part 1: overview of cogeneration and its status in asia - Fire

Summary of country study – Bangladesh 156
3.4 Conclusions and Recommendations for Follow-up Actions 1
Conclusion
From the pre-feasibility study of the selected sites, one can conclude that thanks to the
availability of natural gas distribution network in some economic areas, gas-based
cogeneration is found to be the most cost-effective option for Bangladesh. In view of the
present national power situation, cogeneration in sites having a steady need for heat and
power, and access to natural gas, can improve the production reliability and efficiency while
reducing the burden on the already stressed national grid. Moreover, natural gas-based
cogeneration will reduce the dependency on imported fuel and will have less adverse impact
on the environment.
Power demand in many sites is not very high, ranging from 0.5 to 2 MW. These sites are
ideal for gas-based reciprocating engines that already have a good presence in the local
market. The internal rates of return in all the cases were found to be quite high (above 40
per cent) for the best feasible options, mainly due to the low price of gas prevailing in the
country.
In spite of the significant techno-economic potential for cogeneration applications in
Bangladesh, cogeneration has not been widely adopted in the country due to several
reasons. The foremost among them is the low level of awareness at all levels about the
technological alternatives, economic merits, environmental benefits and business
opportunities related to the application of cogeneration as an efficient energy use option. No
systematic study has been undertaken so far to assess cogeneration potential by taking into
account factors such as energy demand patterns, plant size, power-to-heat ratio, access to
gas pipeline, etc. There is practically no interaction between the energy utilities and the
energy users to explore the cogeneration option though the government is serious about
encouraging private investment in the power sector.
Recommendation for follow-up actions
Since cogeneration development seems to be very promising, the hurdles (institutional
structure, policy and planning, energy pricing and tariff, investment and financing etc.) in this
sector may be removed for its further propagation.
Regulatory measures are needed for the sale of excess electricity to the grid or third party,
and back-up power supply from the grid as and when necessary.
The establishment of a national interagency co-ordinating committee may be seriously
considered. Government may also initiate demonstration projects using advanced
technologies in selected public sector enterprise in the industrial estates/export processing
zones/satellite city centres.
State energy suppliers (electricity and gas companies) may play a greater role in the
propagation of cogeneration by establishing partnership with potential cogenerators, public
or private, in making investment, guaranteeing operation and maintenance, and sharing
costs and benefits in the process.
1 These conclusions and recommendations are based on the deliberations of participants in the
South Asia Sub-Regional Seminar organized at Dhaka on 14 and 15 November 1998. The
programme details of the Seminars are included in Appendix 3A.