Renewable energy cheaper, but govt looks to coal

Costs for electricity generated from solar energy, wind and other renewable sources are decreasing by 13 per cent annually.

Over the past 10 years, solar power production costs fell by 82 per cent and of wind energy by 39 per cent. The production costs of such renewable energy is far cheaper than that of the new coal-based power plants being built.

If power plants based on renewable energy were established instead of 500,000 coal-based power plants all over the world, USD 23 billion would be saved annually and carbon emissions would decrease by 1.8 tonnes. This would mean a 5 per cent reduction in carbon emissions globally.

These figures were revealed on Tuesday in a report of the UN’s International Renewable Energy Agency (IRENA). The agency, with 183 members including Bangladesh, has its headquarters in Abu Dhabi.

The IRENA report said that the per unit production cost of electricity at solar power plants was, on average, 6.8 cents, equivalent to Tk 5.78 in Bangladesh currency. Every year this production cost was going down by 13 per cent.

Production costs of the wind power stations on land and sea were also falling annually. The per unit production cost of wind power at the land-based plants was 5.3 cents (Tk 4.50), and of the sea-based plants was 11.5 cents (Tk 9.77).

According to the report, production costs will go down even further at the solar power plants which will be ready by the year 2021. The production costs of the solar power plants to be established by next year all around the world will be 3.9 cents (Tk 3.31), that is 43 per cent less than the costs in 2019.

IRENA members Saudi Arabia, UAE, Chile, Ethiopia, Mexico and Peru have said that they can immediately keep solar energy production costs in their countries below 3 cents.

The production cost of hydroelectricity had, however, increased, the report said. Hydroelectricity production costs were 4.7 cents ( Tk 3.99) per unit, which had been 3.7 cents (Tk 3.14) 10 years ago.

According to the IRENA report, per unit production costs of electricity from oil, coal and such fuel had previously been 7.6 cents (Tk 6.46), and was now 6.6 cents (Tk 5.61). But this was just an average estimate of fossil fuel. Production costs were lower in countries which had their own coal and oil. But in countries like Bangladesh, the costs were higher. In Bangladesh, the power production bill included the fuel costs, the power plant rent (even if it was idle), the cost of electricity and the plant maintenance costs. So in Bangladesh, the per unit cost of electricity produced from imported coal came to about Tk 8.5 to Tk 9 on average.

Commenting on the IRENA report, state minister for power, energy and mineral resources, Nasrul Hamid, told Prothom Alo that the production cost of solar energy around the world had decreased, but in Bangladesh it had not gone below 13 cents and 10 cents. That is why the government had, for the time being, taken initiative for 650 MW solar power production. The private sector had failed in solar power and so over the next few years, solar power plants of at least 3000 MW would be built under government supervision.

The minister said that in a matter of 10 years, solar and wind energy had managed to beat the costs of the previously cheap fuel, coal. Electricity produced by solar power was cheaper than that produced by coal, yet Bangladesh was focusing on coal-fired power plants. Nasrul Hamid said power produced with imported coal would be even costlier and coal-fired power plants were harmful to the environment. The extent of damages was even further reaching, taking into consideration the harm done to human health, he said.

Plant construction costs decreased too

Both production costs and costs of constructing renewable energy power plants had decreased, according to the IRENA report. In 2010 the per unit construction cost of solar power plants was USD 4,695. In 2019, that came to only USD 995. Land-based wind power plants cost USD 1,849 per unit in 2010. Presently this has come down to USD 1,473. Construction costs for renewable energy plants is less than that of coal, oil and gas-fired power plants.

Also, solar power plants do not require capacity payment. The government purchases this electricity on a ‘no electricity, no payment’ basis.

Professor Anu Muhammad, convenor of the national committee for the protection of oil, gas, mineral resources, power and ports, which has long been protesting against the coal-fired power plant near the Sundarbans in Rampal, Bagerhat and promoting renewable energy, told Prothom Alo that production costs of coal-based and nuclear power plants had always been high, taking into consideration environmental and public health risks. And now, even without taking these risks into cognizance, renewable energy is cheaper. He said, the government should look after the interests of the country’s economy, people and environment, rather than foreign interests. It will then be possible to do well with renewable energy in this country.