Energy audit: Bangladesh’s most overlooked energy solution

Bangladesh's energy debate is still dominated by a familiar refrain: build more power plants, secure more fuel, and expand generation capacity. Yet this approach overlooks a stark reality: as fuel import bills surge, LNG dependence deepens, and subsidies strain public finances, a vast and cheaper energy source remains largely untapped—the energy we waste every day. At the heart of this missed opportunity lies the underutilisation of energy audits.

An energy audit is a systematic assessment of energy use within a facility or system, aimed at identifying inefficiencies and recommending corrective measures. According to studies by the International Energy Agency (IEA), energy audits can reduce energy consumption by 10% to 30% in many industrial processes, commercial buildings, and public infrastructure systems.

The country's industrial sector—particularly ready-made garments (RMG), textiles, ceramics, and steel—accounts for a substantial share of total energy consumption. Yet many of these industries operate with outdated machinery, poor maintenance practices, and limited awareness of energy-efficiency standards.

After auditing three composite textile factories in Bangladesh, the Sustainable and Renewable Energy Development Authority (SREDA) reported that approximately 2.53 million cubic metres of natural gas and 3.6 million kilowatt-hours (kWh) of electricity could be saved annually through the adoption of various energy-saving measures and investments in energy-efficient equipment, resulting in annual savings of Tk6.33 million. Similarly, an energy audit of a hotel found that approximately 0.73 million kWh of electricity could be saved each year (SREDA, 2017).

In Bangladesh, where industries often spend 25%–30% of their production costs on energy, even modest efficiency gains can translate into substantial savings. Every unit of energy saved is equivalent to generating new energy—a principle long emphasised by the IEA. Energy audits are among the most cost-effective ways to address Bangladesh's energy challenges. Yet their potential remains largely untapped due to institutional, financial, and perceptual barriers.

International experience demonstrates that energy auditing delivers results when supported by strong policy frameworks. Mandatory audits, strict enforcement, financial incentives, and continuous monitoring are key features of successful systems.

Countries that have successfully integrated energy audits into their energy policy frameworks treat them as mandatory, enforceable, and financially supported activities. For example, in the European Union, large enterprises are required to conduct regular energy audits under the Energy Efficiency Directive, backed by strict compliance measures and incentives. Such models highlight the importance of combining regulation, capacity building, and financial support to ensure meaningful outcomes.

As Bangladesh navigates a complex energy transition marked by rising demand and global uncertainties, prioritising energy audits is no longer optional—it is imperative. Although Bangladesh introduced the Energy Efficiency and Conservation Master Plan and has identified certain large consumers as "Designated Consumers" under SREDA, compliance remains weak. Mandatory energy audits for high-consuming industries are often not strictly enforced, and penalties for non-compliance are minimal or absent.

Financial constraints also play a role. Many small and medium-sized enterprises (SMEs) perceive energy audits as an additional cost rather than an investment. This perception persists despite evidence that the payback period for audit-driven efficiency measures is often short. Limited access to affordable financing further discourages industries from implementing recommended upgrades, even when audits are conducted.

The neglect of energy auditing has far-reaching implications. Inefficient energy use leads to higher operational costs, reduced industrial competitiveness, and increased greenhouse gas emissions. It also exacerbates the country's dependence on imported energy, undermining economic resilience. In a global context where energy efficiency is increasingly seen as the "first fuel," Bangladesh risks falling behind by not prioritising this critical tool.

Leveraging digital technologies, smart metering, data analytics, and energy management systems can enhance the effectiveness of audits and ensure continuous monitoring. Energy audits should be reframed as profit-enhancing tools rather than regulatory burdens. Demonstrating successful case studies can help shift perceptions.

In a resource-constrained economy like Bangladesh, the cheapest unit of energy is the one that is not consumed. Energy audits offer a practical pathway to realise this principle. It is time to move energy audits from the margins to the mainstream of Bangladesh's energy policy discourse. The gains—in terms of cost savings, competitiveness, and sustainability—are simply too significant to ignore.

Mohammad Alauddin is a former Rector at Bangladesh Power Management Institute (BPMI).

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.