Power sector in 2030

Bangladesh’s power mix was dominated by fossil fuels in 2019 – they accounted for approximately 99% of generation.¹⁸ Natural gas is the largest fuel source, followed by oil. With the aim of diversifying its power mix, reducing its high reliance on domestic natural gas resources and its dependency on oil, the country had planned to increase coal capacity. However, this plan was scrapped in 2021 – with 90% of the planned coal capacity expansion cancelled. While this is a step forward in the right direction, the country is still planning to rely on fossil fuels for power generation, aiming to replace the planned coal expansion with natural gas.

While coal plays a minor role currently in Bangladesh’s power mix, for it to be aligned with a 1.5°C compatible pathway it would need to be phased out in 2030. Our analysed scenarios show that by 2030, unabated fossil fuel generation share in the power sector needs to be reduced to 74-77% (compared to 99% in 2019), while renewable energy uptake should increase up to 19-26% by 2030 under different scenarios.^6,34 In its updated NDC, Bangladesh plans on improved efficiency in power generation through technological improvements particularly in the gas capacity through installation of combined cycle gas turbine (CCGT). This might lead the country on a dangerous path of stranded assets in the long term, as opposed to focusing on the developing of available and cheaper technologies such as renewables.

Towards a fully decarbonised power sector

Power generation in Bangladesh is heavily dependent on natural gas, with an estimated emissions intensity of 460 gCO₂/kWh in 2019. Bangladesh’s electricity sector is one of the fastest growing in South Asia, with an average annual growth of ~10% during the past decade.²⁴ 1.5°C compatible pathways shows Bangladesh’s power sector fully decarbonised by 2040, with gas phased out of power generation by 2040, and share of renewables ramping up from 1% in 2019, to 99-100% by 2050.

Investing in any new fossil fuel capacity risks stranded assets and locking in the country to a carbon intensive emissions pathway.

Renewable power is starting to take hold in Bangladesh. The Bangladeshi government has recently announced a target of 40% of power generation to come from renewable energy sources by 2041, up from the current levels of 3%.²⁵ Bangladesh aims to add 2 GW of renewable energy to reach an installed capacity of 2.5 GW by 2021, and 3.8 GW by 2041.

To achieve this Bangladesh will need to strengthen its renewable energy targets to replace the current plan for fossil capacity additions. The phasing out fossil fuel subsidies, combined with the fact that new solar PV is now significantly cheaper to build than new coal, are potential opportunities for the country to capitalise on in the decarbonisation of its power sector.²⁶

¹ Ministry of Environment and Forests, G. of B. Second national Communication of Bangladesh to UNFCCC. (2012).

² FAOSTAT. Land use Total Data Bangladesh. (2021).

³ Gerretsen, I. Bangladesh scraps nine coal power plants as overseas finance dries up. Climate Home News (2021).

⁴ Reuters. Bangladesh looks to cut future coal use as costs rise, Energy News, ET EnergyWorld. Energyworld.com (2020).

⁵ Dhaka Tribune. State Minister: 40% of Bangladesh’s power will come from renewables by 2041. Dhaka Tribune. (2021).

⁶ USAID. Greenhouse Gas Emissions by Sector Bangladesh. (2012).

⁷ Statista. Bangladesh – share of economic sectors in the gross domestic product 2019. (2020).

⁸ Governement of Bangladesh. Bangladesh Year Book-Chapter 6 Energy. (2019).

⁹ Ministry of Environment, F. and C. C. of B. Third National Communication of Bangladesh to UNFCCC. (2018).

¹⁰ International Trade Administration. Bangladesh – Power and Energy. (2020).

¹¹ Bangladesh Planning Commission. Making Vision 2041 a Reality PERSPECTIVE PLAN OF BANGLADESH 2021-2041. (2020).

¹² Cabraal, A., Ward, W. A., Bogach, V. S. & Jain, A. Living in the light: The Bangladesh solar home systems story. (2021).

¹³ Government of the People’s Republic of Bangladesh. Nationally Determined Contributions (NDC) 2021-Bangladesh. (2021).

¹⁴ Government of the People’s Republic of Bangladesh. Intended Nationally Determined Contributions (INDC)- Bangladesh. (2015).

¹⁵ SREDA. Energy Efficiency and Conservation Master Plan in Bangladesh. (2015).

¹⁶ IEA. Bangladesh – Countries & Regions. (2019).

¹⁷ Worldometer. Bangladesh Natural Gas Reserves, Production and Consumption Statistics. (2017).

¹⁸ SAARC. SAARC Energy Outlook 2030. (2018).

¹⁹ IEA. World Energy Balances 2019 (OECD and Selected Emerging Economies). (2019).

²⁰ Huda, A. S. N., Mekhilef, S. & Ahsan, A. Biomass energy in Bangladesh: Current status and prospects. Renew. Sustain. Energy Rev. 30, 504–517 (2014).

²¹ Khan, M. S. et al. Prospect Of Biofuel In Bangladesh: Bioethanol And Biodiesel Production At Local Condition. In Joint Conference International Conference on Environmental Microbiology and Microbial Ecology & International Conference on Ecology and Ecosystems (2017).

²² Rouf, M. A. & Haque, M. N. Role of Renewable Energy (Biogas and Improved Cook Stoves) for Creation of Green Jobs in Bangladesh. (2008).

²³ Fisher, M. Introduction of Nuclear Power in Bangladesh Underway with IAEA Assistance. (2020).

²⁴ BP. Statistical Review of World Energy 2020. (2020).

²⁵ Ministry of Power, E. and M. R. Power System Master Plan. (2016).

²⁶ Timilsina, G. R., Pargal, S., Tsigas, M. & Sahin, S. How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? (2018).

²⁷ Salam, R. A. et al. An Overview on Energy and Development of Energy Integration in Major South Asian Countries: The Building Sector. Energies 2020, Vol. 13, Page 5776 13, 5776 (2020).

²⁸ Bangladesh National Building Code (BNBC) 2020. (2020).

²⁹ Green Finance Platform. Bangladesh’s Green Transformation Fund (GTF). Green Finance Platform. (2019).

³⁰ Kamal, M. National Budget Speech 2021-2022 (full text). [Speech transcript]. Daily Sun. (2021).

³¹ Climate Analytics. Decarbonising South and South East Asia: Shifting energy supply in South Asia and South East Asia to non-fossil fuel-based energy systems in line with the Paris Agreement long-term temperature goal and achievement of Sustainable Development Goals. (2019).

³² While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for countries, they underestimate the feasible space for developed countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.

³³ Global cost-effective pathways assessed by the IPCC Special Report 1.5°C tend to include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches, and often rely on rather conservative assumptions in the development of renewable energy technologies. This tends to result in greater reliance on technological CDR than if a faster transition to renewables were achieved. The scenarios available at the time of this analysis focus particularly on BECCS as a net-negative emission technology, and our downscaling methods do not yet take national BECCS potentials into account.

³⁴ At the regional level, models suggest coal-fired power to be phased out in South Asian countries by 2040.³¹