Is Bangladesh moving in the right direction towards affordable and clean energy?

Bangladesh, a country burdened with a rapidly growing population, is currently striving for clean and affordable energy security. The United Nations Sustainable Development Goal (SDG 7) aims to ensure access to affordable, reliable, sustainable, and modern energy for all by 2030 (United Nations in Bangladesh, 2024). Despite significant progress in industrialisation, the urgency for clean and sustainable energy has never been more pronounced. The question now arises: is the nation on the right path towards achieving this vision of clean and affordable energy?

It is important to note that fossil fuel-based sources account for the majority of Bangladesh's electricity consumption. Fossil energy sources contribute a substantial 82% of electricity production, with gas being the dominant source at approximately 45%, followed by coal at over 26%. Additionally, just over 16% of the country's electricity supply comes from net imports (BPDB, 2024) (Low-Carbon Power, 2024). While these energy sources have propelled the country's rapid industrialisation, they have also led to considerable challenges, including environmental degradation and vulnerability to global price fluctuations. Moreover, almost the entire population now has access to electricity, a remarkable achievement given the past challenges. However, this progress presents new concerns, as the growing dependence on fossil fuels raises questions about the sustainability and affordability of this energy trajectory.

To address these challenges, Bangladesh has begun taking steps towards clean and affordable energy. The Bangladesh Delta Plan 2100 outlines that to achieve its goal of becoming a developed nation by 2041, the country must reduce its reliance on fossil fuels and increasingly adopt renewable energy sources (General Economics Division, 2018). As of 2024, solar power accounts for 80% of the 1,183 MW of total renewable capacity in Bangladesh. However, this renewable energy contributes only 4.3% of the country's total installed power capacity of 27,740 MW (BPDB, 2024). In the past, the Government of Bangladesh has set ambitious targets to increase the share of renewable energy to 15% by 2030, 40% by 2041, and 100% by 2050 (Energy and Mineral Resource Division, 2023). Achieving these goals requires significant investment and the rapid adoption of renewable technologies (ITA, 2024).

In Bangladesh, solar home systems have become the largest renewable energy initiative, facilitated by an integrated programme implemented by the government through its financial agency, IDCOL. Since its inception in 1996, six million units have been installed, with continued expansion (SREDA, 2021). Wind energy also holds promise, particularly in coastal regions. The Cox's Bazar Wind Farm, the country's first large-scale wind energy project, commenced operations in 2024. It is expected to generate an average of 144.92 million kilowatt-hours of power annually, contributing to economic growth, energy conservation, emissions reduction, and environmental sustainability. However, the project faced challenges such as the COVID-19 pandemic, slow land acquisition, and continuous rainfall, which delayed its implementation (PowerChina, 2024). Additionally, to reduce reliance on conventional biomass, biogas facilities and improved cooking stoves can provide significant benefits in rural areas. Bangladesh has substantial potential for biogas energy, as it produces nearly 124.15 million tonnes of livestock and urban waste each year (Ali et al., 2019).

Bangladesh has sought international partnerships to strengthen its energy sector and improve energy efficiency. Nordic nations—Norway, Sweden, and Denmark—along with the Asian Development Bank and the World Bank, have become key allies in the country's energy transition. Furthermore, Bangladesh's shift towards green energy is supported by the Team Europe Initiative Green Energy Transition (TEI GET). Through substantial financial investments, technical expertise, and strategic collaborations, these international partners are assisting Bangladesh in its transition to a more sustainable energy future (EU, 2023) (The Geopolitics, 2024). The UN highlights Bangladesh's ambitious commitment to reducing carbon emissions by 21.8% by 2030, with a focus on energy efficiency and a greater adoption of renewable energy. This pledge underscores the country's dedication to a sustainable energy future (UN Bangladesh, 2024).

Despite these achievements, significant challenges remain. The primary obstacle to promoting investment in renewable energy is financing. Additional hurdles include land acquisition for renewable energy projects, a shortage of skilled professionals and technical expertise, a lack of motivation to accelerate the expansion of grid-connected renewable energy, and inadequate institutional capacity within both the private and public sectors. To foster growth in the renewable energy sector, the government should provide further subsidies and incentives, along with reductions in tariffs and taxes on related equipment and services. The cost-effectiveness of renewable energy is another pressing concern.

While solar home systems have transformed rural communities, the initial installation costs remain unaffordable for many low-income households without financial assistance. Ensuring that renewable energy solutions are both accessible and affordable is crucial for long-term success (End User Subsidies Lab, 2020). In this regard, establishing a robust strategic framework for energy transition and guaranteeing energy security and sustainable long-term growth must be top priorities for Bangladesh.

It is also worth mentioning that Bangladesh recently experienced a leadership transition, and the interim government has taken charge with a mandate to reform various sectors, including power and energy. The government has introduced several initiatives to support the growth of renewable energy, such as installing solar panels on school buildings, developing large-scale solar parks, promoting solar-powered street lighting, encouraging battery-operated rickshaws, and establishing solar-powered cold storage facilities (ITA, 2024). Achieving affordable and clean energy will undoubtedly be a challenging journey, as Bangladesh seeks to balance environmental sustainability with economic prosperity (World Bank, 2024). However, with sustained commitment and strategic efforts, the vision of a more sustainable and eco-friendly energy future is well within reach.

Sketch: TBS

Md Jahurul Islam, Chairman (Acting), Department of Agricultural Economics, Khulna Agricultural University