[🇧🇩] Energy Security of Bangladesh

[Saif]

'Energy dominance agenda' and the catastrophic global warming

The new US 'reciprocal tariff' policy announced on April 2, 2025 has shaken the global trade systems and escalated tensions across the globe. It has been interpreted that the Trump administration wanted to increase US exports primarily to reduce the existing trade imbalances among the commodity exp

thefinancialexpress.com.bd

'Energy dominance agenda' and the catastrophic global warming
Mushfiqur Rahman
Published :
Apr 17, 2025 21:39
Updated :
Apr 17, 2025 21:39

The new US 'reciprocal tariff' policy announced on April 2, 2025 has shaken the global trade systems and escalated tensions across the globe. It has been interpreted that the Trump administration wanted to increase US exports primarily to reduce the existing trade imbalances among the commodity exporting countries and the USA.

The USA has been encouraging the increase of American export including the US energy export all over the world. Despite the sweeping package of imposed new tariff (President Trump's newly announced tariff has a minimum 10 per cent universal rate) on US imports, energy commodity imports received an exemption. Fossil fuel lobby groups in the USA had expressed their satisfaction and decided to welcome President Trumps' decision to exclude oil and natural gas from the new tariff. Within a short period of the President Trump's new import tariff policy announcement, globally fossil fuel prices started to decline (though the US new tariff policy would not apply directly to many oil and gas products). Demands for crude oil has been declining in the global market as the US exports increases and Chinese demands declining.

In the meantime, India and the USA have agreed to significantly increase the supply of oil and gas from the USA to the Indian market. At the end of the Indian Prime Minister Mr. Modi's US visit on February 14, 2025, it was stated that the US would be 'a leading supplier of crude oil and petroleum products and liquefied natural gas (LNG) to India'. Earlier international media reported that the Republic of Korea, the third largest LNG importing country of the world expressed its intention to buy more US oil and gas to reduce the existing trade surplus with the USA and improve energy security. Japan, the largest LNG importer of the world wanted to increase its LNG purchases from the USA to diversify its supply sources. Lorne Stockman, research director of the Oil Change International, a research and advocacy organisation for transition to clean energy suspected that the 'US seeks to either flood markets with cheap fossil fuels, or bully countries into buying more of its fossil fuels, or both.' It may be recalled that the USA is the largest oil and gas producer in the world. President Trump's 'drill, baby, drill' slogan is primarily aimed at ramping up fossil fuel extraction. AP report (February 15, 2025) suggests that the Trump administration announced the conditional export permission for a huge LNG project in Louisiana, USA (President Biden administration paused the project a year ago). President Trump has been encouraging for increased US energy productions, particularly fossil fuels and remove regulatory barriers that may slow down the increment. President Trump was delighted that the United States was blessed with 'liquid gold' and urged energy companies to sell more oil and gas to allies in Europe and around the world. As per published reports, President Trump stated 'we are going to make more money than anybody has ever made with energy.' He further explained, 'We're lucky to have it. I call it liquid gold under our feet. And we're going to utilise it.'

The shale fracking technological revolution helped the United States significantly increase natural gas and LNG productions in the mid-2000s. Natural gas productions in the USA surged dramatically and climbed 50 per cent from 2005 to 2015 and oil production doubled during 2009 to 2019. This production boom in the domestic market helped the Trump administration to promote 'energy dominance' agenda for the USA. The said agenda emphasised expanded fossil fuel production, deregulation and the use of US energy exports for 'economic strength and geopolitical leverage'. President Trump's 'energy dominance' strategy inadvertently would boost global oil and gas supply. Trump administration hopes that the USA's increased exports of oil and gas (and LNG) will reduce OPEC+'s groups bargaining power. It will help the USA 'to reshape global energy geopolitics and shifting US energy policy from dependency to strategic power.'

Trump administration has notified the United Nations of its withdrawal from the Paris Climate Agreement. 'The Guardian' reports (March 10, 2025) that Mr. Chris Wright, the US energy secretary stated that 'the Trump administration will end the Biden administration's irrational, quasi-religious policies on climate change that imposed endless sacrifices on our citizens.' He further stated that 'the Trump administration will treat climate change for what it is, global physical phenomenon that is a side-effect of building the modern world.' He added, 'everything in life involves trade off,'

Inevitable consequences of President Trump's energy dominance policy will be the weakening of the global efforts to 'transition away from carbon intensive energy'. Environmental rollbacks could delay the transition to clean energy solutions, net zero target achievements. Climate experts have been raising alarm that delaying actions to limit global warming would make the problem 'more dangerous and harder to solve'. If the world increases fossil fuel use including in the USA, the rate of global warming will move to the wrong direction. Already President Trump's 'drill, baby, drill' pledge is attracting other countries to reciprocate. As an example, Indonesia has hinted that it may follow the suit of the US administration policy. As reported by the news agency 'Antara', the Indonesian special envoy for climate change Mr. Hashim Djojohadikusumo raised question, 'if the United States does not want to comply with international agreement, why should a country like Indonesia comply with it?' It may be mentioned that the per capita production of carbon in Indonesia is three tons while in the USA it is 13 tons.

The energy dominance doctrine of the US administration may attract investment to increase fossil fuel energy and create job opportunity for Americans. However, it will further escalate climate change induced sufferings for the world, primarily for the most vulnerable nations.

Mushfiqur Rahman is a mining engineer. He writes on energy and environment issues.​

 

[Saif]

BIDA sees gas tariff hike as 'discriminatory'

The investment promotion authority found the recent gas tariff hike as ‘discriminatory’ for new investors and apprehended that it would put an adverse impact on its ongoing efforts to attract new investment. The hike just after the investment summit would ‘undoubtedly’

thefinancialexpress.com.bd

BIDA sees gas tariff hike as 'discriminatory'
Doulot Akter Mala
Published :
Apr 17, 2025 08:50
Updated :
Apr 17, 2025 20:10

The investment promotion authority found the recent gas tariff hike as ‘discriminatory’ for new investors and apprehended that it would put an adverse impact on its ongoing efforts to attract new investment.

The hike just after the investment summit would ‘undoubtedly’ create a negative perception among the aspiring investors, said Bangladesh Investment Development Authority (BIDA) executive chairman in a letter to BERC.

The latest upward revision, on April 13, 2025, of gas prices by 33 per cent would put a higher tariff burden on the new investors compared to that of the existing one.

However, BIDA said it supported the government’s effort to cut subsidy but it should not be discriminatory.

“The government can consider trimming the subsidy uniformly,” BIDA Executive Chairman Chowdhury Ashiq Mohammad Bin Harun wrote in a letter sent to the Chairman of the Bangladesh Energy Regulatory Commission (BERC) on Tuesday.

In the letter, obtained by the FE, Mr Chowdhury found the necessity to review the gas tariff hike decision for the sake of new investment and keep economic mobility unhindered.

Talking to the FE, Energy Adviser Md Fouzul Kabir Khan said investors were queuing up with their investment proposals despite the gas tariff hike.

“Many investors are willing to make investment despite this gas price. So far, we have more than 300 investment proposals who have agreed to invest at this price,” he told the FE.

It’s BERC’s discretion to review it, but the government is not in a position to subsidise for an unlimited period, he said.

In the letter, the BIDA chair said the discriminatory policy on gas tariff would affect new investment and discourage country’s competitiveness.

“Investors have already taken stance against the decision,” he wrote.

BIDA thinks that this decision would hinder the Foreign Direct Investment (FDI) flow to Bangladesh, he added.

To attract investment, the Bangladesh Investment Summit-2025 was held from April 7 to 10 in the city.

A total of 450 investors from 40 countries participated in the summit.

“A number of investors have signed Memorandum of Understanding (MoU) and agreements with the BIDA showing their interest to invest in Bangladesh,” Mr Chowdhury wrote.

In the letter, Mr Chowdhury sought sincere cooperation of BERC to set an investment friendly gas tariff rate.

He suggested a review and impact analysis workshop to discuss the issue.

Talking to the FE on Wednesday, BERC chairman Jalal Ahmed said they were yet to officially receive the letter.

“We are open to discuss the issue in the commission and also with the Petrobangla that has put forward the proposal of gas tariff hike, if it creates any controversies,” he said.

The BERC chairman said the commission delayed the decision of gas tariff hike considering the investment summit.

Nahian Rahman Rochi, Head of Business Development of BIDA, said the BIDA chair put forward the proposal to review as differential tariff structure will dissuade new investors from entering the market.

“We are happy to organise a consultation to further discuss and pros and cons about it,” he said.

However, Mr Rochi urged the BERC to do review it within the fastest possible time.

“….and we need to ensure that the ultimate decision on rate is investment friendly,” he said.

Preferring anonymity, representative of one large foreign investor said the energy advisor have played smart, with this new concept, everyone is against rather discriminatory price between old and new, next move he will do is equalize old industry in to new industry to Tk 40 per cubic meter from today’s rate of Tk 30 cm.​

 

[Saif]

Abnormal capacity charges show power sector abuse

Greatly varying capacity charges paid to power companies with similar capacities highlight a chronic ill practice by the past Awami League regime, sending Bangladesh’s economy into a tailspin.

www.newagebd.net

Abnormal capacity charges show power sector abuse
Emran Hossain 19 April, 2025, 00:10

Greatly varying capacity charges paid to power companies with similar capacities highlight a chronic ill practice by the past Awami League regime, sending Bangladesh’s economy into a tailspin.

The Bangladesh Power Development Board calculated the capacity charges considering the use of 60 per cent capacities of the power plants.

Established about the same time using the same technology, some power plants received way more capacity charge than their peers, 300 per cent or even more, per unit of electricity produced, revealed a BPDB analysis.

The list of beneficiaries invariably included AL favorites whose names frequently surfaced in reports, including the white paper published by the incumbent interim government in December last year, as power companies raking abnormal profits, often flouting the law.

‘The varying capacity charges speak of too many ill practices,’ said Hasan Mehedi, member secretary, the Bangladesh Working Group on Ecology and Development.

From manipulating loans to bribing politicians to distorting information on equity to tampering expenses, private power companies left no stones unturned to inflate their capacity charges, he noted.

‘The sad news is they are still enjoying the privilege despite a political changeover promising to end such favours,’ he said.

Capacity charge is the amount of money the BPDB pays a power-sector investor, covering the power plant’s establishment cost plus its estimated profit, regardless of whether the plant produces or does not produce electricity.

Energy experts explained that capacity charge covers the loans received by a plant, along with interest, employees’ salaries and a return on equity.

Power plants with shorter lifetime could be entitled to a higher rate of capacity charge. Power plants taking loans at high interest rates could also result in excessive capacity charge payment, energy experts said.

‘Usually the return on equity remains about 12 per cent,’ said energy expert Mohammad Tamim, who was also a member of the team that prepared the white paper on the economy of Bangladesh last year.

Joint ventures were found to be earning 16 per cent return on equity while the Rampal power plant was entitled to an 18 per cent return on equity, he said.

After considering possible investment in power plants by different types of fuels, energy experts gave a range of ideal capacity charge rates per unit of electricity – around Tk 1 for gas-based power plants, maximum Tk 4 for coal-based power plants and Tk 2 for oil-based power plants.

But the situation in Bangladesh is far from ideal.

For instance, the Jamalpur 115MW oil-based power plant, owned by the United Group, received Tk 4.23 for generating per KWh of electricity. The rate is 327 per cent higher than what is paid to another private power producer Raj Lanka for its 52MW power plant in Natore – Tk 0.99. The power plants operate with reciprocating engine. While the Jamalpur plant has been operating since 2019, the Natore plant has been in operation since 2014.

The United Group received Tk 4.26 for a unit of power for its 200MW power plant in Mymensingh, which was established in 2018.

Set up in 2020, the 104MW oil-based Meghnaghat power plant, owned by the Orion Group, receives Tk 3.42 per unit, which is 272 per cent higher than what state-owned oil-based power plant receives on average – Tk 2.39 a unit.

Similarly, the 149MW and the 300MW oil-based Kodda power plants and the 55MW oil-based Madanganj power plant, all owned by the Summit Group, receive in capacity charge for a unit of electricity Tk 3.34, Tk 3.33 and Tk 3.06 respectively. The Summit Group built its power plants between 2016 and 2018. The 200MW oil-based power plant in Chandpur, owned by the Desh Energy, set up in 2018, receives Tk 3.42 per unit in capacity charge. The power plants all have reciprocating engines.

The average capacity charge received by independent oil-based power plants for a unit of power is Tk 3.23, followed by similar public plants earning Tk 2.44 and state-owned power plants Tk 2.39. The state-owned oil-based 100MW Gopalganj power plant, set up in 2011, receives the lowest Tk 0.92 capacity charge per unit.

‘Such huge differences in prices are reminiscent of the absence of competition in the power sector,’ said Shafiqul Alam, lead energy analyst, Institute for Energy Economics and Financial Analysis.

During the 15 years of the past AL regime, power projects went ahead mainly through one-on-one negotiation without any tender under the indemnity law recently scrapped. The power ministry was under the authority of former prime minister Sheikh Hasina and she oversaw $33 billion investments.

The average capacity charge paid to gas-based independent power plants is Tk 3. The gas-based Meghnaghat 335MW and 583MW power plants, both owned by the Summit Group, receive Tk 3.48 and Tk 3.67 per unit respectively. The power plants were set up in 2015 and 2024 respectively with combined cycle engines.

The 584MW Meghnaghat power plant, owned by the Unique Group and set up in 2024 with combined cycle engine, receives Tk 3.78 per unit.

The average gas-based joint venture projects’ capacity charge stands at Tk 3.71. The 195MW Ashuganj power plant, set up in 2015 and owned by the United Group, receives Tk 3.51 per unit.

There were big anomalies in capacity charges received by public power companies. For instance, the Haripur 100MW plant, set up in 1987, receives Tk 2.42 as capacity charge, far higher than Tk 0.55 received by the Ghorashal 409MW power plant, set up in 1989.

There are other gas-based public power plants that get less than Tk 1 in capacity charge per unit. The average capacity charge received by BPDB-owned gas-based power plant is Tk 1.31. The average capacity charge received by gas-based power plants owned by public companies other than the BPDB is Tk 2.44.

To coal-based state-owned power plants, the average capacity charge paid is Tk 4.63 for each unit. Joint venture coal projects receive an average of Tk 5.43 capacity charge per unit. Independent power plants, on the other hand, get an average of Tk 7.17.

The 1,320MW coal-based Banshkhali power station, owned by the

S Alam Group and set up in 2023, receives the highest Tk 7.34 capacity charge per unit.

The national capacity charge spending is set to reach Tk 38,000 crore in the current financial year of 2024–25. Initially introduced to incentivise private investment to tackle an acute power crisis by the ousted AL government, the capacity charge eventually proved to be a huge burden for the nation.

In September 2023, the then power state minister informed the parliament that in its three consecutive terms, the AL government paid a total of Tk 1.04 lakh crore as capacity charges.

Bangladesh’s power generation overcapacity is about 50 per cent of the total installed generation capacity of 27,645MW. The overcapacity is the result of the inability to buy energy, mainly due to the dollar crisis partly triggered by the massive power sector spending. The energy crisis has also set off a staggering inflation, trapping Bangladesh in a huge debt obligation.

BPDB chair Rezaul Karim said that they are reviewing power purchase agreements and will sit with power companies to present their side of the story.

‘We want to resolve the issue rationally, giving the companies a chance to present their case as well,’ he said.

‘We can assure you that a good result will come out of it,’ he told New Age on Friday.​

 

[Saif]

https://thefinancialexpress.com.bd/trade/bangladesh-to-buy-3-more-spot-lng-cargoes-by-mid-june

Bangladesh to buy 3 more spot LNG cargoes by mid-June
FE Online Report
Published :
Apr 19, 2025 19:50
Updated :
Apr 19, 2025 20:00

Bangladesh has moved to buy three spot liquefied natural gas (LNG) cargoes by mid-June to meet mounting summer demand.

State-run Rupantarita Prakritik Gas Company Ltd (RPGCL) floated three separate tenders to procure three spot LNG cargoes for May 22-23, June 5-6 and June 12-13 delivery windows, a senior RPGCL official told The Financial Express Saturday.

The country’s energy demand has gone up since March with the advent of summer and is expected to grow further with the rise of mercury.

Bangladesh has been buying three spot LNG cargoes for the delivery windows of March and April, respectively.

The bid winners will deliver the LNG cargoes at Moheshkhali Island in the Bay of Bengal, with options to discharge the cargo at either of the country’s two floating storage re-gasification units (FSRUs) located on Moheshkhali Island.

The RPGCL, a wholly owned subsidiary of state-run Bangladesh Oil, Gas, and Mineral Corporation, or Petrobangla, looks into LNG trades in Bangladesh.

The volume of each of the spot LNG cargoes will also be around 3.36 million British Thermal unit (MMBtu).

Bangladesh currently imports LNG from Qatar Energy and OQ Trading International under long-term deals and purchases LNG also from the spot market to re-gasify LNG in its two operational FSRUs, having a total capacity of 1.10 billion cubic feet per day (Bcfd).

The country has been reeling from an acute energy crisis as its natural gas output is depleting.

Bangladesh has been rationing gas supply to industries, power plants and other gas-guzzling industries to cope with the mounting demand.​

 

[Saif]

Capacity charge ills should not menace power sector

THIS is unfortunate that the capacity charge — the money that the Power Development Board pays power-sector investors even when the plants do not produce electricity, with an aim to cover the loans that the plants receive, along with interests, salaries of the employees and returns on the equity...

www.newagebd.net

Capacity charge ills should not menace power sector
20 April, 2025, 00:00

THIS is unfortunate that the capacity charge — the money that the Power Development Board pays power-sector investors even when the plants do not produce electricity, with an aim to cover the loans that the plants receive, along with interests, salaries of the employees and returns on the equity — continues even after the political changeover of August 5, 2024, with the interim government having promised to end such favours dished out quarters close to the Awami League government that was toppled in a mass uprising. But this does not make up the whole story. What is further unfortunate is that the capacity charges greatly vary depending on power companies with similar capacities. The power board calculates the capacity charge considering the use of 60 per cent capacity of the plants. Set up about the same time with the same technology, some plants receive way more capacity charge than the others do, 300 per cent or even more, as a power board analysis shows, for the production of a unit of electricity. Whilst the capacity charge remains a menace, varying capacity charges suggest that the power sector is plagued with too many ill practices, putting the economy in a tight spot.

Private-sector power producers have tried all every possible means — manipulating loans, bribing politicians, distorting information on equity or tampering with expenses — to inflate their capacity charge. An energy expert who was on the committee that prepared the white paper on the state of the Bangladesh economy, submitted to the government on December 1, 2024, says that the return on equity is usually 12 per cent. Joint ventures are found to be earning 16 per cent return on equity. The Rampal power plant is, however, entitled to an 18 per cent return on equity. In view of possible investments in power plants run on various types of fuel, energy experts say that an ideal capacity charge for plants based on gas is about Tk 1 a unit, for plants based on coal a maximum of Tk 4 a unit and for plants based on oil Tk 2 a unit. But the proposition remains far from ideal. The average capacity charge paid to gas-based independent power plants is Tk 3 a unit. The average capacity charge for gas-based independent power plants is Tk 7.17 a unit. The average capacity charge for independent oil-based plants is Tk 3.23 a unit.

With the overcapacity having already been about 50 per cent, this is pressing that the government should rethink the provision, or at least renegotiate, especially after the interim government in November 2024 repealed the Awami League-era Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 that brought in the menace in the energy policy.​

 

[Saif]

Eliminating power subsidy more than a challenge

The International Monetary Fund's (IMF) insistence on eliminating power subsidies and raising electricity tariffs has got the interim government in a difficult position. These two measures are among the primary conditions for the release of the 4th and 5th tranches of the IMF's $4.7 billion loan. A

thefinancialexpress.com.bd

Eliminating power subsidy more than a challenge
Published :
Apr 24, 2025 23:32
Updated :
Apr 24, 2025 23:32

The International Monetary Fund's (IMF) insistence on eliminating power subsidies and raising electricity tariffs has got the interim government in a difficult position. These two measures are among the primary conditions for the release of the 4th and 5th tranches of the IMF's $4.7 billion loan. As per the latest IMF review mission, which conducted a comprehensive assessment of Bangladesh's economic landscape, the government is expected to completely remove power subsidies by the 2025-26 fiscal year to qualify for further disbursements from the multilateral body. The IMF has also recommended an upward adjustment in electricity tariffs to reduce the fiscal burden. According to media reports, failure to phase out the electricity subsidy could jeopardise the release of the 4th and 5th tranches of the loan.

However, the reality on the ground in Bangladesh's power and energy sector starkly by no means corresponds to these expectations. The interim government recently revised the national budget, increasing the total subsidy allocation from Tk 360 billion to Tk 620 billion. Over the years, electricity subsidies have escalated, largely due to the proliferation of independent power producers (IPPs) and rental power plants that operate at high costs. To manage the growing fiscal pressure, the Bangladesh Power Development Board (BPDB) has begun ramping up generation from coal and gas-fired power plants -- seen as more cost-effective options. This shift is part of a broader strategy to gradually reduce dependence on expensive IPPs. Nonetheless, some newly commissioned IPPs have already begun supplying power to the national grid under previously signed power purchase agreements (PPAs), and their outstanding payments remain a financial liability. The BPDB has informed the IMF that it may take a few more years to clear these dues and trim overall subsidies.

The IMF's call for a zero-subsidy regime stems from its emphasis on building a sustainable, market-driven economy. However, many economists argue that such a model may not be suitable for a power-starved country like Bangladesh. Removing subsidies so soon could have far-reaching consequences, particularly for the manufacturing sector which is highly dependent on affordable energy. The ripple effects could include higher inflation, a spike in production costs, and a decline in export competitiveness -- outcomes that are likely to undercut the very economic stability the IMF loan aims to support. A more balanced and pragmatic approach would be to implement a gradual phase-out of subsidies, allowing industries and common consumers time to adapt. A sudden and complete withdrawal, as suggested by the IMF, may result in economic disruption that outweighs the benefits of the $4.7 billion loan.

It is crucial for Bangladesh to secure the IMF funds, including the additional $3.0 billion agreed upon recently, but not at the cost of macroeconomic stability. Currently, a high-level delegation from the interim government is in Washington, D.C., participating in the IMF-World Bank annual meetings. Their mission is to negotiate the release of the delayed tranches and to persuade the IMF to adopt a more flexible approach to subsidy reform. There is hope that with careful diplomacy and sound economic reasoning, the delegation can convince the global lender to support a gradual transition that better aligns with the country's current realities.​

 

[Saif]

Govt to set up land-based LNG terminal soon: Alam

The interim government has decided to set up a land-based LNG terminal to ensure a smooth gas supply to the country’s factories. “Many are saying that they are unable to set up factories due to a lack of gas. So, we want to set up a land-based LNG terminal as quickly as possible so tha

thefinancialexpress.com.bd

Govt to set up land-based LNG terminal soon: Alam
BSS
Published :
Apr 25, 2025 16:28
Updated :
Apr 25, 2025 16:28

The interim government has decided to set up a land-based LNG terminal to ensure a smooth gas supply to the country’s factories.

“Many are saying that they are unable to set up factories due to a lack of gas. So, we want to set up a land-based LNG terminal as quickly as possible so that enough gas can be brought (from abroad),” Chief Adviser’s Press Secretary Shafiqul Alam told reporters in Doha on Thursday.

In this regard, he said, a plan was shared with Qatar Energy during Chief Adviser Professor Muhammad Yunus’s tour to Doha.

The land-based LNG terminal will be set up soon to expand the gas supply to factories in Bangladesh, the press secretary said.

Regarding the chief adviser’s Doha tour, he said it was a very successful and fruitful visit.

“I would say it is one of the most successful and very engaging visits,” he said.

Due to this tour, Alam hoped, the reputation of Bangladesh would spread across the world and many foreign investors would come forward to invest in Bangladesh.

Highlighting the bounce-back of the country’s economy, he said there were outstanding debts of US$ 3.2 billion during the ousted regime, but the interim government has reduced it to US$ 600 million.

The remaining debt will be paid within a few months, the press secretary said, adding, “It sends a positive signal to the outside world that we are ready for business.”

Wrapping up his four-day tour, Prof Yunus is scheduled to leave Doha today for Rome, Italy, to join the funeral of Pope Francis.​

 

[Saif]

Grid failure plunges 21 southern districts into darkness

Around 21 districts in the southern region of the country, including the entire Barishal Division and parts of Khulna Division, were plunged into darkness on Saturday evening following a major power grid failure. According to officials at Power Grid Company of Bangladesh (PGCB), the grid collapse

thefinancialexpress.com.bd

Grid failure plunges 21 southern districts into darkness
Published :
Apr 26, 2025 22:17
Updated :
Apr 26, 2025 22:36

Around 21 districts in the southern region of the country, including the entire Barishal Division and parts of Khulna Division, were plunged into darkness on Saturday evening following a major power grid failure.

According to officials at Power Grid Company of Bangladesh (PGCB), the grid collapse began at 5:45 pm in one district and then gradually spread across the 21 districts, UNB reports.

However, the power transmission was restored within 45 minutes to one hour in all the affected areas, they said.

“A good number of districts had their power supply restored within 15 to 20 minutes due to the prompt measures taken by PGCB,” said the transmission entity in an official statement.

It added that the transmission system is currently operating normally following the restoration across the Barishal and Khulna regions.

The reason behind the massive grid failure could not be confirmed immediately, as no PGCB official could determine the exact cause as of filing this report.

So far, no committee has been formed to investigate the incident, an official said.​

 

[Saif]

Bangladesh’s energy crossroads

BANGLADESH’S energy sector stands at a critical inflection point, caught between the urgent need to meet growing demand and the imperative to transition towards sustainable solutions. The country has made impressive strides in electricity coverage, expanding access to over 96 per cent today. Yet...

www.newagebd.net

Bangladesh’s energy crossroads
Musharraf Tansen 27 April, 2025, 00:00

BANGLADESH’S energy sector stands at a critical inflection point, caught between the urgent need to meet growing demand and the imperative to transition towards sustainable solutions. The country has made impressive strides in electricity coverage, expanding access to over 96 per cent today. Yet this remarkable achievement rests on increasingly shaky foundations — an overreliance on imported fossil fuels that drains foreign reserves, exposes the economy to volatile global markets, and contributes significantly to environmental degradation. With peak electricity demand projected to reach 40,000 MW by 2041 and climate change intensifying vulnerabilities across the country, Bangladesh faces a defining challenge: how to power its economic ambitions while ensuring energy security and environmental sustainability.

The cost of fossil fuel dependence

BANGLADESH’S current energy model has become economically unsustainable. The country spends approximately $2.5 billion annually on fossil fuel subsidies — equivalent to 15 per cent of its total import bill — while simultaneously grappling with a dollar shortage crisis. The much-touted shift to liquefied natural gas (LNG) as a bridge fuel has backfired spectacularly, with import prices soaring 300 per cent since 2021 and forcing painful cuts to power generation. Meanwhile, the coal power expansion strategy, which envisioned 22,000 MW of new capacity, has left the country with underutilised white elephants like the 1,320 MW Payra plant that operates at just 40 per cent capacity due to fuel affordability issues. This overreliance on imported energy has not only created fiscal strain but also environmental consequences, with air pollution from fossil fuel combustion estimated to cause 80,000 premature deaths annually.

Structural barriers to clean energy transition

SEVERAL entrenched obstacles stand in the way of Bangladesh’s renewable energy potential. Policy inconsistency remains a fundamental challenge — the 2008 Renewable Energy Policy’s target of 10 per cent renewables by 2020 was missed by a staggering 65 per cent, even as contradictory support for coal power continued. Financial constraints compound these issues, with dollar shortages limiting clean technology imports and risk-averse local banks preferring to finance conventional fossil projects. The grid itself presents technical barriers, lacking the flexibility to handle variable renewable output and constrained by land scarcity that complicates large-scale solar and wind deployment. These challenges are exacerbated by institutional fragmentation, where overlapping mandates between the Bangladesh Energy Regulatory Commission, Power Division, and Sustainable and Renewable Energy Development Authority often lead to conflicting priorities and stalled progress.

Overdependence on imported fossil fuels: Bangladesh’s energy security is compromised by its heavy reliance on imported fossil fuels. The volatility of global fuel prices, as evidenced during the Russia-Ukraine conflict, has led to increased electricity generation costs and significant subsidy burdens. In the fiscal year 2021–22, the power sector’s subsidy burden escalated to approximately $2.82 billion. This financial strain limits the government’s capacity to invest in renewable energy infrastructure and technologies.

Limited land availability: As one of the most densely populated countries, Bangladesh faces acute land scarcity, posing a significant challenge for large-scale renewable energy projects. The competition for land use between agriculture, habitation, and energy infrastructure necessitates innovative solutions, such as rooftop solar installations and floating solar systems, to optimize space utilization.

Grid infrastructure constraints: The existing electricity grid infrastructure is ill-equipped to handle the variability and intermittency associated with renewable energy sources. The lack of modern grid management systems, energy storage solutions, and smart grid technologies hampers the integration of renewables into the national grid, leading to inefficiencies and potential reliability issues.

Policy and regulatory challenges: While the government has introduced policies to promote renewable energy, such as net metering guidelines, the overall policy framework lacks coherence and long-term vision. The absence of a comprehensive, integrated energy and power master plan has resulted in fragmented efforts and limited investor confidence. Additionally, bureaucratic hurdles and inconsistent regulatory practices deter private sector participation and investment in the renewable energy sector.

Financial and investment barriers: The high upfront costs associated with renewable energy projects, coupled with limited access to affordable financing, pose significant challenges. Despite the Bangladesh Bank’s directive for financial institutions to allocate at least 5 per cent of their loan portfolios to green financing, actual disbursements remain below target. Furthermore, the lack of risk mitigation instruments and incentives for investors impedes the mobilization of private capital.

Untapped renewable potential

BENEATH these challenges lies extraordinary untapped potential. Bangladesh’s solar energy capacity alone could theoretically generate 3,000 MW from rooftops — equivalent to six mid-sized coal plants — yet current installations total just 329 MW. The country’s extensive coastline holds an estimated 5,000 MW of wind power potential, while agricultural residues could produce 500 MW of bioenergy. The success of Bangladesh’s pioneering solar home system programme, which brought electricity to 20 million people, demonstrates the viability of distributed renewable solutions. Coastal areas could host hybrid offshore wind and solar farms, while Kaptai Lake’s 3,000 MW floating solar potential remains virtually unexploited. Emerging technologies like green hydrogen could eventually decarbonize hard-to-abate industries like fertiliser production by leveraging existing gas infrastructure.

Policy priorities for accelerated transition

Reforming the financial architecture: The transition requires fundamental financial restructuring. Bangladesh must move from blanket fossil fuel subsidies to targeted incentives for renewables, establishing a 500 million green bond market to attract institutional investors. Partnering with multilateral development banks on currency hedging instruments could mitigate forex risks for renewable projects, while development partners could help capitalise a renewable energy development fund. The recent 4.5 billion IMF bailout, partially necessitated by energy sector strains, underscores the urgency of these financial reforms.

Modernizing grid infrastructure: Grid modernization represents another critical frontier. Deploying smart meters and AI-driven demand forecasting could better manage variable renewable supply, while creating dedicated renewable energy zones with streamlined land allocation would accelerate project development. Pilot battery storage installations at 50 strategic substations could demonstrate the viability of energy storage for grid stability. These technical upgrades must be paired with regulatory reforms that properly value distributed generation and encourage private investment in grid flexibility solutions.

Strengthening institutions and human capital: Institutional strengthening is equally vital. Elevating Sustainable and Renewable Energy Development Authority to a statutory authority with real enforcement power would give renewables policy more teeth, while implementing renewable purchase obligations for large industrial consumers could create guaranteed demand. Launching a ‘Clean Energy Corps’ fellowship programme could build the technical capacity needed across government and utilities, ensuring the workforce keeps pace with technological change.

Economic imperative of transition

THE case for energy transition is fundamentally economic. Every 1,000 MW of added solar capacity could save $300 million annually in avoided fuel imports while creating three times more jobs per megawatt than fossil fuel projects. Renewable energy offers insulation from commodity price shocks — during the 2022 global energy crisis, solar-powered factories maintained operations while gas-dependent industries faltered. Moreover, positioning Bangladesh as a regional leader in offshore wind and green hydrogen could attract significant foreign investment in coming decades.

A just transition road map

THE path forward must balance urgency with equity. In the short term (2025–2026), Bangladesh should impose a moratorium on new coal and LNG plants while launching a 500 MW rooftop solar initiative and reforming tariff structures to favour renewables. The medium-term (2027–2030) should focus on achieving 15 per cent renewable penetration through offshore wind and waste-to-energy projects, coupled with retraining programmes for 50,000 fossil sector workers. Long-term planning (2031–2041) should envision Bangladesh as a regional clean energy leader, with 40 per cent renewable generation supported by green hydrogen backup and potential electricity exports to neighbouring countries.

Seizing the moment

BANGLADESH’S energy choices in the coming years will determine whether it becomes trapped in a cycle of fossil fuel dependency or emerges as a solar-powered pioneer. With coordinated policy action, financial innovation and technological adaptation, the country can build an energy system that powers inclusive growth while meeting climate commitments. The alternative — continued reliance on expensive, unreliable fossil imports — risks economic stagnation and ecological harm. For a nation that has already shown remarkable ingenuity in expanding energy access, the renewable energy transition represents the next great challenge — and opportunity — in its development journey.

Musharraf Tansen is a development analyst and former Country Representative of Malala Fund.​

 

[Saif]

18,000MW power production planned for summer

Load shedding during the summer days will be kept at a tolerable level, Power and Energy Adviser Fouzul Kabir Khan said yesterday.

www.thedailystar.net

18,000MW power production planned for summer
Load shedding to stay tolerable, says energy adviser

Photo: Freepik

Load shedding during the summer days will be kept at a tolerable level, Power and Energy Adviser Fouzul Kabir Khan said yesterday.

"I won't say there will be no power outage during the summer, but the load shedding will remain within a tolerable level. And there will be no difference between urban and rural areas," he said at a seminar, titled "Energy Crisis: Way Forward," organised by the Forum for Energy Reporters Bangladesh (FERB) at Bidyut Bhaban in the capital.

He said plans are in place to produce 18,000 megawatts (MW) during peak demand in summer, up from the current 16,000 MW. Additional demand will be met through coal and LNG imports.

Kabir added that when the interim government took charge, the power sector was in a disastrous state. "We have paid most overdue and late payments to companies."

The overdue bill, originally around US $3.2 billion, has been reduced to US $600 million and is expected to hit zero by the end of the fiscal year in June, he added.

To clear the payments, the government cut allocations from unnecessary projects. Kabir noted that late payments had also raised power production costs.

On gas exploration, Kabir said the government only took steps it could complete within its tenure.

Regarding electricity prices, Kabir said negotiations are ongoing with coal-based power plants, setting the Matarbari plant's rate of Tk 8.44 per kilowatt-hour (kWh) as a benchmark. "We are asking them why their prices differ by Tk 3-4 instead of Tk 0.30-0.40," he said.

Activities to reduce system loss will be visible by next June, he added.

Addressing the recent gas price hike for new industries, Kabir said it was set based on the marginal cost.

In the keynote paper, energy expert Ijaz Hossain said Bangladesh's energy crisis began in 2019 when gas production declined and oil replaced gas, increasing the government's energy subsidy burden.

"Gas reserves were depleting, but exploration was ignored, while LNG import was preferred at a time when the government should have gone for aggressive production," he said.

He noted that local production stood at 2,786 million cubic feet of gas a day (mmcfd) in 2019 but has now fallen to 1,800 mmcfd. Future governments should promise to keep production around 2,000 mmcfd by exploring at least 10 wells a year, he said.

Bangladesh will also need to import 2,600 mmcfd of LNG after 2030 and build two new floating storage and regasification units (FSRUs), he added.

Dr Shamsul Alam, energy adviser to the Consumers' Association of Bangladesh, said Bangladesh is shifting towards becoming an LNG-importing nation, with domestic gas's share expected to fall from 75 percent to 25 percent by 2030.

Dr Golam Moazzem, research director at the Centre for Policy Dialogue, called for a new energy policy with a clear transition plan.

He warned that ongoing LNG deals with Qatar and the US could impact the country's long-term renewable energy goals.​

 

[Saif]

Five per cent tax rebate for solar panel users under consideration: DNCC

Administrator of Dhaka North City Corporation (DNCC) Mohammad Azaz has said his administration is contemplating providing a 5.0 per cent tax rebate for city dwellers who will use solar panels as part of green energy promotion. "The DNCC is thinking of considering a 5.0 per cent tax rebate for the

thefinancialexpress.com.bd

Five per cent tax rebate for solar panel users under consideration: DNCC
UNB
Published :
Apr 28, 2025 22:16
Updated :
Apr 28, 2025 22:16

Administrator of Dhaka North City Corporation (DNCC) Mohammad Azaz has said his administration is contemplating providing a 5.0 per cent tax rebate for city dwellers who will use solar panels as part of green energy promotion.

"The DNCC is thinking of considering a 5.0 per cent tax rebate for the city dwellers if they use the rooftop solar panel", he made the remarks at a policy dialogue titled "The Role of Renewable Energy for in Building a Just Urban".

The event was jointly organised by Dhaka North City Corporation (DNCC) and the Center for Atmospheric Pollution Studies (CAPS) at the auditorium of the DNCC Nagar Bhaban in Gulshan-2 on Monday.

With Professor Mohammad Ali Naqi, head of the Department of Architecture, State University of Bangladesh, in the chair, the seminar was also addressed by Prof Dr Ahmad Kamruzzaman Majumder, Chairman of CAPS, who made the keynote presentation.

The DNCC administrator also stressed the need for continued research in this area as to how the advantage of green energy could be utilised.

He emphasised the potential of installing solar panels on buildings in Dhaka's planned neighbourhoods, where rooftop solar clearance is adequate due to uniform building heights.

He noted that through the effective rooftop solar implementation, buildings can meet their own electricity demand and even contribute to the national grid-making the concept of a "just transition" more attainable.

Prof. Dr. Ahmad Kamruzzaman Majumder said that Dhaka ranks among the worst cities in terms of air quality, liveability, traffic congestion, and noise pollution.

Referring to Yale University's 2024 Environmental Performance Index, where Bangladesh ranks 175th out of 180 countries, he warned that unplanned urbanisation, industrialisation, and population growth have led to severe environmental degradation. Transitioning from fossil fuels to renewable energy is one of the key solutions to combat this crisis.

DNCC Chief Executive Officer Abu Sayed Md. Kamruzzaman pointed out that Dhaka is an unplanned city and achieving justice in such a context requires comprehensive planning and implementation.

Prof. Dr Adil Mohammed Khan, President of the Bangladesh Institute of Planners (BIP), noted that Bangladesh has significant potential for renewable energy. He emphasised the need to promote its use across sectors and raise awareness to build a greener and healthier future.

Professor Dr M. Shahidul Islam, Chairman of the Department of Geography and Environment at the University of Dhaka, advocated for reduced energy demand, increased use of public transport, and greater responsibility among polluters.

Mohammad Fazle Reza Sumon, Convenor of BIP's Advisory Board, proposed that rooftop management could be a major source of renewable energy and urged collective action at the individual level.

Professor Dr Ijaz Hossain, former Dean of the Faculty of Engineering at BUET, suggested identifying major polluters and taking strict control measures, including promoting electric vehicles charged by solar energy.

Roufa Khanam of the Center for Climate and Environmental Research (CCER) stressed the need for skilled technical management, effective monitoring, and incentives to implement renewable energy laws effectively.

Professor Naqi underscored the dual necessity of reducing energy consumption and increasing the use of renewable energy.​

 

[Saif]

Severe energy crisis affects life, business

A severe energy crisis has been affecting every aspect of life, commerce and business as the country passes yet another year of bad energy planning.

www.newagebd.net

Severe energy crisis affects life, business
Industries report big drop in production, people suffer at home

Emran Hossain 28 April, 2025, 23:27

A severe energy crisis has been affecting every aspect of life, commerce and business as the country passes yet another year of bad energy planning.

While industries are left with no choices but to reduce production by half or even more due to long hours of power cuts, compounded by a severe shortage of gas, power plants sat idle in dozens, CNG refueling stations saw long lines of vehicles and many households needed to wait until midnight to cook meals.

The crisis is a grim reminder of the interim government’s failure to import enough energy as it continues to carry the energy sector debt burden left behind by the past Awami League regime amid the dollar crisis.

On April 27, the latest daily gas report released by Petrobangla showed that the overall gas supply stood at 2,692.2mmcfd against the demand of 4,000mmcfd. The gas supply was 10 per cent less compared with the same day a year before.

An analysis of daily Petrobangla reports of the days in comparison revealed that gas production from domestic wells fell by 170.9mmcfd amid reduced liquefied natural gas imports of 159mmcfd.

‘We are witnessing the worst energy crisis ever,’ said Bangladesh Knitwear Manufacturers and Exporters Association vice president Saleudh Zaman.

About 19 per cent of about 1,800 textile mills are running at their half or 40 per cent capacity navigating seven to nine hours of power cuts daily, he said.

Industries could not use their alternative captive power generation because of gas supply shortage. Many industries need gas as raw materials.

‘Many factories might default on paying workers’ wages,’ he said.

Gas accounts for 54 per cent of Bangladesh’s total energy supply. The other energy sources are oil, coal and biomass. Power sector is the biggest gas consumer accounting for 43 per cent of the overall consumption. Captive power consumes 17 per cent of gas.

Industries use 18 per cent of supplied gas while households use 11 per cent and CNG and fertilizer production use 5 per cent each.

On April 27, gas supply met 42 per cent of power sector demand and only 38 per cent of fertilizer sector demand.

Consumers are particularly angered by the gas crisis because their gas bill soared in the past few years without any improvement in its supply. Industries saw gas price increase by more than two and a half times since 2023.

Over the past week, the crowd of vehicles at CNG refueling stations in the capital and many other districts got thicker, signaling a worsening turn in the energy crisis.

The gas pressure, supposed to be 15psi, dropped to between zero and 2psi in two-thirds of CNG refueling stations, said Farhan Noor, general secretary of the Bangladesh CNG Filling Station and Conversion Workshop Owners Association, a platform of 539 refueling stations.

The refueling stations never received the promised pressure and faced gas rationing since 2010.

Though the stations are supposed to get gas 21 hours a day, the supply reaches operable levels around midnight.

‘The problem is that you cannot find customers in the wee hours,’ said Farhan.

Low gas pressure means increased energy cost for the refueling stations which need to use three to five times more electricity to run their compressors to get a certain amount of output, he explained.

Farhan said that he was under pressure from his colleagues to call a nationwide strike as their margin dropped over the years amid inflation, wage hike, and the devaluation of taka.

‘I lost a long-time client today as I was two hours late to pick him up due to long queues at gas refueling stations,’ said Abdul Malek, a rent-a-car owner in Tangail.

The drop in the gas supply in CNG refueling stations mirrored lives in households relying on piped gas. Many households have to wait until midnight to start cooking.

‘Cooking at midnight after working a whole day is simply inhuman,’ said Hamida Banu, a housewife in the capital’s Badda area.

Most households using piped gas pay a fixed monthly price though they never get what they pay for. Households in many areas in Dhaka reported acute low gas pressure in most parts of the day.

The shortage of gas is felt more than any other energy shortage as public infrastructures are mostly gas-based. Coal and furnace oil are mostly used in industries and power production.

Petrobangla director Rafiqul Islam said that the crisis was unlikely to improve until June when the state-owned oil company is planning to increase LNG import.

‘Local gas production fall and increased power demand are the main drivers of the crisis,’ he said.

This summer has been rather less warm as the warmest month of the year, April, is about to end with maximum day temperatures remaining around 37C. Last April saw consecutive days spread over weeks with temperatures exceeding 40C over vast swathes of land.

Still, frequent load shedding occurred, even in Dhaka.

At 1:00am on April 28, 218MW of load shedding was recorded when the power demand rose to 15,240MW. Bangladesh’s current installed power generation capacity is over 27,500MW with gas accounting for nearly half of the capacity. Coal and oil account for 20 per cent of the capacity each.

Energy expert Ijaz Hossain advised increasing gas supply to industries even if it meant increasing load shedding. He called for prioritizing some industries to supply 200mmcfd of extra gas, which could go a long way in saving the country’s economy.

‘The crisis reflected shortcomings of energy planning,’ he said, ‘I don’t understand what the government is trying to achieve by not fully using its LNG import capacity.’

Bangladesh’s full LNG import capacity is 1,100mmcfd.

Oil-based power plants could be used more to mitigate power outages, he suggested.

‘There is no easy solution. We are facing a critical situation. Further failure in taking the right action could lead everything to collapse,’ said Ijaz.​