Solar generation can help Bangladesh save $2.7b in 2022-2024

Bangladesh could save $2.7 billion between 2022 and 2024 by solar generation, according to a report published by Ember, a global energy think tank. 

In another mini briefing published by Ember, it was found that spot market LNG imports could cost Bangladesh about $11 billion between 2022 and 2024 while solar could reduce these imports by 25% and save the country $2.7 billion. 

Institute for Energy Economics and Financial Analysis (IEEFA's)  recent analysis showed that Bangladesh imports about 59% of the LNG from the spot market, opening itself to price volatility risk.  

According to a report published Thursday jointly by Ember, the Centre for Research on Energy and Clean Air (CREA) and the Institute for Energy Economics and Financial Analysis (IEEFA) finds that solar generation allowed seven Asian countries– China, India, Japan, South Korea, Viet Nam, the Philippines and Thailand – avoid billions of dollars in fossil fuel costs in the first half of 2022 alone. 

The joint analysis by three global energy think tanks shows that in the wake of soaring fossil fuel prices, solar power is already contributing to meeting electricity demand in Asia and enhancing energy security.

The contribution of solar generation in seven key Asian countries avoided potential fossil fuel costs of approximately US$34 billion from January to June 2022. This is equivalent to 9% of total fossil fuel costs during this period.

The report also analysed the growth of solar power over the last decade, finding that five of the top ten economies with solar capacity are now within Asia, including China, Japan, India, South Korea and Viet Nam. 

The report finds that the majority of the estimated US$34 billion savings are in China, where solar met 5% of the total electricity demand and avoided approximately US$21 billion in additional coal and gas imports from January to June 2022.

"Asian countries need to tap into their massive solar potential to rapidly transition away from costly and highly-polluting fossil fuels," CREA's Southeast Asia Analyst Isabella Suarez said. 

Realising these goals will require grid stabilisation, innovative policy reforms to unlock investments and collaboration with the private sector. However, it is clear that solar power is set to play a considerable role in Asia's energy story over the next decade.

"A key challenge for successful solar expansion in Asia will include investments in grid stabilisation and energy market reform which, in turn, depend on how attractive solar is to investors. In the short-term though, cost elements such as capital costs, fuel costs as well as operations and maintenance costs will be critical to realise the region's solar potential," IEEFA financial analyst said.

"Asian countries have shown that rapid solar deployment is possible. As the prices of solar and storage plummet, and the potential cost savings have started to materialise, solar dominance in Asia now looks to come much sooner than previously expected," Ember's Asia Electricity Analyst Dr Achmed Shahram Edianto said. 

The report said that Japan saw the second-highest impact, with US$5.6 billion in avoided fuel costs thanks to solar power generation alone.  

In India, solar generation avoided US$4.2 billion in fuel costs in the first half of the year. It also avoided the need for 19.4 million tonnes of coal. 

Viet Nam's solar power avoided US$1.7 billion in additional fossil fuel costs. Viet Nam's solar generation was close to zero terawatt hours (TWh) in 2018. In 2022, solar accounted for 11% of electricity demand from January to June.

While solar only accounted for 2% of Thailand's electricity in the first six months of 2022, an estimated US$209 million of potential fossil fuel costs were avoided. The Philippines avoided US$78 million in fossil fuel spending, despite solar accounting for only 1% of generation.

Similarly in South Korea, solar power generated 5% of the country's electricity throughout the year's first half, avoiding potential fossil fuel use costing US$1.5 billion.