Category: Energy and Power

Bangladesh’s natural gas supply has suffered a major setback after a fi re forced the shutdown of one of the country’s fl oating LNG import terminals (FSRU) operated by USbased Excelerate Energy off Maheshkhali, reducing national gas supply by around 450-500 million cubic feet per day (MMCFD).

The disruption has brought the country’s total gas supply down to around 2,200 MMcfd, intensifying shortages for industries, power plants, CNG fi lling stations and residential consumers across the country.

Speaking at a recent program, Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud said the incident had created a signifi cant shortfall in gas supply.

He noted that Bangladesh narrowly avoided a more serious accident because no LNG carrier was connected to the terminal when the fi re occurred.

The Minister said the supply disruption has severely affected consumers in several parts of the country, including Mymensingh, where households, industrial users and CNG stations are experiencing acute gas shortages.

In some areas, the crisis has triggered public protests and road blockades.

India has announced plans to expand its nuclear power generation capacity to 100GW by 2047, making nuclear energy a key pillar of its strategy to achieve netzero emissions by 2070.

Minister of State for Atomic Energy Jitendra Singh told Parliament that India, which currently has 8.8GW of installed nuclear capacity, will scale up generation through a phased expansion over the next two decades.

Under the government’s Nuclear Energy Mission, India also aims to deploy at least fi ve indigenously developed Small Modular Reactors (SMRs) by 2033.

The Bhabha Atomic Research Centre (BARC) is developing three indigenous designs, including the 220-MW Bharat Small Modular Reactor, a 55-MW SMR, and a high-temperature gas-cooled reactor for hydrogen production.

The government says the expansion will strengthen energy security, support clean electricity generation, and create new opportunities for international cooperation in nuclear technology and manufacturing.

China has unveiled an ambitious renewable energy development plan targeting 3.5 terawatts (TW) of installed renewable power capacity and around 6,000 terawatt-hours (TWh) of annual renewable electricity generation by 2030 as part of its 15th FiveYear Plan for Renewable Energy Development (2026- 2030).

Released by the National Energy Administration (NEA), the plan aims to raise renewable energy consumption to 1.8 billion tonnes of coal equivalent (about 1,260 Mtoe) by 2030, reinforcing China’s longterm transition towards a low-carbon energy system.

Under the roadmap, combined installed wind and solar capacity is expected to exceed 2.8TW, producing more than 4,000 TWh of electricity annually.

China also plans to add over 300 GW of renewable-based peak-shaving capacity to improve grid fl exibility and launch around 100GW of new offshore wind projects during the fi ve-year period.

Bangladesh’s prolonged gas crisis has entered a more critical phase after the shutdown of one of its two fl oating LNG terminals exposed the country’s growing dependence on imported liquefi ed natural gas (LNG) and the lack of adequate import infrastructure.

For nearly fi ve years, the country’s gas defi cit has continued to widen as production from domestic gas fi elds declines by around 150 million cubic feet per day (MMCFD) annually.

Meanwhile, Bangladesh’s LNG regasifi cation capacity has remained capped at about 1,100 MMCFD, with no new import infrastructure added despite rapidly increasing demand.

Although expanding LNG imports has become the only viable short-term option to offset declining domestic production, progress in developing new import facilities has been slow.

The government has recently granted inprinciple approval to begin negotiations for the country’s third Floating Storage and Regasifi cation Unit (FSRU), but construction and commissioning will still take several years.

The vulnerability of the existing system became evident after a fi re and technical failure forced the shutdown of Excelerate Energy’s FSRU at Moheshkhali on July 21, cutting gas supply to the national grid by about 450 MMCFD.

As a result, total gas supply has fallen to below 2,200 MMCFD, against an estimated national demand of around 4,200 MMCFD, leaving a supply gap of nearly 1,800-2,000 MMCFD.

The shortage has deepened across all major consuming sectors.

Gas allocation to industries has fallen to nearly half of demand, while supplies to gas-fi red power plants have been reduced by another 150-200 MMCFD.

The outage of a single LNG terminal has demonstrated how vulnerable Bangladesh’s energy system has become as dependence on imported LNG continues to increase Industry Bears the Biggest Blow The manufacturing sector, particularly the textile and ready-made garment (RMG) industry, has been hit hardest.

According to Petrobangla, industries account for nearly 39 percent of national gas demand, requiring around 1,560 MMCFD for captive power generation and industrial processes.

Under normal conditions, industries receive around 950 MMCFD, but current supply has fallen to nearly 800 MMCFD.

Textile mills, spinning, weaving, knitting, dyeing and washing factories are operating well below capacity as inadequate gas pressure prevents boilers from functioning effi ciently.

Industrialists estimate that production capacity has declined by 25-30 percent, forcing many export-oriented factories to shift production to late-night hours while raising concerns over timely delivery of export orders.

BGMEA President Mahmud Hasan Khan said the gas crisis has persisted for almost fi ve years despite repeated tariff increases.

‘The government raised industrial gas prices from Tk16 to Tk40 per cubic meter with the promise of ensuring adequate supply.

However, the supply situation has not improved.

Production continues to suffer, and if this continues, many garment factories will become fi nancially unviable and eventually shut down,’ he said.

BTMA President Shawkat Aziz Russell told Energy and Power that many textile mills have already ceased operations, with inadequate gas supply being one of the principal reasons.

‘There is no alternative to urgent government intervention if the textile industry is to survive,’ he said.

Recognizing the seriousness of the situation, leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA) recently met Prime Minister Tarique Rahman, warning that continued gas shortages could severely undermine Bangladesh’s largest export sector.

The Prime Minister assured industry leaders that the government would take immediate measures to minimize disruptions to industrial production and instructed the relevant ministries and agencies to expedite actions to restore stable gas supplies.

Urban Residents Face Severe Hardship The crisis has also become a daily struggle for millions of urban households.

Residents in Dhaka, Narayanganj, Gazipur and Chattogram report receiving little or no cooking gas for extended periods.

In many neighbourhoods, gas pressure remains too low to cook throughout most of the day, with some households receiving supply for only one or two hours.

Many families have been forced to switch to electric cookers, LPG cylinders or purchase prepared meals, signifi cantly increasing household expenses.

Complaints from residents unable to cook have fl ooded social media, while working families have been among the worst affected.

Long Queues at CNG Stations The transport sector has also experienced major disruptions.

Long queues stretching several hundred meters have become common at CNG fi lling stations across the country.

Many stations are operating with limited supply hours, while others have temporarily suspended operations altogether.

Although CNG station owners have withdrawn their planned strike after discussions with the government, motorists continue to wait six to eight hours to refuel.

The prolonged delays have reduced the number of CNGpowered three-wheelers, ride-sharing vehicles and buses operating in Dhaka, creating additional pressure on the city’s already strained public transport system.

Power Generation and Fertilizer Production Under Pressure The gas shortage has forced authorities to further reduce supplies to gas-fi red power plants and fertilizer factories.

Although the power sector requires around 2,400 MMCFD, Petrobangla normally allocates between 900 and 1,000 MMCFD.

Following the FSRU outage, supply has dropped to around 700-800 MMCFD.

Gas allocation to fertilizer factories has also been sharply reduced from the required 316 MMCFD to only about 114 MMCFD, affecting urea production.

To maintain electricity supply, the government has increased reliance on coal-fi red and liquid-fuel power plants, a move that signifi cantly raises generation costs and increases subsidy requirements.

Government Accelerates Emergency Response The government has mobilized international technical experts to restore the damaged FSRU as quickly as possible.

Energy offi cials expect partial operations to resume in the coming weeks, with full restoration depending on the arrival and installation of replacement equipment.

At the same time, authorities are accelerating plans to strengthen Bangladesh’s LNG infrastructure.

The Cabinet Committee on Government Purchase has granted in-principle approval to negotiate with China National Energy Engineering and Construction Co.

(CNEE) for the development of the country’s third FSRU at Kutubjom in Moheshkhali.

The proposed terminal is expected to add 550-600 MMCFD of regasifi cation capacity.

The government is also moving ahead with plans to develop a land-based LNG terminal at Matarbari, which is expected to provide greater long-term supply security than fl oating terminals.

A Wake-Up Call for Energy Policy Energy analysts say the current crisis extends far beyond a temporary technical failure.

It has highlighted Bangladesh’s growing dependence on imported LNG while domestic gas production continues to decline.

With only two operational FSRUs, the outage of a single terminal has been suffi cient to disrupt industrial production, electricity generation, fertilizer manufacturing, urban life and public transportation nationwide.

The incident underscores the urgent need to accelerate domestic gas exploration, diversify energy sources, expand LNG infrastructure, strengthen transmission pipelines and increase investment in renewable energy.

Without a comprehensive long-term strategy, experts warn that similar crises are likely to become more frequent as Bangladesh’s dependence on imported LNG continues to grow.

When will the Damaged FSRU Resume Operations? Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmud has said that the damaged fl oating storage and regasifi cation unit (FSRU) is being repaired under the supervision of international specialists, while critical replacement components are being imported from overseas.

He expressed optimism that the terminal would gradually resume operations during the fi rst half of August.

State Minister for Power, Energy and Mineral Resources Aninda Islam Amit said the FSRU is expected to restore 280-300 MMCFD of gas supply in the initial phase.

Once fully repaired and commissioned, the terminal is expected to return to its full regasifi cation capacity of around 500 MMCFD, signifi cantly easing the ongoing gas shortage.

Government Pursues Multiple Measures Even as it deals with the immediate crisis, the government has accelerated both short-term and long-term initiatives to strengthen Bangladesh’s energy security.

Alongside expanding LNG import infrastructure, efforts to increase domestic gas production are also continuing.

Bangladesh has already launched an international bidding round for offshore oil and gas exploration in the Bay of Bengal, with bid submissions scheduled to close in November.

Energy Minister Iqbal Hassan Mahmud has also indicated that the government is considering inviting international investors to participate in onshore oil and gas exploration to accelerate domestic resource development.

To strengthen LNG import capacity, the Cabinet Committee on Government Economic Affairs recently granted inprinciple approval to begin negotiations with China National Energy Engineering and Construction Co.

(CNEEC) for the installation of Bangladesh’s third FSRU at Kutubjom in Moheshkhali.

The proposed facility is expected to add 550-600 MMCFD of regasifi cation capacity to the national gas grid.

Offi cials said the government is simultaneously advancing plans for a fourth FSRU and a land-based LNG terminal at Matarbari, Cox’s Bazar, aimed at improving long-term supply security.

As an alternative supply option, the government is also evaluating the feasibility of importing LNG from Malaysia using ISO tank containers, particularly for supplying gas to industrial consumers.

A Malaysian delegation recently visited Dhaka and held discussions with Petrobangla and representatives of Bangladesh’s ready-made garment (RMG) industry to explore the proposal.

Bangladesh Seeks Malaysia’s Support The government is also expanding international energy cooperation to strengthen long-term energy security.

During a recent bilateral meeting, Prime Minister Tarique Rahman requested support from Malaysian Prime Minister Anwar Ibrahim in enhancing Bangladesh’s energy security through increased LNG supplies, investment and broader cooperation in the energy sector.

The two leaders reportedly discussed opportunities for long-term collaboration in LNG trade, energy infrastructure development and strategic investment to help Bangladesh address its growing dependence on imported natural gas.

Is the Crisis Merely Temporary? Energy experts argue that the current shortage is not simply the result of a technical failure at one LNG terminal.

Rather, it exposes the structural weaknesses of Bangladesh’s energy system.

Domestic gas production has been declining steadily for years, while dependence on imported LNG continues to grow.

Consequently, the shutdown of a single FSRU has been enough to disrupt gas supplies nationwide, affecting industries, power generation, fertilizer production, urban households and the transport sector.

The situation has also highlighted Bangladesh’s growing exposure to volatile global LNG prices, increasing import costs and the government’s subsidy burden.

Experts believe that installing additional FSRUs alone will not provide a lasting solution.

They stress the need for an integrated long-term strategy that includes accelerated domestic gas exploration, expansion of transmission pipeline infrastructure, development of strategic gas storage, greater investment in renewable energy, and diversifi cation of the country’s energy mix.

According to analysts, the current gas crisis should serve as a wake-up call.

Without sustained investment and comprehensive reforms to strengthen energy security, Bangladesh could face increasingly frequent and more severe supply disruptions in the years ahead.

Bangladesh is facing a challenge in its fi ght for energy independence.

For decades, the country relied on its own natural gas to produce over 60% of its electricity.

Now, those local reserves are rapidly running out.

To make up for the shortage, Bangladesh has fallen into a trap of spending millions of dollars importing expensive and unpredictable foreign fuel like Liquefi ed Natural Gas (LNG), coal and oil.

This massive spending is draining the country’s foreign currency reserves and hurting the economy.

To truly protect its independence, Bangladesh must shift away from imports and build a domestic energy system powered by local renewable energy sources.

Bangladesh’s Climate Prosperity Plan aims for a bold 40% clean energy share by 2041, but red tape is blocking progress.

At fi rst, the proposed National Budget for FY 2026-27 brought hope by removing import duties, value-added tax (VAT), and advance income tax (AIT) on solar equipment.

However, the National Board of Revenue (NBR) quietly weakened this plan.

Just three days before the budget announcement on 11 June 2026, the NBR issued Statutory Regulatory Orders (SROs) with strict conditions that directly undermine the government’s green goals.

The SROs implement contrasting tax policies, scaling back broad fi scal support for fossil fuels while offering a signifi cant, phased income tax holiday to encourage utility-scale clean energy generation.

The comparative table below outlines the primary tax and incentive structures by the NBR: Stakeholder groups criticize current NBR policies.

Groups like the Centre for Policy Dialogue (CPD) and Bangladesh Solar and Renewable Energy Association (BSREA) point out restrictive eligibility.

They argue these tax waivers mainly benefi t large corporations instead of residential rooftop users or small farmers.

Analyzing the above table, NBR SROs act as a barrier to energy independence by creating an unfair market.

It grants duty and tax waivers only to VAT-registered Renewable Energy Service Companies that generate electricity under a PPA.

Instead of encouraging a widespread solar boom across households and villages, the policy limits tax and duty benefi ts almost entirely to large commercial operations and utility-scale projects.

The SROs potentially exclude everyday residents, small-scale farmers and rural entrepreneurs, who are completely excluded from tax incentives.

As a result, while a massive industrial conglomerate can import solar components duty-free to cut costs, an ordinary citizen trying to install a modest 02 kW solar system on a village roof must pay heavy import duties.

By shutting out everyday consumers, the SROs are choking the massive potential of decentralized clean energy.

Bangladesh has the technical capacity to generate over 100,000 MWp from advanced rooftop solar alone.

To unlock this, the public must be empowered to become active energy producers.

When fi nancial policies create barriers for the average household, it stunts the growth of the clean energy grid and slow down job creation.

While the national budget aims to create over half a million generic jobs, civil society groups point out that a fully unlocked renewable energy sector could independently create over one million green jobs.

Unfortunately, this economic potential is currently stalled by bureaucratic red tape.

This regulatory barrier may reveal a deeper conflict in the state’s economic strategy.

Its old attachment to fossil fuels is undermining its new climate goals.

Even though offi cial statements celebrate a green transition, Government funding continues to back dirty energy.

This keeps fossil fuels artifi cially cheap and slows down the shift to clean energy.

The contrast between fossil fuel incentives and renewable energy support in the current National Budget (FY 2026-27) could be examined as follows: Sector Present Status and Allocation Impact on Energy Independence Renewable Energy Allocation Only 2.20% (Tk 379.24 crore) of the total Tk 17,193 crore power development budget Severely inadequate to fund the Tk 21,750 crore annual investment required for a green transition Fossil Fuel Subsidies 15% VAT and 2% advance income tax waivers remain active for LNG imports Artifi cially lowers fossil fuel costs and prolongs dependence on imported energy Coal Project Expansion Active funding for domestic coal mining (like Barapukuria), where extraction costs (USD170/ tonne) exceed global prices (USD 90-120/tonne) Wastes national funds that could otherwise support solar energy development Ultimately, setting clean energy goals means nothing without the right regulations to back them up.

To escape the expensive trap of importing fuel before its own gas reserves run out, Bangladesh must align its tax policies with its long-term vision.

Resolving this crisis requires immediately canceling or majorly revising the restrictive NBR-issued SROs so that everyone gets equal tax benefi ts.

True energy independence cannot be achieved by only favoring big corporations.

Instead, the country needs an open, inclusive framework that empowers every household, farm and community to contribute to a green energy future

Information and Broadcasting Minister Zahir Uddin Swapon has stressed the need for strong political commitment and long-term policy support to accelerate the expansion of renewable energy in Bangladesh and strengthen the country’s energy security.

He made the remarks while addressing a policy dialogue organized by the Bangladesh Working Group on Ecology and Development (BWGED) at the Jatiya Sangsad Bhaban recently.

The minister said energy security is not limited to ensuring an uninterrupted electricity supply but is also closely linked to Bangladesh’s economic independence and sustainable development.

He emphasized that achieving a successful energy transition would require consistent political commitment, strategic planning and sustained investment in renewable energy.

A study presented by BWGED at the dialogue highlighted the economic benefi ts of solar energy, estimating that every kilowatt of installed solar capacity could save around Tk 30,000 annually in imported fuel costs.

Over the estimated 20-year lifespan of a solar power system, the cumulative savings could reach approximately Tk 550,000.

The University Grants Commission (UGC) has launched a major initiative to expand rooftop solar power generation across Bangladesh’s public universities, aiming to reduce electricity costs and promote clean energy through private sector investment.

According to a UGC press release, the initiative was discussed at a review meeting on rooftop solar power installations held at the Commission recently.

Under the fi rst phase of the program, around 60 MW of rooftop solar capacity is planned for 31 public universities through an Operational Expenditure (OPEX) model, under which private investors will fi nance, install, operate and maintain the solar systems.

UGC said feasibility studies have already been completed at 47 public universities and one international university

The government cannot cancel contracts signed with private power companies at will because they are backed by sovereign guarantees, making the process of termination lengthy and complex, Energy Minister Iqbal Hassan Mahmud said recently.

Responding to a supplementary question from reserved seat MP Mardia Mumtaz in the parliament, the minister said the previous ‘fascist government’ had handed over several power plants to private companies.

‘In those agreements, sovereign guarantees were given, meaning the state itself guaranteed the contracts.

Canceling such guarantees is a lengthy process.

We are trying to negotiate with them on several issues, particularly late payment fees, which we are refusing to pay.

Hopefully, these discussions will be fruitful,’ he said.

He added that once a power plant enters production, the system cannot be patched or run through ad hoc negotiations.

Governments worldwide are projected to spend US$1.1 trillion supporting the fossil fuel industry this year, with the fi gure potentially rising to US$1.43 trillion if global oil prices climb to US$110 per barrel, according to a new report by the United Nations Development Program (UNDP).

The fi ndings were released as climate campaign group 350.org, Fuel Poverty Action and other coalition partners staged a demonstration outside the UK Department for Energy Security and Net Zero, protesting rising energy costs and calling for stronger measures to accelerate the transition to clean energy.

The UNDP report, Military Escalation in the Middle East: Cushioning the Global Shock, says governments have responded to conflictdriven increases in oil prices by expanding fossil fuel subsidies, introducing fuel price caps and offering tax rebates to cushion consumers from rising energy costs.

While these measures provide short-term relief, the report warns they are placing a growing strain on public fi nances and diverting resources from long-term investments in education, healthcare, renewable energy and climate resilience.

Redirecting fossil fuel subsidies to renewable energy and clean transport is a widely supported policy goal, but achieving it is far more complex than many assume, according to a new analysis by Ronald Steenblik, Senior Technical Advisor at the Quaker United Nations Offi ce.

The analysis notes that despite nearly two decades of international commitments to phase out ineffi cient fossil fuel subsidies, progress has remained slow due to political, economic and social challenges.

While many governments and international organizations advocate shifting these subsidies to renewable energy, there are no binding global rules requiring countries to allocate savings from subsidy reforms to clean energy investments.

The report highlights that, based on the methodology used for the UN Sustainable Development Goals (SDG 12.c.1), global fossil fuel subsidies averaged about USD 1.1 trillion annually between 2021 and 2024