Renewable Energy in Bangladesh – Current Trends and Future Opportunities

10 February 2021 – by Viktor Tachev

Renewable energy in Bangladesh is an energy sector with room to grow. As of 2019, Bangladesh is among the top 6 global economies by annual GDP growth, according to the World Bank. To satisfy its energy consumption needs, the country currently relies mainly on natural gas and biofuels.

The Growth of Renewable Energy in Bangladesh

In 1980, only 0.016% of the locals had electricity. Fast forward 40 years, today that figure stands at 85%. Yet, alongside Mongolia, it is the only other country in the region with electrification rates below 90%.

Since the renewable energy policy guidelines were published in 2008 by the local Ministry of Power, Energy, and Mineral Resources, Bangladesh has made small but steady progress.

Over 65% of the power generation currently is attributed to natural gas. However, wind, hydropower, and solar PV are also growing.

Total Energy Supply by Source, Bangladesh, 1990 - 2018, IEA
Total Energy Supply by Source, Bangladesh, 1990 – 2018, IEA

The installed renewable power capacity in Bangladesh at the end of 2018 was 579 MW, on-grid and off-grid installations included. The share is as follows – solar PV (59.5%), small-scale hydropower (39.7%), biomass and biogas (0.8%).

Bangladesh’s Renewable Energy Potential

Bangladesh introduced a National Solar Energy Action Plan with three possible scenarios for total solar energy capacity by 2041. These include business-as-usual (8 GW), medium (25 GW), and ambitious (40 GW).

For now, the last one seems hard to achieve, considering that the renewables’ share within the national power mix. In 2019, they were 1.5%, currently sitting at 3%. Yet, the strategy’s authors are hesitant that the country should pursue the ambitious plan. If successful, it will ensure the following capacity:

  • 16 GW solar hubs;
  • 4 GW electric utilities;
  • 5 GW private developers;
  • 2.5 GW irrigation pumps;
  • 12 GW rooftop installations.

The potential for a swift transition and a diversified renewable energy mix is there. Utilizing only 1% of the Kaptai dam’s water surface for floating solar will ensure nearly 500 MW of solar capacity. Additional unexplored potential is also laying in the river banks and islands like the Meghna estuary.

According to the National Renewable Energy Laboratory (NREL), there are also over 20 000 km2 of land where the wind speeds vary between 5.75 and 7.75 m/s. This equals a potential of over 30 000 MW.

Bangladesh's Renewable Energy Potential, World Future Council
Bangladesh’s Renewable Energy Potential, World Future Council

Bangladesh’s Government’s Efforts to Help the Renewable Energy sources Transition

The government announced plans to install rooftop systems on all educational facilities to feed additional solar power to the grid. The government of Bangladesh also plans to replace its fossil fuel fleet with solar power vessels. Besides, this year the country will finally accept the Electric Vehicle Registration and Operation Guidelines, proposed in 2018 and start building solar charging stations for EVs with an average capacity of 20 kilowatts.

For now, although distant, the future looks bright. REN21’s report concludes that Bangladesh, alongside China, India, and Japan, leads renewable energy developments in the region. According to Dandan Chen from the World Bank, Bangladesh has one of the most successful off-grid renewable energy programs globally.

The sustainable energy transition is fueled by institutional capacity and government policies, including the Solar Home System Program by IDCOL. IDCOL was established in 1997 by the local government and the World Bank. Its goal is to provide funding and technical know-how to private companies and retail consumers within the renewable energy niche. As a result, today, Bangladesh hosts the largest domestic solar power program worldwide, covering over 11% of the local population.

Bangladesh’s Challenges in front of the Renewable Energy resources Transition

Bangladesh is among the worst-affected countries from global warming. According to a study from 2019, the coastal land and riverbanks territories are subject to constant erosion and flooding. This process forces people to relocate frequently and also complicating the renewable energy network development.

To make a quick turnaround in the national power system, Bangladesh has to solve a plethora of additional challenges. Such are the lack of incentives for private investors – missing coordination among ministries, procedure difficulties, limited budget allocation to the RERs-based projects, slow technological adoption, lack of awareness and application of green building policies, lack of a better grid infrastructure with enhanced demand and capacity, and more.

More importantly, even with authorities’ best efforts, the entire area of Bangladesh cannot be electrified. The UN projects some 10% to remain off the grid. This has led to innovation from not-for-profit groups such as Grameen Shakti to sustain electricity production and supply renewable energy technologies in rural areas.

The Advantages of the Renewable Energy Transition

The transition towards the renewable energy sector will further accelerate economic development, keep energy access reliable and affordable, and improve health care and the quality of life.

A key enabler for Bangladesh’s renewables transition is the support from global organizations. Since the country’s independence, the World Bank has provided over $30b in grants and interest-free credits. Currently, Bangladesh continues to take advantage of the interest-free credits to fund its renewable energy projects.

Another success story is the partnership between the World Future Council, the local Coastal Development Partnership organization, and the German development organization Bread for the World. In 2018, it kicked-off the “100% Renewable Energy for Bangladesh – Access to renewable energy for all within one generation” project.

There are also long-lasting and ongoing initiatives with partnering organizations like REEP. Their goal is to help promote renewable energy transition within the country.

How Renewable Energy Transition Affects the Coal Industry in Bangladesh

Bangladesh has seen a 33% annual rise in coal consumption since 1990. By the end of 2021, it plans to ensure coal-based power plants with the capacity to produce 7.5 GW of electricity. This is nearly 50% of what it had in place in 2017.

However, even then, Bangladesh won’t be as dependent on coal as other countries in the region and will continue to rely predominantly on natural gas. The renewable energy transition won’t have such a drastic impact on the coal industry in the short term.

Bangladesh's Renewable Energy Transition Forecasts, World Future Council
Bangladesh’s Renewable Energy Transition Forecasts, World Future Council

However, long-term forecasts predict that, if Bangladesh manages to achieve its renewable energy goals, by 2050, the share of coal within the total energy mix would be negligible.

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