Authors: Mohammad Nazmul Huda
Abstract: Bangladesh's sugar industry possesses an under-recognized indigenous energy asset in the form of bagasse-based cogeneration. Bagasse, the fibrous residue generated during sugarcane crushing, is traditionally combusted in boilers to produce process steam and electricity for sugar-mill operations. This study develops an avoided-cost framework to estimate the economic value of bagasse-based electricity generation associated with sugar mills under the Bangladesh Sugar and Food Industries Corporation (BSFIC). Previous studies have documented 14 bagasse-based cogeneration plants in Bangladesh with a combined historical installed capacity of approximately 38.1 MW, while engineering assessments have identified potential surplus export capacity of approximately 3–4 MW per mill under suitable operating conditions. Using an analytical capacity range of 42–49 MW, with a central estimate of 45.5 MW, and a 40% capacity factor, annual electricity generation is estimated at approximately 159.4 GWh. Using the historical Bangladesh Institute of Development Studies (BIDS) benchmark of Tk 11.97/kWh for quick-rental electricity, the equivalent avoided conventional-generation expenditure is approximately Tk 1.91 billion (Tk 190.8 crore) per year. A seasonal scenario of 135 operating days and 22 hours per day produces approximately 135.1 GWh and an equivalent replacement expenditure of approximately Tk 1.62 billion (Tk 161.8 crore). These figures represent gross avoided generation expenditure rather than direct government savings, because actual net economic benefits require deduction of operation and maintenance costs, biomass opportunity costs, capital recovery, and grid-integration costs.
