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 2024.1 Fossil gas is the largest fuel source, accounting for 67% of generation in 2024.2 Although the cut-off date in our graphs is 2022, recently released data from Bangladesh shows efforts to diversify Bangladesh’s power mix and meet increasing demand have led to an increase in coal capacity, with its share increasing to 20% in 2024 from 2% in 2015.3 Between 2021 and 2024 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 2023 to 83% in 2040. Gas would be phased out around 2070.5 In all other pathways, a higher deployment of hydrogen allows a faster phase out of gas.
The government has adopted the Renewable Energy Policy 2025 which has set targets for generating 20% and 30% of electricity from renewable energy sources by 2030 and 2040 and launched measures like mandatory rooftop solar on public buildings to reduce dependence on costly imports.6 However, renewables still account for only a small share of supply, and many planned projects remain stalled.
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 and of the targeted 40% clean energy by 2041, only 9% (approximately 5,280 MW) is projected to come from traditional renewable energy sources.
Improved efficiency of transmission and distribution (T&D) is expected to play an important role in the country, with analyses showing only 1% improvement in transmission and distribution losses could reduce the country’s energy generation needs by 884 GWh.7
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 our assessed 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 pathway. 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).8 To realise the 2025 Renewable Energy Policy, Bangladesh would require USD 980 mn until 2030 and USD 1.46 bn until 2040 annually. Analysed 1.5°C compatible pathways show a much steeper ramp up of renewable generation after 2030, reaching up to 83% in 2040 compared to the national renewable energy targets. Bangladesh would require substantial private and international financial support to reach the required levels of investment compatible with a 1.5°C pathway.9
Bangladesh Bank has expanded its green refinancing schemes, lowering interest rates and broadening eligibility to cover more green products and projects.10 The Green Transformation Fund (about USD 400–450 mn) and the Green Products/Projects Initiative fund (about USD 80 mn) now offer concessional loans at 5–6%.11 Yet utilisation remains low, and the schemes are still too small and short-term to support large solar parks. Most financing continues to favour smaller rooftop and distributed solar projects.12
To accelerate the transition, Bangladesh should explore diverse financing sources like multilateral development banks, green bonds, private equity, and investment facilities.13 Non-banking financial institutions can also finance clean energy projects. However, more local institutions need the capacity to tap into financing from low-cost multilateral development bank.
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 |
2022
|
2030
|
2035
|
2040
|
2050
|
Power sector decarbonised by
|
|---|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
588
|
354 to
442
|
187 to
299
|
43 to
78
|
4 to
61
|
2050 to
2054
|
|
Relative to reference year in %
|
-40 to
-25%
|
-68 to
-49%
|
-93 to
-87%
|
-99 to
-90%
|
| Indicator |
2022
|
2030
|
2035
|
2040
|
2050
|
|---|---|---|---|---|---|
|
Share of unabated coal
%
|
6
|
0 to
0
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of unabated gas
%
|
68
|
73 to
87
|
41 to
63
|
10 to
16
|
1 to
13
|
|
Share of renewable energy
%
|
2
|
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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