What is Bangladesh's pathway to limit global warming to 1.5°C?
Power
Decarbonising the power sector
Bangladesh’s power mix is dominated by fossil fuels, which accounted for approximately 98% of power generation in 2023.1 Fossil gas is the largest fuel source, accounting for 70% of generation in 2023.2 Efforts to diversify Bangladesh’s power mix and meet increasing demand have led to a switch from fossil gas to coal, with the share of coal increasing to 15% in 2023 from 2% in 2015.3 Between 2021 and 2023 coal capacity has increased by four fold, to 4.8 GW.4
Bangladesh's power mix
terawatt-hour per year
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Graph description
Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC AR6 global least costs pathways. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2023.
Methodology
Data References
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Across all analysed pathways, the power sector starts to decarbonise in the near term, with emissions intensity declining immediately. This requires a significant scale up of renewables. The Net Zero Commitments pathway shows the share of renewables in the power mix increase from 1.5% in 20235 to 83% in 2040. Gas would be phased out around 2070. In all other pathways, a higher deployment of hydrogen allows a faster phase out of gas.
Bangladesh’s electricity sector is grappling with overcapacity and increased dependence on costly fossil fuel imports.6 This heavy reliance on imports leaves Bangladesh vulnerable to global energy market fluctuations and contributes to power shortages. The sector also faces substantial subsidy burdens due to overreliance on costly imported fossil fuels, further complicating its financial sustainability.7 Investing in renewables allows Bangladesh to diversify its mix, increase energy independence, and reduce the risk of carbon lock-in.
The Integrated Energy Power Master Plan 2023 (IEPMP 2023) aims for 25% clean energy by 2030, rising to 40% by 2041. However, it is important to note that the IEPMP considers nuclear and fossil gas as clean energy. It recommends infrastructure upgrades such as modernising the grid and developing better storage capacity, though IEPMP pathways also include unproven technologies like carbon capture and storage and ammonia coal co-firing.8
Improved efficiency of transmission and distribution (T&D) is expected to play an important role in the country, with analyses showing just only 1% improvement in transmission and distribution losses could reduce the country’s energy generation needs by 884 GWh, where the current T&D loss accounts for 10% of the power generation. This could have a significant impact as current transmission and distribution loss is more than 10%.9 However, implementation is a major challenge – particularly mobilising the required international financial support.
Bangladesh's power sector emissions and carbon intensity
MtCO₂/yr
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Graph description
Emissions and carbon intensity of the power sector in selected 1.5°C compatible pathways.
Methodology
Data References
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Power capacity investments
Across the set of 1.5°C pathways, annual investments in renewable energy capacity in Bangladesh are projected to range between USD 1-2.3 bn/yr from 2026-2030, reaching between USD 5.6-9.7 bn/yr from 2031-2040 and 6.3-18 bn/yr from 2041-2050, depending on the scenario. The Deep Electrification pathway shows high renewable capacity investments, driven by increased electrification of end-use sectors, growing energy demand, and expanded electricity access.
The IEPMP 2023 estimates that adding 5.5 GW renewable energy capacity between 2023-2030 would require a total investment of USD 3.1 bn (or USD 0.4 bn annually) excluding any storage cost (under the advanced technology scenario).10 In the long term, the IEPMP 2023 shows 37.8 GW of renewable capacity added between 2023-2050. Analysed 1.5°C compatible pathways show a much steeper ramp up of renewable capacity after 2030, reaching total capacity of 285-369 GW by 2050. Bangladesh would require substantial international financial support to reach the required level of investment compatible with a 1.5°C pathway.
While Bangladesh Bank, the central bank of Bangladesh has increased its refinancing scheme for green projects to USD 84.6 million between October-December 2023, the loan cap for solar parks remains inadequate, limiting project scalability.11 To accelerate the transition, Bangladesh should explore diverse financing sources like multilateral development banks, green bonds, private equity, and investment facilities.12 Non-banking financial institutions can finance clean energy projects, however, more local institutions need the capacity to tap into low-cost multilateral development banks financing.
Bangladesh's renewable electricity investments and capacities
Billion USD / yr
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Graph description
Average annual investments in power sector renewable electricity capacity and cumulative installed power capacities across time under 1.5°C compatible pathways downscaled at country levels.
Methodology
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1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Bangladesh
| Indicator |
2019
|
2030
|
2035
|
2040
|
2050
|
Decarbonised power sector by
|
|---|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
580
|
354 to
442
|
187 to
299
|
43 to
78
|
4 to
61
|
2050 to
2054
|
|
Relative to reference year in %
|
-39 to
-24%
|
-68 to
-48%
|
-93 to
-87%
|
-99 to
-89%
|
| Indicator |
2019
|
2030
|
2035
|
2040
|
2050
|
|---|---|---|---|---|---|
|
Share of unabated coal
per cent
|
1
|
0 to
0
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of unabated gas
per cent
|
81
|
73 to
87
|
41 to
63
|
10 to
16
|
1 to
13
|
|
Share of renewable energy
per cent
|
1
|
9 to
20
|
32 to
52
|
76 to
83
|
80 to
87
|
BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded
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Methodology
Data References
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