Draft energy master plan risks locking country into costly fossil fuel infrastructure: CPD

The Centre for Policy Dialogue (CPD) has raised serious objections to the interim government's draft Energy and Power Sector Master Plan 2026-2050, describing it as "no better than" the previous government's Integrated Energy and Power Master Plan. 

It warned that approving the plan in its current form would run counter to energy transition goals, potentially pushing Bangladesh further away from a sustainable energy pathway and locking the country into expensive, carbon-intensive fossil fuel infrastructure for decades.

The think tank further noted that the draft represents a backward shift in policy and is driven more by bureaucratic dominance and vested interests than by Bangladesh's long-term economic and energy needs. The plan seems to reflect pressure from foreign partners and entrenched domestic energy lobbies, particularly in relation to the expansion of liquefied natural gas infrastructure, it added.

The views came at a media briefing today on CPD's quick reaction on the draft where it urged the interim government to immediately suspend the formulation of the plan and defer it until after the national elections.

Through its energy master plan the interim government outlines a long-term strategy to meet the country's energy and power needs, with an emphasis on delivering reliable, affordable and sustainable energy through better use of local resources, improved energy security, efficiency and environmental safeguards.

Presenting CPD's quick reaction analysis, CPD Research Director Dr Khondaker Golam Moazzem said the proposed master plan is fundamentally flawed and non-participatory, and risks deepening the power sector crisis rather than steering it towards a sustainable transition.

Questioning the mission and vision of the draft, Moazzem said renewable energy has not been placed at the core of the plan, while domestic coal is being promoted under the banner of "resource optimisation". 

He also questioned the rationale for planning nearly 60,000MW of power generation capacity, asking who would ultimately consume such a volume of electricity.

Under a business-as-usual GDP growth scenario, the draft EPSMP projects peak electricity demand to reach 59,351MW by 2050. CPD said this projection is grossly overestimated.

According to the think tank's analysis, about half of the proposed capacity would be sufficient to meet demand by 2040, particularly as Bangladesh's future industrial growth is expected to be more service-oriented, labour-intensive and less energy-intensive.

CPD estimates that actual demand is unlikely to exceed 30,000MW by 2040. Overestimating demand, Moazzem warned, would worsen excess capacity, raise capacity payments and further strain the power sector's finances.

The draft estimates total investment needs of $70-85 billion for the primary energy sector and $107.4 billion for the electricity sector by 2050.

Referring to upcoming economic and trade agreements with Japan and the United States, Moazzem said there are strong indications that energy-related commitments have influenced the master plan.

Concerns over LNG, coal expansion

CPD Senior Research Associate Helen Mashiyat Preoty, delivering the keynote presentation, criticised what she described as a renewed tilt towards fossil fuels, particularly coal and liquefied natural gas (LNG).

The draft proposes expanding coal-based power generation capacity from 6.8GW to 12.9GW and prioritises new LNG terminals, including a land-based terminal and additional floating storage and regasification units (FSRUs).

"These are costly investments that undermine long-term energy security," Preoty said, urging policymakers to abandon coal and LNG expansion in favour of renewable energy.

CPD also warned of an emerging "LNG trap", noting that the draft proposes $25-30 billion in investments for LNG terminals and pipeline infrastructure – nearly half of the total estimated energy investment.

The think tank argued that expanding coal-based power generation is incompatible with a sustainable energy transition and called for all plans for new coal-fired power plants to be dropped, along with a time-bound phase-out of existing coal capacity.

Renewables, grid and subsidy concerns

While the draft EPSMP outlines a "green revolution", targeting 30% renewable energy by 2040 and potentially 50% by 2050, CPD said these targets are misleading due to the plan's broad definition of renewable energy.

Preoty said the draft includes technologies such as hydrogen and ammonia co-firing and carbon capture and storage (CCS) as part of its clean energy pathway. 

"Bangladesh is yet to be technically and economically ready for green hydrogen or green ammonia," she said, warning that such technologies are often used to justify continued fossil fuel use.

CPD also criticised the limited focus on grid modernisation, noting that smart grid implementation has been pushed back to 2040, even though the existing grid cannot handle more than 20% variable renewable energy. 

The think tank recommended initiating smart grid projects in the early phase to support renewable integration by 2040.

Preoty further cautioned that the proposed phase-out of energy subsidies between 2030 and 2042 could lead to higher energy tariffs unless the government addresses the underlying burden of capacity payments.

CPD said the draft largely ignores the potential of regional power trade, aiming to reduce power imports to just 1%, despite opportunities to access cost-effective renewable electricity from India, Nepal and Bhutan.

The think tank recommended redefining renewable energy to focus on proven sources such as solar and wind, prioritising high-potential regions including Chattogram, and integrating regional renewable energy trade into the master plan.