Policy consistency, incentives, skills key to Bangladesh’s clean energy future: Experts
The dialogue, “Just Energy Transition in Bangladesh: Challenges and Way Forward,” was held on 13 August at The Business Standard’s conference room in the capital’s Eskaton
Bangladesh's clean energy transition needs a skilled workforce, incentives for private entrepreneurs, community-based renewables, and battery storage for solar power to ensure an inclusive shift, said experts at a policy dialogue, while warning that policy inconsistencies, inflated demand forecasts and a weak banking sector are discouraging renewable investment.
The dialogue, "Just Energy Transition in Bangladesh: Challenges and Way Forward," was held on 13 August at The Business Standard's conference room in the capital's Eskaton.
ActionAid Bangladesh, The Business Standard, the Institute for Energy Economics and Financial Analysis (IEEFA), and the Just Energy Transition Network Bangladesh jointly organised the event.
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Farah Kabir, country director of ActionAid Bangladesh, moderated the dialogue, while Shafiqul Alam, IEEFA's lead energy analyst for Bangladesh, presented the keynote paper, outlining the critical issues and pathways for advancing a just and sustainable energy transition in the country.
Shafiqul Alam
Lead Energy Analyst for Bangladesh at IEEFA
Bangladesh must carefully redesign its pathway for a just energy transition to ensure both affordability and sustainability.
Over-dependence on fossil fuel – LNG and coal imports – exposes the country to global price volatility and drains foreign reserves. A planned, phased transition to renewable energy is no longer optional but essential.
Solar and wind have strong potential in Bangladesh but require stronger policy support, better grid integration, and financing models that attract private investment. We should prioritise utility-scale solar, rooftop solar, and offshore wind to diversify its energy mix.
The government has reduced import duty on inverters from 10% to 1% but other tariff-related issues on solar panel materials remain in place, which slows down the transition from fossil fuel to green energy.
M Tamim
Vice Chancellor of IUB; Professor at BUET
Given the heavy investment in fossil fuel-based plants, an immediate large-scale shift to renewables is not realistic.
Around 20,000 MW of installed capacity in the power sector are fossil fuel dependent. The lifespan of combined-cycle power plants is 22 years, while coal-based plants last 25 years. In that equation, we are stuck for at least 20 years in fossil fuel-dependent electricity.
It is time to rethink the country's energy planning metrics. We should go for gigawatt-hour production instead of megawatt production. Our green energy contribution to power production is less than 1%. To promote energy transition, we must strike a balance between existing capacity and future consumption projections.
When we talk about just energy, we have to make a decision whether it is environmentally just or just for the people. It should be both.
Ijaz Hossain
Former Professor and Dean of Chemical Engineering at BUET
Given the unavailability of solar at nighttime, battery storage systems could be a solution to overcome the limitations of solar power and reduce dependence on fossil fuels.
We can't supply electricity during evening peak hours with solar energy. To promote green energy, we need to go for a battery system when electricity could be stored and use it later at night. The price of battery systems is also falling fast in the global market.
To get rid of expensive fossil fuel energy, we should focus more on solar power and expand the use of battery storage."
Farah Kabir
Country Director of Actionaid Bangladesh
Fossil fuels are contributing to climate change, and we need to shift to green and sustainable energy instead of relying on expensive fossil fuel-based power.
Through our activism, we have influenced policy to a certain stage, but now it is time to develop shadow proposals by technical experts to guide the sustainable energy transition.
Bangladesh needs a structured and inclusive approach to promote energy transition. A short-, medium-, and long-term policies can ensure a smooth and effective transition.
Continued overuse of fossil fuels could make it increasingly difficult to limit global temperature rise to 1.5°C between 2025 and 2029.
For sustainability, it is necessary to work together across the public and private sectors, with the help of experts and environmental campaigners, to ensure a just and sustainable transition.
Md Rezaul Karim
Chairman of Bangladesh Power Development Board
Unrealistic policy decisions and inflated supply-demand projections are holding back the country's energy transition.
We are now reviewing the Integrated Energy and Power Master Plan (IEPMP) on a need-based approach. The gap between demand and generation capacity is a major challenge for the energy transition.
Inflated projections have resulted in inefficiencies and unnecessary strain on the sector, making it difficult to prioritise renewable energy integration. To promote green energy, we are formulating a policy on solar merchant power plants. Export processing zones and big industries can establish solar-based merchant power plants.
The move is expected to open opportunities for private sector investment in renewable energy, particularly in industrial clusters, thereby reducing the country's dependence on fossil fuels.
Rayyan Hassan
Executive Director of NGO Forum on ADB
When multilateral institutions like the Asian Development Bank are interested in financing renewable energy projects in Bangladesh, careful scrutiny of financing conditions is essential.
If we fail to avoid policy-level mistakes, communities will ultimately bear the brunt of these errors.
M Zakir Hossain Khan
Chief Executive at Change Initiative
For a smooth transition, Bangladesh needs an average investment of $1.4 to $1.6 billion. But the reality is grim: from 2002 to 2022, the country received only $0.3 billion, where loans were two times higher than grants. Disbursement rates are below 50%, and international funding often arrives late.
We are talking about renewable energy, but always comparing it with fossil fuels. This is fundamentally flawed thinking. While we discuss net-zero goals, fossil fuels are still being promoted.
Hasan Mehedi
Chief Executive at CLEAN
Bangladesh needs community-based renewable energy projects over large-scale ones.
To encourage community investment in renewable energy, many countries — including India, Vietnam, and Germany — offer cash incentives. Similar policies in Bangladesh can ensure wider participation and ownership in the country's energy transition.
Titu Datta Gupta
Deputy Editor at The Business Standard
Bangladesh went for a massive push to establish 50 solar-based power plants, but failed to create enthusiasm among investors.
Abrupt policy shifts, cancellation of settled deals, and lack of transparency in policy are deterring investors from making a pitch in Bangladesh's renewable quest.
Inconsistent policies and weak governance are undermining the country's efforts to attract private investment in renewable energy projects.
Anis Raihan
Journalist & Independent Researcher
When the government formulates energy policy, we often take for granted that peasants don't have to stay awake to ensure irrigation for cultivation. We accepted that farmers don't need to sleep at night. Our energy policy is framed with such disparity.
We need to focus on an inclusive energy transition that addresses both environmental and social equity.
Mohammad Saiful Islam
Secretary of Energy & Mineral Resources Division
Shifting towards clean energy is inevitable for Bangladesh, but it is not an immediate government priority given the country's pressing challenges in the power and energy sector.
Bangladesh's heavy reliance on natural gas for power generation is creating vulnerabilities. Currently, nearly 60% of the country's power plants run on gas, leaving the energy system exposed to supply disruptions and price volatility.
Our over-dependence on gas for producing power is a burden and is fueling the gas crisis in the country.
To advance energy transition, it is important to adopt timely and strategic decisions as well as ensure adequate financing. There are many pressure groups in this sector, and sometimes they hinder our work.
Mohammad Jahangir Alam
Deputy Managing Director of Jamuna Bank
The duration of financing is a major problem for renewable projects, as they take longer to complete than fossil fuel-based power plants.
Whatever progress has been made in the power sector, the banking sector has played a crucial role by financing projects, regardless of whether they are clean or not.
Structured policy alignment and a supportive financial model are crucial to attract private investment in Bangladesh's renewable energy sector.
Ratan Kumar Ghosh
Chairman of SREDA
The Sustainable & Renewable Energy Development Authority (SREDA) is struggling to play an effective role in Bangladesh's energy transition due to a shortage of technical expertise.
The persons who are deputed to SREDA are non-technical, and most of them come from cadre services. We need specialised, skilled manpower to promote green energy.
To address this problem, SREDA is preparing a new organogram that will focus on building a pool of specialised, skilled manpower dedicated to renewable energy development.
Md Abul Kalam Azad
Manager of Just Energy Transition at ActionAid Bangladesh
Today's Policy Dialogue focused on the recent decisions taken by the interim government, policies adopted by both the incumbent and previous governments, and the key challenges in advancing a just energy transition in Bangladesh.
We were joined by a diverse group of participants, including experts, policymakers, representatives from civil society, academia, private and financial organizations, and government officials. Together, we engaged in an intensive dialogue, shared insights, and formulated recommendations.
All recommendations generated during the discussion will be submitted to the relevant authorities to support and accelerate the country's journey toward a just energy transition. By working collaboratively across sectors, we aim to ensure a sustainable and inclusive energy future for Bangladesh.
Md Rezaul Karim Khan
Director (Power) at BERC
The total capacity of captive power plants is 6000MW, and of them, 4000MW are gas-fired power plants. Of those gas-fired power plants, 60% of power plants are running with 30% efficiency, and it is urgent to cut off the gas supply to such low-efficiency power plants.
We have sufficient grid-connected power to meet the industrial demand. As a gas-starved nation, it is time to phase out such low-efficiency power plants and only allow combined-cycle power plants that run above 55% efficiency.
Tashmeem Muntazir Chowdhury
Head of Sustainable Finance at BRAC Bank
Banks usually don't finance projects under the OPEX model, largely because financing depends on EPC contracts, which carry significant risk. Financing for green energy is gradually growing, supported in part by Bangladesh Bank's low-cost refinancing schemes, which have helped encourage investment in renewable projects.
Mohammad Alauddin
Rector of Bangladesh Power Management Institute
Bangladesh is undergoing an energy transition unnoticed, as the share of gas and coal in power generation is gradually declining.
The question is, how can we make this transition cheaper and faster? To meet future challenges, we need to develop human resources, as technology in this sector is evolving very fast.
To attract the private sector, we need to provide them with a profitable and sustainable business model. Until we ensure that, this will not work. Strategic policy and financial planning are crucial for the green energy transition.
Experts emphasized that Bangladesh's clean energy transition hinges on a skilled workforce, consistent policies, financial incentives, and community-based renewable initiatives.
Despite challenges such as fossil fuel dependence and financing gaps, coordinated public and private sector efforts can ensure an inclusive and sustainable energy future.
The dialogue was also attended by Sharier Khan, Senior Executive Editor of The Business Standard; Muhammad Wahidur Rahman, EVP & Unit Head (Technical), Renewable Energy, IDCOL; Dr. Farseem Mannan Mohammedy, Professor at BUET; and Mostafa Al Mahmud, President of BSREA.
