Properly calibrated projections are therefore essential to shape policies that prioritize energy efficiency

As Bangladesh looks ahead as an economy, there is a need for addressing what has long been an issue for the nation - its increasing demand for energy. However, given the advent of climate change and our vulnerability to it, as projections are outlined for our energy needs, they must be grounded in practicality and data-driven insights, while also having an eye towards sustainability.

Fossil expansion may derail clean energy goals, warns the think tank

Bangladesh will need to install more than 35 gigawatts (GW) of renewable energy capacity to reach its 30% clean energy target by 2040, , as set out in the newly drafted Renewable Energy Policy, according to a new report by the Centre for Policy Dialogue (CPD).

The power plant is a joint venture between Bangladesh and India, implemented by the Bangladesh Power Development Board (BPDB)

The Rampal thermal power plant has emerged as a key contributor to Bangladesh’s energy supply, delivering over 10.5 billion units of electricity to the national grid.

The country's gas reserves are running out. Production is declining continuously. If new gas fields are not discovered and extraction from new mines is not started, domestic reserves may run out in the next eight years.

Currently, 1.8 billion cubic feet of gas is extracted from domestic gas fields per day. In 2017, it was around 2.7 billion cubic feet. That is, domestic gas extraction has decreased by 33 per cent.

Policy backfires. These two words perfectly sum up Bangladesh's gas-based power strategy.

For two decades, the country has grappled with a widening gas shortage, even after importing LNG. Yet, the previous government kept approving gas-fired power plants without securing fuel.

Bangladesh will significantly increase imports of liquefied natural gas (LNG), liquefied petroleum gas (LPG), and refined fuels from the United States from next year as part of the government’s efforts to narrow the trade gap with Washington, a top energy official has said.

“We will procure LNG, LPG, and refined fuels worth about US$1.2 billion annually from the United States starting next year,” said Mohammad Saiful Islam, Secretary of the Energy and Mineral Resources Division (EMRD), in an interview with Just Energy News.

To future arrears, distribution companies are replacing postpaid meters with prepaid ones

Public and private entities across the country owe over Tk10,000 crore in unpaid electricity bills to six distribution companies, according to the Power Division.

The $137 billion project can generate 60 GW of power, but lacks transparency on water storage capacity and environmental impact on millions of people.

In December 2024, China approved construction of a mega hydropower dam on the Yarlung Tsangpo river in Tibet. The river flows into Arunachal Pradesh as the Siang and eventually merges with other rivers to form the Brahmaputra. It then flows into Bangladesh as the Jamuna river.

Bangladesh will set up a special fund to implement the proposed Eastern Refinery Limited-2 (ERL-2) project by allocating Tk 2 from the profit of each litre of fuel sales under the fuel pricing formula, a senior energy official said.

Of the amount, Tk 1 will be used for internal loan repayment and the other Tk 1 for taxes and duties payable to the National Board of Revenue (NBR) over the next eight years, Energy and Mineral Resources Division (EMRD) Secretary Md Saiful Islam told Just Energy News.

Amid the ongoing energy crisis in Bangladesh, the government’s announcement of an ambitious programme to install 3,000 megawatts (MW) of rooftop solar capacity by December 2025 has been welcomed as a timely move to boost renewable energy.

However, a new briefing note by the Institute for Energy Economics and Financial Analysis (IEEFA) raises concerns about the feasibility of achieving the target within the given timeframe.

Moves taken over the past year since the incumbent government assumed power to launch new fossil fuel projects or revive scrapped ones threaten to worsen Bangladesh’s economic woes, said energy experts.

Two of the moves involved liquefied natural gas import, though energy experts warned about it increasing expenses in the energy sector, which is highly subsidised.

The government is moving to phase out subsidies on imported Liquefied Natural Gas (LNG) from the next fiscal year, after spending more than Tk 36,712 crore over the past seven years to keep gas prices stable.

Energy and Mineral Resources Division (EMRD) Secretary Mohammed Saiful Islam said efforts to cut LNG import costs are already paying off. “We have signed a deal with OQ Trading International of Oman that reduced the LNG spot market premium from 63 cents to 15 cents. We hope to bring it down further, close to 10 cents,” he told Just Energy News.

Bangladesh’s power sector stranded assets are increasing by leaps and bounds, exposing a new Achilles heel of Bangladesh Power Development Board (BPDB), which bled fiscally dry after pursuing a flawed energy policy during the 15-year rule of the past Awami League government.

With large power plants awaiting commissioning for months or sitting substantially idle after launch, the stranded asset problem is more pronounced than ever before.

Bangladesh’s transitional government set new ambitions for renewable energy growth, but sees little action on the ground.

In the wake of student uprisings that toppled Sheikh Hasina’s Bangladesh government last July, an interim government vowed to bring reform to the country’s energy sector that is responsible for three-quarters of its planet-heating emissions.

Solar energy sees financing crunch

As of July, 2025, Bangladesh's installed solar energy capacity reached 1,307.15 megawatts (MW), up from 949.65 MW in June 2023-a 38 per cent increase in just over two years. While this surge underlines the growing momentum in the country's transition to clean energy, significant financial, technical, and policy challenges threaten to slow the pace of expansion.