CPD proposes 'emergency response committee' to tackle energy crisis

The government should urgently form an "emergency response committee" to tackle the country's energy crisis, which has reached a point where gradual solutions are no longer viable, said Khandaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD).

"The committee should be formed immediately, with all relevant stakeholders meeting within three days," he said at a CPD dialogue held at the BRAC Centre in Dhaka yesterday.

It could be formed with representatives from the energy ministry, finance ministry, Energy Regulatory Commission, Petrobangla, and other relevant agencies, he added at the event titled "Industrial Decarbonisation in the RMG Sector: How to Take it Forward?".

He said the committee should take swift decisions, announce them publicly and ensure their implementation to help ease the challenges facing the energy and renewable energy sectors.

"There is no scope for delays in making decisions. Operational decisions can be taken quickly, but processes are being held up by different stakeholders," he said, adding that some parties appear to prolong crises and delay solutions.

Moazzem further said the government must immediately begin building an industrial and economic structure based on alternative energy sources, including renewable energy, alternatives to gas-fired boilers, and of electric vehicles.

He added that ensuring a stable power supply to factories and adopting alternative technologies could reduce overall production costs by up to 4%. Such replacement or modernisation could also save 10-17% in energy consumption, he added.

Tk13,209cr investment could save 25,000MWh in RMG

A CPD survey on renewable energy in the RMG sector found that major technological upgrades could help factories save more than 25,000 megawatt-hours (MWh) of electricity annually, but would require an estimated Tk13,209 crore in investment.

The study found 85% of machinery in the RMG sector is used in sewing, but technological upgrades in the section could deliver only about 3% of total potential electricity savings. By contrast, cutting accounts for just 5.5% of machinery but could generate more than 27% of total electricity savings through modern technology.

Washing and dyeing are the most energy-intensive processes. Electricity or solar power alone cannot replace gas in these heat-intensive operations. The CPD identified electric boilers as a sustainable alternative, but said their high cost could require subsidies.

The CPD estimated capital costs of Tk6,604 crore for implementing energy-efficient technologies in half of the factories and Tk13,209 crore for full implementation.

The largest 25% of factories would account for around 71% of the total investment, while the smallest factories would require just 0.3%.

The study also found that rooftop solar could help reduce dependence on imported energy and exposure to volatile LNG prices. Using 30% solar power could cut factories' average monthly energy costs by up to 15.7% and energy-price exposure by up to 4%.

Recommendations

The CPD recommended stronger incentives and financial support for energy-efficient equipment in the relatively cost-effective cutting, and energy-intensive washing sections.

It also called for easier access to financing for smaller factories, as well as long-term research to reduce electricity use in thermal washing and dyeing processes and sewing technologies.

Md Imranul Hoque Chowdhury, deputy director (PIM), Team Asia, International Business Development at ib vogt Singapore, said entrepreneurs face administrative and policy hurdles in renewable energy investment, including tariff complications for solar panel imports and delays of up to six months in net-metering approvals.

He called for tailored financing models for small and medium-sized businesses, including guarantee schemes for those lacking sufficient collateral.

Fazlee Shamim Ehasan, executive president of the BKMEA, said renewable energy is no longer a future option for the garment sector but an immediate necessity. "European laws and regulations will increasingly require exporters to use more green energy."

He said renewable energy currently accounts for around 6% of Bangladesh's total energy use, compared with 30-50% or more in many competing countries.

"Bangladesh therefore needs to accelerate its transition, he added.

Ehasan said financing remains a major barrier to green investment. Entrepreneurs struggle with lengthy procedures for accessing green funds from banks.

"Tax incentives alone are not enough. The government must ensure that entrepreneurs actually benefit from them and receive meaningful incentives for green investment," he said.

Vidiya Amrit Khan, vice-President of BGMEA, said entrepreneurs are interested in renewable energy, but policy complexities and various charges often undermine the viability.

She called for open access, reasonable wheeling charges and simpler power purchase and sale arrangements for renewable energy.

"If renewable energy is a government priority, the Finance Ministry and other relevant agencies must maintain a consistent policy stance," she added.

Vidiya Amrit also said international brands should share the cost of the transition through financial support and partnerships to reduce the environmental impact.