Smart solution to curb electricity crisis

A possible way of resolving most of the Bangladesh’s electricity problems could be through introduction of the Smart Grid Technology

In the contemporary era, it is a trend to smarten all possible sectors in the economy using the best possible technology at disposal which leads to the idea of smart gridding the electricity sector in Bangladesh. Electricity is the most important form of energy that is profusely used in household as well as in commercial scales, all throughout Bangladesh. However, the nation has always faced difficulties in ensuring sufficient electricity supply that could meet its growing demand. Following the surge in demand for electricity day in and day out, the pressure on the nation’s national grid is rapidly growing at the same time. As a result, the peak load management has become a crucial issue in Bangladesh’s energy sector. In addition, the electricity sector in Bangladesh is characterized by several irregularities and inefficiencies resulting in huge amounts of transmission and distribution losses, depriving the electricity producers of potential revenue. The gap between demand and supply of electricity in the country often leads to forced outages, hampering industrial outputs in particular, which in turn exert negative impacts on its macroeconomic indicators. A possible reason behind the electricity crisis could be the fact that the electricity generation in Bangladesh has always been below the potential capacity following acute shortages in energy inputs and also due to the electricity generation plants often remaining out of operation because of aging. Enhancing electricity generation and mitigating the electricity deficit is one of the topmost agendas of the government. Although the government has announced to ensure electricity for all by 2021, at present only 74% of the total population has been brought under the national grid. The picture is even gloomier if we look at the rural electrification scenario which, at present, hovers merely around 40%. These are ominous signs for the government as there is so much to cover within such short time period. However, the government is determined to tap all possible options available at its disposal for boosting electricity generation and in order to do so it ready to bring about changes that are necessary for development of its energy sector.    
A possible way of resolving most of the problems could be through introduction of the Smart Grid Technology (SGT) that has already made its way into the energy markets across the developed world. It is a cutting edge tool through which electricity generation, transmission, distribution, regulation and its usage could be executed from remote areas via automation. Compared to the conventional grid, which is characterized by a centralized mechanism, the smart grid is decentralized and distributed in nature involving a two-way communication. A smart grid’s task is not just confined to providing electricity but it also has the capacity to receive and store electricity back from where it has supplied at the first place. Thus, smart grids allow consumers of electricity to also become electricity producers through which the surplus electricity produced can also be added to the national grid. In lay man’s terms, a smart grid is a small automated grid within the main grid. Thus, the relatively smaller smart grid tends to upend the larger traditional grid in a multidirectional manner. The SGT actually involves installation of micro and nano grids those work as small-scale electricity supply networks that are designed to manage electricity demand within a certain land area. Moreover, the excess off-grid electricity produced can also be added to the traditional national grid via those smaller grids. The ultimate task of a smart grid is to make use of the internet in developing better electricity systems which would enhance electricity generation and relieve load pressures from the national grid, preventing grid failures and minimizing forced and planned outages.        
In general, the economies of implementing SGT are not limited to a particular group of people only. Rather, the list of beneficiaries includes the electricity producing company, the consumers and more importantly the benefits are generalized in the form of societal benefits as well. Thus, the feasibility of employing the SGT in Bangladesh’s national energy policy framework should not be questioned, provided the nation manages to develop the energy infrastructure which is a pre-requisite for such major structural change encompassing the energy sector. Amongst the several advantages, improvement in grid reliability, enhancement of electricity efficiency, energy resource diversification, environmental betterment and greater rural electrification are the major things that can be associated with the use of SGT. 
A smart grid has the capability of ensuring grid reliability. A reliable grid is one that provides good quality electricity to the consumers when they need it most. Following the everyday surge in electricity demand in Bangladesh, the amount of peak load pressure on the national grid is simultaneously on the way up. As a result, possibilities of grid failure and electricity outages are ought to become higher by the day. Smart Grids can solve unplanned outage issues by locating outage site in real time. It can then automatically understand the root cause of the outage so that appropriate measures can be taken rather than swapping the entire system which is not a good idea. In addition, a smart grid can ensure overall grid reliability by also offering off-grid electricity whenever in-grid electricity supply is not available, thereby virtually eliminating extensive blackouts. The reliability aspect of the national grid would relieve the burdens off the shoulders of the electricity producing companies and save their revenues that would otherwise be exhausted in paying the bills associated with grid failures. Simultaneously, the residential and industrial consumers would have the luxury of uninterrupted supply of prime quality electricity. In addition, they no longer would have to rely on private generators for generation purposes which are subject to fuel costs. Thus, grid reliability would ensure socioeconomic benefits in the form of greater national output levels through reliable supply of energy all throughout. 
Poor efficiency levels engulfing the electricity sector in Bangladesh is another problem that can be resolved through successful implementation of smart grid systems.  Smart grids can actively improve electricity efficiency by reducing the costs of electricity generation, delivery and consumption. Advanced metering systems can efficiently keep track of electricity usage and provide immediate feedbacks in case of any irregularity in the usage. 
Moreover, smart grids can be effective in reducing technical losses resulting from peak shifting or flattening purposes. For example, during peak load hours peak shifting becomes essential through whereby smart grids can automatically transfer some energy by saving electricity use at peak hour to off-peak electricity use. Recent studies have concluded that the monetary value of transmission and distribution losses in the country equals to almost 30% of the total cost of producing electricity in Bangladesh. 
A major constraint hampering the growth of electricity generation in Bangladesh is acute shortage of natural gas, the main input used in Bangladesh. Besides, the imported oils used as a supplement to natural gas create fiscal burdens too. Thus, fuel diversification is essential in boosting electricity production for which SGT is an ideal platform. This is because smart grids offer scopes for large renewable integration, especially in the form of solar and wind energy employment for electricity generation. Bangladesh is the largest solar home system in the world and each solar system, if placed in a house, can generate 30% more electricity than the. total household demand, which can then be added to the national grid. This would further provided incentives for the consumers to become ‘prosumers’ who not only would consume electricity but would also produce surplus amounts to be supplied for societal uses. As far as the environment is concerned, the smart grid through greater integration of renewables can lead to betterment of the environment by significantly limiting greenhouse gaseous emissions. Environmental safety is of key importance for Bangladesh due to the country being extremely vulnerable to natural calamities following climate changes. 
Finally, introduction of SGT in the remote areas can be exemplary in countering the poor rural electrification rate in Bangladesh. Currently, about 40 million people living in the rural areas in Bangladesh are yet to have regular access to electricity. As a result, the disparity between urban and rural standard of living is expressively high which is pretty much against the inclusive development strategies of any developing nation. Lack of access to electricity has been a main barrier hampering rural development in the nation. Ensuring electricity availability in the rural regions can open up new job opportunities which can also reduce the urban-rural wage differences. Hence, setting up solar-based micro smart grids for renewable-electricity generation can contribute in the form of off-grid electricity supply.
Considering the immense benefits and potential of SGT, it is a recommended tool for Bangladesh’s energy sector development. However, adoption of this technology can be a challenging task ahead of the government. Firstly, adoption of this cutting edge electricity generation technology is subject to costs and requires hefty investments. On average, the cost of setting up the smart grid system could equal the cost required to produce 3.1% of the total electricity produced in the nation. This is not a small amount and as a result, decision to invest in such expensive projects often gives potential investors a second thought. In addition, electricity prices artificially fixed by the government also contributes to the avid reluctance of investors in investing money in the associated sector. 
It is quite evident that incorporating SGT into the national energy policy of Bangladesh is a colloquial task, but for the greater benefits in the future such task is worth being undertaken through a trade-off between current costs and future profits. Bangladesh is a nation that has immense prospects in embracing socioeconomic development in the near future. Thus, the opportunity cost of not having electricity is unimaginably high which furthermore advocates in favor of adopting smart grid systems all across the national boundary. According to a report by the World Bank, prolonged unscheduled electricity outages in Bangladesh account of a 5.5% fall in output levels of Small and Medium Enterprises (SMEs) which is not a good phenomenon with regards to the nation’s growth rate of GDP. 

The writer is Research Assistant, School of Business and Economics
North South University

Smart solution to curb electricity crisis

A possible way of resolving most of the Bangladeshs electricity problems could be through introduction of the Smart Grid Technology

In the contemporary era, it is a trend to smarten all possible sectors in the economy using the best possible technology at disposal which leads to the idea of smart gridding the electricity sector in Bangladesh. Electricity is the most important form of energy that is profusely used in household as well as in commercial scales, all throughout Bangladesh. However, the nation has always faced difficulties in ensuring sufficient electricity supply that could meet its growing demand. Following the surge in demand for electricity day in and day out, the pressure on the nations national grid is rapidly growing at the same time. As a result, the peak load management has become a crucial issue in Bangladeshs energy sector. In addition, the electricity sector in Bangladesh is characterized by several irregularities and inefficiencies resulting in huge amounts of transmission and distribution losses, depriving the electricity producers of potential revenue. The gap between demand and supply of electricity in the country often leads to forced outages, hampering industrial outputs in particular, which in turn exert negative impacts on its macroeconomic indicators. A possible reason behind the electricity crisis could be the fact that the electricity generation in Bangladesh has always been below the potential capacity following acute shortages in energy inputs and also due to the electricity generation plants often remaining out of operation because of aging. Enhancing electricity generation and mitigating the electricity deficit is one of the topmost agendas of the government. Although the government has announced to ensure electricity for all by 2021, at present only 74% of the total population has been brought under the national grid. The picture is even gloomier if we look at the rural electrification scenario which, at present, hovers merely around 40%. These are ominous signs for the government as there is so much to cover within such short time period. However, the government is determined to tap all possible options available at its disposal for boosting electricity generation and in order to do so it ready to bring about changes that are necessary for development of its energy sector. A possible way of resolving most of the problems could be through introduction of the Smart Grid Technology (SGT) that has already made its way into the energy markets across the developed world. It is a cutting edge tool through which electricity generation, transmission, distribution, regulation and its usage could be executed from remote areas via automation. Compared to the conventional grid, which is characterized by a centralized mechanism, the smart grid is decentralized and distributed in nature involving a two-way communication. A smart grids task is not just confined to providing electricity but it also has the capacity to receive and store electricity back from where it has supplied at the first place. Thus, smart grids allow consumers of electricity to also become electricity producers through which the surplus electricity produced can also be added to the national grid. In lay mans terms, a smart grid is a small automated grid within the main grid. Thus, the relatively smaller smart grid tends to upend the larger traditional grid in a multidirectional manner. The SGT actually involves installation of micro and nano grids those work as small-scale electricity supply networks that are designed to manage electricity demand within a certain land area. Moreover, the excess off-grid electricity produced can also be added to the traditional national grid via those smaller grids. The ultimate task of a smart grid is to make use of the internet in developing better electricity systems which would enhance electricity generation and relieve load pressures from the national grid, preventing grid failures and minimizing forced and planned outages. In general, the economies of implementing SGT are not limited to a particular group of people only. Rather, the list of beneficiaries includes the electricity producing company, the consumers and more importantly the benefits are generalized in the form of societal benefits as well. Thus, the feasibility of employing the SGT in Bangladeshs national energy policy framework should not be questioned, provided the nation manages to develop the energy infrastructure which is a pre-requisite for such major structural change encompassing the energy sector. Amongst the several advantages, improvement in grid reliability, enhancement of electricity efficiency, energy resource diversification, environmental betterment and greater rural electrification are the major things that can be associated with the use of SGT. A smart grid has the capability of ensuring grid reliability. A reliable grid is one that provides good quality electricity to the consumers when they need it most. Following the everyday surge in electricity demand in Bangladesh, the amount of peak load pressure on the national grid is simultaneously on the way up. As a result, possibilities of grid failure and electricity outages are ought to become higher by the day. Smart Grids can solve unplanned outage issues by locating outage site in real time. It can then automatically understand the root cause of the outage so that appropriate measures can be taken rather than swapping the entire system which is not a good idea. In addition, a smart grid can ensure overall grid reliability by also offering off-grid electricity whenever in-grid electricity supply is not available, thereby virtually eliminating extensive blackouts. The reliability aspect of the national grid would relieve the burdens off the shoulders of the electricity producing companies and save their revenues that would otherwise be exhausted in paying the bills associated with grid failures. Simultaneously, the residential and industrial consumers would have the luxury of uninterrupted supply of prime quality electricity. In addition, they no longer would have to rely on private generators for generation purposes which are subject to fuel costs. Thus, grid reliability would ensure socioeconomic benefits in the form of greater national output levels through reliable supply of energy all throughout. Poor efficiency levels engulfing the electricity sector in Bangladesh is another problem that can be resolved through successful implementation of smart grid systems. Smart grids can actively improve electricity efficiency by reducing the costs of electricity generation, delivery and consumption. Advanced metering systems can efficiently keep track of electricity usage and provide immediate feedbacks in case of any irregularity in the usage. Moreover, smart grids can be effective in reducing technical losses resulting from peak shifting or flattening purposes. For example, during peak load hours peak shifting becomes essential through whereby smart grids can automatically transfer some energy by saving electricity use at peak hour to off-peak electricity use. Recent studies have concluded that the monetary value of transmission and distribution losses in the country equals to almost 30% of the total cost of producing electricity in Bangladesh. A major constraint hampering the growth of electricity generation in Bangladesh is acute shortage of natural gas, the main input used in Bangladesh. Besides, the imported oils used as a supplement to natural gas create fiscal burdens too. Thus, fuel diversification is essential in boosting electricity production for which SGT is an ideal platform. This is because smart grids offer scopes for large renewable integration, especially in the form of solar and wind energy employment for electricity generation. Bangladesh is the largest solar home system in the world and each solar system, if placed in a house, can generate 30% more electricity than the. total household demand, which can then be added to the national grid. This would further provided incentives for the consumers to become prosumers who not only would consume electricity but would also produce surplus amounts to be supplied for societal uses. As far as the environment is concerned, the smart grid through greater integration of renewables can lead to betterment of the environment by significantly limiting greenhouse gaseous emissions. Environmental safety is of key importance for Bangladesh due to the country being extremely vulnerable to natural calamities following climate changes. Finally, introduction of SGT in the remote areas can be exemplary in countering the poor rural electrification rate in Bangladesh. Currently, about 40 million people living in the rural areas in Bangladesh are yet to have regular access to electricity. As a result, the disparity between urban and rural standard of living is expressively high which is pretty much against the inclusive development strategies of any developing nation. Lack of access to electricity has been a main barrier hampering rural development in the nation. Ensuring electricity availability in the rural regions can open up new job opportunities which can also reduce the urban-rural wage differences. Hence, setting up solar-based micro smart grids for renewable-electricity generation can contribute in the form of off-grid electricity supply. Considering the immense benefits and potential of SGT, it is a recommended tool for Bangladeshs energy sector development. However, adoption of this technology can be a challenging task ahead of the government. Firstly, adoption of this cutting edge electricity generation technology is subject to costs and requires hefty investments. On average, the cost of setting up the smart grid system could equal the cost required to produce 3.1% of the total electricity produced in the nation. This is not a small amount and as a result, decision to invest in such expensive projects often gives potential investors a second thought. In addition, electricity prices artificially fixed by the government also contributes to the avid reluctance of investors in investing money in the associated sector. It is quite evident that incorporating SGT into the national energy policy of Bangladesh is a colloquial task, but for the greater benefits in the future such task is worth being undertaken through a trade-off between current costs and future profits. Bangladesh is a nation that has immense prospects in embracing socioeconomic development in the near future. Thus, the opportunity cost of not having electricity is unimaginably high which furthermore advocates in favor of adopting smart grid systems all across the national boundary. According to a report by the World Bank, prolonged unscheduled electricity outages in Bangladesh account of a 5.5% fall in output levels of Small and Medium Enterprises (SMEs) which is not a good phenomenon with regards to the nations growth rate of GDP. The writer is Research Assistant, School of Business and Economics North South University