The South Asia country’s move to expand coal power comes as challenges remain for renewable energy development, including inadequate grid infrastructure, lack of robust policies, and incentives or subsidies, except net metering which has also been only moderately successful.
The cost of electricity generation is also high in the country, which has burdened power generation companies. The government has increased electricity imports from India over the years since it has proved to be a cheaper option. To overcome cost challenges, Bangladesh plans to nearly triple its electricity imports which will mostly come from thermal power generation in India.
Though Bangladesh’s measures provide temporary relief to secure supply, they do not provide a long-time solution. Moreover, this steers the country away from its unconditional target to reduce GHG emissions by 27.56 Mt CO2e (6.73%) below business as usual (BAU) levels in 2030. The rise in electricity demand has led to an increase in gas-based generation over the years.
Bangladesh has lagged in the development of renewable energy sources with only 537MW of total renewable installed capacity in 2021 accounting for 2.5% of the country’s capacity mix. Among renewables, solar PV accounted for 98.6% of the renewable installed capacity, with onshore wind, biopower, and small hydro accounting for the rest of the share.
In the long-term, the country should look at incentivizing renewable power plants to encourage adoption, invest in upgrading the grid, and focus on development of energy storage to overcome dependency on thermal power and meet its climate goals.