A Thriving Power Sector: Bangladesh 2021 Vision for Energy Sector

Global energy demand is expected to increase over the next few decades, especially in developing countries, due to rapid economic growth, urbanization and projected increases in population. Most developing nations will need to radically change their energy policies to accommodate this accelerated demand. Investment from the private sector would only be part of the solution. Government must lead.

Bangladesh has emerged as a model for energy independence through its energy diversification strategy, which focuses on construction of nuclear power plants to reduce the country’s dependence on natural gas and encourage the use of renewable energy such as solar power.

With a population of 166 million, Bangladesh has experienced robust economic growth. Over the past two decades, Bangladesh’s economy has grown at an annual rate of about 6 percent. The combination of a large population and sustained economic growth has created an almost insatiable demand for energy. Technological innovation to make energy more available is especially vital to the 65 percent of the population that live in rural areas where access to the electrical grid is limited.

Bangladesh has struggled for decades to meet consumer and industrial demand for electricity. Businesses dealt with frequent blackouts. Residents kept diesel-powered generators to use as backup. When Prime Minister Sheikh Hasina and her government took over in 2009, less than 50 percent of Bangladeshis had access to electricity. Today, thanks to the Power Sector Master Plan, 79 percent of Bangladeshis have access to electricity. The number of power plants has increased from 27 to 118, power generation increased from less than 5,000 megawatts to 20,000 megawatts, and system loss of power has decreased 11 percent.

Lately, Prime Minister Hasina established a new goal: to transform Bangladesh into a developed nation by 2041 with upper middle-income status by 2031. To meet these targets, Bangladesh must diversify its energy portfolio. Currently, natural gas accounts for 62 percent of the energy that supplies power production. But dependence on natural gas is not a long-term solution because of Bangladesh’s limited domestic natural gas reserves. To maintain its status among developing nations as a pioneer in the energy sector, Bangladesh must continue to invest in the construction of nuclear power and embrace renewable energy.

The development of Bangladesh’s first nuclear power plant, the Rooppur Nuclear Power Plant in the Pabna District of central Bangladesh, demonstrates the government’s commitment to securing to renewable resources. The first power plant, Rooppur 1, broke ground in November 2017 and is expected to be operational by 2023. In July 2018, a second nuclear power plant, Rooppur 2, was approved and is slated for completion in 2024. The two sites will produce a staggering 2.4 gigawatts, providing affordable electricity to millions of people.

The plant will insulate Bangladesh from the price fluctuations of oil, coal and fossil fuels, increasing energy independence. Nuclear power is about 8,000 times more efficient than fossil fuels, which makes it ideal for Bangladesh. One gram of uranium can produce approximately 90,000 times more energy than one gram of coal, with minimal environmental impact.

Approximately 70 percent of Bangladesh’s electricity comes from natural gas. Its proven gas reserves, 18 trillion cubic feet, will be exhausted in roughly a decade. After that, Bangladesh would have to import coal to supply its expected 34,000 megawatts of electric demand in 2030. Most of its commercial power generation plants are driven by natural gas. Bangladesh currently produces about 2250 million cubic feet per day of natural gas, with a shortage of about 450 million cubic feet per day. Coal importation is an expensive and environmentally harmful alternative.

Bangladesh has looked at numerous options to reduce its reliance on natural gas reserves, including the construction of three offshore Liquefied Natural Gas terminals. The government has also drawn up plans for a liquified natural gas import facility at Matarbari Port, a deep-sea port in Chittagong. The proposed port could process nearly 3.5 million tons of liquified natural gas a year.

The government is also encouraging the replacement of natural gas by Liquified Petroleum Gas (LPG). The demand for LPG has increased in many developing nations because it is cheaper and easier to transport than liquified natural gas. To further promote LPG usage, Bangladesh has granted more than 30 new licenses to private LPG operations. Bangladesh is also using biogas, a mixture of 65 percent methane and 35 percent carbon dioxide, that can be produced from agricultural waste, manure, municipal waste, plant material, sewage, green waste or food waste. In rural Bangladesh, where the electrical grid may not yet reach, biogas has been an indispensable energy source, producing 2 megawatts of power annually.

Bangladesh has also emerged as a leader in solar and renewable energy, incentivized, in part, by the World Bank. Since 2009, the World Bank has partnered with the Bangladesh government to expand renewable energy programs, providing more than $1.6 billion for production, transmission and distribution of renewable energy. In recent years, Bangladesh has also been among the largest recipients of the World Bank’s interest-free loans. These have helped transform Bangladesh from a country with virtually no renewable energy 10 years ago to one of the world’s largest domestic solar producers, covering 14 percent of the population.

Bangladesh operates the largest solar home systems program in the world. To date, over 4 million solar home systems have been installed, with 50,000 installations being completed a month on average. More than 25 million people are directly benefitting from these solar energy programs, which have created an estimated 114,000 jobs.

Low-interest financing from the World Bank also helps increase the use of solar irrigation pumps, a low-cost technology that functions efficiently in Bangladesh’s flat terrain. This switch from diesel pumps to this technology will reduce greenhouse gas emissions that cause climate change and will save foreign exchange by reducing the government’s subsidy on diesel imports. By replacing diesel-run pumps, about 10,000 megawatts of electricity can be produced by solar energy.

Although the World Bank’s assistance has been crucial, Bangladesh has also sought home-grown solutions. Prime Minister Hasina recently called on neighboring countries to rally around the Bay of Bengal’s energy potential. The region’s hydroelectric potential, she argued, exceeds 300 gigawatts and its expansive marine resources remain largely untapped.

Bangladesh is also seeking to enhance its use of wind power. A recent agreement between the Bangladesh Power Development Board and DK Energy Ltd. will facilitate the construction of a 60megawatt wind power plant in Cox’s Bazar. In addition, the board is looking at Cox’s Bazar, Kutubdia, Khepupara, Feni and Chittagong as possible wind power locations. It is estimated that Bangladesh’s 460-mile coastline can produce as much as 20,000 megawatts of electricity through wind generation.

Increasing access to electricity has profoundly improved the quality of life of the Bangladeshi people. Thanks to nuclear power and solar and wind energy, Bangladesh has emerged as a leader in reducing its reliance on fossil fuels.


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