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Bangladesh leaning towards coal-based power
1/2/2023
Bangladesh is set to increase its coal-based power generation capacity to ensure supply security as challenges remain for renewables development, including inadequate grid infrastructure and a lack of robust policies, incentives or subsidies, according to a new report from GlobalData.
The report reveals that the share of coal power in the country’s total generation is estimated to reach 12.6% in 2032. In September 2022, the Bangladeshi government announced plans to add around 4.3 GW coal-based thermal power to address frequent blackouts, which caused a major strain on industries, especially the garment industry which accounts for over 80% of the country’s exports.
The report notes that the cost of electricity generation is also high in Bangladesh, which has burdened power generation companies. The government has increased electricity imports from India over the years as it has proved to be a cheaper option. It plans to nearly triple electricity imports going forwards, which will mostly come from coal-based thermal power generation in India.
Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: ‘Though Bangladesh’s measures provide temporary relief to secure supply, they do not provide a long-time solution. Moreover, this steers the country away from its unconditional target to reduce greenhouse gas emissions by 27.56mn tCO2e (6.73%) below business-as-usual levels in 2030. The rise in electricity demand has led to an increase in gas-based generation over the years.’
In 2021, gas-based generation accounted for 66.4% of total annual generation in Bangladesh. It is estimated that the country’s natural gas reserves will be depleted in 10 to 12 years based on the current usage. The increase in global energy prices makes importing natural gas an unattractive option.
Bangladesh has lagged in the development of renewable energy sources, with only 537 MW of total renewable installed capacity in 2021, accounting for 2.5% of the country’s capacity mix. Among renewables, solar PV accounted for 98.6% of the renewable installed capacity, with onshore wind, biopower, and small hydro accounting for the remainder.
Saibasan concludes: ‘There are no major utility-scale renewable power plants in the country and the grid infrastructure is not equipped to streamline renewable power generation on a large-scale. The country’s preference towards coal-based thermal power development and imports may only be a temporary measure to overcome these challenges. In the long-term, the country should look at incentivising renewable power plants to encourage adoption, invest in upgrading the grid, and focus on development of energy storage to overcome dependency on thermal power and meet its climate goals.’
