To embrace green energy, Bangladesh must break free from fossil fuel

The world is rapidly shifting towards green energy. However, Bangladesh — despite being among the most climate-vulnerable nations — continues to lag behind in its green energy transition. The country is still highly dependent on fossil fuels.

By June 2023, renewable energy sources, including solar, wind, hydro, and biomass, had an installed capacity of just 1,183 MW, making up a modest 4.5% of Bangladesh's total energy capacity. While ambitious targets were set in the past, progress has been slow due to bureaucratic delays, inconsistent policies and a reliance on imported fuel.

Now, as the interim government works on rebuilding the nation, can we expect a paradigm shift in the green energy transition? 

The government published a draft of the new Renewable Energy Policy 2025 in February this year, and also emphasised the renewable energy sector at the recent Bangladesh Investment Summit 2025.

The policy draft promises generation of 20% (6,145 MW) of electricity from renewables by 2030 and 30% (17,470 MW) by 2041. However, the previous government had also set its fair share of ambitious goals of achieving 40% by 2041, and 100% by 2050. 

Are such targets realistic? 

According to Shahriar Ahmed Chowdhury, director of the Centre for Energy Research at United International University (UIU), Bangladesh's renewable energy plans are formulated in a way that leaves the targets vague. 

"There is no clear mention of how much electricity will be produced from which sources, making it difficult to achieve these goals. Meanwhile, countries like China, Pakistan, India, and Vietnam are rapidly progressing in this sector," he said.

According to the Research Director at the Centre for Policy Dialogue (CPD), Khondaker Golam Moazzem, the government seems to be rushing the formulation of the renewable energy policy, leading to an incomplete and superficial draft. Different government policies present conflicting renewable energy plans, which could confuse investors. 

"While fossil fuel plans are highly structured in the policy draft, renewable energy policies lack proper organisation. We must recognise that expanding renewable energy within an economic framework heavily dependent on fossil fuels is not practical," he noted.

Shahriar Ahmed Chowdhury mentioned that the renewable energy sector in Bangladesh remains neglected because, in practice, the country continues to protect the interests of the fossil fuel industry. 

Yet, the cost of renewable energy technology is declining globally. The money Bangladesh will spend on fossil fuel imports over the next 20 years could be used to develop a renewable energy capacity ten times greater. 

"Only realistic policy support from the government is needed. If renewable energy projects received the same level of support as fossil fuel-based projects, the private sector alone could drive significant progress in this sector," he concluded.

"While fossil fuel plans are highly structured in the policy draft, renewable energy policies lack proper organisation. We must recognise that expanding renewable energy within an economic framework heavily dependent on fossil fuels is not practical."

Khondaker Golam Moazzem, Research Director, CPD

Furthermore, Bangladesh must move away from relying solely on the Integrated Energy and Power Master Plan (IEPMP) and adopt more accurate electricity demand forecasting. Without reliable data, renewable energy projections will not be effective, he warned.

Achieving the country's energy goals requires a balanced mix of both domestic financing and foreign direct investment (FDI). However, the policy draft overlooks the role of FDI, which is crucial in the current context.

"For utility-scale energy production, foreign direct investment will be a crucial source of funding alongside multilateral development bank (MDB) funding. We should actively seek more investors like China's Longi. However, we must ensure policy stability first to gain investor confidence," noted Shafiqul Alam, Lead Energy Analyst for Bangladesh at Institute for Energy Economics and Financial Analysis (IEEFA).

Notably, prior to the investment summit, Chinese solar panel manufacturing giant 'Longi' announced plans to establish an office and invest in solar panel production in Bangladesh, Chinese Ambassador to Bangladesh Yao Wen confirmed on 16 March. The decision follows visits by several top Chinese solar panel companies to Bangladesh in December to explore potential investment opportunities.

Shafiqul Alam believes it will definitely have a positive impact if we can manufacture it on our own.

"However, some challenges will still remain. For example, the economies of scale will be a crucial factor to consider. We'll need to import critical minerals required for the process. Besides, our local renewable energy expansion rate is very slow. We must assess its economic viability keeping export prospects in mind. Only then can we achieve a significant advantage," he said.

In the renewable energy sector, we have two types of projects. One is utility-scale — expansive projects that directly connect to the national grid. The other involves small-scale, decentralised projects such as solar irrigation and rooftop solar systems.

"The major challenge with utility-scale projects is land acquisition. On one hand, land is expensive; on the other, there are often multiple owners, making the process complex. In addition, implementation partners may lack sufficient equity to carry out the projects. Due to these reasons, even after issuing Letters of Intent (LOIs), many projects face long delays," Alam explained.

In this case, he suggests that the government can lease out some unused land. Furthermore, the private sector can also help manage and provide some land, making it important to mobilise public-private partnership to make these projects more effective.