Bangladesh Renewable Energy Profile

Table of Contents

Last updated Jul. 15, 2024.

I. Introduction

Over the past ten years, Bangladesh has faced the challenge of insufficient energy supply to meet rising demand. Although 93.5% of Bangladesh’s population had access to electricity in 2019, 79% of users still experienced low voltage supply and 60% experienced load-shedding.1Md Abdullah-Al-Mahbub & Abu Reza Md Towfiqul Islam, Current status of running renewable energy in Bangladesh and future prospect: A global comparison, NIH (Mar. 2023), https://pubmed.ncbi.nlm.nih.gov/36967906/. Renewable energy sources offer solutions to fulfill Bangladesh’s electricity demand.2Al-Mahbub & Islam, supra.

II. Current Status of Renewable Energy

Bangladesh’s progress in developing renewable energy has been sluggish since 2008 when the Ministry of Power, Energy, and Mineral Resources published their policy guidelines. Currently, renewable energy represents only 2.93% or 650.14 MW of Bangladesh’s energy mix out of a total installed power capacity of 22,215 MW. The renewable energy mix includes biogas, hydropower, solar, and wind.

Solar

Bangladesh has an average theoretical solar potential of around 4.59 GHI (global horizontal irradiation), which means the situation is good and solar is viable.3Erik Koons, Solar Energy In Bangladesh: Current Status and Future, Energy Tracker Asia (Jun. 9, 2024), https://energytracker.asia/solar-energy-in-bangladesh-current-status-and-future/. As a low-lying country with high solar irradiation levels, Bangladesh has potential for large-scale PV farms, although currently utility-scale solar is mostly undeveloped.4Koons, supra.

Solar energy currently accounts for 416MW of Bangladesh’s installed renewable energy capacity.5Viktor Tachev, Solar and Wind Power Potential in Bangladesh, Energy Tracker Asia (Jun. 12, 2024), https://energytracker.asia/solar-and-wind-power-potential-in-bangladesh/.

The National Solar Energy Roadmap 2021-2041 calculated that under the business-as-usual (BAU) case, cumulative solar PV capacity will be 6,000 MW by 2041.6Draft National Solar Energy Roadmap 2021-2041, https://climateportal.ccdbbd.org/wp-content/uploads/2021/03/National-Solar-Energy-Roadmap.pdf. With aggressive policies, solar PV could cover up to 30,000 MW by 2041.7Draft National Solar Energy Roadmap 2021-2041, supra.

Wind

Wind power accounts for near zero of Bangladesh’s current installed energy capacity.8Tachev, supra. A report on the renewables technical capacity found, however, that Bangladesh has the potential to deploy up to 150GW of wind.9Tachev, supra.

Hydropower

Bangladesh has a current installed capacity of 230MW of hydropower.10Tachev, supra.

Other

The Bay of Bengal offers potential for RE projects such as offshore wind and technologies to extract energy from waves and tides.11Myisha Ahmad et al., Renewable Energy Potentials along the Bay of Bengal due to Tidal Water Level Variation, MATEC Web of Conferences 147, 05008 (2018), https://www.matec-conferences.org/articles/matecconf/pdf/2018/06/matecconf_sibe2018_05008.pdf.

III. Renewable Energy Potential

Bangladesh currently generates around 1 percent of its electricity from renewable energy sources. Fossil fuels, primarily natural gas (69% share), dominate the country’s energy mix as of 2023.12Ember Electricity Data Explorer, ember-climate.org. However, a 2023 study analyzing sunlight and solar panel efficiency estimated Bangladesh’s solar energy potential at 50,174 megawatts (MW).13East Asia Forum. Strategic and innovative implementation of renewable energy sources (RES) could meet 80% of the country’s projected electricity demand in 2041 with solar energy alone.14East Asia Forum, supra.

While the country’s potential is significant, achieving this will require overcoming barriers in policy, financing, and geography. Bottlenecks are present that may constrain its RE development. These challenges include:

  • difficulty in obtaining permits and approvals; 
  • uncertainty in auction/tender timings;
  • an underdeveloped local supply chain; 
  • limited incentives and financing difficulties; and 
  • large scale solar farms may encounter difficulty in finding suitable land areas given the scarcity of land area.15USAID.

Addressing these challenges could result in Bangladesh unlocking its full RE potential.

IV. Summary of Renewables Policies and Incentives

TYPE OF POLICYBANGLADESH
REGULATORY POLICIESRenewable energy in INDC or NDC✔
Renewable energy targets✔
Feed-in tariff/auctions/premium payment✔
Net-metering/billing/direct consumption-supply✔
Biofuel blend obligation/mandate/target✔
Electric utility quota obligation/RPS✔
Tradable REC✔
Renewable heat obligation/mandate✔
FISCAL INCENTIVES AND PUBLIC FINANCINGTax incentives✔
Public investment/loans/grants/subsidies/rebates✔
Reductions in sales, CO2, VAT or taxes✔
Tendering
Investment or production tax credits
Energy production payment

V. Summary of Identified Challenges

Challenges

  • Policy Gaps: Existing policies such as the Net Metering Guidelines (2018) do not offer enough benefits or incentives to end users and do not lower their risks.
  • Faulty Equipment: Companies developing net metered systems face no liability for faulty or malfunctioning products, lowering the incentive to manufacture quality products.
  • High Costs: High purchase costs for suppliers cascade down to high equipment costs for consumers. Taxes on key components used in renewable energy equipment further contribute to their high upfront costs.

View comprehensive list of identified challenges here.

VI. Future Outlook

VII. Renewable Energy Case Studies

Solar Home Systems

  • Bangladesh has provided and successfully implemented solar home systems for millions of households to address the lack of access to electricity, especially in rural areas. This has had positive ripple effects on education, healthcare, and income generation.20SohailKhan2K22, Solar Energy Success Stories in Developing Countries, Green.org (Jan. 30, 2024; last updated Feb. 7, 2024), green.org/2024/01/30/solar-energy-success-stories-in-developing-countries/ (Accessed Jul. 9, 2024).
  • As of 2018, almost 5.5 million systems had been installed so far with an average of 60,000 installations per month, serving more than 4 million households and about 20 million people in rural areas, most of whom were not connected to the national grid.21Abdullah Ar Rafee, Renewable Energy Empowerment at the Grassroots: The Success Story of Solar Home System (SHS) in Bangladesh, IPAG (Nov. 2020), https://ic-sd.org/wp-content/uploads/2020/11/Syed-Munir-Khasru.pdf.
  • The program was originally part of the Rural Electrification and Renewable Energy Development (RERED) Project and is considered to be the largest off-grid solar system program in the world.

VIII. Conclusion

Bangladesh is one of the countries hit hardest by climate change, the negative effects of which complicate RE development. Bangladesh faces additional challenges including a lack of incentives for private investors in RE. However, the future holds promise for Bangladesh. According to REN21’s report, Bangladesh is at the forefront of renewable energy development in the Asia-Pacific region along with China, India, and Japan.22Asia and the Pacific: Renewable Energy Status Report, REN21, 2019, https://www.ren21.net/wp-content/uploads/2019/05/REN21_Asia_Report_2019_Web.pdf. Moreover, Bangladesh’s off-grid solar program has been cited as one of the most successful renewable energy programs in the world.23World Bank Helps Bangladesh Expand Renewable Energy, World Bank Group (Mar. 1, 2019), https://www.worldbank.org/en/news/press-release/2019/03/01/world-bank-helps-bangladesh-expand-renewable-energy.

References