Copyright is owned by the Author of the thesis. Permission is given for a copy to be downloaded by an individual for the purpose of research and private study only. The thesis may not be reproduced elsewhere without the permission of the Author. Transfer of Sustainable Energy Technology to Developing Countries as a Means of Reducing Greenhouse Gas Emission: The Case of Bangladesh A thesis submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Applied and International Economics at Massey University Palmerston North, New Zealand Mohammad Ershad AIi 2001 Abstract Over the last two decades the world has been becoming increasingly concerned about greenhouse gas ( GHG) emissions, global warming, unsustainable development, and poverty in the developing countries. The most acceptable way of mitigating GHG emission is the use of sustainable energy technology ( SET) instead of fossil fuel. SET is available in the global market, but is outside the scope of availability for many developing countries. Due to the lack of economic and technical capabilities and wide-spread poverty, developing countries are unable to introduce SET independently, hence a need for appropriate assistance from developed countries. The case study was conducted in Bangladesh, one of the poorest countries in the world, with acute shortages of energy and largely disadvantaged rural population. The study assessed three energy technologies-biomass, solar, and wind-to identify the most viable options of SET for the rural Bangladesh. The appropriateness of the proposed SETs is assessed on the basis of certain criteria: availability of resources, cost-effectiveness, degree of technological complexity, matching demand and supply, and contribution to reducing GHG emission. It has been found that each SET taken separately, has its limitations. The main barrier for biomass energy technology is the availability of biomass due to scarcity of land, and hence, producing food is preferable to growing trees for fuel. The major limitations for solar and wind energy technologies are high levels of capital investment and technological complexity. The study proposes a combination of biomass, solar, and wind SETs as a long-term solution of energy crisis in the rural Bangladesh. It suggests relevant policy and types of assistance in the form of investment in education and training, machinery, spare parts, know-how etc. A brief proposal for capacity building has been prepared. It is expected that the proposed SETs will benefit sustainable development, poverty alleviation of rural Bangladesh, and the national socio-economic conditions. The study findings contribute to general knowledge, and are especially useful for developing countries. ii Acknowledgments I am grateful to almighty Allah who gave me the opportunity to complete this research amidst many difficulties. I owe a great deal to Dr. Peter Read who supervised me throughout the period of this research. His guidance, advice, and comments at every stage of this research were crucial to the success of this research project. Indeed, I feel fortunate and proud of having worked under his supervision. I also acknowledge the invaluable guidance received from my supervisors Professor John Overton and Dr. A.K.Enamul Haque. It is a pleasure to acknowledge financial assistance provided by the Massey University without which I could not have undertaken this research. I also acknowledge the financial assistance received from the Department of Applied and International Economics. I am greatly indebted to all staff members of this Department. I gratefully acknowledge the continuous support from my relatives, friends and well wishers in completing this study. I acknowledge my sincere gratitude to Professor Srikanta Chatterjee, Dr. Nabiul Islam and Dr. Waresul Karim for their kind help and support in completing this study. Without their support and assistance it would have been impossible to complete this research. I also express my thanks to Abdul Wahab, Kamal Ahmed, Ainul Islam and Omar Al Farooque for their friendly co-operation and logistical support in completing my study. Finally, I am proud of the support and co-operation provided by my wife lulekha who sacrificed a lot for the success of my research. My daughters Sumaya and Shakiya always encouraged and pushed me to step forward to the door of success. III Table of Contents Abstract Acknowledgment Table of contents List of Tables List of Maps List of Figures and Photographs List of Annexes List of Acronyms and Abbreviations Energy Conversion Factors CHAPTER ONE: INTRODUCTION 1 .l. Introduction 1 .2. The Bangladesh Context 1 .3. Energy Demand and supply scenario of Bangladesh 1.4. Research Problem 1 .5. Objectives of the Study 1 .6. Sustainable Energy Technology 1. 7. Importance of the Study 1.8. Scope and Limitations of the Study 1 .8.1. Scope 1.8.2. Limitations 1 .9. Structure of the Thesis CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction 2.2. Studies Relevant to Global Concern of environmental effects 2.3. Studies Relevant to Availability of SET 2.4. Conceptual Debate 2.4.1 . Sustainable Development, Poverty and Environment 2.4.2. Alternative, Renewable and Sustainable Energy IV Page 11 111 iv Xl XIV XV XVI XV11 xx 1 5 9 10 14 14 14 16 16 17 17 20 20 21 28 31 32 34 2.4.3. Difference in Gross and Net Reduction of C02 Emission 2.5. The Bangladesh Context 2.6. Conclusion CHAPTER THREE: METHODOLOGY 3.1 Introduction 3.2 Identification of Parameters and Their Definitions 3.3 Nature of Demand and Supply 3.3.1 Demand for Energy 3.3.2 Supply of Energy 3.4 Household as an Unit 3.4.1 Family Size 3.4.2 Joint Family 3.5 Background Characteristics of Energy Users 3.5.1 Land Ownership 3.5.2 Household Income 3.5.3 Education 3.6 Environmental Awareness 3.7 Willingness of Participation in SET Transfer 3.8 Methods of Data Collection 3.8.1 Questionnaire Administration 3.8.2 Participant Observation 3.8.3 Participatory Rural Appraisal 3.9 Sampling Design 3.10 The Questionnaire 3.1 1 The Interview Team 3.12 Data Analysis 3.13 Conclusion CHAPTER FOUR: BABGLADESH ENERGY SCENARIO 4.1 Introduction 4.2 General Features of Bangladesh y 35 38 42 44 44 46 48 48 50 51 52 52 53 53 53 54 54 55 55 55 56 57 61 64 66 67 68 69 69 69 4.3 4.4 4.5 4.6 4.7 Background of the Energy Sector Institutional Arrangements Energy Supply Networks Energy Consumption Networks Major Weaknesses of Energy Infrastructure of Bangladesh 71 72 75 77 79 4.8 Non Renewable Energy Resources in Bangladesh 84 4.8.1 Natural Gas 84 4.8.1.1 Gas Resource Classification and Reserve Estimation 86 4.8.1.2 Differences in Opinions on Gas Reserve Records 88 4.8.1.3 Projection of Gas Demand 89 4.8.1.4 Projection of Gas Supply 90 4.8.1.5 Existing Gas Pipelines 91 4.8.1.6 Projection of Gas Production Capacity in Bangladesh 91 4.8.1 .7 Would Natural Gas be a Sustainable Resource of Energy for Rural Bangladesh 93 4.8.2 Coal 93 4.8.2.1 Coal Use 93 4.8.2.2 Jamalgonj Coal 94 4.8.2.3 Dinajpur Coal 96 4.8.2.4 Peat Reserve 96 4.8.2.5 Would Coal be a Sustainable Source of Energy for Rural Bangladesh 97 4.8.3 Electricity 98 4.8.4 Hydropower 99 4.8.5 Oil 100 4.9 Renewable Energy Resources in Bangladesh 101 4.1 0 Pattern of Energy Balance 102 4.11 Conclusion 1 04 CHAPTER FIVE: SET OPTIONS IN RURAL BANGLADESH 107 5.1 Introduction 5.2 Pattern of Expenditure on Energy in Rural Bangladesh 5.3 Pattern of Energy Supply and Demand in Rural Bangladesh 5.3.1 Biomass vi 107 107 110 110 5.4 Available Renewable Energy Technologies in Rural Bangladesh 113 5.4.1 Biomass Energy Technology 1 13 5.4.1.1 Charcoal 1 14 5.4.1.2 Charcoal Cake 1 16 5.4.1. 3 Animal Dung Cake or Stick 1 16 5.4.1.4 Woods, Twigs, Leaves 119 5.4.1 .5 Crop Residues 121 5.4.1 .6 Biogas 124 5.5 Other Renewable Energy Technologies 127 5.5.1 Solar Energy 127 Passive Solar Systems Solar Ponds Solar Drying Light Utilizing Systems Wind Energy 134 5.5.2 5.5.3 5.5.4 5.5.5 5.6 5.7 5.8 Sustainable Energy Technologies ( SETs) in Rural Bangladesh Conclusion CHAPTER SIX: ENERGY USE IN RURAL BANGLADESH 6.1 Introduction 6.2 Characteristics of the Sample 6.3 Rural Energy Situation in Bangladesh 6.3.1 Sources of Existing Energy Supply 6.3.1.1 Energy from Own Animals 6.3.1.2 Energy from Own ForestlLand 6.3.1 .3 Energy from Market Based Sources 6.3.1.4 Electricity 6.3.2 Usage of Energy by Rural Households 6.3.3 Usage of Energy for Commercial Activities 6.3.4 Reasons for Using the Existing Sources of Energy 6.3.5 Energy from Home Sources 6.4 Potential for SET in Rural Bangladesh 6.5 Perception on Producing Energy with SETs vii 128 128 1 29 129 1 36 1 38 139 139 142 147 147 148 149 149 150 150 1 51 152 1 53 1 54 158 6.6 6.7 6.8 Rural Energy Demand Leaders'p Opinions on SETs Conclusion CHAPTER SEVEN: ANALYSIS OF RESPONDENTS' BACKGROUND CHARACTERISTICS 7.1 Introduction 7.2 Energy users' Characteristics 7.2.1 Dung Users' Characteristics 7.2.2 Firewood Users' Characteristics 7.2.3 Leaf Users' Characteristics 7.2.4 Kerosene Users' Characteristics 7.2.5 Diesel Users' Characteristics 7.2.6 Environmental Awareness 7.2.7 Willingness to Participate in SET Transfer Process 7.2.8 Energy Needs for Cooking 7.2.9 Energy Needs for Lighting 7.2.10 Energy Uses for Entertainment 7.3 Correlation Analysis 7.4 Regression Test 7.5 Conclusion 160 164 165 167 167 169 169 173 176 178 181 183 185 187 189 191 194 195 198 CHAPTER EIGHT: CHOICE OF SET FOR RURAL BANGLADESH 201 8.1 Introduction 8.2 Criteria of Justifying SET 8.3 Nature of Energy Needs in Rural Bangladesh 8.3.1 Energy for Households 8.3.1.1 Cooking in Rural Households 8.3.1.2 Household Lighting 8.3.2 Energy for Commercial Activities 8.3.3 Energy Demand in Agriculture 8.3.3.1 Human Labor viii 201 202 203 207 208 211 213 215 216 8.3.3.2 Animal Power 218 8.3.3.3 Energy for Irrigation 219 8.3.4 Energy for Rural Industries 221 8.3.5 Summary 221 8.3.6 Justification of SET 222 8.4 Feasibility of Biomass Technology 222 8.4.1 Availability of Biomass for Energy 222 8.4.2 Technological Complexity of Biomass Use 231 8.4.3 Cost Effectiveness of Biomass Technology 231 8.4.4 Matching with Demand and Supply 232 8.4.5 Contribution to GHG Reduction 232 8.4.6 Major Constraints of Biomass Technology 233 8.5 Feasibility of Solar Energy 234 8.5.1 Availability of Solar radiation for Energy 234 8.5.2 Technological Complexity of Solar Energy 234 8.5.3 Cost Effectiveness of Solar Energy 235 8.5.4 Matching with Demand and Supply 237 8.5.5 Contribution to GHG Reduction 237 8.5.6 Major Constraints of Solar Energy Technology 237 8.6 Feasibility of Wind Power 237 8.6.1 Availability of Wind for Energy 238 8.6.2 Technological Complexity of Wind Power 239 8.6.3 Cost Effectiveness of Wind Power 240 8.6.4 Matching with Demand and Supply 241 8.6.5 Contribution to GHG Reduction 242 8.6.6 Major Constraints of Wind Power Technology 242 8.7 Summary of Feasibility of SET in Matrix Format 242 8.8 Energy Supply and Demand Linkage Model 244 8.9 Conclusion 247 CHAPTER NINE: CONCLUSION AND POLICY IMPLICATIONS 248 9.1 Introduction 9.2 Summary of Previous Chapters ix 248 248 9.2.1 Background of the Study 248 9.2.2 Literature Review 249 9.2.3 Methodology of the Study 250 9.2.4 Bangladesh Energy Scenario 251 9.2.5 SET Options in Rural Bangladesh 253 9.2.6 Energy Use in Rural Bangladesh 254 9.2.7 Analysis of Respondents' Background Characteristics 256 9.2.8 Choice of SET in Rural Bangladesh 257 9.3 Achievement of Objectives 259 9.4 Policy Implications 260 9.5 Directions for Further Research 263 9.6 Conclusion 263 REFERENCES AND BIBLIOGRAPHY 265 x LIST OF TABLES Table 1.1 Percentage of Export Earnings Spent for Fuel Import of Bangladesh 8 Table 1.2 Energy Demand and Supply Scenario of Bangladesh 10 Table 3.1 Major Topographical Features of Sampled Villages 56 Table 3.2 Number of Sampled Respondents by Sex, Land Ownership, and Divisions 62 Table 4.2 .1 Comparison of Per Capita Energy Consumption of Bangladesh and Some Neighbouring Countries 71 Table 4.4.1 Organisations Involved in Energy Management, and Their Responsibilities 74 Table 4.5.1 Energy Supply Networks in Bangladesh 76 Table 4.6.1 Energy Consumption Networks in Bangladesh 78 Table 4.8.1 Information on Discovered Gas Fields 87 Table 4.8.1.2 Announced Gas Reserves in Bangladesh 89 Table 4.8. 1.4 Gas Production Capacity of Bangladesh as of 2000 91 Table 4.8.1.6 Production Forecast Ti1l2005 of Gas Fields 92 Table 4.8.2.1 Summary of Typical Seam Sections of Jamalgonj Coal Reserve 95 Table 4.8.3.1 Installed, Production and Distribution Capacity of Electricity in Bangladesh 98 Table 4.8.5.1 Volume of Oil Import ( in Thousand Tons) 100 Table 4.10 .1 Bangladesh Overall Energy Balance (1994/95 ) 103 Table 5.2.1 Energy Expenditure Pattern in Rural Bangladesh 108 Table 5.3.1 Major Sources of Biomass in Rural Bangladesh 111 Table 5.4.1.5 Alternative Use of Crop Residues 121 Table 5.5.1.1 Solar-Based Power Plants in Rural Bangladesh 128 Table 5.6.1 Wind Power Generation in Bangladesh 134 Table 6.1.1 Sampled Household survey by Division 140 Table 6.2.1 Educational Qualification of Respondents 142 Table 6.2 .2 Respondents by Occupation 144 Table 6.2 .3 Annual Income of Rural Households 145 xi Table 6.2.4 Homestead Land Area 145 Table 6.2.5 Arable Land Area 147 Table 6.3.1 Sources of Energy Supply in Rural Bangladesh 148 Table 6.3.2 Animals Owned by Rural Households 149 Table 6.3.2.1 Use of Energy by Rural Households 151 Table 6.3.3.1 Use of Energy by Rural Commercial Enterprises 152 Table 6.3.4.1 Reasons for Using the Existing Energy Sources 153 Table 6.3.5.1 Energy from Home Sources by Rural Households 154 Table 6.4.1 Awareness about Environmental Pollution from Energy Use 155 Table 6.4.2 Knowledge of Environmental Consequences of Energy Use 155 Table 6.4.3 Knowledge of SET 156 Table 6.4.4 Knowledge of Wind Energy and Its Use 156 Table 6.4.5 Knowledge ofBiogas and Its Use 157 Table 6.4.6 Knowledge of Solar Energy and Its Use 158 Table 6.5 .1 Will You Participate in Producing SET? 158 Table 6.5.2 What Do You Need to Participate in Producing Energy Using SET? 159 Table 6.5 .3 Assistance Available from the Rural Population in Building SET Plants 160 Table 6.6.1 Activities Suffering Due to Energy Shortages 161 Table 6.6.2 What Will You Do if You Have More Energy? 162 Table 6.6.3 More Energy Means 163 Table 6.6.4 Potential Future Benefits from More Energy in Rural Bangladesh 163 Table 6.7.1 Number of Respondents According to Sampled Villages 164 Table 7.2.1 Dung Users' Characteristics 172 Table 7.2.2 Firewood Users' Characteristics 175 Table 7.2.3 Leaf Users' Characteristics 177 Table 7.2.4 Kerosene Users' Characteristics 180 Table 7.2.5 Diesel Users' Characteristics 182 Table 7.2.6 Characteristics of Respondents' Environmental Awareness 184 Table 7.2.7 Characteristics of Respondents' Willingness to SET 186 Table 7.2.8 Characteristics of Respondents' Who Used Energy for Cooking 188 Table 7.2.9 Characteristics of Respondents' Who Used Energy for Lighting 190 xii Table 7.2.10 Characteristics of Respondents' Who Used Energy for Entertainment 193 Table 7.3.1 Correlation Output 194 Regression Equation 7.1 197 Regression Equation 7.2 197 Table 8.3.1.1 Per Capita Biomass Fuel Consumption for Cooking as Estimated by Some Studies 209 Table 8.3.2.1 Estimated Energy Consumption in Major Areas of Rural Households of Bangladesh 214 Table 8.3.3.3 Area Covered by Using Different Devices in 1998 in Rural Bangladesh 220 Table 8.4.1 Projection of Biomass Fuel Supply in Usual Business Scenario 223 Table 8.7.1 Feasibility of Introducing SET in Rural Bangladesh, in Matrix Format 243 xiii LIST OF MAPS Map 4.7.1 : Category-Related Location of Power Plants in Bangladesh 83 Map 4.8.1 : Location of Gaswells, Existing and Proposed Gas Transmission Pipelines in Bangladesh 85 Map 5.1 : F orestland of Bangladesh 1 22 Map 5.2: Types of Land in Bangladesh 1 23 Map 5.3: Location of PV System Used in Bangladesh 1 32 Map 5.4: Location of Wind Power Generators in Bangladesh 1 35 Map 6.l Sample Location for Household Survey in Bangladesh 1 41 Map 8.1 Characteristics of Arable Land in Bangladesh 229 xiv UST OF FIGURES AND PHOTOGRAPHS Figure 4 .8 .1 .1 Production Shares of Natural Gas by Operators 9 2 Figure 4.9 .1 The Use of III Health Cows for Preparing Land 10 2 Figure 5 .3 .1 A Woman Carrying Firewood 112 Figure 5 .3 .1 .2 Children Carrying Collected Biomass 112 Figure 5.4.1 .1 Charcoal Production System in Rural Community 115 Figure 5.4.1.3. c A Woman Making Dung Cakes with Cow Dung 117 Figure 5 .4 .1.3a A Woman Collecting Cow Dung 118 Figure 5.4.1.3b A Woman Making Dung Sticks with Cow Dung and Jute Straws 118 Figure 5 .4 .1 .6 a Biogas Plant under Construction 1 26 Figure 5 .4.1.6 b A Woman Cooking with Biogas 1 26 Figure 5.5.4.1 a A Woman Cooking with Solar Cooker 133 Figure 5 .5.4.1 b A Woman Drying Chili with Solar Dryer 133 Figure 8 .8 .1 Energy Supply and Demand Linkage Model for Rural Bangladesh ( Household Purposes) 245 Figure 8.8 .2 Energy Supply and Demand Linkage Model for Rural Bangladesh ( Commercial Purposes) 246 xv LIST OF ANNEXES Annex 1 Sea Level Rise at Low Growth Rate 293 Annex 2 Sea Level Rise at Medium Growth Rate 294 Annex 3 Air Pollution: Photograph taken from Dhaka City 295 Annex 4 Focus Group Interview: Some of the Female Participants of Kutubdia Village 296 Annex 5 Focus Group Interview (PRA Survey) Female Paliicipants Drawing Map of the Area to Suitable Location for Windmill at Loxmikola Village 297 Annex 6 Focus Group Interview (PRA Survey) Male Pruiicipants Drawing Map of the Area to Suitable Location for Windmill at Kutubdia Village 298 Almex 7 Living Condition of Focus Group in Kutubdia Village 299 Almex 8 Location of Windmill Site Proposed by Focus Group of Loxmikola Village 300 Annex 9 Location of Windmill Site Proposed by Focus Group of Kutubdia Village 301 Annex 10 Questionnaire for Household Survey 302 Almex 11 QuestiOlmaire of Leadership Opinion Survey 309 Annex 12 Map of Bangladesh 312 Annex 13 Width of Banks of Major Rivers in Bangladesh 313 Annex 14 Intensity and Duration of Sunshine in Bangladesh 317 Annex 15 Wind Speed Data of Bangladesh 322 Annex 16 Concepti Guideline for Preparing Project Proposal of Capacity Building on Sustainable Energy Technology Transfer 327 Nmex 17 Concept of Mann-Whitney Test 348 Annex 18a Regression Output (Table 7.4.1 a) 351 Annex 18b Regression Output (Table 7.4.1 b) 352 xvi AC ACRE ADB ADP BBS BCIC BCSIR BFIDC BIDS BPC BPDB BRAC BRDB BREB BSCIC BTC btc/year BTV BUET BUP BWDB CMI C02 DC DE DESA DESCO FCCC FFYP FFYP SFYP List of Acronyms and Abbreviations Alternating current Unit of land (I acre=IOO decimals) Asian Development Bank Annual Development Programme Bangladesh Bureau of Statistics Bangladesh Chemical Industries Corporation Bangladesh Council for Scientific and Industrial Research Bangladesh Forest Industries Development Corporation Bangladesh Institute of Development Bangladesh Petroleum Corporation Bangladesh Power development Board Bangladesh Rural Advancement Committee (NGO) Bangladesh Rural Development Board Bangladesh Rural Electrification Board Bangladesh Small and Cottage Industries Corporation British Tobacco Company Billion tons per year Bangladesh Television Bangladesh University of Engineering and Technology Bangladesh Unnayan Parishad Bangladesh Water Development Board Census of Manufacturing Industries Carbon dioxide Direct current Department of Environment Dhaka Electric Supply Authority Dhaka Electric Supply Company Framework Convention for Climate Change Fourth Five-Year Plan Fifth Five-Year Plan Sixth Five-Year Plan XVlI GHG GIIP GJ GOB GTCL Ha IFAD IOC IPCC Kg LGED LPG ME&F MEMR MLR NEP NGO OECD PC PJ PRA PSC PSMP PV REDB RES RISP SET SFYP SPSS sq. km. tcf TFYP TGL Greenhouse gas Gas Initially In Place Gigajoule, Energy unit of 10*10 Government of Bangladesh Gas Transmission Company Limited Unit of land measurement International Fund for Agricultural Development International Oil Company Inter-Governmental Panel on Climate Change Kilogram Local Government Engineering Department Liquid Petroleum Gas Ministry of Environment and Forestry Ministry of Energy and Mineral Resources Multiple Linear Regression National Energy Policy Non-Government Organisation Overseas Economic Cooperation and Development Planning Commission of the Government of Bangladesh Peta Joule, energy unit of 10* 15 joules Participatory Rural Appraisal Production Sharing Contract Power Sector Master Plan Photovoltaic Rural Electrification Development Board Rio Earth Summit Rural Industries Study Project Sustainable Energy Technology Second Five-Year Plan Statistical Package for Social Science Square kilometre Trillion cubic foot Third Five-Year Plan Titas Gas Limited xviii TOE UNDP WAPDA WB Ton of Oil Equivalent United Nations Development Programmes Water and Power Development Authority World Bank xix 1000 cft of gas 1000 cft of gas 1000 cft of gas 1000 eft of gas 1000 cft of gas 1 ton erude oil 1 gallon of kerosene oil 1 gallon of diesel oil 1 mound firewood 1 ton firewood 1 ton coal 1 hectare 1 acre 1 acre 1 bigha ( lOcal unit) 1 BTU 1 calorie 1 foot 1 sft. 1 yard 1 toe 1 PJ Energy Conversion Factors = = = = = = = xx 6.4 gallon of crude oil 6.5 gallon of furnace oil 6.1 gallon of kerosene 6.1 gallon of diesel oil 6.1 gallon of gasoline oil 40 MCF of gas 164 eft of gas 164 eft gas 572 eft gas 15.5 MCF gas 28.00 MCF gas 2.471 acres 4,046 sq.m 100 decimals 33 decimals 1055 J 4.184 J 0.3048 ID 0.092903 sq.m 0.9144 m 42.7 GJ 10 EIS J