Category: Energy and Power

The Asian Development Bank (ADB) has signed a $30 million sustainabilitylinked loan facility agreement with Envoy Textiles Limited, marking ADB’s first such loan in Bangladesh.

the financing will support the design and construction of a new automated, energy-efficient spinning unit at Envoy’s manufacturing plant in Jamirdia, Mymensingh, boosting the company’s annual yarn production capacity by 4,550 tonnes.

the loan will also finance the installation of 3.5 MWp rooftop solar panels and refinance short-term local working capital loans. Sustainability-linked loans are performance-based debt instruments tied to predefined key performance indicators, assessed against sustainability performance targets. For Envoy, these include rooftop solar generation capacity and greenhouse gas emission reductions.

Of the many problems plaguing the energy sector, unaccountedfor gas (UFG) or system loss is certainly a significant one.

it constitutes a direct financial loss at a time when the government has to provide subsidies, and does not have enough foreign currency to purchase LNG. System loss is an ageold problem in Bangladesh, as it is in many developing countries. Unpublished data for 11 months of the latest fiscal year (FY 2024-25) from Petrobangla reveal that the total system loss based on the difference between gas entering the national grid and gas sold to customers is 7.77%.

if this is the only loss, it wouldn’t be too bad.

the problem arises with the hidden loss in the domestic or residential sector. Since this sector is predominantly unmetered and consumers pay a flat fee according to the number of burners, the question that logically arises is: how is the amount of gas consumed by this sector determined? The gas shown as consumed is calculated using a hypothetical consumption per burner. The data from the gas consumption of metered customers indicate that this figure is an overestimation. Petrobangla, in their annual gas consumption data for FY 2023-24, has shown a gas consumption of 11% in this sector. Knowledgeable insiders strongly believe this cannot be more than 8%.

therefore, nearly 3% gas is unaccounted-for (UFG).

this UFG is in addition to the 7.8% normally shown in annual reports.

thus, the actual gas loss exceeds 10%. Table 1 presents a historical picture of system loss from the FY 1994-95 to the present.

the first noteworthy thing is that the system loss has increased from 5-6% in the late 1900s/early 2000s to 7-8% in recent years.

the second is that in volume terms, the gas loss has gone from around 25 Bcf to nearly 80 Bcf. Before 2017, the gas loss was something no one worried much about because gas was cheap, and it was thought we would comfortably cross 2030 before any shortage was felt. This belief was shattered in 2015 when the gas shortage started to bite, especially in the industrial sector.

the reason oilfired power plants were introduced was precisely because we could not supply enough gas to our gas-fired power plants. This crisis was considered so serious that power plants started to be built having dual-fuel capability – oil and gas.

today, as a result of the huge scarcity of gas, even a 1% system loss must be looked upon with great seriousness. Moreover, the financial implications of gas loss must be computed in terms of the cost of importing LNG. Petrobangla data on gas sector system loss between the years 2006-07 and 2018-19, nearly 12 years, is unreliable. During this period, gas pressure at the customers’ meters would fall to dramatically low values.

under these pressures, the old meters gave erroneous readings because the meters assume the designated pressure of 15 psig is available.

this resulted in over-billing of hundreds of customers. As a result, instead of system loss, Petrobangla’s data showed system gain. This metering error continued for a long time.

this has been corrected for all the larger distribution companies (Discoms), but the smaller distribution companies still have metering errors.

as a result, their gas situation, even in FY 2023-24, shows system gains (see Table 2). Since system gain is a physical impossibility, hundreds of customers are being overcharged, and theft of gas is continuing undetected. Petrobangla has recently released the financial loss due to UFG or system loss company-wise (Table 2).

it estimates that Tk 3,790 crores is lost as a result of UFG. The financial loss is calculated using a gas price of Tk 18.6 per cubic meter, which is the average price of gas for Petrobangla (LNG gas price + domestic gas price). If this loss is calculated at the full LNG import price, the loss will exceed Tk 12,000 crores or nearly USD 1.0 billion. Note UFG – Unaccounted-for Gas; MMcm – million cubic meters One always hears the name of Titas when it comes to system loss, but it is interesting to note from Table 2 that Bakhrabad has the highest loss at 10%. This is an unacceptably high distribution system loss.

another interesting thing that has come to light in recent times is the GTCL system’s loss of 2%. Such a high transmission loss is unusual, to say the least.

this implies that even before the gas reaches the distribution companies, 2% of the gas handled by GTCL, worth approximately Tk 1,000 crore, is lost. At the full LNG import price, the UFG is worth at least Taka 3,000 cores. Each cargo of imported LNG costs approximately Tk. 500 crore.

that means the equivalent of nearly 6 cargoes of LNG is lost in the transmission network operated by GTCL.

if UFG is assumed to be a metering error, such a high metering discrepancy is technically extremely difficult to explain. Since theft from the high-pressure transmission lines would be highly challenging, to explain this phenomenon to everyone’s satisfaction, Petrobangla needs to investigate this with due importance. The actual system loss of the distribution companies, especially Titas and Bakhrabad, is much more than revealed by the data in Table 2.

this is because these larger distribution companies supply a lot of gas to bulk users, i.e., the gasbased power plants and fertilizer plants. There is very little or no system loss in the supply to these customers.

if the gas supplied to these bulk users is deducted from the total supplied by the discoms, then the actual performance with regard to gas loss emerges. For example, in FY 2023-24, a total of 992 Bcf of gas was supplied, of which 75 Bcf was UFG, 545 Bcf, and 51 Bcf were supplied to gasbased power plants and fertilizer plants, respectively.

therefore, 992-545-51 = 396 Bcf of gas was distributed by the distribution companies to non-bulk users, i.e., industries, CNG stations, commercial institutions, and domestic customers.

the loss of 75 Bcf of gas shown for 2023-24 occurs in these sub-sectors.

therefore, the actual loss is approximately 18.9% (75/396). A long time back, there was a study of gas loss according to feeders (pipelines serving areas); some feeders with a high percentage of residential and small commercial/industrial customers were found to have a loss exceeding 30%. This clearly indicates the problem of distributing gas to densely packed areas. Table 3 shows the mean UFG (system loss) in various regions of the world.

as can be seen, the average system loss of the world’s natural gas transmission and distribution infrastructures is only 1.67%. However, high system losses do exist, but very high system lossesare becoming rare.

the countries with the highest UFG percentages are Myanmar (15%), Syria (13.8%), Pakistan (11.7%), and South Africa (8%) (Ravalec et al., 2025).

it should, however, be noted that two of the high system loss countries are embroiled in civil wars, while the other two are countries that have never been able to manage their energy sector well. Table 3: UFG (System Loss) from Natural Gas Transmission and Distribution Network in 2021 Source – Global methane emissions from natural gas transmission and distribution networks Geoffroy Hureau, Armelle Lecarpentier, Sylvain Serbutoviez, Jean Kaniewicz, Mike Madden, Chris Brooks, Aileen Robertson, Colin Harrison, Chris Langston and Mickaele Le Ravalec Sci.

tech.

energ.

transition, 80 (2025) 28 DOI: https://doi.org/10.2516/stet/2025007 Countries with moderate system losses are Russia (2.0%) and the USA (2.1%) (Ravalec et al., 2025).

it is worth pointing out that at one time, Russia was a big methane emitter with pipeline losses exceeding 10%. With regards to the USA, the average of 2.1% comes from a spread of 1-4%.

the average system loss of developed countries, as reported by Eurostat, is 0.5%. Several EU countries have system losses below 0.5%.

these system loss data point to one unmistakable fact, and that is Bangladesh’s gas system loss is very high.

the fact that some countries have similar high losses is no excuse to continue this bad performance. The fact that Petrobangla is being transparent by revealing the financial losses of its distribution and transmission companies is indeed praiseworthy. Moreover, they have initiated measures to reduce UFG, including disconnecting illegal connections.

the problem is monumental, and it is certainly not possible to bring down the system loss to the global average of 1.67% considering the poor state of the distribution pipelines, especially within Dhaka city, and the numerous socio-economic constraints, but a 4.0% UFG and the elimination of theft through illegal connections in the domestic sector are targets that can be set.

the future of sustainable gas supply in Bangladesh depends on reducing UFG to levels that will meet the expectations of the people.

The Anti-Corruption Commission (ACC) conducted raids at various facilities of the state-owned Jamuna Oil Company Limited in Chattogram recently, following reports of discrepancies involving 375,365 liters of diesel — a loss categorized as damage to state assets.

the daylong operation was carried out by the enforcement team of the ACC’s Chattogram District Office-1, confirmed Md Subel Ahmed, its deputy director.

the team visited the company’s Patenga terminal and its head office in Agrabad.

a three-member team led by ACC Assistant Director Sayeed Mohammad Imran conducted the raid, he added. During the operation, the ACC team visited the Patenga terminal and summoned fuel supply records from the officials concerned. Mohammad Maksudur Rahman, assistant general manager (terminal) of Jamuna Oil, handed over the relevant documents to the investigators. Preliminary examination of the records revealed that the Chattogram terminal had reported a total shortfall of around 375,000 liters of diesel sent to depots in Fatullah and Cumilla at different times

Power tariffs of half a dozen of the state-owned power plants are set to be cut years after initiation of their commercial operations, said sources.

the proposed new tariffs are expected to get approved by the Advisers Council Committee on Economic Affairs as state-run Bangladesh Power Development Board (BPDB), the lone buyer of electricity from these plants, has already negotiated down the tariff rates of these power plants, they said.

the power-purchase agreements (PPAs) between the BPDB and the relevant power plants will also be amended accordingly.

the return on investments (ROEs) of those power plants might be fixed at 6.0 per cent from existing 12 per cent and the tariff rates would also be reduced proportionately, a senior BPDB official said.

of the six power plants — four are owned by state-run Rural Power Company Ltd (RPCL) and two are owned by another state-owned BR PowerGen Ltd.

the RPCL-owned units are: 210MW Mymensingh Power Plant, 52.194MW Kodda Power Plant, 25.50MW Rowzan Power Plant and 105MW Gazipur Power Plant.

and two other plants –163MW Mirsharai Power Plant and Kodda 150MW Power Plant – are owned by BR PowerGen Ltd.

In 2010, fewer than six in ten Bangladeshis had electricity.

today, more than 99% of households are connected-a transformation that has touched every corner of life. Factories run shifts, students study under light, mothers deliver babies in powered clinics, and life expectancy has risen above 72 years. From boro rice, which is entirely irrigation-dependent, to aquaculture that relies on aeration, pumping, and cold-chains, Bangladesh’s nearuniversal electricity access has been a quiet force behind our rise from ~32 million metric tonnes to ~37 million metric tonnes of rice (milled), and from ~3.1 million metric tonnes to ~5.0 million metric tonnes of fish since 2010.

these gains in food security are as vital as the gains in manufacturing and services.

this achievement is often overshadowed by criticism of ‘capacity payments’-fees paid to power plants for being available, even when underutilized.

these payments rose to around Tk 260-280 billion annually. Yet what did the nation gain in return? Bangladesh’s economy expanded from US$115 billion in 2010 to nearly US$450 billion today. Exports tripled to US$55-58 billion annually, powered by electricityreliant industries.

almost 48 million electricity customers-homes, farms, and factories-depend daily on this reliability. Studies consistently show that electricity consumption drives GDP growth, not the other way around.

the challenge now is not to undo progress but to optimize it. Retiring costly rental units, cutting system losses, and integrating renewables could save over Tk 138 billion annually. Bangladesh ended the darkness.

the next step is efficiency-ensuring that every kilowatt we generate continues to fuel growth, dignity, and resilience

New commitments to boost renewable energy and increase access to electricity and clean cooking technologies by 2030 have brought the finance and investment pledged through the United Nations to US$ 1.6 trillion, with $284 billion already mobilized, according to the fourth edition of the Energy Compacts Annual Progress Report being released today.

the report, which is being launched at the EnergyNow SDG7 Action Forum on the margins of the UN General Assembly, shows expanding action under the Energy Compact voluntary commitments on both energy access and transition. Of the $284 billion mobilized or deployed since 2021 through the Compacts, the majority has been private sector investment in renewable power generation. The report cites figures from the 2025 Tracking SDG7 Report that over $4 trillion total investment is needed annually to reduce the ranks of 660 million people living without electricity and over 2 billion still cooking with polluting fuels, while setting the world on a climate action trajectory towards net-zero emissions by 2050 and averting ever-worsening climate impacts.

Saudi Arabia, Russia and six other key members of the OPEC+ alliance are likely to agree to raise crude output when they meet virtually, with analysts divided over the size of the expected hike.

the meeting by the group of eight oil-producing countries known as the ‘Voluntary Eight’ (V8) comes as oil prices head for weekly losses and rumors of a possible output increase of up to 500,000 barrels per day (bpd) swirl.

angered by what it dismissed as ‘wholly inaccurate and misleading’ media reports, the 12-nation Organization of the Petroleum Exporting Countries (OPEC) urged news outlets in a recent statement to ‘exercise accuracy…

in order to avoid fueling’ market speculation.

experts had initially expected a production hike of 137,000 bpd from November, which would mirror the October increase. But Commerzbank analyst Barbara Lambrecht cautioned that uncertainty remained, as ‘the group has frequently surprised markets with swift production hikes in the recent past’

Top government officials, including former power and energy state minister Nasrul Hamid, reportedly colluded with several corporate entities in Bangladesh and India to secure controversial power deals under an indemnity law during the past Awami League regime.

the national committee, commissioned to review the controversial power deals of the AL era, reportedly gathered sufficient circumstantial evidence to prosecute the corporate companies and their collaborators in an international arbitration court.

the national committee comprising five members was formed in September last year, about three months before the controversial indemnity law-Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010- was finally repealed 14 years after its promulgation.

after the repeal, the incumbent government, which replaced the past AL government in August last year following a student-led uprising, cancelled all solar projects approved under the now-defunct law but retained all fossil fuel-based projects

Many emphasized the need for a just transition that supports sustainable development, called on all countries to honor their commitments to climate finance and technology transfer, and reiterated their commitment to multilateralism.

a number of speakers underscored the role of the courts in holding countries to account, and cited the ICJ advisory opinion, affirming that countries have legally binding obligations to prevent climate harm and protect human rights.

in closing, UN Deputy Secretary-General Amina Mohammed emphasized that it is possible to limit global temperature rise to 1.5°C, but only if countries act with urgency, determination, and solidarity.

uN Secretary-General António Guterres convened the Climate Summit 2025 as a platform for country leaders to announce climate change commitments and to accelerate momentum toward the 2025 UN Climate Change Conference (UNFCCC COP 30) in November. Nearly 100 countries shared their plans for or updated nationally determined contributions (NDCs), which signal their countries’ intentions to take climate action.

in addition to announcing updated national targets for climate action, Heads of State and Government and ministers reaffirmed their support for multilateralism and science and demanded immediate action to prevent irreversible damage. During the opening segment, Scientists Johan Rockström, Director, Potsdam Institute for Climate Impact Research, and Katherine Hayhoe, Texas Tech University, provided assessments of current efforts to meet the goals of the Paris Agreement. Rockström warned that impacts associated with a temperature rise beyond 1.5°C risk crossing tipping points, leading to irreversible change. ‘The window is still there, but it’s narrow,’ he said. Hayhoe said while the science is clear, awareness does not necessarily lead to action. Saying we need to know we are not alone and there is hope, she called on leaders to ‘choose courage over fear, action over delay, and hope over despair.’ UN Secretary-General António Guterres emphasized that both science and economics compel climate action. He said COP 30 must conclude with a credible global plan to get us on track by: n supercharging the clean energy transition; n drastically cutting methane emissions; n ending the destruction of forests; n cutting emissions from heavy industry; and n ensuring climate justice. Luiz Inácio Lula da Silva, President of Brazil, said the submission of NDCs is not an option but an obligation, citing the recent advisory opinion by theInternational Court of Justice (ICJ). Xi Jinping, President of China, announced his country’s new NDC, which aims to, inter alia: reduce its economy-wide net GHG emissions by 7-10% from peak levels by 2035; increase the share of nonfossil fuels in total energy consumption to over 30%; expand installed capacity of wind and solar power to over six times the 2020 levels; scale up total forest stock volume; expand national carbon emissions trading market to cover major sectors; and establish ‘a climate adaptive society.’ Ursula von der Leyen, President of the European Commission, announced the EU will formally submit its new NDC ahead of COP 30, said the emissions reduction target would be between 66% and 72%, described work on a 2040 target of 90% emissions reduction to reach climate neutrality by 2050, and outlined the EU’s efforts in the areas of global partnerships and climate finance. Mia Mottley, Prime Minister of Barbados, called for using innovative financial instruments to implement NDCs and for a legally binding agreement on methane that could be based on the Montreal Protocol. Many emphasized the need for a just transition that supports sustainable development, called on all countries to honor their commitments to climate finance and technology transfer, and reiterated their commitment to multilateralism.

a number of speakers underscored the role of the courts in holding countries to account, and cited the ICJ advisory opinion, affirming that countries have legally binding obligations to prevent climate harm and protect human rights.

in closing, UN Deputy Secretary-General Amina Mohammed emphasized that it is possible to limit global temperature rise to 1.5°C, but only if countries act with urgency, determination, and solidarity.

the Climate Summit 2025 took place on 24 September, during the High-Level Week of the 80th session of the UN General Assembly (UNGA).

tackling Climate, Sustainable Development Crises Together Could Cut Costs by 40%: Report A report issued by a UN-convened expert group finds that tackling the climate and sustainable development crises together could unlock efficiencies at scale and reduce government spending needed to address these crises by nearly 40 percent. Harnessing Climate and SDG Synergy: Quantifying the Benefits, the third global report prepared by the independent Expert Group on Climate and SDG Synergy, was launched today ahead of the Climate Summit during the UN General Assembly High-Level Week, at a time when progress towards achieving climate targets under the Paris Agreement and the Sustainable Development Goals (SDGs) is far off track.

the finance gap for SDG action exceeds USD 4 trillion annually, and over USD 6 trillion annually for climate action. ‘The climate and development crises are not separate – they are deeply interconnected, and so must be their solutions,’ UN Under-Secretary-General for Economic and Social Affairs Li Junhua and Executive Secretary of UNFCCC Simon Stiell stated jointly in the preface of the report, representing the two agencies that co-convene the expert group. Declaring that the report shows that ‘we have the solutions and roadmap’ for a more integrated approach, they issued a call for cooperation across ministries and sectors – for a whole-of-society approach. ‘Let us seize this moment of opportunity for transformative change, for people and planet,’ they concluded.

the expert report comes at a crucial time: 2025 presents a critical window to maximize the potential of synergistic action, as countries prepare new national climate commitments under the Paris Agreement, some of which are being announced at the Climate Summit.

these Nationally Determined Contributions (NDCs) can be a key mechanism, the report states, to align climate action with sustainable development and the SDGs. Citing two examples of co-benefits, the report urges that NDCs should include action on biodiversity and recognize the positive health impacts in cities of reducing emissions and air pollution.

the report suggests that tailoring synergistic strategies to country-specific development and climate objectives ensures that investments are targeted where they are needed most, and that climate action delivers multiple social, economic, and environmental benefits. Currently, ‘fragmentation across governance, finance and policy continues to hinder progress,’ the report states, ‘necessitating reforms for effective and inclusive action.’ Stating that private sector investment is vital, the report makes the argument that by aligning incentives, demonstrating economic value, and reducing risk through synergistic action, governments can leverage private funding to magnify the impacts. Growing Evidence The report’s conclusions are based on statistical modelling, using the cost of meeting the greenhouse gas emission reduction objective of fulfilling all NDCs as well as achieving certain development targets measured by the Human Development Index. By contrast, synergistic allocation of funds could reduce total government spending by up to 37 percent, according to the modelling. The expert group intends to broaden the analysis in future reports to add other benefits, including social values such as lives saved.

the report expands the growing body of evidence on the clear benefits of synergistic policies and action, building on the expert group’s global reports over the past two years, as well as detailed thematic reports examining specific synergies that can yield major impact.

it cites examples showing that: n Nature-based climate solutions such as conserving biodiversity and restoring ecosystems could deliver up to 37 percent of cost-effective CO2 mitigation by 2030; n City policies such as fossil-fuel phaseout, and encouraging cycling and walking as well as plant-based diets can deliver major co-benefits for climate and health; and n Integrating disaster insurance into development plans can boost resilience, considering that in Africa, only 0.5 percent of disaster losses are insured, and each 1.0 percent rise in coverage brings countries 5.8 percent closer to achieving the SDGs. Political momentum on climate and SDG synergies has been building, including through annual conferences, with increasing recognition of the need to break down the silos that are holding back progress urgently needed.

the recommendations in the report will continue to be advanced in various forums, including at Climate COP30 coming up in Brazil in November.

the 17-member expert group, drawn from diverse backgrounds and research institutions, is co-led by Luis Gomez Echeverri (International Institute for Applied Systems Analysis) and Heidi Hackmann (CREST, Stellenbosch University).

On the verge of a climate change disaster, greenhouse gas (GHG) emissions have become a major global concern, particularly energyrelated emissions, which account for about 75% of total GHGs. Consequently, many countries are reshaping their energy portfolios to achieve net-zero targets. Bangladesh is no exception and is making significant efforts to introduce emissionfree technologies into its energy mix.

the Energy Balances of Bangladesh reveal that the electricity sector consumes more than 55% of Total Primary Energy Supply (TPES), and this share continues to rise (Fig. 1).

therefore, introducing emission-free primary energy sources for power generation is critical to building a low-carbon society. Renewable energy, particularly solar and wind, can play a pivotal role in this transition. However, developing utility-scale solar projects in Bangladesh faces several barriers, primarily the lack of nonagricultural land.

in addition, the absence of local manufacturing facilities for quality panels and battery storage systems increases dependence on imports, requiring substantial foreign currency outflows.

these challenges have kept the cost of solar electricity production relatively high compared to other countries, although costs are steadily declining. Keeping renewable energy affordable will be crucial for maintaining competitiveness and phasing out fossil fuels in the future.

this study examines the characteristics of solar power, the daily electricity demand curve, and electricity generation costs from both conventional and renewable sources to determine an optimal solar capacity target for meeting Bangladesh’s future power demand. Fig 1: Primary Energy Requirement for Electricity Production (55% of TPES) Daily Demand Curve Analysis Electricity demand varies widely depending on lifestyle patterns, weather conditions, seasonal changes, and festivals.

to meet this fluctuating demand, electricity must be generated instantaneously and delivered through the transmission and distribution network within fractions of a second.

the daily demand pattern of an electricity system guides the scheduling of generation fleets to maintain demand-supply balance, based on generation technology, fuel type, and cost.

in Bangladesh, the power system experiences a pronounced evening peak between 7:00 p.m.

and 9:00 p.m., while the lowest demand occurs in the morning (around 7:00 a.m. in summer and 5:00 a.m.

in winter).

the daily demand curve can be divided into three segments-base, intermediate, and peak demand-based on duration and intensity. Power plant types are selected accordingly, depending on their operational flexibility and production costs. See the typical summer daily demand curve in Fig. 2 below: Peak Load/Demand The peak period begins at sunset when lighting demand surges and continues until midnight (18:00-24:00 hrs). Hydropower, gas turbines, and battery storage systems are suitable for this segment due to their ability to start and stop quickly, operate for fewer hours, and manage fuel costs efficiently. Peaking plants typically have plant factors of 20-35%, and their capacity accounts for roughly 20% of the system’s maximum demand.

intermediate Load/Demand Intermediate demand falls between base and peak periods. Power plants with load-following capabilities, such ascombined-cycle units, are ideal for this duty.

their plant factors generally range from 40% to 60%.

these plants operate most of the day but do not always run at full capacity.

intermediate demand capacity typically represents 18-20% of the system’s maximum demand. Base Load/Demand Base demand constitutes the lowest, most continuous portion of the daily demand or load duration curve (LDC), extending 24 hours a day. Nuclear, steam turbine (ST), and combined-cycle (CC) power plants with low-cost fuels are most suitable for base load generation.

their plant factors range from 70% to 90%, as they run continuously at or near full capacity. Base demand usually makes up 50-60% of the system’s maximum demand. For simplicity, this study assumes base, intermediate, and peak demands to be 60%, 20%, and 20%, respectively, though these ratios vary seasonally. During winter (November-February), overall demand falls by about 20%. Solar Power in the Demand Curve Solar generation begins around 7-8 a.m., peaks at noon, and declines until about 4-5 p.m. Due to its variable nature, solar output fluctuates with weather conditions. To address peak, intermediate (except day peak), and base load requirements, solar power needs to be paired with a Battery Energy Storage System (BESS) for peak shifting. Solar with BESS can cover demand under the curve if overall costs permit. Given the shorter duration of peak demand, 1 MW of solar can offset 1 MW of peak demand, but mitigating intermediate or base load requires substantially higher capacity. For instance, about 3 MW of solar and double that amount of storage are needed to cover 1 MW of intermediate load, while 5 MW of solar capacity is required for 1 MW of base load.

these requirements significantly affect upfront investment. Understanding the daily demand curve and solar characteristics is therefore essential for determining solar energy costs and planning solar deployment. Cost of Fossil Fuel-Based Power Generation in Bangladesh Fuel costs in fossil fuel-based power plants account for about 60-70% of total electricity generation costs. Since fossil fuel prices are highly volatile in global markets, even small fluctuations have a significant impact on overall electricity costs.

in this analysis, indigenous natural gas-currently subsidized and priced below its economic value-is excluded from consideration as a candidate fuel. Per-unit electricity costs for newly built conventional power plants using various fossil fuels and nuclear energy have been derived based on market prices as of October 2025 (Table 1).

according to the table, nuclear, coal-based steam turbines, LNG-based combinedcycle plants, and power imports appear to be the most cost-competitive options for base load generation. LNG-based combined-cycle and gas turbine plants are suitable for intermediate and peak loads. Notably, solar power is already cost-competitive during daytime peak hours and is likely to remain so for fuel substitution in the future. Cost of Solar Power in Bangladesh Utility-scale solar power remains more expensive in Bangladesh than in neighboring countries.

in FY2024, the average purchase price from about 700 MW of solar capacity was roughly Tk 14 per kWh (12 US cents), mainly because earlier power purchase agreements (PPAs) had higher tariffs.

although recent project costs have declined, they are still above the desired level.

to compare solar with fossil fuel-based power plants, this study estimates tentative solar costs based on simplified calculations.

investment costs were broken down into foreign and local currency components to highlight foreign exchange requirements and import dependency. Table 2.

investment Requirement in Foreign and Local Currency Table 2 shows an estimated total investment cost of USD 888 per kW, comprising USD 436 (49%) in foreign currency and USD 452 (51%) in local currency.

this includes all relevant costs such as interest during construction (IDC), financial charges, customs duties, and VAT, but excludes transmission investments. Key assumptions for levelized cost calculation: 1. Capacity factor: 20% 2.

equity/loan ratio: 20/80 3. Return on equity: 15% 4.

interest on debt: 8% 5.

economic life: 20 years 6.

exchange rate: USD 1 = Tk 120 7. Land requirement: 3.5 acres/MW 8. Land lease cost: Tk 100,000 per acre/ year 9.

insurance: 0.4% of total investment per year Based on these assumptions, the levelized cost of electricity (LCOE) for new solar projects is estimated at 7.11 USS/kWh or Tk 8.53/kWh. Notably, local components account for about 60% of the total LCOE. A transparent and competitive bidding process can further enhance the Taka component in tariffs. Solar without BESS during Day-Peak v The cost of solar power is considerably lower than that of diesel, HFO, and LNG-based peaking or intermediate plants- both in total and in fuel-only terms. Thus, daytime solar can effectively replace these plants and reduce expensive fuel use, even while paying existing capacity charges. v At Tk 8.53/kWh, solar electricity is also cheaper than the energy charge (Tk 9.28/kWh) of LNG-based combined-cycle plants operating in base mode.

if solar costs remain below Tk 9.00/kWh, it could even replace base-load LNG plants during the day.

therefore, operating solar without storage is the least-cost option to meet daytime intermediate and upper base-load demand. Cost of Solar and BESS for Peak Shifting Evening peaks are a defining feature of Bangladesh’s power system. While solar without storage can reduce fuel use by displacing daytime intermediate generation, it does not contribute to system peak capacity.

adding BESS allows solar energy to be shifted to evening or night hours, supporting peak and intermediate demand or even contributing to base load if costs permit.

this section evaluates the cost of solar plus BESS for these applications, based on US DOE (2020) and NREL (2025) cost projections. Solar with BESS for Evening Peak To shift solar power from day to evening (18:00-24:00 hrs), approximately 6.25 kWh of battery storage is required per kWp of solar (considering 80% depth of discharge and 90% round-trip efficiency) to deliver 4.5 kWh usable energy. Currently, due to Bangladesh’s high reserve margin (around 50%) and several ongoing projects, no new peaking contracts are expected before 2030. However, after 2030, solar with BESS may be considered for peaking duty.

this study estimates the cost of solar plus BESS at Tk 24.00/kWh in 2030, Tk 20.00/kWh in 2035, and Tk 16.00/kWh in 2050 (Table 4). Compared to the LNG-based gas turbine peaking cost of Tk 19.85/kWh, solar plus BESS will not be cost-effective before 2035, but competitiveness is expected thereafter. Solar with BESS for Intermediate Load In 2030, the cost of solar plus BESS for intermediate load (Tk 18/kWh) remains higher than conventional generation (Tk 15.70/kWh). By 2035, costs will narrow to near parity. Peak shifting to intermediate load could start around 2046 after full peak-load mitigation, though initial investments may reach USD 6,600/kW. Solar with BESS for Base Load Costs for nuclear, coal, and LNG-based CC generation are Tk 8.00, Tk 11.00, and Tk 12.00 per kWh, respectively (Table 1).

in contrast, solar plus BESS base-load costs are Tk 21, Tk 18, and Tk 14 per kWh (Table 4). Hence, solar with BESS is currently uncompetitive for base load. However, if battery prices fall below USD 100/kWh and conventional generation costs rise, it could become viable. Renewable Energy Target (Maximum) Based on daily demand curve analysis and cost estimates, Table 5 summarizes potentialsolar power targets with and without BESS. Currently, solar without BESS offers the most attractive, low-cost opportunity by replacing expensive fuel during the daytime. Intermediate load represents about 20% of system maximum demand, of which 15% can feasibly be met by utility-scale solar without storage, considering contributions from wind and rooftop solar. Solar capacity development is expected to start from 2028, as projects require at least two years for implementation. However, solar without storage primarily offsets fuel consumption and does not contribute to maximum system capacity. While solar with BESS for evening and intermediate loads remains uneconomical until at least 2035, pilot BESS projects may be introduced between 2031 and 2035. Starting from 2036, 2% of system peak demand may be met annually through solar plus BESS additions, achieving full 20% peak coverage within a decade. Solar with BESS for intermediate loads is expected from 2046 onward, requiring roughly three times the solar capacity and double the storage compared to peaking needs. Despite high capital costs, the per-unit energy cost may stabilize due to increased utilization. By 2050, a 25,000 MW solar capacity-about 45% of a projected 55,000 MW system peak- could meet roughly 25% of total demand. Base-load substitution by renewables will likely remain unfeasible before 2050 without major advances in storage and cost reductions. Nonetheless, after 2040, modestly higher solar costs could be justified for environmental benefits as national income and purchasing power rise. Recommendations and Conclusion Solar power is already cost-competitive during daytime peaks, with total generation costs lower than the fuel cost component of most fossil fuel plants (except subsidized domestic gas and coal). Deploying solar for daytime intermediate loads without BESS offers an immediate, low-hanging opportunity. The government should prioritize proper planning, competitive bidding, and riskbalanced project implementation.

although solar with BESS remains costlier than fossil fuel-based generation, falling battery costs may make it viable by the mid2030s.

if LNG prices rise globally, parity could occur even earlier.

the country should therefore prepare policy and infrastructure frameworks for timely deployment. However, BESS penetration in base-load generation will remain challenging unless storage costs drop below USD 100/kWh and conventional generation costs rise substantially. Breakthroughs in solar efficiency and storage technology could transform the outlook, warranting close monitoring of global RandD developments.

the estimated investment requirement for solar development is USD 888/kW, with roughly 50% in foreign currency- compared to 80% for conventional plants- indicating reduced import dependency. Local RandD and manufacturing of panels and batteries could further strengthen selfreliance in the power sector. Finally, the variable nature of renewables will continue to challenge grid stability. Integrating BESS can help maintain frequency regulation in line with grid code standards. Solar targets should remain dynamic and be revised annually based on demand forecasts, technology trends, cost changes, and policy directions to ensure an optimal, adaptive power development plan.