Authority (DNA) has been constituted for
clearing and endorsement of CDM project. The DNA is a three-tier body comprising National
CDM Board, National CDM Committee and CDM Clearing house/ secretariat. The CDM
project document is submitted to CDM clearing house/secretariat which scrutinizes and
assesses the document and if necessary asks for its revision. If the clearing house/secretariat
is satisfied with the content of document, it is forwarded to CDM committee for approval and
finally to CDM Board for endorsement. The structure of DNA in Bangladesh is as follows.
39
Structure of DNA of Bangladesh
National Designated Authority
CDM Board
For endorsement
National CDM
Committee
For approval
Project
Project
Project Concept
Concept submitted Endorsement
Concept
paper/
CDM Clearing Letter for
paper
Full Project
paper
Document House/Secretariat Validation
Full
FullProject
Project
Develop
Project Comments and

Developer/Owner Request for
Revision
8. Financial Analysis of the Project

Financial analysis was done in accordance with the ADB’s guideline for preparation and
presentation of Financial Analysis. The financial analysis was carried out to examine the financial
viability of the project through calculation of the financial rate of return (FIRR). All constituent
costs and benefits of the project are included in the analysis. The FIRR is based on the investment
costs and stream of cost and benefits spread over the life of the project (14 years).
8.1 Project Cost (Estimated)
A 476 MWh/ year solar-wind-diesel system will be set up at Charfasson, a coastal sub-district
where both wind and sunshine are available. During Monsoon when sunshine is less, wind is
available in plenty. Two 50 kW wind turbines, 25 kWp PV panels, two 20 kW diesel gensets and
the required accessories will be procured. The suppliers provide costs.
40
A. Investment Cost (million Taka)
i) Two 25 KVA gensets including 4 times overhaul ..................................... 0.946

ii) Two 50 kW wind turbine set ....................................................................... 5.85
iii) 25 kWp PV panels....................................................................................... 4.387
iv) Land and site development ......................................................................... 1.90
iii) Building ...................................................................................................... 0.46
iv) Battery, inverter etc including one-time replacement ................................. 3.12
v) Physical contingency (5%) ........................................................................ 0.833
--------------------------------------------------------------------------------------------------
Total Investment Cost .............................................................................. 17.496
B. Operation and maintenance cost
i) Diesel cost for 53,000 litres (@ Tk. 20 /litre) ............................................ 1.06

ii) Manpower cost ........................................................................................... 0.29
iii) Repair and maintenance cost @ Tk 0.25 ml./GWh .................................... 0.12
iv) Lubricants ................................................................................................... 0.06
--------------------------------------------------------------------------------------------------
Total operation & maintenance cost .......................................................... 1.53
C. Revenue
i) Gross generation of electricity 0.476 GWh
ii) Electricity sale (95%) 0.452 GWh
ii) Revenue (@ 8.00 million Tk./GWh) 3.616 million Tk.
D. Gross profit per year

Revenue – Total operation and maintenance cost
= 3.616 – 1.53 = 2.086 million Tk.
8.2 Financial Analysis.

In the analysis of costs and benefits, an exchange rate of 58.5 Taka = 1 US$ (2004) has been
used for correct valuation at a later date.. A fourteen-year financial life has been used though
actual life could be higher than 14 years. The loan term is also assumed 14 years excluding
the construction period with 10% nominal rate of interest. Working capital is equity financed.
Among the tangible output of the project, electricity is the only saleable product. Diesel oil is
the major input.
Financial results show that the FIRR is 6.47%, NPV is –0.83 million Taka and B/C ratio is
0.82 (Annex 3a) The project is therefore not viable in the base case with Tk.8.00/kWh as
tariff. Price at the break-even point is Tk. 8.31/kWh; whereas the national grid price is Tk.
2.50/kWh. Subsidy and CDM may help bridge this gap at the beginning. Once the users get
accustomed to the comfort of electricity, they are expected to agree to pay the higher price.
The tariff should be increased to the production cost gradually.
(1) For a decrease in revenue by 15%, FIRR reduces to -32.53%, NPV (@ 10% interest)
to –4.46 million Taka and B/C to 0.01 (Annex 3b).
41
(2) For an increase in project cost by 15%, FIRR reduces to -3.07%, NPV to –3.87
million Taka and B/C to 0.41 (Annex 3c).
Financial analysis was recast incorporating carbon dioxide credit price. With CO2 credit
price of US$ 10.00 i.e. Tk. 585.00 per tonne of CO2, IRR, NPV and B/C are as under (Annex
4a):
IRR = 12.97%
B/C = 1.17
revenue (Annex 4b)
The project therefore turns viable if the CO2 credit price of US$ 10.00 per tonne is
incorporated. But a possible 15% fall in revenue or 15% increase in investment cost makes
the project unviable.
9. Economic Analysis
Economic analysis was done in accordance with the ADB guidelines for the economic
analysis of projects. The economic analysis was carried out to reassess the economic viability
of the project through calculation of economic rate of return (EIRR). All constituent costs and
benefits of the projects are included in the analysis. The EIRR is based on the investment cost
and the stream of costs and benefits spread over the life of the project.
The quantifiable benefits of the project are estimated in terms of gross margin e.g. by
subtracting variable cost like diesel oil and other materials, salaries and wages cost, other cost
etc. from gross revenue. All costs and benefits are expressed at 2003 domestic price
numeraire. A shadow exchange rate factor (SERF) of 1.11 has been used to convert non-
tradable values to this numeraire. A conversion factor (CF) of 0.88 has been used to adjust
salaries and wages to economic value. A zero residual value has been assumed for project
machinery and equipment. A constant exchange rate of Taka 58.5 = 1 US $ (2004) has been
used to convert constant dollar values to their local currency equivalent. A fourteen-year
economic life has been used, though actual life could be higher than 14 years. The loan term
is assumed 14 years excluding the construction period with 10% nominal rate of interest.
Working capital is equity financed.
Among the tangible output of the project, electricity is the only saleable product. Oil is the
major input. In case of diesel oil and lubricants, as they are imported items, import parity
prices are used. Other costs like wages and salaries, etc. are multiplied by the CF.
Description of machineries and equipment and basis of cost has been given earlier chapters
(Chapters – 6, 8).
42
Revenue estimates from electricity sales are calculated on the basis of recent figures related
to electricity production by diesel genset. Oil price is the current bulk sale price (Tk. 20/litre)
Economic results show that EIRR is 7.54%, NPV is –0.65 million Tk. and B/C ratio is 0.87
(Annex 5a) and as such the economic analysis does not show any significant improvement
when compared with the financial analysis. Sensitivity analysis has been given in Annex-5b
and Annex-5c:
. In view of the results above, the proposed project could be established if this could be
combined with CDM project as per the provisions of the Kyoto Protocol.
10. Stakeholders’ Meeting

A stakeholders’ meeting on the three pre-feasibility studies viz. (1) Cogeneration in Sugar
Industries, (2) Solar-Wind-Diesel Hybrid for Power Generator in Small Towns and Villages
and (3) Fuel Switching from Oil to Gas was held on 26 July 2004 from 10:00 A.M. to 02:00
P.M. in the LGED Bhaban, Dhaka 118Participants connected with renewable energy and
energy efficiency representing different Government, NGO and private sectors attended the
meeting. The meeting was chaired by Dr. Saleemul Huq, Chairman of BCAS Board and co-
chaired by Dr. A. Atiq Rahman, Executive Director of BCAS. Dr. M. Eusuf, NTE Team
Leader, presented a keynote paper describing the technical aspects of the three projects.
Social, financial and economic aspects were jointly prepared by Dr. Saleh Ahmed
Chowdhury and Mr. Khandaker Mainuddin and presented by the lather.
A panel of three discussants initiated discussion. They were: (1) Mr. B.D. Rahmatullah,
Director, Power Cell, (2) Dr. Eng. Khursheedul Islam, President, Bangladesh Renewable
Energy Management and Development Co (BREMADCO) and (3) Prof. M. Ibrahim,
Executive Director, Centre for Mass Education in Science.
Presentations of Dr. Eusuf and Mr. Mainuddin related to this pre-feasibility study cover the
salient points in chapters 2 to 9. The panelists emphasized on the necessity of the hybrid
system because of the insufficient supply of electricity by PV during Monsoon and seasonal
and site-specific velocity of wind in Bangladesh.
There was a lively discussion on all the three topics. Discussion on solar-wind-Diesel hybrid
was centered on the cost of electricity (Taka 5.00 per kWh) and the present status of stand-
alone PV system. The following recommendations were adopted unanimously.
1. Because of low insolation and high wind speed in Monsoon, a solar-wind-hybrid
backed up by a diesel generator is a necessity for the sake of uninterrupted supply.
2. A solar-wind-Diesel hybrid will be installed at Charfasson, a coastal sub-district
where wind velocity was found to be reasonable high.
3. A study will be undertaken to find out the present status of solar home systems (SHS).
4. Five Representatives from Charfasson present in the meeting have welcomed the
project, as the supply of electricity from the project will be uninterrupted.
43
Rapid Appraisal techniques were used for obtaining information from key informants of the
diesel based Power Generation system operating in the coastal areas. The results show that
about 31% of 45 workers would be willing to pay Taka 50 per month for access to the better
service promised by the Project. On the other extreme 100 percent of the households would
use the service at a zero charge. The slope of the demand curve is – 50/(100-31) or –0.73.
The demand curve becomes D = a – 0.73P. Therefore by extrapolation, all households would
cease to use the service at a charge of Taka 137 per month. The Project’s health and
environment service can then be valued through the average demand price 137/2 or Tk. 68.5
using the domestic price numeraire. Benefit of the health and environment service at the mill
premise becomes Taka 0.04 million.
11. Major Findings and Recommendations

This pre-feasibility study has attempted to determine reliability and acceptability of stand-
alone solar PV and wind turbine gensets in the country and to suggest a way of providing
reliable and uninterrupted supply of electricity to inaccessible areas. The major findings are:
Solar home systems (SHS) supplied so far (about 2 MW) cannot meet the demand during
Monsoon because of less sunshine.
Wind velocity is not high in Bangladesh except in the coastal districts and offshore islands.
Wind velocity in the coastal areas is consistently high (4 – 5 m/sec) during Monsoon thus
compensating for low insolation.
To make the solar-wind-hybrid 100% reliable and continuous a diesel backup will be
provided with the required control system.
A 476 MWh/yr solar-wind-Diesel hybrid will be set up at Charfasson, a coastal sub-district

having good wind speed, average contribution of solar, wind and diesel being 10%, 60% and
30% respectively.
With 100% diesel for 476 MWh yearly generation of CO2 is 577 tonnes in the absence of the
project activity, whereas with the project activity yearly production of CO2 is 173 tonnes. The
emission additionally is 404 tonnes of CO2 per year.
The total investment cost is 17.51 million Taka with an initial working capital of 0.42 million
Taka.
(1) For a decrease in revenue by 15%, FIRR reduces to -32.53%, NPV (@ 10% interest)
to –4.46 million Taka and B/C to 0.01 (Annex 3b).
(2) For an increase in project cost by 15%, FIRR reduces to -3.07%, NPV to –3.87
million Taka and B/C to 0.41 (Annex 3c).
Financial analysis was recast incorporating carbon dioxide credit price. With CO2 credit
price of US$ 10.00 i.e. Tk. 585.00 per tonne of CO2, IRR, NPV and B/C are as under (Annex
4a):
IRR = 12.97%
44
B/C = 1.17
revenue (Annex 4b)
The project therefore turns viable if the CO2 credit price of US$ 10.00 per tonne is
incorporated. But a possible 15% fall in revenue or 15% increase in investment cost makes
the project unviable.
Economic results show that EIRR is 7.54%, NPV is –0.65 million Tk. and B/C ratio is .87
(Annex 5a) and as such the economic analysis does not show any significant improvement
when compared with the financial analysis. Sensitivity analysis has been given in Annex-5b
and Annex.-5c.:
In view of the results above, the proposed project could be established if this could be
combined with CDM project as per the provisions of the “Kyoto Protocol”.
A rapid appraisal was carried out to determine the present situation in Charfasson.
* Because of load shedding for long duration, oil-based captive power generator is quite
common in Charfasson, especially in the sub-district Headquarter. This is polluting
the local atmosphere.
* Project would keep the atmosphere clean by reducing smoke and oil smell.
* Project would improve working conditions by providing uninterrupted power supply.
45
References
• BCAS, 1998a Wind Energy Study (WEST) Project, Final Report by Bangladesh
Centre for Advanced Studies (BCAS)
• BCAS, 1998b. BCAS Monitoring Report on Narsingdi Solar PV Pilot Project
• BPDB, 2001-02. Bangladesh Power Development Board, Annual Report.
• BPDB, 2002-03 Bangladesh Power Development Board, Annual Report.
• Chowdhury, 2004. Private Communication from Prof. T.A. Chowdhury, Professor of

Electrical Engineering Dept. of Bangladesh University of Engineering and
Technology (BUET), Dhaka.
• Hossain, 1996. “Wind Energy Study- Progress and Preliminary Findings” – First
Seminar of Wind Energy Study (WEST) Project 28 October 1996, Prepared by
BCAS/LGED/ETSU, coordinated and chaired by Dr. M. Anwar Hossain, Wind
Energy Consultant and Ex-Chairman, Bangladesh Atomic Energy Commission
(BAEC)
• Islam, 1999. “Present Scenario and Future Commercial Potential of Solar

Photovoltaic (PV) Electricity in Bangladesh - published under Section Energy &
Power in the Journal of Commerce & Industry, Vol. 26, 1999 - Dr. Engr. K. Islam
• MOFP (2000). Ministry of Finance & Planning, GOB, Bangladesh Economic Review
• MOEF, 2002. Ministry of Finance and Planning, Bangladesh Economic Review
• PSMP, 1995. Power System Master Plan
• Raghavan, 1997. “Wind-Diesel Hybrid System And Its Applications” – by K.

Raghavan, Renewable Energy Consultant, India - Paper presented at Wind Energy
Seminar held on 23 November, 1997 at Dhaka, Bangladesh
46
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Draft Final Report

PROMOTION OF RENEWABLE ENERGY,

Solar-Wind- Diesel Hybrid

A Pre-Feasibility Study Report1

1. EXECUTIVE SUMMARY 1-8

3. ENERGY SITUATION & GOVERNMENT POLICY 11-16

4. AVAILABILITY OF SOLAR & WIND ENERGY IN BANGLADESH 16-19

5. TECHNOLOGY OPTIONS, CHOICE OF TECHNOLOGY FOR

6. PROJECT DESCRIPTION 23-28

7. EMISSION REDUCTION, MONITORING & VERIFICATION PLAN 28-40

8. FINANCIAL ANALYSIS OF THE PROJECT 40-42

10. STAKEHOLDERS’ MEETING 43

11. MAJOR FINDINGS AND RECOMMENDATIONS 44-45

Table 1: List of Power Plant installed since 1997 11

List of Press Cutting

1.2 Energy Situation and Government Policy

Government Policy on Renewable Energy

In this Solar-Wind-Diesel Hybrid System, as proven technology, using inverters is proposed to

 Wind Power Component

 The Hybrid Power Plant (REHPP)

1.6 Project Description

1.6.1 Project Objectives

1.6.2 Project Location

1.6.3 Project Outputs

1.6.4 Project Implementation Plan

1.6.5 Likely Fiscal Incentives for the Project

1.7.1 Baseline Scenario

1.7.2 Project Cost and Revenue

1.7.2.1 Project Cost (Estimated)

A. Investment Cost (million Taka)

B. Operation and Maintenance Cost

1.7.2.2 Financial Analysis.

Results of sensitivity tests are:

Results of sensitivity analysis are shown below:

1.7.3 Additional Environment and Social Benefits

2.2 Justification of the Project

Table 1: List of Power Plants installed since 1997

Plant Capacity (MW) Commencement of Generation

3.2 Present and Forecasted Energy Situation

Table 2: Gross Peak Growth Forecast

Fiscal Year Gross Peak Growth, MW

3.3 Constraints and Issues

Year Installed Generation Demand Demand Load Reserve

Table 4: System Loss of Electricity Organizations

Year BPDB DESA REB DESCO Combined

• Power transmission system became inadequate because of lack of investments in

Fiscal year BPDB DESA

3.4 Government Policy and Strategy

3.5 Government Policy on Renewable Energy

3.6 Market for Electricity

4. Availability of Solar & Wind Energy in Bangladesh

 Availability of Solar Energy - Macro (National) Scenario

 Micro (Site specific) Scenario on Availability of Solar Energy

 Availability of Wind Energy - ‘Macro’ (National) Scenario

As already mentioned, in terms of availability of wind energy, Bangladesh appears to be not as

 Availability of Wind Energy - ‘Micro’ (Site) Scenario

Coastal Location Average Wind Speed (m/sec) during

4.2 Critical Aspects of the Availability of Economic Wind Speed in Bangladesh

5. Technology Options, Choice of Technology for Power Supply to Small

5.3 Choice of Technology - Wind PV-Diesel Hybrid System

 The Renewable Energy (Wind-PV-Diesel) Hybrid Power Plant (REHPP)

ASIAN DEVELOPMENT BANK

Wind Power Component

The Hybrid Power Plant (REHPP)

Availability of Solar Energy - Macro (National) Scenario

Micro (Site specific) Scenario on Availability of Solar Energy

Availability of Wind Energy - ‘Macro’ (National) Scenario

Availability of Wind Energy - ‘Micro’ (Site) Scenario

The Renewable Energy (Wind-PV-Diesel) Hybrid Power Plant (REHPP)

476,000 kWh/Yr. Or 0.476 GWh/Yr., which is equal to 1.714 TJ/Year

Monitoring of Project Performance