Fr om both ?nancial and technical perspectives, Bangladesh’s power and energy sector is currently in a vulnerable state.
the most pressing challenge is the shortage of primary fuel.
at present, more than 56% of the country’s combined power and energy supply depends on imports.
the exploration and extraction of domestic gas and coal resources could signi?cantly reduce this dependence. However, such initiatives require substantial investment and long implementation periods.
in contrast, expanding renewable energy offers a faster and comparatively lower-cost solution to ease import pressure.
over the past two decades, despite extensive discussions and policy frameworks, renewable energy expansion has lacked effective implementation planning.
as a result, Bangladesh’s total renewable electricity generation capacity-both grid and off-grid-stands at around 1,700 MW, of which 1,317 MW is grid-connected.
this includes: ? Hydropower: 230 MW ? Solar: 1,025 MW ? Wind: 62 MW Current Power Generation Mix Bangladesh’s total installed power generation capacity exceeds 28,000 MW, distributed as follows: ? Gas-based: 12,000 MW ? Coal-based: 7,000 MW ? Furnace oil-based: 6,000 MW ? Electricity imports from India and Nepal: 2,500 MW In 2024, just slightly over 2% of electricity supplied came from renewable sources. Compared to last year, peak demand has increased by approximately 1,000 MW.
as a result, expensive furnace-oilbased generation may be required not only during peak hours but also during daytime to meet demand.
economic Reality: A Dollar Drain Bangladesh spends approximately US$13.2 billion annually on energy and power imports. Meanwhile, domestic natural gas production continues to decline at an average rate of 150-200 MMCFD /year.
it is projected that this year, the combined cost of energy imports and loan repayments will reachUS$24 billion annually, or nearly US$2.0 billion per month. When such a large share of foreign currency is spent on fuel imports, capital machinery imports decline, industrialization slows, and employment opportunities shrink.
in this context, renewable energy is not just an environmental alternative-it is an economic survival strategy. Why Renewable Energy Makes Economic Sense 1. Foreign Currency Savings Replacing imported oil, coal, and LNG with domestic solar and wind power will conserve valuable foreign exchange. 2.
accelerated Industrialization Saved foreign currency can be redirected toward capital machinery imports and industrial expansion. 3. Lower Long-Term Power Costs With proper planning, electricity can be generated at Tk 5-7 per unit. 4.
investment Attraction Stable policies can attract signi?cant domestic and foreign investment. 5.
employment Generation Large-scale renewable deployment can create hundreds of thousands of jobs in manufacturing, installation, operation, and maintenance. Bangladesh has already made notable progress in rural electri?cation through solar home systems. However, the time has now come for large-scale grid-connected solar and wind power development. Policy Support: What is Urgently Needed? 1. Land and Transmission Readiness The government should identify suitable land-especially khas land or acquisition-ready land near grid substations-for solar and wind projects. Pre-arranged transmissioninfrastructure will signi?cantly accelerate implementation.
a district-based coordination mechanism involving Deputy Commissioners (DC), Additional Deputy Commissioners (Land), Assistant Commissioners (Land), and Executive Engineers of substations could ensure effective planning. 2. Full Duty Exemption on Equipment Complete duty exemption on solar panels, inverters, Battery Energy Storage Systems (BESS), wind turbines, and related equipment will reduce generation costs and boost investment. 3. Low-Interest Green Financing Banks should provide long-term ?nancing at concessional rates.
the central bank can expand green ?nance schemes to support renewable projects. 4.
tax Holidays A 5-10 year tax holiday will strengthen investor con?dence. 5.
integration of BESS in the Grid Adding Battery Energy Storage Systems (BESS) to grid substations is essential to ensure a stable supply, manage peak loads, and address intermittency challenges.
integrated River-Centric Development Model As a riverine country, Bangladesh can adopt an integrated development approach along major riverbanks, combining: ? River dredging ? Riverbank protection ? Road construction ? Solar power projects Potential Bene?ts: 1.
improved navigability through dredging 2. Riverbank protection and infrastructure development 3.
expansion of cultivable land 4. Sustainable development of char (river island) regions 5. Reduced transportation costs via waterways 6. Strengthened rural economies 7. Creation of over 2 million jobs across construction, operations, logistics, and support sectors A 1-3 Year Renewable Acceleration Plan If the new government prioritizes rooftop and utility-scale solar under a structured 1-, 2-, and 3-year action plan, Bangladesh could add at least 3,000 MW of renewable capacity by 2026-2028.
to achieve this, renewable energy expansion must be placed at the center of the government’s 180-day priority program. Conclusion: A Strategic Choice for Bangladesh Bangladesh now stands at a strategic crossroads. Will we continue to spend billions annually on imports, increasing economic pressure? Or will we move toward a self-reliant, employmentdriven, and sustainable energy future? With the right policy support, land preparation, ?nancial incentives, and grid modernization, renewable energy can become: A tool for foreign currency savings A driver of industrial growth A foundation for rural development A source of millions of jobs A pathway to a sustainable and secure Bangladesh The time for bold decisions has arrived.
a large-scale transition to renewable energy must now become a national priority.