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Bangladesh Sectors

What is Bangladeshʼs pathway to limit global warming to 1.5°C?

1.5°C aligned targets
Current targets

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 emission 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 Ministry of Environment, Forest and Climate Change. Nationally Determined Contributions (NDCs) 2021: Bangladesh (Updated). (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 oint 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. (2018).

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 Daily Sun. National Budget Speech 2021-2022 (full text) | Online Version. (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

Bangladeshʼs power mix

gigawatt

Scaling
Dimension
SSP1 Low CDR reliance
2019203020402050400600
SSP1 High CDR reliance
2019203020402050400600
Low Energy Demand
2019203020402050400600
High Energy Demand - Low CDR reliance
2019203020402050400600
  • Unabated fossil
  • Nuclear and/or fossil with CCS
  • Renewables incl. Biomass
  • Negative emissions technologies via BECCS

Bangladeshʼs power sector emissions and carbon intensity

MtCO₂/yr

Unit
−20020406019902010203020502070
  • Historical emissions
  • SSP1 High CDR reliance
  • 100%RE
  • High Energy Demand - Low CDR reliance
  • SSP1 Low CDR reliance
  • Low Energy Demand

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
2040
2050
Decarbonised power sector by
Carbon intensity of power
gCO₂/kWh
460
320 to 330
−10 to 0
−30 to 0
2040
Relative to reference year in %
−31 to −29%
−102 to −100%
−107 to −100%
Indicator
2019
2030
2040
2050
Year of phase-out
Share of unabated coal
Percent
1
0
0
0
2021
Share of unabated gas
Percent
81
56 to 65
0 to 12
0
2040 to 2049
Share of renewable energy
Percent
1
19 to 26
77 to 98
99 to 100
Share of unabated fossil fuel
Percent
99
74 to 77
0 to 12
0

Investments

Demand shifting towards the power sector

The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time compared with a current policy scenario. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Two modelled pathways (the “high energy demand” and the “low energy demand”) of the four analysed here entail a high degree of renewable energy-based electrification across the various sectors, and thus see a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.

Bangladeshʼs renewable electricity investments

Billion USD / yr

203020402050206023

Yearly investment requirements in renewable energy

Across the various 1.5°C compatible pathways we have anaysed, Bangladesh will see a decline in the average cost of power generation over time as the share of renewable energy increases within the power sector and the costs of renewable energy systems continue to fall. All scenarios see the average cost of power generation peak in 2020, falling from around USD 30-50 /MWh in 2020 to USD 25-45/MWh by 2030 and around USD 15-35 /MWh by 2050 (a decline of 30-50% in the cost of power generation between 2020 and 2050). For comparison, we have also downscaled the IEA’s Stated Policies Scenarios to estimate power generation costs for Bangladesh under current policies. This shows a much shallower decline than the 1.5°C compatible pathways.

Decreasing the cost of electricity generation

Across the set of 1.5°C pathways that we have analysed, investments in renewable energy increase in Bangladesh to be on the order of between USD 1 to 8 billion by 2030 and up to 3 to 25 billion by 2040 depending on the scenario considered. The high energy demand and low CDR reliance pathways show a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and/or growing energy demand and expansion of electricity access. Conversely, other modelled pathways focus on the deployment of alternatives to renewable energy sources and energy efficiency gains, such as negative emissions technologies, requiring high up-front investments.

View capacities

Bangladeshʼs electricity generation cost

USD per megawatt hour

1020304050203020502070
  • SSP1 Low CDR reliance
  • SSP1 High CDR reliance
  • Low Energy Demand
  • High Energy Demand - Low CDR reliance
  • WEO 2021 Stated Policies

Footnotes