2017年-世界发展银行全球_Mini_Grids_in_Bangladesh___A_Case_Study_of_an_Incipient_Market_28页_1mb

Summary of MINI GRIDS IN BANGLADESH: A CASE STUDY OF AN INCIPIENT MARKET

Core Content

This report is a case study on the development of mini grids in Bangladesh, focusing on the regulatory environment, technologies, business models, and challenges in expanding electricity access through private initiatives. It is part of a broader ESMAP initiative to understand regulatory settings for mini grids in six countries.

Main Actors in the Power Sector

• Bangladesh Power Development Board (BPDB): A public utility responsible for generating, trading, and distributing power. It also manages the expansion of the national grid.
• Bangladesh Energy Regulatory Commission (BERC): An independent regulator that sets tariffs and service standards for the main grid.
• Infrastructure Development Company Limited (IDCOL): A government-owned financial institution that acts as the de facto regulator for mini grids, setting tariffs and standards.
• Power Grid Company of Bangladesh (PGCB): National grid operator responsible for transmission and grid connections.
• Generation Companies (GENCOs): State-owned entities that generate electricity, contributing to nearly a quarter of total generation.
• Distribution Companies (DISCOs): Responsible for distributing electricity, including DPDC, DESCO, and WZPDC.
• Rural Electrification Board (REB): Implements rural electrification projects and oversees rural distribution through Palli Bidyut Samity (PBS).

Overview of the Power Sector

• Electricity access has increased significantly over the past two decades, from 3% in 1971 to 76% in 2016.
• Electricity consumption has grown at an average rate of 9.7% annually from 2004 to 2015.
• Per capita consumption remains low at 311kWh in 2014, one of the lowest globally.
• Transmission and distribution losses have declined from 21.2% in 2004 to 11.2% in 2015, but load-shedding and low voltage supply are still prevalent.

Mini Grids in Bangladesh

• As of early 2017, there were seven mini grids connecting 2,243 rural customers.
• The first commercial solar mini grid started operating in 2010 on the island of Sandwip.
• Three more mini grids were commissioned in 2017, connecting roughly 3,000 people.
• Mini grids are typically solar PV-diesel hybrid systems, serving rural and remote areas where grid expansion is not feasible.
• Mini grid operators are not required to obtain licenses but are subject to tariff and performance standards set by IDCOL.

Policy Settings for Mini Grids

• There is no comprehensive legal framework for mini grids in Bangladesh.
• The Government uses a "regulation by contract" approach, with IDCOL acting as the de facto regulator.
• IDCOL sets tariffs and standards for mini grids through Implementation Agreements.
• Tariffs for mini grids are subsidized, with an average of BDT30 per kWh (US$0.38), significantly lower than the main grid's cost.
• Subsidies are provided to mini grid operators to ensure affordability and service quality.

Expansion Planning

• The Rural Electrification Board (REB) identifies areas where grid expansion is not viable and prioritizes mini grid development.
• IDCOL and REB jointly determine 1,027 areas suitable for mini grid deployment.
• Developers must submit proposals to IDCOL, and funding is only available for projects targeting remote rural areas.
• If the grid is not expected to reach a site within four to five years, IDCOL may approve the mini grid project.

Technical and Service Standards

• Mini grids must adhere to technical and service standards set by IDCOL.
• These standards ensure reliable and high-quality service, with 24-hour electricity availability.
• Performance monitoring is conducted to ensure compliance and service improvement.

Tariffs, Financing, and Subsidies

• Mini grids operate under highly subsidized tariffs, with BDT30 per kWh.
• Subsidies are provided by the government to ensure affordability.
• Financing is mainly through IDCOL, which offers grants and loans to private developers.
• The regulatory treatment of subsidies is designed to support mini grid development without distorting the market.

Handling the Relationship with the Main Grid

• When the main grid arrives, mini grids may face competition and need to adjust their business models.
• Wholesale tariff setting is managed by IDCOL, ensuring fair pricing for electricity supplied to the grid.
• Power Purchase Agreements (PPAs) are used to facilitate the integration of mini grid electricity into the main grid.
• Utility obligations to purchase mini grid output are in place to ensure economic viability for operators.

Lessons Learnt

• Regulatory flexibility is crucial for mini grid development.
• Subsidies are necessary to make mini grid electricity affordable but must be managed carefully.
• Public-private partnerships are key to scaling up mini grid projects.
• Technical and service standards ensure quality and reliability.
• Integration with the main grid requires clear policies and agreements to prevent market distortion.