Power sector in 2030
Bangladesh’s power mix was dominated by fossil fuels in 2019 – they accounted for approximately 99% of generation. 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., 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. 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%. 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.