Unravelling Current Energy Crisis in RMG sector of Bangladesh: Challenges and Solutions

adv-06

Md Shadman Shakil

Introduction:

Save energy save country
Figure: Save Energy Save Country

Bangladesh, a South Asian country with a large population, is now dealing with an exceptional energy crisis that has negatively influenced its overall development, social well-being, and economic growth rate. The RMG sector in Bangladesh, which has experienced tremendous expansion since the 1980s, is set to suffer as a result of the inconsistent gas and electricity supply. The industry for exporting clothing may be forced over the edge by a sudden increase in the cost of fuel for energy production and transportation, as well as by exchange rate instability.  The country’s energy infrastructure has been put under strain by a number of internal and foreign forces, leading to the crisis, which has left its population dealing with acute energy shortages and rising prices. By 2023, the country will be at a crossroads, searching for workable ways to ease the load of this urgent energy problem. From July 1993 to September 2022, Bangladesh’s electricity production statistics was updated on a monthly average basis and averaged 2,029 GWh.

Current Impact and Energy Capacity:

According to Ember’s Global Electricity Review 2023, Bangladesh’s power industry is one of the most reliant on fossil fuels in Asia since they account for a staggering 98% of the country’s energy mix. For comparison, 61% of the world’s power in 2022 was generated by fossil fuels. While green energy sources are becoming more prevalent globally, solar and hydropower comprise only 2% of Bangladesh’s electricity mix. The outcome is among the most disastrous in South Asia, well below Pakistan (43%) and India (23%). Renewable energy and energy efficiency may be two fundamental stepping stones for the nation’s sustainable development. Currently, Bangladesh only has 967 MW of green energy capacity at the time of April 2023, with just 2.08% of that coming from renewable sources. According to the power system strategic plan, by 2030, 4.1 GW of green energy capacity, including over 2.3 GW of solar power capacity, is the target. The government is currently implementing a number of initiatives with a heavy focus on solar power, such as solar power, solar boating, pump watering, mini-grid, waste to electricity, windmills, and biomass, among others, to meet that goal.

Fig: Changes in Installed the production of electricity reservoir and Mix Energy from 2009 to 2023 (Source- IEEFA)   Figure courtesy: Energy Tracker Asia

Core Problem in RMG supply Chain: The Ready-Made Garment (RMG) industry in Bangladesh is heavily dependent on natural gas for power generation, which is experiencing severe shortages and price increases. This dependence is at the root of the industry’s energy issue. Production operations are disrupted by the inadequate and unstable energy supply, which increases operating costs and decreases worldwide market competitiveness. The RMG sector’s development potential is severely limited without improved energy infrastructure and a diversity of energy sources, which has an effect on the nation’s entire economy and job prospects.

Probable Solutions to reduce the impact of RMG sector of Bangladesh:

A cooperative strategy, including the government, the private sector, and other stakeholders, is needed to address the present energy problem in RMG sector of Bangladesh. These probable solutions that follow demonstrate how such cooperation may successfully address the problems:

  1. Governmental Offerings and Support for Policy

In order to encourage the RMG sector to endorse sustainable energy practices, the government may play a significant role. RMG firms that invest in energy from renewable sources like wind, solar power, or biomass may be eligible for financial rewards, grants, and subsidies. A further incentive for enterprises to switch to greener energy sources is tax rebates or lower import taxes on renewable energy equipment. The government may also simplify the procedures for using renewable energy plants to encourage rapid adoption.

To further encourage renewable energy methods in the RMG sector, it is crucial to implement benevolent rules and regulations. The government can establish targets for the use of green energy sources and enhancements to energy efficiency, encouraging businesses to achieve these objectives. The sector will be propelled into sustainable practices by strong environmental regulations and penalties for overuse of energy or non-compliance.

  • Public-Private Partnerships (PPPs)
Figure: Partnership must be needed for proper utilization of energy

 Through collaboration between the private and public sectors through PPPs, the switch from energy derived from fossil fuels into energy derived from renewable energies in the sector of RMG might be significantly expedited. The government may offer land or financial assistance for renewable energy projects, while private enterprises may contribute to project management as well as technology implementation experience. Energy providers and RMG producers may form joint ventures to build renewable energy facilities specifically intended to power RMG factories.

Public private partnership can help with funding as private industry is able to provide a sizeable chunk of the capital needed for renewable energy projects. Long-term power purchase arrangements between energy suppliers and RMG companies can also guarantee a consistent electricity supply at fair prices.

  • Energy evaluations and resource development:

To find energy inefficiencies and possible areas for improvement, conducting energy evaluations in RMG plants is a crucial and important step. The government may help interested RMG manufacturers with energy audits through partnerships with industry groups and energy specialists. These audits will assist industries in evaluating their patterns of energy usage, identifying energy-intensive operations, and proposing energy-saving solutions.

Through capacity development workshops and programs, factory owners and employees should be trained on energy-saving methods and best practices. The use of energy-efficient technology, adequate maintenance procedures, and behavioral adjustments may all be included in these training sessions. The industry will be able to take proactive steps to minimize energy usage thanks to the information obtained via capacity building.

  • Development and Research:
Figure:  Must increase the research & development department

Driving innovation in green energy solutions for the RMG industry requires cooperation between GOB research sector, research facilities, and the corporate sector. The government can provide funding for research initiatives that concentrate on creating effective technologies for energy storage, innovative grid strategies, and individual renewable energy solutions for the RMG sector. Collaborations between businesses and research   institutes will make testing and applying innovative technologies in RMG plants easier. The outcomes and learning from these partnerships can help policymakers create efficient energy plans for the whole industry.

  • Cooperation across sectors:

In Bangladesh, teamwork between sectors can assist to maximize energy use. By fostering cooperation across various industries, the extra energy generated in one may be used by others at times of high demand. For instance, extra energy produced throughout the textile or manufacturing sectors may be sent to RMG firms during times of substantial demand for energy in the RMG sector. Energy exchange agreements, which allow companies with excess energy to sell it to those in need, can help achieve this. Such transfers may be facilitated effectively and securely with the help of smart grid technology.

Figure: International Funding and Cooperation can increase the energy storage capacity for a special need period
  • International Funding and Cooperation:

Bangladesh’s attempts to shift to a cleaner energy source can be supported by international collaboration and assistance from development organizations, contributor nations, and climate funds. Collaboration with overseas partners may give access to cutting-edge technology, knowledge, and best practices in the field of renewable energy. Additionally, it can aid in luring foreign direct investments within the sector of renewable energy. The RMG industry may gain from worldwide breakthroughs in energy effectiveness and environmental sustainability through international collaboration, which can also create opportunities for knowledge transfer and capacity building.

Energy-saving promotion campaigns:

Figure: Energy saving campaign can increase awareness

Campaigns to raise awareness of energy saving may be launched with the help of industry groups, factory owners, and consumers. These campaigns can make use of a range of media channels to inform key audiences about the value of energy saving, its effects on the natural environment, and its financial advantages.

While factory owners may be educated on the financial advantages of utilizing renewable energy, industrial workers can be urged to adopt energy-saving behaviors such as switching off lights as well as equipment when not in use. Customers can be persuaded to support eco-friendly and sustainable companies, increasing demand for green items.

Conclusion:

In conclusion, resolving the current shortage of energy in the RMG sector of Bangladesh calls for a cooperative strategy that promotes a win-win outcome for all parties concerned. The government, the RMG sector, and the energy sector may all benefit from finding solutions together. Aside from reducing the industry’s dependency on natural gas, investing in green energy sources like solar and wind power also encourages sustainability and environmental preservation. To encourage RMG manufacturers to embrace these eco-friendly technologies, the government may provide incentives and regulatory assistance, which will increase the nation’s capacity for renewable energy.

The RMG industry will benefit from increased energy efficiency initiatives that boost production and lower operating costs. By facilitating access to money and technology for cost-effective renovations, private-public collaborations may encourage innovation and competitiveness. Energy security, economic expansion, and environmental sustainability are all guaranteed by a cooperative win-win strategy. The RMG industry can maintain its competitiveness in the global market while promoting a greener as well as more robust future for Bangladesh by adopting renewable energy along with energy-saving measures.

References:

Bangladesh’s energy crisis: A looming threat for the RMG industry | The Daily Star

Bangladesh Electricity Production, 1993 – 2023 | CEIC Data

The Electricity Sector in Bangladesh: What Comes Next? (energytracker.asia)

Sustainable Renewable Energy for RMG Industry – Goldnfiber | Apparel Merchandising Blog